The towns of Monterey County have no shortage of development projects in the works. There’s just one problem: One of their key funding sources could be sucked dry by the state in the very near future.


“Pay up or die” is how Salinas Redevelopment Director Alan Stumpf describes two pieces of redevelopment legislation, Assembly Bills 26 1X and 27 1X, signed into law June 29 by Gov. Jerry Brown as part of the state’s 2011-2012 budget. 


The former dissolves existing city and county redevelopment agencies, which bankroll major infrastructure projects through state funding and property tax revenue. The latter allows individual agencies to continue operating if they pay remissions – or “ransom,” as Stumpf calls it – to school districts. 


Statewide, the redevelopment ransom amounts to $1.7 billion in the coming fiscal year, and Salinas alone would have to cough up nearly $2 million. Not surprisingly, local agencies are bracing for the worst.


“We’re scrubbing our numbers,” says Jim Cook, director of the Monterey County Office of Economic Opportunity. “We need contingency plans so we can respond to the state and potential legal action.”


That legal action is being led by the League of California Cities and a coalition with the slogan “Redevelopment: Mend It, Don’t End It” that encompasses scores of cities, including Gonzales, Salinas and Watsonville.


The coalition alleges the Legislature’s elimination of redevelopment agencies is a raid on city coffers, and thus a violation of Proposition 22, which voters passed last November to prevent the state from seizing local funds.


Numerous county leaders agree, including Mayors Dennis Donohue of Salinas and Chuck Della Sala of Monterey, and City Manager Ray Corpuz of Seaside.


“This [legislation] will eliminate all of our city redevelopment jobs, and it will affect our general fund to the tune of $1.5 million,” Corpuz says. “We’ll lose 10 to 15 additional city positions, not to mention construction jobs. It’s just devastating.”


Seaside and its northern neighbor, Marina, both have significant swaths of blight within their borders, in the form of the former Fort Ord. The cities’ long-range plans to redevelop the shuttered Army base are now in jeopardy.


“Elimination of the Marina Redevelopment Agency will virtually assure that the economic redevelopment of this blighted military base will cease,” Marina Mayor Bruce Delgado wrote in a June 17 statement. “As a result, we may have no other option but to cease existing.”


The picture’s not quite so bleak in Monterey and Salinas, but both cities have cornerstone developments underway that rely on low-interest loans and property tax revenue made possible by redevelopment agencies. Stumpf says Salinas may have no choice but to stop the East Alisal street improvement project midstream, while Della Sala says 10 new units of affordable housing near Monterey’s downtown are now up in the air.


“To say I’m outraged by this situation is an understatement,” Della Sala says. 


For now, he and everyone else will have to sit back, simmer, and wait for the state Supreme Court to lay down the law.


That includes Assemblyman Luis Alejo (D-Watsonville), whose AB 1250 would have helped save redevelopment agencies.


“I’m disappointed in the governor’s signature on eliminating redevelopment,” he says. “My focus now will be to continue fighting for California jobs.”