In a decision that will reverberate throughout the state, the California Supreme Court upheld a law Thursday that and struck down a law that allowed the agencies to pay to stay in operation.
The ruling in California Redevelopment Association v. Matosantos clears the way for the state to dismantle redevelopment agencies and use their assets to fund education programs. The CRA contended that the state did not have the authority to eliminate redevelopment agencies, but the court disagreed.
"[The state's] power includes the authority to create entities, such as redevelopment agencies, to carry out the state's ends and the corollary power to dissolve those same entities when the legislature deems it necessary and proper," the court's ruling reads.
Monrovia passed a earlier this year that allowed it to make a $1.2 million payment to the state to stay in operation, but the law allowing such ordinances was invalidated by the court Thursday.
A forlorn Mayor Mary Ann Lutz said Thursday that the city is scrambling to figure out what the decision will mean for Monrovia and the future of the Gold Line Foothill Extension.
"On the face of it, it looks like we're out of business," Lutz said. "At this point it just looks like bad news all the way around."
Interim City Manager Mark Alvarado had a lot to digest in his first day on the job Thursday. Alvarado called the decision "a blow to all redevelopment agencies."
Under the law upheld by the court, the agencies must turn over their assets to an that will decide on how that money is doled out. The city already moved to shield $40 million in assets earlier this year by transferring them from the Monrovia Redevelopment Agency (MRA) to the city.
The court's decision has major implications for the for use in a critical maintenance yard project. The MRA entered into that deal, but since it is now dissolved, Alvarado said the city will pursue special legislation in Sacramento that would allow the transaction to be executed.
"[Special legislation] would still allow the agency to basically consummate the deal. We would just show the state, this is what we have lined up...all we're looking for is just a finalized transaction," Alvarado said.
Since the deal would allow a regional project like the Foothill Extension to progress, the state may be more agreeable to allowing it, Alvarado said.
"Because this is a deal that is not just for Monrovia...it's something that we feel is very important to all the transportation needs in the area," he said.
In a written statement, the CRA and League of California Cities vowed to fight on and called for their own special legislation that would re-establish redevelopment in California.
"Without immediate legislative action to fix this adverse decision, this ruling is a tremendous blow to local job creation and economic advancement," wrote CRA Board President Julio Fuentes in the statement. "The legislative record is abundantly clear that legislators did not intend to abolish redevelopment. We hope to work with state lawmakers to come up with a way to restore redevelopment."