Folsom Development Stalled By Agency's Elimination

FOLSOM (CBS13) - Gov. Jerry Brown eliminated redevelopment agencies last year to balance the budget, but now a brand new Folsom development is missing a big piece of a very pricey puzzle.

"We've already graded the site, spent a quarter of a million dollars grading the site, so we're ready to go," developer David Bernau told CBS13 on Tuesday.

But while the public portion of Folsom's new downtown project - a $6 million amphitheater and public plaza - is ready to be unveiled Saturday, the first of Bernau's four buildings on the site hasn't even broken ground.

"The law that terminated redevelopment stopped all activity," Folsom city official David Miller said.

Combined with challenges over the legality of ending redevelopment agencies, the project that was supposed to start last August is still at least 10 months out.

"Our first building, we have 27 out of 30 units sold," David Bernau said. "Those people have been waiting for some time now. We're losing money on our investment, plus we're having to scramble to do other things in the economy because we still have to pay the bills."

And now the developer will have to wait even longer. Despite agreeing to buy the land before redevelopment agencies were eliminated, Bernau now needs approval from not one but three different boards.

The Department of Finance says it has yet to review Bernau's case and it expects many more like his to flood the office in the coming weeks.

Bernau expects his case to go through because he's not asking for a subsidy and plans to pay market value for the land, but he still says it's unfortunate the state's delays are making it this hard to do business.

"When we build these buildings, instead of vacant parcels generating no revenue for anyone, there'll be $400,000 worth of tax revenue once all four buildings are completed," he said.