Friday notes: New Obama, Brown proposals could affect development in Stockton

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.

Will Barack Obama's administration be sending help to Stockton?

Will Barack Obama’s administration send help to Stockton?

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.

Governor Jerry Brown's decisions are increasingly more anti-city

Governor Jerry Brown’s budget offers funding for rail projects

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.

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Categories: Community Commentary, Transportation

Author:David A. Garcia

David A. Garcia founded SCL in March of 2012. He holds degrees from UCLA as well as Johns Hopkins University and currently works as the Chief Operating Officer at Ten Space in Downtown Stockton, and previously worked as a researcher/analyst for a congressional agency in Washington DC. The views expressed here are solely of the author.

2 Comments on “Friday notes: New Obama, Brown proposals could affect development in Stockton”

  1. Jon Seisa
    January 10, 2014 at 9:12 pm #

    Frankly, waiting for more empty ‘promises’ and one isolated and limited singular Fed ‘Obama Handout’ will scarcely garner the most economic synergy in (re)development and economic transformation that the region desperately needs, and QUICK. Stockton needs to take the initiative like White Flint, Maryland, and use “value capture financing” to transform Stockton’s urban and transit dynamics, and quantum leap itself into the future. This can be done without one dime from the Feds and the tonnages of draconian paperwork and subsequent additive millions in over budget costs due to time-dragging bureaucratic red-tape procedures, despite ‘promises’ to ‘change’.

    ARTICLE: How Value Capture Financing Will Revitalize White Flint – by Tanya Snyder

    http://dc.streetsblog.org/2011/10/20/how-value-capture-financing-will-revitalize-white-flint/

    LEARN MORE: Value Capture – Reconnecting America
    http://www.reconnectingamerica.org/resource-center/value-capture/

  2. David Garcia
    January 14, 2014 at 5:42 pm #

    To be fair, the Promise Zones provide assistance through several programs, not just one. These federal programs should not be regarded as a hand out: they are highly competitive and are responsible for hundreds of great projects across the country that promote transportation infrastructure and walkability where other funds are simply not available. For example, a TIGER grant could bring millions of dollars to jump start high-speed rail connections to the Bay Area, and therefore any special consideration would be most welcome as these grants are highly competitive. A high-speed hub here would create that economic synergy and transformation you speak of, I believe.

    Value capture is a good idea. However, for more established corridors, it makes the most since. In Stockton, it’s harder to prove to a developer or land owner that X improvements will lead directly to a precise increase in property values. There first needs to be other development to show the private sector just how valuable investing in Stockton can be, but this is kind of the chicken or the egg question, which one actually happens first?

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