A variety of planned projects in Santa Monica could be in jeopardy as the city has been ordered to turn over $21 million in local redevelopment funds as a result of the state’s budget crisis.

The City of Santa Monica Redevelopment Agency was forced earlier this month to return the funding to the Los Angeles County Auditor, a required payment resulting from the state’s decision to raid $2.05 billion in redevelopment funds as part of the 2009-10 state budget, city officials said.

A ruling by Sacramento Superior Court Judge Lloyd Connelly this month instructed local redevelopment agencies to abide by the provisions of ABX4-26, passed last year as part of the state budget. The bill allows the state to take $2.05 billion in redevelopment funding to use for state obligations.

Santa Monica officials noted that instead of the funding going to local parks, community improvements and affordable housing, the money has been siphoned off to help pay the state’s obligations.

“Taking this funding comes at the worst possible time when other funding sources for parks, community facilities and infrastructure have dried up,” Mayor Pro-Tem Pam O’Connor said. “Moving forward on construction of these important projects would have provided a shot in the arm to the local, regional and state economy at a time when so many workers in construction and related industries are on the unemployment lines.”

The California Redevelopment Association has appealed the Superior Court ruling to the Court of Appeal.

According to city officials, the projects that have been affected by the funding turnover, and may ultimately be cancelled if state raids continue, include:

ï Palisades Garden Walk, a proposed six-acre park on Ocean Avenue and across Main Street from Santa Monica City Hall;

ï Seismic retrofitting and rehabilitation of the landmark Santa Monica Civic Auditorium;

ï A new park and related cultural facilities adjacent to the Santa Monica Civic Auditorium;

ï Shared parking facilities to serve the Santa Monica Civic Center area;

ï An early childhood education center in partnership with Santa Monica College;

ï Shared-use facilities at Santa Monica High School, including a bikeway and pedestrian promenade, tennis courts and football stadium;

ï Traffic signal synchronization on major street corridors;

ï Station area improvements associated with the Exposition Light Rail line;

ï Pathway and street improvements associated with the Exposition Line terminus;

ï A new branch library to serve the Pico Neighborhood; and

ï Investment in affordable housing, above and beyond what is required by state law.

New construction projects identified above are expected to create nearly 3,600 full-time-equivalent construction-related jobs, while identified rehabilitation projects are expected to create nearly 1,400 construction-related jobs, officials note.

California Redevelopment Association Executive Director John Shirey has vowed to fight the Superior Court ruling and says he is confident that the decision will be overturned by the appellate court.

“We strongly disagree with Judge Connelly’s ruling which effectively says the Legislature has unlimited discretion to redirect local redevelopment funds to any purpose it wishes. Under that logic any state program could be called redevelopment,” Shirey said. “The Legislature needs to deal with its budget problems by making hard decisions using its own limited resources, not by taking away local government funds.

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