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Top 10: State turns off key Napa economic engine

Death of redevelopment forced lots of city scuffling
2012-12-28T18:52:00Z 2012-12-31T19:19:08Z Top 10: State turns off key Napa economic engineCHANTAL M. LOVELL Napa Valley Register
December 28, 2012 6:52 pm  • 

The start of a new year often marks a new beginning, but for California redevelopment agencies, the start of 2012 was the end.

The end of the decades-old engine that had been used to revamp dilapidated parts of Napa and spur economic development ranked No. 4 in the Register’s list of top stories of 2012.

In mid-January, after the California Supreme Court ruled in December that the California Legislature could dissolve the roughly 400 redevelopment agencies across the state, the City Council voted to take on the responsibilities of ending the agency. The city would receive about $250,000 annually in property tax revenue to help pay for its new task of winding down the agency’s duties, but the roughly $6 million the city would have received from property tax revenue for redevelopment would go to help the state fill its budget gap from that point on.

Napa’s redevelopment agency had been responsible for assisting projects like the Napa Riverfront, Napa Square, Oxbow Public Market, the then Avia hotel and the Westin Verasa hotel, among others.

Amid confusion about what exactly would happen to planned city redevelopment projects, the council allocated $150,000 in January to keep five redevelopment staff on board. In March, the city allocated another $150,000 to keep former redevelopment staff employed and the economic development running through the end of June.

Eventually, the staff was reassigned. Three staff members — the economic development manager, development project coordinator and secretary — were moved to the economic development department. Two others — the sustainability coordinator and senior development project coordinator — went to the recycling division and Public Works Department, respectively.

City manager Mike Parness held strong in his opinion that the employees should be kept.

“Redevelopment was an important tool ... that I think worked very well here,” Parness said. “But, redevelopment was a tool to accomplish economic development and that is as needed now as ever.”

Amidst talk of the fate of employees, it became more clear that at least two redevelopment assets might be lost to the state. The Napa Firefighters Museum, situated in a historic building on Main and Pearl streets, is slated to close, though its doors were still open in late December. The nonprofit museum rents the agency-owned building for a nominal fee and will, in all likelihood, need to move out.

Museum officials have said they plan to pack up much of the artifacts for storage, donate others and display some at firehouses throughout the city.

A loading dock behind the Kohl’s department store, also owned by the agency, will likely need to be sold as well.

By May, the city had allocated $4.39 million from its General Fund to provide cash flow to itself as the successor agency. Much of the money was used to cover future bond debt payments, while some would be held in a reserve to cover upcoming payments.

Like with everything related to the former redevelopment agency, the city made copious documentation of the activity and designated the allocations as loans in hopes it will be refunded by the state.

Money is not the only thing the city could lose in the aftermath of redevelopment. The state may seize city parking lots or parks purchased or built with redevelopment money, an idea Councilwoman Juliana Inman called, “the craziest thing (she’d) ever seen.”

“The state is interested in getting as much money as possible from local government,” she said. “I expect it to be a harsh process. The governor has expressed a real punitive attitude toward the cities, and I think this is just the start of it.”

When budgeting for the current fiscal year in June, the council set aside $3.1 million in a “clawback reserve” to be used if it had to go to court over redevelopment problems.

The final project paid for by the Napa Community Redevelopment Agency: The Napa Riverfront Green pocket park at the southwest corner of Third Street and Soscol Avenue was dedicated in June.

The city is in the midst of the seemingly long and tedious process of receiving a Finding of Completion from the state. The designation may enable the city to spend unspent bond proceeds and may mean the city can keep downtown parking lots for public use.

In the meantime, the city is proceeding with at least one project that was to be completed with redevelopment dollars, but will now be funded through other city revenues. Earlier this month, the council approved a new boat dock at the end of Fourth Street, which should be constructed next summer.

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