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Oakland’s woes with state over redevelopment funds: a bit exaggerated in the Chronicle?

Wednesday, May 16, 2012

Coliseum CityMuch ado has been made lately in the Chronicle over state Controller John Chiang’s warning letter to Oakland that the city may have to repay $30 million in redevelopment funds to the state. That would be in connection with Oakland’s deadline-beater for redevelopment expenditures involving the Henry J. Kaiser Convention Center and the proposed Coliseum City project—before the state outlawed redevelopment agencies. The clear inference: that Chiang’s warning letter is a blow to Oakland’s efforts to woo the A’s and Warriors to stay in town. Robert Gammon at East Bay Express has obtained a copy of the letter and guess what? He says it doesn’t appear to be nearly as draconian as inferred by the Chron’s Matier & Ross in this column or this one.

Add: Gammon says the letter doesn’t mention the Kaiser deal or any other, doesn’t demand any money from Oakland, and, in fact, is merely a form letter sent to cities and counties throughout the state. An excerpt:

Chiang’s letter, dated April 20, begins: “Dear City, County, or Public Agency.” It goes on to say that the Controller’s Office plans to “review and audit cities, counties, and public agencies” in the coming weeks to determine whether they should have to pay the state any money for redevelopment deals made after January 1, 2011. Chiang ends his letter by stating: “If you have any question as to whether a particular asset must be returned, you should place such assets into a reserve pending our review.”

In Oakland’s case, the city council last year effectively did just that, placing far more than $30 million or so in question from redevelopment deals into the city’s reserve fund. In fact, the City of Oakland’s reserve fund is flush with cash. As a result, the city will have no trouble paying the state $30 million — if Chiang ultimately decides it must, which he has not yet done.

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