Alysa Liu’s hometown skating rink tells a surprising story about cities

It could have easily become a high-rise luxury condo complex. Or maybe a struggling office tower now being converted into luxury condos. Maybe a parking garage, or a data center.

But instead, 30 years ago this spring, Alameda County Parcel Number 8-641-8-5 became home to the Oakland Ice Center—where recently-crowned Olympic gold-medalist figure skater Alysa Liu still trains.

Located just north of downtown Oakland, in what the city considers the Uptown Retail and Entertainment Area, parcel 8-641-8-5 was just a vacant, privately-owned lot back in 1991. But in that year, Oakland’s now-defunct Redevelopment Agency acquired it as part of a three-parcel transaction for $1.8 million.

The Bay Area was a hot spot for ice sports in the early 1990s. Mountain View’s Brian Boitano had won a figure skating gold medal at the 1988 Winter Olympics. Fremont’s Kristi Yamaguchi was on her way to figure skating gold in the 1992 Winter Olympics. After a brief flirtation with the NHL’s Minnesota North Stars moving to Oakland (the team infamously moved to Dallas in 1993), the Bay Area finally got its first NHL team in the San Jose Sharks, who dropped the puck for their inaugural season in the fall of—you guessed it—1991.

Oakland City Council Members came to believe an ice sports center was just what they needed to revitalize a struggling downtown. The eight other ice sports facilities in the Bay Area were over-booked with youth and adult hockey leagues as well as figure skaters of all ages training, twirling and competing.

Projections came in that a new ice center would bring in 500,000 visitors annually to downtown Oakland, generating nearly $5 million a year in retail, food and lodging revenue. So in April 1995, Oakland’s Redevelopment Agency signed a ground lease with a private developer team to build and operate the facility, which the agency financed with $11 million in tax-exempt bonds.

Those projections were way off, of course. The private developer team went belly-up just three months after the Oakland Ice Center opened in March 1996. It would take more than a decade and three changes in private operators to stabilize the Oakland Ice Center. The parent company of the San Jose Sharks, which still manages the facility today, took over in October 2007—when Alysa Liu was just 26 months old.

The City of Oakland now owns the Oakland Ice Center. But the community investment program that enabled this center’s development has been dissolved: The state of California contentiously eliminated its 400-plus local redevelopment agencies in 2012 as part of closing a $26 billion state budget deficit.

While budget hawks and accountability groups praised the move, it meant eliminating specialized public entities that created redevelopment plans, funded local infrastructure improvements, assembled parcels, assisted developers, brokered deals and sold tax-exempt bonds to pay for all the above.

California’s redevelopment agencies had their flaws and missteps, but planners and community development leaders across the state say no entity has truly filled the gap they left, both as long-term stewards of publicly-owned land and sources of local public dollars dedicated to local economic and real estate development.

And so the ecosystem that created Alysa Liu’s home rink—and shielded it from the pressures of the market until it could find its footing—no longer exists.

Complicated roots

At the time California’s redevelopment agencies were dissolved in 2012, they were recipients of $5.6 billion a year in property tax revenues. Enough for Next City to label them “America’s Biggest Redevelopment Program.”

The story of California’s redevelopment agencies begins in 1945, when state lawmakers passed the Community Redevelopment Act. The legislation gave cities and counties the authority to establish redevelopment agencies (or RDAs) as independent, publicly-affiliated entities with a mission to eliminate blight through development, reconstruction, and rehabilitation of residential, commercial, industrial, and retail districts.

Those agencies were supercharged after Congress passed the Housing Act of 1949. Title I of that legislation infamously created “Slum Clearance” powers that allowed cities across the country to declare entire neighborhoods as “slums” and offered federal loans and grants to bulldoze them and make way for private developers to rebuild. To access those federal loans and grants, local governments needed to come up with their own matching funds. In 1951, California passed new legislation that provided RDAs with matching dollars via the nation’s first “tax-increment financing” scheme.

With tax-increment financing, also known as TIF, cities or counties designate an area or sometimes a single property as “blighted” and in need of new investment. Upon designation, the existing amount of property taxes paid to the local government (as well as to the school district, parks district, transportation district or other local government bodies) is frozen within that area. Over time, if property values within the designated area rise, any property taxes assessed above the frozen amount are set aside to subsidize redevelopment projects or fund other eligible activities within the designated area.

Fueled by Title I Slum Clearance and their new TIF dollars, California RDAs went right to work, using eminent domain to demolish cherished homes and neighborhoods wholesale in the name of “urban renewal.” The project that incited James Baldwin to re-dub urban renewal as “negro removal” was in fact a project involving the San Francisco RDA bulldozing a huge chunk of the Fillmore District, a predominantly-Black enclave in San Francisco.

Oakland created its RDA in 1956. Its first large-scale project involved bulldozing the 34-acre Acorn neighborhood, home to around 500 primarily low-income families (78% African American, 20% Mexican American, and 2% white) living in some 600 dwellings.

But it wasn’t as simple as RDAs being wielded only to destroy Black neighborhoods and hand them over to white developers and contractors.

In the aftermath of Acorn’s 1962 destruction, John B. Williams became the head of Oakland’s RDA in 1964—making him among the first Black people to head a city agency in the United States.

A baptist preacher born in Covington, Georgia, Williams also had a fine arts degree and helped found First Enterprise Bank, the first minority-owned bank in Northern California. According to Places Journal, with his fine arts background he supported art as a means to engage community members in the agency’s work. He was the first Oakland official to enforce minority training and hiring policies, and required that the agency employ laborers and award contracts proportionate to city demographics. Williams led Oakland’s RDA until he died of cancer in 1976.

Complicated demise

Since proliferating across the country, TIF schemes differ from state-to-state, and they go by many names. In Texas, it’s known as a Tax Increment Reinvestment Zone, or TIRZ. Florida calls it Community Redevelopment Area, or CRA. Back in 2018, Chicago infamously had around 150 TIF districts, as many as the next nine largest U.S. cities combined, according to a study of TIFs by the Lincoln Institute of Land Policy.

For local public officials, TIF can seem like a magical way for redevelopment to pay for itself. Cities can borrow dollars up front, based on projected future TIF area property tax payments, then use those dollars to do almost anything they want—like build the Oakland Ice Center. If all goes as planned, property tax revenues will then be collected within the TIF area repay the debt automatically as time goes by.

TIF schemes also vary greatly in how decisions get made about what projects to finance or which properties to acquire for redevelopment. Not all TIF schemes create an RDA-like entity that can acquire properties. In Chicago, TIF districts don’t have a separate governing entity, only separate bank accounts whose dollars are ultimately doled out by the city’s Department of Planning and Development, which is really controlled by the mayor. In Texas and Florida, each TIRZ or CRA has its own board of commissioners that oversees an entity that controls its dollars, acquires properties and sets up partnerships with private developers.

Back in California, each city or county established an RDA with the power to designate multiple TIF areas, acquire properties and spend TIF dollars on projects located in the designated areas where the dollars came from. City and county legislators had the flexibility to control RDAs directly themselves or create an appointed commission to wield RDA powers.

Since it derives revenue from local property taxes, TIF is often seen as pulling money away from schools, fire departments, parks, libraries and other local public services usually supported by local property taxes. TIF projects also don’t often require direct approval from mayors, city councils or voters, so TIF dollars also often end up being used as a slush fund to support local politicians’ pet projects that happen to be developed by their biggest campaign donors. For these and other reasons, TIF continues to be a hot button issue in places like Chicago or St. Louis.

Ultimately, it was the TIF funding mechanism that led to the demise of California’s RDAs.

When former Oakland Mayor Jerry Brown came into office as California governor in 2011, he inherited a $26 billion state budget deficit from the Governator. Although Brown had been a huge beneficiary of Oakland’s RDA during his time as mayor, the RDAs suddenly became sacrificial lambs to help close that giant hole.

Under the state laws governing RDAs, the state was obligated to pay local school districts for any revenues lost to tax-increment financing. The state, he argued, could no longer afford those payments. At the time, RDAs accounted for 12% of all property taxes paid across California; in some places, they earned more property tax revenue than the local city or county government that created them.

Cities, counties and RDAs fought back vehemently. Gov. Brown first tried eliminating them by executive order. When that didn’t work, the state passed legislation that the RDAs and local governments later fought in court. The state emerged victorious, leading to the dissolution of RDAs in 2012.

More than money

Losing RDAs has meant losing more than just funding for local economic and real estate development across California.

While many of the decisions they made were questionable or arguably malicious, each RDA over time came to build its own internal capacity for wielding land and money in ways that always had the potential to reflect the best of public interest. And that capacity that has never really been replaced.

Helen Leung is the executive director of LA Más, a nonprofit fighting against real estate speculation in Northeast Los Angeles, where she was born and raised. She previously worked as a planning and land use staffer for former L.A. city council member Eric Garcetti, who held that office from 2001-2013 before becoming mayor.

“It was fascinating to see how much money and land the redevelopment agency had access to, how much power it had to put together giant economic development projects,” Leung tells Next City. “Projects took a long time but they were also catalytic and had community benefits or contributions that weren’t possible outside the redevelopment agency area or without redevelopment agency investment.”

Things have changed for planners and local officials attempting to revitalize their cities.

“All the things we do now to require things like prevailing wages on projects or inclusionary housing was just done deal-by-deal by the redevelopment agency,” she says. “I can appreciate that power as someone with a planning background and who used to work for local government — but I can also understand the fear or skepticism of big agencies with a lot of power and the ability to move fast.”

While they had the power to move fast, as public entities RDAs also had the ability to be patient when warranted.

After the Oakland Ice Center’s original developers went belly-up, Oakland’s Redevelopment Agency was able to step in quickly and take ownership of the facility, keeping it open as it searched for a new private partner to operate it. The second manager it picked ended up having political ties as a campaign contributor. They were gone after three years. The third manager it picked only signed a two-year lease, but stayed on month-to-month for five more years as the facility continued to lose money.

It wasn’t till 2007 that Oakland’s Redevelopment Agency finally found a partner—the corporate parent of the San Jose Sharks—who was able to work out a sustainable business model for the facility.

Models for this sort of dedicated, long-term stewardship of real estate by public or quasi-public independent entities have shown long-term success in other places, most notably Seattle.

In 1973, the Seattle City Council created the Pike Place Preservation and Development Authority to steward the landmark eponymous public market, which the city previously tried to convert into a parking garage. Created in 1974, Historic Seattle stewards a citywide portfolio of historic cultural venues. Created in 1975, the Seattle Chinatown-International District Preservation and Development Authority stewards a growing portfolio of properties in its eponymous neighborhood.

Around 20 such entities operate in and around Seattle, including the Social Housing Public Development Authority, created in 2023 to acquire and build a citywide portfolio of mixed-income housing. The new social housing development authority shows that it’s not necessary to fund redevelopment entities using TIF schemes, either: It’s funded by a 5% tax on local employee salaries of $1 million or more. The tax netted $115 million in its first year, far exceeding projections.

The success of California’s redevelopment agencies varied greatly from city to city, sometimes TIF area by TIF area, within a single redevelopment agency. There’s also more than one way to define or measure success: A neighborhood where RDA-supported projects succeed in catalyzing new private investment without RDA support may also be targeted for speculative investment that displaces the very people who were supposed to benefit from their own property tax dollars being invested locally.

“Redevelopment agency projects also gentrified some communities,” Leung says. “Hollywood looks a lot different now than it did back then. Everyone you talk to about redevelopment agencies will have lots of pros and cons, whether they’re in the weeds or not in the weeds.”

This story was originally published by Next City, a nonprofit news outlet covering solutions for equitable cities. Sign up for Next City’s newsletter for their latest articles and events.