Happy Friday, everyone. Yesterday was a busy day for sustainable development advocates as a flurry of initiatives and budget proposals were released that could have a significant impact, especially in Stockton. At the federal level, a new initiative to help struggling cities was announced, while new proposals in California spell out how funding may be used to affect growth and development in the state.
President Obama announces “Promise Zones”
Yesterday, President Obama announced the first five cities of the administration’s new “Promise Zones” initiative aimed at helping economically depressed areas navigate red tape to fully leverage federal funding. These five areas include sections of Los Angeles, Philadelphia, San Antonio as well as portions of Kentucky and Oklahoma. Each of these cities submitted an economic revitalization plan, and the administration chose cities where the poverty level was at least 20%. Eventually, the administration wants to extend these Promise Zone designations to 20 cities or regions overall in the next three years.
This new initiative was most likely born out of the administration’s Strong Cities, Strong Communities (SC2) Network, which helped cities by providing resources—such as executive agency experts—to help cities win competitive grant money. Cities such as New Orleans, Youngstown and even Fresno were part of this program, with Fresno’s assistance directly leading to a $16 million TIGER grant from the Department of Transportation to reopen the Fulton Mall area of their downtown. Based on the President’s comments yesterday, it looks like the Promise Zone designation will be similar, providing both technical assistance and giving preferential consideration for 25 federal grant programs. Promise Zone areas would also benefit from tax incentives to lure businesses.
Nearly one year ago in 2013, President Obama dedicated a portion of his State of the Union address to announce a new initiative targeting “the 20 hardest hit communities” in the country. Representatives in Stockton seized on that announcement, calling for the White House to include our region. Congressman Jerry McNerney penned a personal letter to the administration. Hopefully, Stockton can make a case for why it deserves to be included in this new round of aid.
Governor Brown releases 2014 budget proposal
Here in California, Governor Jerry Brown put forth his budget for the year, with much of it having big implications for development in the state, and especially in the Central Valley. Here are some of the highlights
– Cap and Trade revenue to fund high-speed rail
As expected, part of the Governor’s proposal included $250 million in funds for high speed rail from the state’s Cap and Trade revenue. As you may have heard, the state’s high speed rail plan has come under financial difficulties after a judge blocked funding approved by voters in Proposition 1A. By tapping Cap and Trade funds, the plan can move ahead as scheduled while the high speed rail authority sorts out their legal issues. As Stockton is slated for its own high speed rail stop (albeit not for a very long time), the project’s completion is of great importance to the city as greater connectedness to the rest of the state will spur more economic growth.
– Other Cap and Trade funding
Brown’s proposal for Cap and Trade funds also includes $50 million for competitive Caltrans grants and $100 million for Sustainable Community Strategies. In theory, these two sources could be tapped for expanding ACE train service and transit oriented and infill development.
The Cap and Trade program also stipulates that 25% of revenue must be used in low-income neighborhoods with poor health outcomes. As defined by the state EPA, most of central and south Stockton (and the Central Valley in general) falls into this category. These funds may be used for projects such as bike lanes and complete streets to promote walking and biking with the goal of improving health outcomes.
– Redevelopment agencies
While the Governor has not been receptive to legislation reauthorizing redevelopment agencies, his proposal yesterday offered somewhat of a compromise. Brown proposed expanding the use of Infrastructure Financing Districts (IFD), a seldom-used entity that has Tax Increment Financing (TIF) authority to fund infrastructure improvements. Traditionally, a two-thirds vote by the public is necessary to authorize an IFD, but Brown’s proposal lowers that threshold to 55% and expands the usage of IFD to include urban infill development, much like redevelopment agencies used to do. However, the expansion of IFDs is tied to the termination of all outstanding redevelopment agency issues, such as lawsuits.
While it’s nice to see Brown offering alternatives, the redevelopment agency bill passed last year—but ultimately tabled by Senate President Darrell Steinberg over concerns of a Brown veto— is a much better solution. Steinberg’s proposal would link redevelopment agencies to a region’s Sustainable Communities Strategy, specifically funding transit-oriented development. Brown’s new IFD, on the other hand, does not require an area to be blighted nor tied to transportation, which could allow agencies to use TIF funds for reckless, green-field projects once again.