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Taken together, the agency's past projects have led to a continued drain on its ability to pay for future ones. Its line of credit is running out.
That's why it's curious for Mayor Brown to insist that the agency plunge ahead with Mission Bay and Hunters Point.
The smartest thing for the Redevelopment Agency to do right now, several agency watchers agree, is to find some simple projects that can be completed quickly, generating higher property values and new tax revenue. A fresh infusion of tax increment money would not only provide a short-term boost to the agency's bottom line, but would enlarge the stream of future tax proceeds against which the agency could borrow.
The dumbest thing the agency could do in its current precarious state, those watchers say, would be to keep plowing money into large, slow-moving projects that will take years -- perhaps decades -- before they turn the corner and start producing new property tax revenue for the city's coffers.
Neither Mission Bay nor Hunters Point fulfills the criteria for being financially smart. But that apparently doesn't matter, because those projects do fulfill the only criteria that seems to register these days in city government -- Willie Brown wants them done.
"I work for the mayor," Morales says. "Of course the shipyard and Mission Bay will be my priorities."
The Mission Bay project has two parts, both spearheaded by Brown's former law client, Catellus Development Corp. The project has been in the works in various forms for years, alternately pursued and abandoned with fluctuations in the economy and political mood.
Mission Bay North is envisioned as 65 acres of housing and shops built to the north of China Basin. Mission Bay South is larger and grander, especially now that the University of California, San Francisco has agreed to build its new campus there.
Catellus sees UCSF as a magnet that will draw biotech companies to the development, spawning acres of office buildings and apartments where now there are mostly vacant lots and piles of dirt.
Brown has made it clear that he wants Mission Bay started. But these days neither David Prowler, the Brown aide responsible for ramrodding the project, nor Morales will say how much the Redevelopment Agency will chip into the project.
"It's hard to say," says Prowler.
"We don't have final figures on that," says Morales.
Last July, Prowler told SF Weekly that the redevelopment price tag for the entire Mission Bay development would be about $100 million, and that the money would be raised by selling more Redevelopment Agency tax revenue bonds. Prowler has also been quoted in the past as saying the tab could be as high as $500 million.
The money will be used for infrastructure -- roads, utility lines, sewers, and the like. Morales insists that the project will be fully self-sustaining, the money all paid back from future tax revenue. "I don't think Mission Bay is too grand an undertaking," Morales says. "There's obviously some unknowns, but that's an area that should work."
As for Hunters Point, there's no telling how much money might ultimately be needed to redevelop the old and heavily polluted Navy shipyard. The Navy is supposedly going to clean up the toxic waste at Hunters Point before it transfers the land to the city, but even that promise is in doubt.
Morales acknowledges the shipyard is "a daunting challenge. A lot of government monies are going to have to go in to make it work."
But how much, at this point, is anybody's guess.
Morales and the Redevelopment Agency's financial staff are busily grooming the next budget that will be submitted to the Board of Supervisors, trying to squeeze out more money for the mayor's priorities. But the early figures are echoing exactly what Bob Gamble concluded in his memo more than a year ago.
According to a five-year forecast Morales presented to the Redevelopment Commission in January, the agency has just $65 million in borrowing capacity left, and that figure will shrink in each of the following years.
If Mission Bay, Hunters Point, or any of Mayor Brown's other pet projects needs more money than that -- and they surely will -- the mayor will have to look elsewhere for it.
The best evidence of just how tenuous the Redevelopment Agency's finances are these days is sitting out in San Francisco Bay. That would be Treasure Island, the former Navy base that is about to be turned over to the city.
Brown has spun glorious dreams of what can be done with the island -- a theme park, housing, movie studios, and god knows what else might be built on the remarkable piece of real estate. Clearly, whatever Brown decides to build out there will be beyond the financial wherewithal of the Redevelopment Agency.
That's one of the reasons why Brown pushed for, and won, legislative approval to make Treasure Island its own, self-contained redevelopment zone. Treasure Island will have its own commission, appointed by the mayor, and will not be burdened by the financial woes besetting the rest of the city's redevelopment projects. Of course, that also means that any future tax revenue from Treasure Island won't be of any help to other redevelopment projects. The merchants on mid-Market who are waiting for Brown to put their project on his priority list would be well-advised to ignore the progress of Treasure Island.