City Pays 'Extortion Money' to State

The city agreed today to pay millions in what officials called "extortion money" to Sacramento.

The City Council voted unanimously during a meeting today at the to give the state a cut of the taxes it collects through its redevelopment agency.

The city's redevelopment agency collects property taxes from blighted areas on the condition that it spends the money to rejuvenate those areas.

That process was taken apart by the state recently when it passed bills calling to disassemble these agencies or pay a fee to keep them going.
City officials decided the agency was worth the payments.

"It's the main reason we have the Promenade mall today," said City Manager Shawn Nelson.

He named numerous projects during the meeting that were built using redevelopment funds, including the Civic Center, the parking structure at the mall, the Winchester Road-Interstate 15 interchange, the Old Town Temecula Community Theater and $25 million worth of infrastructure in Old Town.

"All these projects were funded by redevelopment funds," Nelson said.
The city also paid $3 million to improve a school so a university could offer classes there. "We definitely wouldn't have in our community without redevelopment funds," Nelson said.

How much the city will pay

The city's first payment to the state will cost $4.7 million. For each year after that, it will owe only $1.1 million, according to Planning Director Patrick Richardson.

An element of risk was involved in the City's decision to make the payments, he said. The state could change redevelopment law any time, which means the city could make its $4.7 million payment, and next year the state could force city's to dissolve redevelopment agencies anyway, he said.

"It's a weighing of how much risk we're going to take," Richardson said.

'Are we angry?'

The city's obligated by law to provide low-income housing. The city used redevelopment money pay for that in the past, but now officials have no idea how they will pay for it.

City officials renounced the state's plan as robbery during previous meetings.

"Thank you, State of California, for being irresponsible," said Councilmember Maryann Edwards.

The city is involved in a lawsuit against the state. To read about it,

The state is using redevelopment funds rightfully belonging to the city to balance its budget, she said.

"They're looking for every pool of money they can get, and they're coming after your money," she told the audience. "Are we angry? Yes."

Residents' response mixed

Some residents were critical of the redevelopment agency.

"It's a welfare program for developers," said Temecula resident Paul Jacobs.

The redevelopment agency lets the city give special loan packages to big businesses arbitrarily that are unavailable to smaller businesses, he said.

He pointed to a sign the city helped pay for near Interstate 15 that advertises for the auto mall.

"I would question how much property values rose because of the auto mall sign," Jacobs said.

At least one business owner feels projects paid for by redevelopment funds are worthwhile.

"I see something get developed, and I see business come my way," said Bob Hagel, the owner of Eagle's Mark, a sign and awards maker.