City agrees to pay $1.3M to keep redevelopment agency

The Downey City Council unanimously but reluctantly agreed Tuesday to pay the state nearly $1.3 million to continue its redevelopment agency.Council members, who rely on the funds as a tool to spur local development, went as far as to call the payment "ransom" and "extortion" from the state. Downey officials have used redevelopment money in the past to subsidize construction of Porto's Bakery and Bob's Big Boy, and are counting on the money to help finance The View housing complex on 2nd Street. Gov. Jerry Brown signed legislation in June abolishing all redevelopment agencies effective Oct. 1, instead funneling the estimated $1.7 billion into state coffers. The state, however, is allowing cities to opt "into an alternative voluntary redevelopment program that requires various payments in lieu of elimination," community development director Brian Saeki wrote in a report to council members. Downey's fee amounts to $1.28 million, which will be paid using existing redevelopment money, so city services will not be impacted, officials said. The city normally collects about $5 million in taxpayer-funded redevelopment money each year. "For all intents and purposes, this is a ransom payment by the state," said assistant city manager Gilbert Livas. Council members decried the payment, calling it an "illegal raid on city funds." "I think it sucks," said Councilman David Gafin. "I have the perfect word for this," said Councilman Mario Guerra. "It's extortion. They're trying to balance the state budget with this." Councilman Fernando Vasquez called the payment a "really unfortunate situation." "It leaves a bad taste in my mouth," Vasquez added. "We're moving money around...due to the nonsense up in Sacramento." A lawsuit challenging Brown's authority to eliminate redevelopment funds is expected to be heard by the state Supreme Court in January.