California's redevelopment dissolution a blow to Castle

The state's decision to abolish redevelopment agencies will hit several cities hard, but the county will be affected as well.

The only redevelopment agency area in the county is Castle Commerce Center, and though losing the agency won't have a big and immediate impact on development of the area, county officials think it takes away a valuable tool for growth of the site.

Redevelopment money comes from local sources and is aimed at improving infrastructure, fighting urban decay and promoting economic development. Gov. Jerry Brown has said the billions from redevelopment agencies could go to education and other services.

Mark Hendrickson, director of commerce, aviation and economic development for Merced County, said the redevelopment agency played a major role in the county's effort to privatize Castle, and losing it makes that effort more difficult.

But the county's redevelopment agency was created in 2006, so losing it doesn't carry the same fiscal impact as such a loss carries for some cities, Hendrickson said.

"Obviously, the city of Merced is going to be losing millions as a part of what's taking place here," he said. "But for us, it's more of the tools associated with the redevelopment agency that have been of benefit to us."

When Castle develops and sections are privatized, the redevelopment agency would've been used to remove blight and improve infrastructure as more property taxes rolled in, Hendrickson said. "Those types of things are going to be certainly more difficult to do here in the future because of the economic climate," he said.

Since few areas of Castle have been privatized, not much property tax revenue was coming in to the redevelopment agency fund.

Hendrickson said the property tax gross for the county's redevelopment agency in fiscal year 2010-11 was $107,500. The total for fiscal year 2009-2010 came in at $58,951.

"Obviously, as we would have continued to sell property, we would have generated additional revenues in the future from which to utilize relative to infrastructure improvements," he said.

There have also been projects undertaken at Castle for which the Board of Supervisors loaned money from the general fund with the expectation that the money would be paid back from redevelopment agency money.

Hendrickson said the loss of the redevelopment agency throws a monkey wrench into that plan, adding that he thinks the state's decision to cut redevelopment agencies is a mistake.

"From my vantage point, considering the state's economic climate, right now is not the time to be taking tools out of the tool belt," he said. "We need to be helping business grow and develop and obviously, these tools are important in that effort."

Supervisor Linn Davis, whose district includes Castle, couldn't be reached for comment Thursday.

Board of Supervisors Chairman John Pedrozo said the county will have to look to other areas now for improvements at Castle.

"It's a blow," he said. "Let's face it, it's a blow not only to the city, but it's a blow to the county because we're trying to utilize Castle and this is another knock."

Reporter Mike North can be reached at (209) 385-2453 or mnorth@mercedsunstar.com.