Town Hall on Redevelopment

As Gov. Jerry Brown puts pressure on lawmakers to reach a deal on the state budget by March 10, cities such as Milpitas are bracing for the impact. Brown wants to eliminate redevelopment agencies (RDA) in order to save $1.9 billion to close a $25 billion budget deficit. 

The city of Milpitas held to gather public support for its own redevelopment agency. The third and final meeting was Monday night at the Barbara Lee Senior Center and drew a lively conversation from the audience.

City Economic Development Manager Diana Barnhart and City Manager Tom Williams had a presentation with a short video followed by a slide show (also online).

To date, $12 million has been passed through to Milpitas public schools from redevelopment projects, according to the city. But with the 2011-12 state funding for public schools in flux, there was a bit of debate on whether the RDA should go.

Mike Mendizabal, former president of the Milpitas Unified School District Board, disagreed that the Milpitas Redevelopment Agency would provide money for public schools. “Some things I don't agree with; actually RDAs are keeping money from schools. They're good during the good times, not during the bad times.

“In these times we have to make choices," he went on. "Schools in Milpitas are greatly underfunded. More money would go to schools without RDA.”

Williams disagreed, saying, “The school district is better off with higher property values from redevelopment—higher assessed value analysis."

Barnhart and Williams showed on a descriptive graph (slide 11) that 29 percent of the higher valuation increment is passed through to local taxing agencies, like the schools. 

Mendizabal said Milpitas schools get only 40 percent of the 29 percent of mandatory pass-throughs to local agencies. 

Williams replied, “Which is better—40 percent of a $1 million undeveloped parcel or 40 percent of 29 percent of a $100 million developed site?”

Corporations such as Cisco, SanDisk and KLA-Tencor were built in redevelopment zones.

Former council candidate Robert Windisch said, “There's a problem with the lack of funds for schools. Why are we helping wealthy corporations with money?”

Williams replied, “Milpitas gets paid back tenfold.”

Barnhart said, “Redevelopment flood control projects attracted new corporations, industry, retail, jobs and housing. The [mid-town] transit area won't happen without the RDA. Milpitas will stop growing without the redevelopment agency tool.”

The city and RDA just purchased 11 acres in the mid-town transit area for a future school, Williams said. 

It's unclear if Milpitas Unified has money in the near future to build a second school that would provide relief for Zanker Elementary. Enrollment there has expanded to about 640 students, including 50 more than the last school year.

A new elementary school would cost the school district about $50 million, said Mendizabal.

Ann Zeise of GoMilpitas.com said, “College education is costing more and sending the RDA tax increments to the state would lower tuition.”

Don Peoples, Economic Development Commission chairman and structural engineer, said, “Milpitas wouldn't be Milpitas without redevelopment.

"My office in Milpitas grew, but not so in Pleasanton," he said. "If we could replace our outdated, one-story tilt-up buildings with up-to-date seven-story buildings, there would be obstacles like sewer, water, street improvements. We would be stuck without the redevelopment agency.”

Nancy Mendizabal, a former council candidate and retired city employee, asked why Santa Clara County is suing the city over its most recent redevelopment plans. 

Currently, the lawsuit is in San Mateo County Superior Court where a judge will make a final decision—unless the parties decide to settle.

“Counties sue to try and get more from the new project areas," Williams said.

“I'm passionate about redevelopment,” he said. “Without it, Milpitas would be in significant decline. If the RDA goes away, Main Street will never be developed.” 

"Milpitas has created a Housing Authority and Economic Development Corporation to shelter increment funds from future state seizures,” he said. 

There appeared to be little support for the RDAs in the , he said. The city is encouraging residents to send letters to their elected officials in state office and let their voice be heard.

At the same time, state confiscation of local funds may be illegal and unconstitutional under recent voter-approved Proposition 22, according to the State Legislative Counsel.