When Gov. Jerry Brown signed a law abolishing California’s redevelopment agencies, many in baseball assumed public financing of ballparks was a thing of the past. Turns out the news may not be so terrible — but the circumstances are still troublesome.
Tax-increment financing is a tried-and-true economic-development tool, and it’s occasionally used to build ballparks. (How tried and true? There are over 1,000 TIF districts in Wisconsin alone.) In California, TIF is the main tool used by city and county redevelopment agencies to fund future growth in larger construction projects: increases in property taxes generated by these large projects are used to pay back bonds issued to fund the original construction. It’s not a perfect system, but it can work in most circumstances — as evidenced by the huge pot of money held by RDAs.
The state couldn’t pass up raiding billions in redevelopment funds at a time when basic services are being curtailed for a lack of funds. Facing a huge budget deficit, Brown and the California Legislature decided to abolish California’s redevelopment agencies and redirect the proceeds to fund basic services. That had the effect of killing RDA support for new projects in San Jose (an Oakland A’s ballpark), Escondido (a Tucson Padres ballpark) and Chico (a High Desert Mavericks ballpark).
The planned seizure of redevelopment proceeds led to howls of protests from cities and counties, with two remedies bandied about: a lawsuit challenging the constitutionality of the law (a version of it was rejected by voters last fall) and a provision legislation that would allow redevelopment agencies to continue if they make payments to local municipalities in lieu of the state funds. Officially, it’s the Alternative Voluntary Redevelopment Agency Program, and it’s dubbed the “pay to play” provision (It’s also being called a “ransom” by opponents) and it would keep RDAs in business, albeit in a scaled-back form.
Whether this scaled-back form is adequate remains to be seen. In Escondido, a proposed ballpark for the Tucson Padres (Class AAA; Pacific Coast League) was already on very shaky ground: the city was already bumping up against its bonding capability, so scaling back an RDA is highly unlikely to revive the project, and the city seems to have moved on to placing a biotech research park on the ballpark site. In San Jose, where Lew Wolff had proposed a privately financed ballpark for the Oakland A’s, a scaled-back redevelopment agency might be able to pull off the land acquisition necessary. (Probably at a higher price: bonds from the San Jose Finance Authority were downgraded to BB.) In Oakland, there’s a plan to use other city development funds to overhaul the Coliseum/Oracle Arena complex, with the city currently planning on the A’s staying and a new football stadium potentially going up in the complex. (We’ll have more later.) And in Chico, alternative methods of financing a ballpark are on the table, including a new local sales tax, we’re told, so a new ballpark may not be quite as dead as MiLB President Pat O’Conner told a Modesto paper. (We’ll discuss this a little more in a separate article.)
Things certainly are not looking good for any new California ballparks in the near future, admittedly. But there are some glimmers of hope out there, and it would be foolish to totally write off the potential of any new California ballpark until things play out — but as foolish to think a new ballpark will materialize any time soon.
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