On Dec. 29, 2011, in California Redevelopment Association v. Matosantos, 12 C.D.O.S. 32, the California Supreme Court upheld the constitutionality of AB1X 26, a statute ending redevelopment agencies in the state. In the same decision, the court rejected AB1X 27, which would have allowed a carveout for redevelopment agencies to continue to exist if certain requirements were met. This decision will have significant ramifications on existing development projects involving redevelopment agencies and may hinder future development.
The statute that was upheld, AB1X 26, adds two major parts to Health and Safety Code, Division 24. Part 1.8 — what the court dubbed the “freeze” component — that bars redevelopment agencies from incurring new or expanding existing monetary or legal obligations. Part 1.85, the “dissolution” component, terminates the existence of redevelopment agencies in the state.
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