The San Jose Redevelopment Agency, once one of the largest in the state, is about to lay off twelve of the 78 employees it has left. Executive Director Harry Mavrogenes warns that more layoffs are down the road this coming year, and the Agency may be forced to let half of its remaining staff go.
The RDA is confronted with multiple challenges, all tied to the recession and the state budget deficit. Its revenue is largely derived from property taxes, and as these taxes plummet, so do revenues. Furthermore, its own properties have plunged in assessed value by as much as $1.6 billion. The Agency was also required to pay $62 million to the state as part of the Legislatures seizure of local redevelopment agency funds, and it will have to cough up another $13 million in May. In addition, the RDA traditionally pays San Jose’s share of social service costs to the county, amounting to another $60 million dollars for 2009-2011. Meanwhile, its own revenue expectations proved wrong. It had originally expected them to be flat for 2010-2011, and then revised them to a drop of 3.5 percent. The actual drop was almost twice that: 7.9 percent.
The drop in available funds not only affects RDA employees. It could also impact major projects under the RDA’s auspices. These include the proposed baseball stadium and the Convention Center renovation. While Mavrogenes denied that financial difficulties would affect the stadium, he said nothing about how it might affect the Convention Center.
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