Redevelopment Is Paying Off for Fullerton : Voters who recalled council members are right that it costs money, but forget bottom line.

Heroes are born, not made, we have been told. Sometimes campaign issues are made, not born.

That seems to be the case in Fullerton, where redevelopment became an issue in the successful campaign to recall three City Council members earlier this year. It has become an even larger issue in the campaign to elect the successors to the recalled council members. Many of the council candidates are trying to convince voters that the abolition of the city’s Redevelopment Agency will solve many business and social ills.

Most Orange County cities have a redevelopment agency. Proponents say that redevelopment helps to eliminate blight and to develop, reconstruct and rehabilitate areas needing help. The process can include commercial, retail, industrial and residential projects.

When a redevelopment area is formed, the assessed valuation of the area’s property is frozen. Taxes resulting from an increase in assessed valuation above the base year value become the agency’s main source of revenue.

A number of council candidates say they would abolish the Redevelopment Agency as soon as they are elected. But an out-of-hand termination of the agency is illegal under state law.

The slate of candidates endorsed by the Fullerton Recalls Committee says that “Every year the Fullerton Redevelopment Agency takes $1.8 million of property taxes away from Fullerton!” Because of the tax increments that finance the redevelopment agency, that is true. But the Redevelopment Agency has spent $2.8 million on the Fullerton Town Center; for that $2.8-million investment, Fullerton got $883,500 in sales taxes in fiscal 1992-93 alone, a return of about 33% on its investment. Before the investment, annual sales tax revenue to the city from that property was but $58,836. Since the 1984-85 fiscal year, the city has received $9 million in sales taxes from Town Center.

Across Harbor Boulevard, the Redevelopment Agency has invested $1.45 million in Metro Center and is getting $532,400 in annual sales taxes from property that produced only $235,651 eight years ago. By next year, every sales tax dollar from the Metro Center will be net profit. There are other similarly successful projects.

Another criticism of redevelopment by the recall-endorsed slate is that “every year the Fullerton Redevelopment Agency takes $3.6 million of property taxes away from local schools. . . . “

That’s true--as far as it goes. But under state law, tax-increment financing that funds a redevelopment agency does not reduce a school district’s revenue because state school-funding formulas offset any gain or loss in property tax revenue. Also, school district and community college districts receive a portion of the redevelopment tax increments.

Redevelopment has brought new business to Fullerton, may have kept some business in town and certainly brought in enough new tax revenues that the city for years was able to avoid new fees and taxes to maintain public safety levels, library and park services and street repairs.