14 April 2005

Diridon South update - KRON

KRON-4 profiled the Diridon South site on their 5 p.m. newscast earlier this evening. There is a news story and a video clip on that same page.

Important in the story is the following:

But the head of the redevelopment agency says that's simply not true because the money to purchase the 14-acre site is coming from the sale of several properties already owned by the city.

"In the last year, we have spent $20 million on neighborhoods, Mavrogenes said. "We have another $34 million this year and another $20 million next year, so this will not affect that at all."

I'm somewhat skeptical of this, but I suppose it's possible.

San Jose pursues ballpark site, other neighborhoods left out in the cold?

Barry Witt of the Merc writes that on Tuesday, San Jose mayor Ron Gonzales and the City Council held a closed-door session to approve the Redevelopment Agency's pursuit of the 13.9-acre Diridon South site, which has 10 separate property owners. This has leaders in other San Jose neighborhoods worried that funds used to purchase the properties, valued at $20-40 million, will be diverted from their projects.

Where does this money come from, you ask? SJRA has a large pool of money available to them tax increment funds, loans, and other sources. Most of this is reserved for other projects, but there's always some unreserved portion remaining. The unreserved portion usually gets allocated as well, but sometimes it's left to accrue interest.

The kicker is that analysts projected a $25 million operating surplus for SJRA in its five-year plan (2004-05 to 2008-09). A proposal had that surplus go into a Priority Future Projects list, on which such projects could be acted upon in the first two years of a revised budget, but it could just as easily be used for a ballpark site, since SJRA doesn't require any major discussions or hearings to change how unreserved funds are spent.

The mayor and city council argue that SJRA's budget will be big enough to handle all consituents' concerns, but if the price tag on Diridon South escalates to near the $40 million mark, SJRA might have a tough time figuring out where the rest of the money comes from. It's not expected that any funds would be diverted or extra loans taken out to secure the site, but it's not out of the realm of possibility.

The other question to ask is "Why doesn't SJRA send this money back into the general fund to offset the budget shortfall?" A good question that has a very simple answer - they don't have to.