In Oakland, it has forced the city to abandon plans for a waterfront ballpark for the A's, but one element of redevelopment may be saved.
Just a few steps from the State Capitol, the K Street Mall will be one of hundreds of economic development projects statewide that will stop in its tracks when 400 redevelopment agencies shut down Feb.1.
Local governments are upset a tool that's brought revitalization and jobs to California's blighted areas is vanishing.
"The need for in-fill and transit-oriented development, affordable housing infrastructure and jobs is as acute today as it has ever been," California Redevelopment Association spokesperson Jim Kennedy said.
The shutdown of redevelopment agencies is part of Gov. Jerry Brown's plan to save the state money. Critics say redevelopment has become a subsidy for developers at taxpayer expense, building malls and sports stadium and arenas at instead of funding schools, roads and other vital needs.
"The $6 billion a year which they were siphoning away from the school districts is no longer sustainable," Assm. Chris Norby, R-Fullerton, said. "The state's broke and we can no longer afford this kind of expensive corporate welfare that redevelopment has become."
For public schools, the move means they'll receive a billion dollars more a year.
The Brown administration says cities and counties can still count on more than $500 million that can make up for a portion of lost redevelopment money.
"That's general purpose money above and beyond what they're already getting with no strings attached; so, if they want to use some of that for economic development, they're free to do so," California Finance Department spokesperson H.D. Palmer said.
When the doors to redevelopment close, thousands of government jobs will also disappear.
"I do affordable housing, and I love what I do; I think my job is very important, so it's difficult," laid off Oakland worker Leslie Mullins said.
The State Senate just approved a measure that would allow communities to spend about $1.5 billion they have left in affordable housing funds. It's unclear whether the Assembly and governor will sign-off on it.
Still after that money's gone; redevelopment agencies will cease to exist in California.