Press Release | City of San Diego

SAN DIEGO – Hank Cunningham, Assistant Executive Director of the San Diego Redevelopment Agency, has been appointed to the Board of Directors for the California Redevelopment Association (CRA), it was announced today. As a Board member, Cunningham will be directly involved in shaping statewide redevelopment policy.

Redevelopment in San Diego is best known for downtown projects like Horton Plaza, Gaslamp Quarter, and – most controversially – the Ballpark now underway after several lawsuits delayed construction. Downtown redevelopment projects are managed by the Centre City Development Corporation (CCDC), a nonprofit entity set up and wholly owned by the City of San Diego.

However, San Diego’s redevelopment efforts are far broader than just downtown. The San Diego Redevelopment Agency is responsible for 15 redevelopment project areas encompassing over 8,000 acres. Redevelopment agencies are set up under the California Community Redevelopment Law to eliminate physical and economic blight through the expansion of the local tax base. Agencies may assemble land in project areas, convey the land at a negotiated price for re-use, and return the increased tax revenues earned on new projects back to the project area through a financing mechanism called “tax increment financing.” The California Redevelopment Law requires that 20 percent of tax increment be set-aside for development of affordable housing.

Besides the two downtown project areas, San Diego’s Agency – the Board of which consists of the City Council – administers four project areas in the southeastern part of San Diego through the Southeastern Economic Development Corporation, also a City-owned nonprofit corporation, and nine project areas in other parts of San Diego through the City’s Community and Economic Development Department. Some of the Agency’s other well-known projects include the Naval Training Center (now called Liberty Station), the City Heights Urban Village, Las Americas in San Ysidro, and the Gateway Center East Industrial Park, among several others.

The San Diego Redevelopment Agency’s Executive Director is City Manager Michael Uberuaga. As Assistant Executive Director, Cunningham has day-to-day administrative responsibility for the Agency.

Statewide, there are over 350 redevelopment agencies managing 800 project areas, responsible for nearly five billion dollars in project revenues. Said Cunningham, “As a member of the CRA Board of Directors, I will be directly involved in working with the California legislature and the Governor’s office to represent the interests of these public agencies charged with the responsibilities of community revitalization and affordable housing development.

Cunningham assumes this role just as the State of California is facing its most difficult budget crisis in a decade. According to the California Budget Analyst, the State is facing a projected 18-month budget deficit of $34.8 billion. Last year, the State transferred $75 million from the redevelopment agencies around the California. One of the Governor’s proposals to help close the budget gap next year is to transfer unencumbered statewide redevelopment housing funds to the State budget, an amount estimated at $500 million.

“CRA certainly appreciates the State’s difficult budget situation,” according to Cunningham. “However, we believe that transferring funds dedicated to affordable housing development is not the right policy.” Cunningham notes that affordable housing funds generally must accumulate unencumbered in order to secure other housing funds or to issue redevelopment bonds.

Cunningham said that San Diego, along with most of California, faces an affordable housing crisis that, for most residents, is more immediately threatening than the State’s budget deficit. “Last August, the San Diego City Council declared a state of emergency due to the severe shortage of affordable housing, and the Redevelopment Agency authorized the issuance of $55 million in bonds to finance affordable housing development. If our redevelopment housing set-aside funds are transferred to the State, then we will lose this opportunity to build thousands of new affordable units for San Diegans,” explained Cunningham.

Cunningham estimates that all of the San Diego Agency’s housing funds total about $18 million, of which somewhat more than $11 million is committed to projects. The difference – the unencumbered amount – would be used along with future affordable housing funds to repay the bonds.

Cunningham said he did not seek CRA Board membership anticipating the State’s budget woes. “However, the budget crisis has certainly focused CRA’s policy agenda. We need to show the Assembly that successful implementation of redevelopment expands the tax base, thus contributing to the State’s long-term financial stability.” Cunningham adds that the City of San Diego, along with CRA, have legislative proposals to expand the redevelopment law’s application to further help address the housing crisis and the ability to finance public infrastructure.

“Redevelopment is part of the solution to the State’s budget situation,” Cunningham proposes. “However, to be part of the solution, it must be applied consistently over several years.” He notes that CCDC’s efforts to redevelop San Diego’s downtown have taken 25 years to reach their current level of success.

“San Diego is a national model for how to do redevelopment. We should build on that success rather than undermine it.”

The City of San Diego Redevelopment Agency eliminates blight from designated areas, as well as achieves the goals of development, reconstruction and rehabilitation of residential, commercial, industrial, and retail districts. Redevelopment is one of the most effective ways to breathe new life into deteriorated areas plagued by social, physical, environmental or economic conditions that act as a barrier to new investment by private enterprise. The City of San Diego Redevelopment Agencyconsists of three divisions: the City Redevelopment Division (which provides overall agency management and is housed in the City of San Diego Communityand Economic Development Department), the Centre City Development Corporation and the Southeastern Economic Development Corporation.