The state stopped funding over 400 redevelopment agencies in 2009 by passing AB4X26, including The Winters Community Development Agency, an entity that enabled the city to build affordable housing and make well-known improvements downtown to breathe life into the city’s economy through tourism.
Cut off from the resource, and still feeling the effects of the 2008 recession, the city has had to get creative with solutions to keep momentum on development going, dodging obstacles in repaying debt from the dissolved development agency and property owners who value their land over development.
“As far as the state budget, the whole picture for the state was pretty dire,” says City Manager John Donlevy about AB4X26.
He explains that redevelopment money came from tax increment funds. Once the state decided to allocate money toward redevelopment, it would collect property taxes from that year’s assessed value. Every year after that, the taxes on any increase in property value would essentially go toward redevelopment.
The state decided to take back those extra funds and put them toward public education with AB4X26. The state set in motion a process to dissolve redevelopment agencies, but many still had the financial obligation of bonds to repay, so they had to live on as successor agencies until those debts are paid.
The successor agency for the Winters Community Development Agency is the city council, which makes decisions about repaying redevelopment under supervision from an oversight board, which includes a community member and representatives from the county, city council, city staff, Solano Community College board, cemetery district and school district.
“It will exist until the bonds are repaid — another 20 years,” says Shelly Gunby, director of financial management for the city.
“The old agency funded affordable housing including Winters I, Winters II, Orchard Village, Almondwood Apartments, and the upcoming senior housing DOMUS project. It was our number one financing source for affordable housing,” says Donlevy.
The city was required to use at least 20 percent of the redevelopment funds for affordable housing, and the rest went toward revitalizing the downtown area, the trestle bridge renovation, improvements at the Community Center and the construction of the Public Safety Facility.
Donlevy’s vision was to lay the foundation for economic development in the city by creating an infrastructure that could support more businesses, and more people to fill them. Now that the city has an expanded police and fire presence and many structural elements have been improved downtown, the city has its sights set on filling unused space.
Because the city does not have designated funding to pay for more rehabilitation, Donlevy says the city plans on leveraging municipal policies to give property owners downtown incentive to make those improvements.
“It’s going to mean working with property owners in a non-financial way,” he says.
This month, a new City of Winters Economic Development Committee will begin meeting regularly to systematically analyze the issues downtown that keep businesses out of storefronts and second-story space along Main Street and Railroad Avenue. The committee is also tasked to aid in getting business owners, property owners and city staff and leadership all on the same page.
While Donlevy calls the goal for downtown Winters a “renaissance,” open land along Grant Avenue between Railroad Avenue and I-505 drew the city to create completely new sources of revenue out of thin air.
“We purchased land, we negotiated with the developers — that let us drive the truck instead of someone else,” says Gunby. “The area where the credit union and Dollar General are, that was purchased with redevelopment money when the property owner went through foreclosure. It was a whole new experience going through the courthouse action in West Sacramento.”
The city received a stroke of luck when a foreclosure aligned with money in the bank from funds that cities no longer receive, but the limiting factor according to Donlevy is property owner behavior, not funding.
The McClish property adjacent to the new PG&E facility is still keeping the city from continuing some Putah Creek Nature Park improvements.
Donlevy got up from his seat in the second story conference room inside City Hall to go to one of the many maps that fill the walls and spill onto the floor.
“I’ll share a frustration,” he said, pointing at each of the properties along Grant Avenue. “These properties were inherited. Nobody bought the properties to do anything with them.”
Both Donlevy and Gunby say that the city’s biggest source of owed money, and pension liability for all past and current employees, is not a detriment to getting more funds to spur the development they seek.
In 1999, when the state enjoyed economic property, many pensions across the state were increased as a part of SB 400, but after tough economic times in the early 2000s, government agencies promised employees those benefits for life with no way to pay them, causing unfunded liability.
According to Gunby, the city currently has about $5.5 million in unfunded liability, which she and Donlevy are quick to point out is far under what other cities in the area are experiencing. Davis and Woodland are both expected to see the percentage of their budget paid to CalPERS (the state’s pension fund) increase to 50 percent, while Winters will stay around 27 percent. Some other cities are faring even better, however, including neighboring Dixon.
“We have been very strategic in not increasing those benefits,” says Gunby. “From back in 2001, we were hearing the city was super funded, I said, ‘no, that’s a lie, the idea that we’re never going to have to pay retirement is a lie.’”
The buffer that the city set aside with good foresight at the turn of the century worked for keeping pension liability lower than it could be, but the city isn’t able to manage the moving parts of development with the same level of control.
For the 2016-17 year, the city deficit increased by almost half a million dollars because money was not coming in from delayed development projects including DOMUS, which is struggling to pin down final sources of funding, and the freeway and downtown hotels.
Both of these hotels have been in the city’s plan, according to Donlevy, but a large-scale developer was not attracted to the Winters freeway exit until the construction of the PG&E facility. The downtown hotel is expected to be part of the renaissance that seeks money in destination tourism rather than convenience.
Although these moving parts have been difficult to manage, Donlevy and Gunby seem optimistic about the future of Winters development, but it might take a turn of fortune for key property owners to see the light of that vision.
“It’s going to be a success story,” says Gunby.