City may get say in $900,000 for affordable housing

City Council says it must stay in the game
By: Sara Seyydin Journal Staff Writer
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Auburn city officials are holding out hope that the city will have some say over how more than $900,000 of funds that were set aside for affordable housing will be spent. They will further discuss the matter at Monday’s meeting. On Jan. 9 City Council voted to become the successor agency to the Auburn Urban Development Authority, after city staff flip-flopped on their recommendation to City Council. City Council members say the decision to follow the staff’s recommendation will allow for more local control should any of the money from the agency become available through new legislation. Auburn Mayor Keith Nesbitt said there are still a lot of unknowns, but it is important for the city to be the successor agency. “We caught wind that at some point the legislature may change the rules again and maybe sometime in the not too distant future they will establish some different thing for redevelopment,” Nesbitt said. “With there being any possibility of us re-establishing a redevelopment agency you have to remain in the game. You don’t get to restart a redevelopment agency.” The Auburn Urban Development Authority was Auburn’s redevelopment agency. It was dissolved by the legislature through Assembly Bill AB 1X26, along with all of the others in the state, in a decision that was upheld in the California Supreme Court last month. Under the direction of an oversight board, successor agencies have the responsibility of paying off the remaining contracts for the agency and seeing to its closure. “With remaining a successor agency there is an oversight board. We’d lobby heavily so that we have a pretty strong voice in that,” Nesbitt said. “Part of what the oversight board will be doing will be deciding on some of the housing funding.” Nesbitt said $400,000 of the $900,000 was committed to pay for the Mercy Housing Project, but since the funds weren’t under contract they will go back to the county eventually. “If we have a strong voice on the oversight committee, we’ll have a strong voice on how that money will be spent,” Nesbitt said. Auburn City Manager Bob Richardson said Senate Bill SB 659 is being proposed at the Capitol. If it is passed, it will extend the dissolution date for redevelopment agencies to April 15. “The original legislation left quite a number of question marks, as did the court decision. In order for such a large change to occur there has to be a clear legal roadmap for redevelopment agencies,” Richardson said. At the next City Council meeting, scheduled for Jan. 23, the council will also decide whether or not the city will become the successor agency to affordable housing, such as the Mercy Housing Project. Richardson said another possible piece of legislation would allow funds delegated for those projects to stay with the successor agency. If that legislation does not pass, he said the Mercy Housing Project will probably still move forward. “We have been told that it would go forward,” Richardson said. Upon legal review, Richardson said the legal risk for the City of Auburn becoming a successor agency was eliminated and it is the only way to benefit from future legislation that may resurrect the agencies in some form. Council Member and Mayor Pro-Tem Kevin Hanley said any use of the funding for affordable housing depends on future legislation. He voted in favor of becoming a successor agency because it won’t cost the city any additional revenue and will allow for local control. Auburn’s redevelopment was done right, he said, because it created jobs and infrastructure, while banning the use of imminent domain. “As long as we are in the game we can at least try our best to convince the state that this is a good job and value producing mechanism,” Hanley said. “I think this whole thing was a bad move when we have high unemployment. If the state wants to create jobs they should bring back redevelopment and bring it back like Lazareth.” Reach Sara Seyydin at