The state of California will be allowed to take at least $4.1 million from Menlo Park's redevelopment fund, following a ruling in Sacramento Superior Court on Tuesday, May 4.
The ruling by Judge Lloyd Connelly denied the contention by the California Redevelopment Association that the money grab was unconstitutional.
The state Legislature in July 2009 passed a bill that would take $1.7 billion from redevelopment agencies statewide in 2009-10, and $350,000 in 2010-11. That would mean $3.4 million from Menlo Park's coffers in the current fiscal year, and $700,000 in 2011-12.
The city will be able to cover the payments out of its approximately $13 million redevelopment fund reserve, but that reserve could run dry quickly if the state continues to take money from redevelopment agencies, as City Manager Glen Rojas said is likely at the May 4 council meeting. The city uses the fund to cover a variety of operations, such as graffiti abatement, land-use planning, and streetscape improvements, as well as major capital improvements project, such as affordable housing developments and city parks.
Also at the May 4 meeting, the council voted to support potential state legislation that would make it easier for cities to use redevelopment funds to provide incentives for "green" businesses. Councilman John Boyle abstained in that vote, saying he didn't have enough information on the bill to make a decision.
State law allows for the creation of redevelopment agencies to help blighted areas, with a portion of property tax revenues from within the redevelopment zone set aside for bight-eradication projects. Menlo Park's oddly shaped redevelopment zone incorporates the Belle Haven neighborhood and parts of the "light industrial" zone, and extends as far west as Middlefield Road.