The will close indefinitely next summer, and next-door at Santa Monica High School, major renovations will be suspended if the state moves as predicted to halt former redevelopment projects, the Santa Monica City Council decided Tuesday.
It was called a "disappointing" and "difficult" decision made in response to a new California law that guides the dissolution of redevelopment agencies across the state.
"We’re trying to make the best of less money, with two major exceptions," said Mayor Richard Bloom.
A funded by the former redevelopment agency were supposed to temporarily shutter The Civic starting June 2013 before a grand reopening two years later, but $51.9 million in funds to cover the renovations are now at risk under a budget trailer bill, Assembly Bill 1484.
And, with , there's not enough money to keep the doors open either. Andy Agle, Santa Monica's Director of Housing and Economic Development, said The Civic was already a drain on city coffers.
"I don’t know we can recommend in good conscious to keep open a facility in need of seismic retrofits," he said.
Recognizing, however, the auditorium's place in local history, Agle promised to convene a study session in the fall to look at ways to switch the lights on again. The venue once hosted the Academy Awards and famous rock 'n' rollers, and is now mostly a space for trade shows and expos.
Agle warned that any solution to reopen The Civic would likely take several years to implement
Still, Bloom said he was hanging onto a "significant level of hope" that the city could keep The Civic open and pick back up construction at Samohi.
Redevelopment agencies were killed off by the state earlier this year. Although they were allowed to finish projects they started, they were not allowed to start any new ones. As the so-called successor agency of Santa Monica's redevelopment agency, the City Council is responsible for carrying out its projects and debt payments.
The contingency plan adopted Tuesday will go into effect if the state blocks Santa Monica from using some $96 million of bonds and bank loans secured last year to fund projects initiated by redevelopment.
The state Department of Finance could also seize money in the city's General Fund earmarked for projects that are already under contract with architects and construction companies but whose loan agreements were signed after the state budget was signed June 27.
The bill requires each successor agency to hire an accountant to conduct "due diligence" reviews to find any money that can be transferred to the state and other taxing entities, such as counties and schools. The review will identify the execution dates of various contracts, setting the stage for the Department of Finance to challenge the validity of several Santa Monica projects, according to city staffers.
"I think it’s likely that the Department of Finance is going to try to get every penny," City Manager Rod Gould told the City Council.
Under the contingency plan, the council is also suspending plans to continue purchasing and installing environmentally friendly manufactured trailers at Mountain View Mobile Home Park.
However, it is planning to move forward to build a , the and Town Square, and the .
No "projects are by any means safe," Gould said. "We will have to look at other means to fund them."
Councilman Robert Holbrook estimated the projects will cost "way over $100 million."
Redevelopment had helped breathed new life into Santa Monica, most recently with the construction of new parking downtown parking structures and .
California's current budget relies on $3.1 billion in revenues from former redevelopment assets and property tax dollars that would have otherwise flowed to redevelopment agencies had the state not shuttered them, according to the Sacramento Bee.
Redevelopment agencies were funded by the increase in tax revenues generated by projects in their areas, called tax "increment." The agencies used the increment to invest in additional projects mainly in downtrodden areas of cities. (In the 2009-10 fiscal year, Santa Monica's redevelopment agency generated $73.5 million in tax increment.)
While redevelopment generated money off the increased tax revenues, other agencies that typically receive a share of property taxes, such as school districts, did not. Without the revenues, the state government had been forced to pay the difference.