California Land Grab Threatens City Finances Statewide
By James Nash - Nov 13, 2013
Cerritos, the Los Angeles suburb that lays claim to having the world’s biggest auto mall, is one of 36 California cities, including Oakland and bankrupt San Bernardino, facing a state land grab that mayors say will devastate their finances.
Controller John Chiang has ordered Cerritos, a city of 50,000 about 20 miles (33 kilometers) southeast of Los Angeles, to liquidate $171 million in assets including land leased to dealers at the auto mall and a performing-arts center. The city’s redevelopment agency held the property before the state dissolved blight-fighting districts in 2011.
Chiang, a Democrat, said three dozen cities improperly took over similar assets when Governor Jerry Brown, a 75-year-old Democrat facing a budget gap, scrapped their development agencies to free about $1 billion. Cities were to sell the holdings to repay bonds for the projects and use the rest to help cover state obligations to schools, health care and public safety, according to Chiang’s website.
“This is very, very serious,” said Mayor Bruce Barrows, a 66-year-old Republican whose community depends on leases of city-owned redevelopment land for almost 10 percent of its $79 million general-fund revenue. “As soon as you take away our business model by fiat in Sacramento, our cash flow goes away.”
San Bernardino officials cited the loss of redevelopment funds as part of the reason they sought Chapter 9 protection from creditors in August 2012. Barrows said bankruptcy in Cerritos would be a “worst-case scenario” that would take a decade or more to play out.
more...
http://www.bloomberg.com/news/2013-11-13/california-land-grab-threatens-city-finances-statewide.html
= new reply since forum marked as read
