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San Jose's Once-Powerful Redevelopment Agency Cut In Half

SAN JOSE (KCBS) - The agency that helped revive downtown and make San Jose a central part of the Silicon Valley technology industry has laid off nearly half its staff, and the remaining workers could lose their jobs by summer.

San Jose City Councilman Pete Constant traced much of the city's growth to business the San Jose Redevelopment Agency helped bring North San Jose.

"Years ago, North San Jose was basically a swamp and the infrastructure that was invested by the Redevelopment Agency created an economic environment where a lot of high tech companies were able to come build their facilities," he said.

Constant said tech companies in North San Jose account for much of the city's revenue.

KCBS' Margie Shafer Reports:

Redevelopment agencies profit when the property values in a blighted area rise by capturing the difference between the higher value and the original value. That money is then funneled into local projects.

The San Jose Redevelopment Agency was saddled with mounting debt as property assessments fell and the California deficit bled money from its budget. This is the third round of staff cuts in 18 months.

Weeks before Gov. Jerry Brown talked about killing all 425 redevelopment agencies statewide so more property tax revenue would flow to Sacramento, officials at the San Jose Redevelopment Agency were already warning staff of the impending cuts.

Most of the 31 employees who remain could lose their jobs by the end of June, leaving just a skeleton crew to complete the few remaining projects.

If the governor does not dissolve redevelopment agencies entirely, Constant said a rebound in property values could still save the San Jose department.

(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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