Settle state funding lawsuit

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Gov. Gavin Newsom, let’s make a deal.

Petaluma has been trying to reclaim some of its former redevelopment money, which the state seized after redevelopment agencies were abolished amid California’s budget crisis.

Now, California has a new crisis, a lack of affordable housing, and a deal could help Petaluma chip away at the need.

Courts have repeatedly ruled against Petaluma in the city’s attempt to get the $8.7 million it says it lost. The city now plans to ask the state Supreme Court to hear the case. But, in a parallel move, the city is planning on sending a letter to the governor asking to settle the suit for $2 million.

In the proposal, the state would keep $6 million, and the $2.7 million Petaluma would get would go toward affordable housing. Specifically, it could go to PEP Housing’s planned 54-unit low income senior apartment complex on Petaluma Boulevard South. The project has all of the approvals, but it is stalled because of a lack of funding.

While we are deal making with the governor, how about reinstating some form of redevelopment in the near future? The mechanism that allows cities to keep a greater percentage of property tax has been used by many jurisdictions, including Petaluma, to build affordable housing projects. Since the loss of redevelopment, the city has virtually no tools to attract these type of projects.

Now that the state has a $16 billion budget surplus, it should be time to restart the redevelopment program. Bringing back redevelopment is perhaps the topic of a future debate, but we hope it’s one that the state pursues.

In the meantime, let’s finally settle Petaluma’s redevelopment funding case. The city is only asking for a quarter of the money it lost, and it would avoid drawing out an already lengthy case to the highest court.

It doesn’t look great for a state with a record budget surplus to be seen as taking money from a city that could use it for much needed housing, especially at a time when the state is trying to get housing built and taking away local controls over such projects.

Petaluma could use the money right away to build affordable housing. That would be a good deal for all.

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