Updated: Council Bows to State on Redevelopment

The has agreed unanimously to keep the community's redevelopment agency as a precautionary step.

The ordinance can be recinded. City Manager Blair King said Tuesday the decision was “the best advice we have as of today,” which could change by Sept. 6, the next council meeting.

Not that he was happy about it, calling the situation “crazy,” and adding, “we’re asking you to apply a law we believe is unconstitutional.”

The state Supreme Court stayed implementation of the decision to abolish local development agencies until justices can consider a lawsuit filed by the Redevelopment Agency Association and the League of California Cities. 

The court could start talking legal briefs as early as Sept. 15, King said in a memorandum.

The state's legislation regarding redevelopment offered cities the opportunity to maintain their agencies – for a price.

Coronado must pay $3.7 million next year and $897,000 in 2013. The fees rise annually, with the city expecting to pay a total of $18.8 million by 2026.

King appealed the first-year charge, arguing that it should be $1 million less.

“We’re basically buying our way out of this,” Councilman Al Ovrom said.

The city's plans for hospital upgrades remain problematic because under the new legislation loaning money to redevelopment agencies would be too costly.

When the commitment to purchase land and equipment was made three years ago, officials expected to receive general fund loans from the city to meet the obligations, director Rachel Hurst said.

Instead, the agency will have to “restructure its debt over a longer period,” Hurst explained.

The city faced losing nearly $50 million in loans it made for the hospital, and also for school district and city capital improvements.

Still Mayor Casey Tanaka does not regret the decisions. “We knew when we made loans that we might not get the money back,” he said. “The improvements were worth the risk.”

Editor's Note: This story has been revised. Earlier versions incorrectly noted the creation of new agencies, that loans would be prohibited under new rules and that the hospital would be new, when the plans are for upgrades.