2 Cities Say They Are Blanketed by Blight

The neighboring Orange County cities of Stanton and Westminster are set to become the first in the state to take an old tactic to a new extreme--raising revenues by declaring virtually all of their towns “blighted” redevelopment zones.

Instead of using redevelopment to restore dying city centers, officials in Stanton and Westminster voted Wednesday night to turn their cities into redevelopment areas in an effort to keep hundreds of millions in extra tax dollars over the next 30 years. Officials in both cities say they will use most of the new revenue to rebuild roads, sewers and housing.

Westminster spokesman Mark Brewer said it was the only way his city could pay for needed improvements to its aging infrastructure without raising taxes.

“The word we got [from residents] was, ‘We don’t want to pay anything more,’ and this was the only way we could get more money,” he said.

State redevelopment experts said the two cities are the only places in the state where such huge swaths of land have been declared blighted since the law was changed in 1993 to tighten loopholes and prevent cities from putting previously undeveloped land into project areas.

Peter Detwiler, staff director of the state Senate’s Local Government Committee and a redevelopment expert, called the move laudable but wondered whether the emphasis on improving housing stock was economically sound.

“They key is, can they pencil it out?” he said. “People usually think housing is a fiscal loser that consumes more in services than it generates in municipal revenue.”

The object of most redevelopment efforts across the nation has been to entice industry and large retailers, adding sales and property tax revenue to city treasuries and creating jobs. Then most of any increase in property taxes generated by the redevelopment project goes to the city.

Local officials insist it’s a coincidence that the two cities are trying the tactic at the same time.

“Westminster and Stanton each began independently and unbeknownst to the other,” said Don Anderson, Westminster’s community development director. “It’s permitted. We’re comfortable with it. It’s not something that we see as unusual or out of the ordinary.”

Westminster officials say designating the city as a redevelopment zone will give them the money to rebuild the infrastructure over the next 30 years. “We didn’t have any [other] foreseeable way of capturing those funds,” Brewer said.

Westminster expects $606,000 in extra revenue in the first year of redevelopment and a total of $857 million over 30 years.

Stanton is projecting $144 million extra over 30 years.

Both cities also hope the improvements will attract more commercial development, which in turn will net additional taxes.

For now at least, no one seems offended at having their cities declared officially rundown.

“When you say, ‘Is it blighted?’ No,” said Stanton Councilman David Shawver. “Is it old? Yes, it is old. We’re trying to spruce ourselves up; that’s what we’re doing.”

Stanton certainly could use help. The average selling price for a home there as of March 31 was $146,601, compared with $287,055 for the county as a whole, according to the Pacific West Assn. of Realtors.

Redevelopment was intended to make it easier to transform rundown areas of a city or county. Usually a city council or board of supervisors, acting as a redevelopment agency, would buy a crazy quilt of properties and sell the land cheaply to a private owner to be developed as a shopping mall or industrial park. State law requires 20% of redevelopment funds go toward low-income housing.

“The government can use this extraordinary power to take property from some people and sell it to others,” Detwiler said. “It’s a powerful and wonderful device that has changed the way California has looked over the past half century.”

Stanton and Westminster officials have told residents they don’t intend to use the power of eminent domain to seize property, but just to garner more of any increase in property taxes, which was limited to 2% a year by Proposition 13.

Since the 1978 initiative was enacted, cities have resorted to a variety of creative ways to raise revenue, including utility fees, hotel bed taxes and redevelopment projects.

About 80% of California cities now have redevelopment agencies. Before the Legislature tightened the law in 1993, many cities declared 70% or more of their land blighted, often creating redevelopment zones out of undeveloped land and areas that weren’t rundown to begin with.