Sen. Block secures at least $65 million repayment for San Diego in redevelopment loan ‘cleanup’

SACRAMENTO – State Senator Marty Block (D-39) announced today that under Senate Bill 107, the City of San Diego will receive at least $65 million as a repayment owed from a loan to its former local redevelopment agency which was made with funds from the city’s U.S. Department of Housing and Urban Development Community Development Block Grant funds.

Block, a member of the Senate Budget Committee, withheld his vote on earlier versions of the bill that would have hurt San Diego. In response, the Department of Finance made significant concessions.

SB 107, the redevelopment cleanup bill, now contains language authorizing repayment of the loan to the city in full.

Block worked with state and local officials to secure the repayment through SB 107 which creates new administrative cost allowances for successor agencies from California’s Redevelopment Property Trust Fund. “I was thrilled to see that our efforts paid off for America’s finest city,” he said. “The collaboration and relationships resulted in a solid win for San Diego.”

SB 107, a Senate budget committee measure, clarifies that agreements negotiated between the federal government, cities and former redevelopment agencies are enforceable obligations within the redevelopment dissolution law.

In 2010, the City and the former redevelopment agency entered into a settlement agreement with the federal Housing and Urban Development Department regarding Community Development Block Grant funds. Under the agreement, the redevelopment agency agreed to repay San Diego $79 million over a 10-year period. The City, in turn, was to use all the repayment funds for activities allowed by the federal grant. However, after the agreement, the state withdrew from redevelopment funding and it invalidated the repayment agreement to San Diego and other cities. SB 107 reinstates the agreement and allows repayment of the loan still owed under the 2010 agreement.