The other day we noted Steve Greenhut’s piece on the disaster that failed plans for a professional athletic team stadium brought to Sacramento — click here. Now, the Wall Street Journal reports a similar tale of municipal woe from San Jose whose redevelopment agency paid some $25 million for land it planned to transfer to the As to entice them to move from Oakland. (Justin Scheck, San Jose Strategy to Lure A’s Hits Snag, Wall Street Journal, May 9, 2012). But major projects are risky business, and it all went kablooey when the California legislature abolished redevelopment in that state in the middle of it all.
In an effort to deal with that problem, the San Jose Redevelopment Agency transferred the subject land to “a city run entity, still intending for the As to acquire it.” Nice try. It turns out that the State Controller has something to say about that, and has issued a demand that the city (and other local governments that received land from redevelopment agencies last year) return such land to “successor agencies” the legislature created to dispose of redevelopment agency holdings.
In the meantime, the subject property for which the city redevelopment agency paid $25 million is worth only $6.9 million, assuming it could be rezoned for high-rise or other commercial uses. The city is resisting the State Controller’s demand for a clawback, and it looks like it will take years of wrangling — and litigation, after all it’s California — to work it all out.
In the meantime, the taxpayers are out $25 million, to say nothing of the forgone property tax revenues that the subject property would have produced had it remained in private hands.
Your tax money at work.