Neighborhoods around rail stations may get funds; state mulls bill to cite these areas for redevelopment.

A bill making its way through the state Legislature would designate all land within a one-quarter mile radius of a rail transit station in California eligible for government funding of development projects.

Under the Transit Village Development Act, Assembly Bill 3152, redevelopment project areas could be established around transit stations, regardless of whether a given area is "blighted."

Because of opposition from foes of redevelopment agencies, the bill was amended last month by its author to remove a provision allowing property tax "increment" financing for redevelopment in the new transit "villages," said Judy DeVries, aide to Assemblyman Tom Bates, D-Oakland.

But DeVries said tax increment financing will probably be put back into the bill soon, as no other feasible method of financing the redevelopment has been discovered.

"This bill has generated lots of discussion and debate," DeVries noted. "There's some negative feelings about redevelopment around the state."

Tax increment is the increase in property taxes collected in a given area after a redevelopment project area is designated as such, and it is used by community redevelopment agencies to fund redevelopment.

In order to receive project area designation under existing state law, an area must be proven to suffer from economic blight. Under the new bill, mere proximity to a transit station would qualify an area for redevelopment district designation.

"Assemblyman Bates wanted to get out this concept of the transit village, (but) we were spending all our time defending ourselves against redevelopment (foes)," explained DeVries. "It (the bill) was amended to be sent over to the Assembly Local Government Committee. It will be heard in Local Government on May 11.

"The input so far tends to lead us back to hooking back to tax increment, back to redevelopment. ... What we're trying for is something everyone can agree on -- cities, counties, redevelopment agencies, transit authorities."

One possibility, DeVries said, would be negotiating a "pass through" to state and local governments of some of the tax increment to which the villages would be entitled under redevelopment law.

The current amended version of the bill states that redevelopment in the transit villages would be funded using "available funding for innovative federal transit and land use programs in California in which the state has discretionary authority."

DeVries said there is "very little" such money available, although she couldn't come up with a specific amount.

The amended bill is unclear regarding who would administer redevelopment in the new villages. DeVries said Bates probably will amend the bill to allow redevelopment in transit villages to be administered by existing redevelopment agencies or, where redevelopment agencies do not yet exist, by city councils and/or county boards of supervisors.

"We don't want to create a new bureaucracy," she said.

Don Lippman, an anti-redevelopment activist in Hollywood, said foes of the Los Angeles Community Redevelopment Agency oppose Bates' bill because they fear it will "extend the power" of the CRA. Those who oppose the L.A. CRA label it as a corrupt bureaucracy that wastes tax revenue.

So far, the only group DeVries could name that is backing Bates' bill is the Sierra Club.

Redevelopment agencies and transit authorities are watching the legislation, but some transit officials are a bit skeptical because they don't want to compete with the new villages for federal funding, DeVries said.

The L.A. CRA Board of Commissioners has yet to take a position on the bill, which would come in the form of a recommendation to the L.A. City Council on whether to support or oppose it.

"The version (of the bill) we have now, since it doesn't involve us, we can't take a position. If they amend it again, that's different," said CRA spokesman Mark Littman. However, he noted that CRA/city-adopted plans favor development centered around transit stations.