Leaders Pledge to Continue High-Profile Projects and Affordable Housing
By Paul Burton, Contributing Writer
The City of San Francisco is working to ensure that redevelopment projects under way will continue after the elimination of its redevelopment agency Feb. 1. The Board of Supervisors approved a resolution Jan. 10 that puts the city in charge of the agency’s current projects, including Mission Bay, the Hunters Point Naval Shipyard and the Transbay Transit Center, as well as affordable housing projects.
The California Supreme Court recently upheld a law passed by the state legislature that abolished redevelopment agencies. In early 2011, Gov. Jerry Brown had proposed eliminating the agencies and redirecting $1.7 billion of redevelopment funds to schools and public safety. At that time, State Building and Construction Trades Council President Bob Balgenorth expressed concern about taking funds from the redevelopment agencies, pointing out, “… his redevelopment proposal will significantly harm one of the state’s leading job-generating engines, particularly for construction employees. Redevelopment activities support more than 304,000 full- and part-time jobs annually, including 170,600 construction jobs. At a time when unemployment in the construction sector is above 30 percent, we should do all that we can to stimulate jobs in this sector, not destroy them.”
Redevelopment agencies have been key to job growth in construction, particularly at a time when privately funded projects have been hit hard and construction workers have had to rely on public works projects for employment.
In San Francisco, SFRA projects created 3,079 construction jobs in 2010, with more than $21.7 million in gross earnings, and development projects that were active during 2010 generated more than $293 million in construction activity. An additional 3,000 construction jobs were created through SFRA projects in 2011.
Oversight Board Begins
With the closing of the RDA on Feb. 1, cities must now transfer assets, obligations and functions into a successor agency. At its Jan. 10 meeting, the Board of Supervisors also approved an Oversight Board to guide the transition and oversee the repayments and implementation of projects under way.
State law requires the creation of a new Oversight Board to oversee fiscal management of former agency assets other than affordable housing assets. The board will approve certain changes to obligations and new agreements and implement enforceable agreements, including review and approval for issuing bonds. The Oversight Board will exercise authority in land use, development and design approvals under the enforceable obligations for Mission Bay, Hunters Point Shipyard and parts of Transbay.
The RDA’s affordable housing assets will be transferred to the Mayor’s Office of Housing. The SFRA budgets about one half of its funding for affordable housing developments.
According to Transbay Joint Powers Authority spokesman Adam Alberti, construction of the Transbay Transit Center will not be slowed or impacted by the elimination of the RDAs. He said that all the revenues from the RDA are already committed for the construction. Development of the housing, retail and tower proposed for the area around the Transit Center could be impacted but are mostly privately funded. Alberti said that the question going forward will be how the city meets the need to develop affordable housing without the RDA tools (the incremental tax funds created when property values in redeveloped areas increase).
City Will Continue Support
In a statement announcing the resolution to take over the redevelopment functions, Mayor Ed Lee said, “San Francisco will not let the elimination of redevelopment agencies impede our progress in moving the city forward. We will keep creating jobs, boosting economic development and building critical infrastructure in our city. Our continued progress on developing affordable housing, revitalizing blighted neighborhoods and generating the resources for urban infill development must continue. We will make good on our promises from Hunters Point to Mission Bay to Central Market to the many communities who have worked hard for so many years on these projects, and we will show an unwavering commitment to our investors as we deliver on these projects.”
The mayor noted that in recent years, the city has leveraged the powers of redevelopment to build more than 11,000 units of affordable housing, create a growing biotech hub, a new UCSF Hospital and a new Salesforce.com campus at Mission Bay. Using the tools of redevelopment, the city has built world-class convention facilities and museums around Yerba Buena Gardens, and is on the verge of 10,000 new housing units and hundreds of acres of new parks and commercial space at the renewed Hunters Point Shipyard.
The San Francisco Chronicle reported that the court ruling could stall many projects “because while state law allows redevelopment agencies to finish approved projects and pay off existing debt, the court ruling could spook bond investors needed to fund those projects.”
The resolution, sponsored by Lee and Supervisors Malia Cohen, Jane Kim and Christina Olague, will ensure that the obligations tied to the Mission Bay, Hunters Point Shipyard and parts of Transbay will be transferred to the city. Mayor Lee said that the city will move forward with the existing affordable housing goals and commitments by transferring functions to the Mayor’s Office of Housing, working with the state on legislative responses and working locally to develop new tools to finance affordable housing.
The city will continue workforce and local hire programs that directly benefit low-income and at-risk populations by seeking alternative sources of funding including the General Fund. The city will adopt and continue neighborhood revitalization efforts including small business support, corridor façade improvement and public realm improvements.