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May 30th
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Cutting Redevelopment: A Bad Business Decision

budget_100bucksEditor’s Note: This guest column is compiled by Patrice Edwards, Chair, board of directors, and Bill Tysseling, executive director at the Santa Cruz Area Chamber of Commerce, for the Board of Directors.

As business people, we understand the challenge of controlling costs and staying on budget. We understand, too, the challenge facing California and Gov. Jerry Brown as he struggles to plug a $25 billion budget hole.

But we also understand the relationship between costs and benefits. That’s why the Santa Cruz Area Chamber of Commerce opposes the governor’s plan to eliminate redevelopment agencies in California.

As California emerges from what has been termed the Great Recession, the need for redevelopment agencies has never been greater. And that’s especially true for Santa Cruz County.

Retails districts throughout the county would suffer in particular. Without redevelopment, the critical roles played by the public sector in attracting and retaining merchants through infrastructure development and repair, improving building facades, and, even, paying for vital services such as street-cleaning, community service officers, host programs, and promotions would not be performed.

Redevelopment agencies locally are the most nimble parts of government. They work hand-in-glove with the private sector. The irony is that some in the private sector complain about an anti-business atmosphere locally; the reality is that those in redevelopment have been business’ best friend.

It’s through redevelopment efforts that investment packages important to the community have been put together. Consider, for example, the following work by the City of Santa Cruz RDA:

• A $1.8 million package that was raised for Zero Motorcycles’ new facility in Santa Cruz.

• Some $2.7 million raised in Recovery Zone Bonds for Cruzio’s new data center facility in the old Sentinel building on Church Street.

• The underwriting of the Small Business Development Center at Cabrillo College— an organization that offers confidential business counseling and  support to entrepreneurs; as well as RDA’s investment in the novel Project for Innovation and Entrepreneurship in Santa Cruz.

Projects across the county have been funded by redevelopment—even though some may not know it. The seawall at Pleasure Point, the Manabe-Ow annexation in Watsonville, the Tannery Arts Center in Santa Cruz and the under-construction National Marine Sanctuary Exploration Center are just four examples.

These projects and others like them have meant jobs to Santa Cruz. Much-needed jobs.

That’s why cutting redevelopment is the wrong move. Yes, it’s tempting to look at the budgets of redevelopment agencies all around the state as an easy way to pick up a quick $1.7 billion for the state.

The question is: at what cost? Putting redevelopment out of business will only mean loss of tax revenues and costs on the other end: unemployment, welfare and other state services.

Redevelopment agencies are virtually the ONLY source of funds for business-critical infrastructure. Funds from redevelopment agencies support key economic vitality projects– from public works to law enforcement. And, they’re local. Redevelopment has allowed local agencies to actually keep a larger share of property taxes—money that too often has been appropriated by the state.

The cost of the governor’s plan is just too high. Eviscerating the economic development and redevelopment efforts of local government is the boxing-match equivalent of throwing in the towel on improving local business environments.

As a Chamber of Commerce, we are not willing to abandon the efforts by local governments to advance our collective economic vitality.

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