Davis Redevelopment Agency: Basics

What do Bistro33, the Pole Line Road Overcrossing, Varsity Theatre and the pending US Bicycle Hall of Fame all have in common? They all came to fruition with the financial assistance of the Davis Redevelopment Agency.

Redevelopment, like “infill” or “operational greenhouse gas (GHG) reductions”, is one of those planning buzz terms that means a lot of different things to a lot of different people. For this article, however, and in the context of the Davis Redevelopment Agency, redevelopment does have a narrower definition and scope.

On Thursday, August 27th, 2009 the Downtown Davis Business Association’s (DDBA) Board and Visioning Committee hosted a presentation by city staff to help the DDBA membership better understand “Redevelopment Basics”. Katherine Hess, Assistant Executive Director of the Agency, and Ken Hiatt, Deputy City Manager lead an informative presentation and Q&A session.

After the jump, read as I attempt to explain my newfound understanding of this important agency.

The Davis Redevelopment Agency is a separate governmental entity with powers vested by the State of California Redevelopment Law. In Davis, City Council members also serve on the Board of the Redevelopment Agency while the City Manager serves as its Executive Director.

The goal of the Agency is to alleviate physical and economic “blight” that exists due to a lack of private investment. The Agency is funded through incremental tax revenue.

What is incremental tax revenue? Allow me to answer with an example. When the Davis Redevelopment Agency was formed in 1987, the property tax values for 1986 on all property within the district’s boundaries became the “base year” values. The yearly, or incremental, increases in tax revenue over the base year value go directly to the Redevelopment Agency rather than to the City of Davis. Why would the City choose to forego this funding? Simply put, a Redevelopment Agency has more freedom and flexibility to spend this money than the City does.

What is “blight”? Well, blight is in the eye of the beholder. The story of two Davis buildings should shed some light: the old cinderblock structures at the corner of 3rd & C Streets that were demolished to build the Crepeville building was blight, Westlake Plaza did not qualify as blight this past June.

It must be noted that all actions of the agency are done with the expectation of future increases in property tax. The main focus of Agency projects is physical: infrastructure improvements, open space and recreation areas, commercial rehabilitation, assistance to private development, parking structures and public art. The Davis Redevelopment Agency has a history of entering into partnerships with other funding agencies and mechanisms for most of the big-ticket items e.g. Richards Interchange Improvements, Pole Line Road Overcrossing. Redevelopment money has also been used
in partnerships with private projects (mostly with long term loans) e.g. Varsity Theatre remodel, 5th & G Office Building, theater and parking structure, Bistro33 at Historic City Hall.

In addition to alleviating blight, 20% of the tax increment revenue must be dedicated to affordable housing. They may be public, non-profit or for-profit housing and can be inside or outside the Project Area. Recent projects include Cesar Chavez, Eleanor Roosevelt and the 3rd & J site.

Further increasing the complexity of this arrangement is the role of the various “Pass-Through Agreements” that the Agency enters into with other jurisdictions. Basically, the Agency agrees to “pass-through” or pass-along some of its tax increment to other jurisdictions. The Davis Redevelopment Agency has agreements with Yolo County, the Cemetery District and the Flood Control District.

The Pass-Through Agreement with Yolo County is one of the most misunderstood political deals in the city. For $2 million a year in pass-through funds from the Redevelopment Agency to the County, there is a tacit agreement in place that the County will allow the City to control all growth on its borders. More on this agreement in a future article, but does it sound like an above the table bribe to anybody else?

Another important power of the Redevelopment Agency is eminent domain.  Although the Davis Agency has not  followed through with an eminent domain case to completion, it is an awful big  stick to brandish at your “partners” in redevelopment.

The guiding document of the Agency is the Redevelopment Plan. That document, along with several others, can be found here.

So, what’s new for the Agency? They’ll be assisting with the new Mishka’s Building next to the Varsity Theatre and the next reincarnation of the Tank House. Also, the Governator and our paralyzed Legislature just “borrowed” all of their money. Hope you enjoyed a little light reading for a hot Saturday…  I’m now off to enjoy a cold beer and the best pizza in Davis at the newly redeveloped home of Village Pizza & Grill at 403 G Street… pretty sure that they didn’t receive any of this fancy Redevelopment Agency funding, but did that place go from blight to just right almost overnight?