F.V. projects on hold after redevelopment ruling

For years, Fountain Valley has planned to spruce up the section around the San Diego (405) Freeway near the Santa Ana River, adding a hotel, retailers and more to catch the eye of commuters and bring jobs to town.

Now, like hundreds of other cities statewide, it’s had to put its plans on hold.

The state Supreme Court abolished city redevelopment agencies in December, leaving Fountain Valley, which has had its own agency since 1975, without the resources to complete many of its projects planned for the next few years.

Fountain Valley’s redevelopment agency, like others, became defunct Wednesday.

Redevelopment agencies use a portion of property tax revenue to partner with developers to encourage development in blighted areas. The court’s ruling put more than 400 agencies out of business in an effort to fill a hole in the budget.

Fountain Valley’s redevelopment agency has one active redevelopment zone, a 498-acre stretch along the Santa Ana River and mostly north of the 405 Freeway. In recent years, the agency has funded an expansion of Mile Square Regional Park, homebuyer programs and street improvements, among other things.

Some projects that were funded by redevelopment have outstanding debt, while others haven’t started construction but have contracts in place. Those expenses will be paid for with tax revenues created by increased evaluation of the city’s redevelopment areas, Planning and Building Director Andy Perea said.

But projects that have not started construction and do not have contracts or outstanding bonds will be abandoned for the time being. One of those projects was an affordable housing area near Fountain Valley Regional Hospital, which Perea said would cut down on travel time for medical workers.

“Instead of having to travel 45 miles, you’re essentially in the same parking lot as your workplace,” he said.

Despite its list of discontinued projects, Fountain Valley will likely take a smaller financial hit than many larger peers. The Los Angeles Times recently reported, for example, that Los Angeles may have to shell out $109 million if it opts to finish its redevelopment programs and keep 192 employees on staff.

By contrast, City Manager Raymond Kromer said, Fountain Valley has no staff members whose jobs revolve solely around redevelopment. In addition, the city’s financial burden will likely be between $800,000 and $1.4 million to cover administrative expenses and other lingering costs.

That expense could be covered in whole or part by the city’s $1.3-million budget surplus last year, Kromer said.

michael.miller@latimes.com

Twitter: @MichaelMillerHB