Indian Wells’ Low-Income Housing Exemption Vetoed

SACRAMENTO — Saying he is concerned about setting a statewide precedent, Gov. George Deukmejian on Monday announced his veto of legislation that would have allowed Indian Wells, California’s wealthiest city, to build much of its state-required low-income housing outside its borders.

In his veto message, the governor said there is not “sufficient cause” to exempt the desert resort from the housing requirement applied to all cities that use state redevelopment funds to bolster their treasuries.

“It would be difficult to deny other jurisdictions similar relief in the future,” Deukmejian said, adding that the ramifications of the bill “extend far beyond the boundaries of Indian Wells and the county of Riverside.”

Even though Indian Wells boasts the state’s highest per capita income, city officials had declared virtually the entire community to be “blighted” so that it could, under state redevelopment law, use taxpayer money to attract tax-paying luxury resorts.

The redevelopment law, however, requires that 20% of the property taxes collected from the new development be used to build low- and moderate-income housing within the city. With all the new construction, city officials now say there is little room left in the town to build the housing and have been seeking the exemption so that the dwellings could be built in neighboring communities where land costs also are lower.

The bill resulted from a legal settlement between the city and the Western Center for Law and Poverty, which alleged that Indian Wells was systematically trying to export its poor. The settlement requires Indian Wells to build 148 units of low- and moderate-income housing within the city but would have granted an exception so that tax money could have been spent to build an additional 1,350 units out of town in close proximity to the city.

Deukmejian’s veto of the bill means that Indian Wells must now find space to build the housing within its jurisdiction or call on commercial resort developers to voluntarily build that housing elsewhere.

Sen. Robert Presley (D-Riverside), the bill’s author, said he believes that Deukmejian’s veto means that fewer units of affordable housing will be built in or near the wealthy desert resort town, located southeast of Palm Springs.

“The real losers are the low-income people who will be deprived of the 1,300 additional units of affordable housing that would have been the result of this becoming law,” Presley said.

The bill was the subject of a high-spending lobbying effort by Sunrise Co., a private developer that is planning to build a 4,500-room resort on the last major parcel of vacant land remaining in the city.

Campaign Contributions

The firm contributed about $150,000 between April, 1987, to May, 1988, to the campaigns of more than 80 members of the Assembly and Senate, according to documents filed with the secretary of state. This amount was part of more than $400,000 contributed to local and state political campaigns during the period, the documents show.

Critics contend that the contributions were a key factor in the measure’s approval by the Legislature. Much of the political money was spent to defeat a city referendum that would have sidetracked the resort development.

A spokesman for Sunrise earlier said that the project’s development does not hinge on the outcome of the bill and that the firm plans, in any event, to use its own money to build 750 units of low-income housing.

Indian Wells Councilman Philip Manuell on Monday said he expects the developers to keep that promise and vowed that the bill’s veto will not deter the development of the huge resort complex.

“It’s not a deal breaker,” Manuell said of Deukmejian’s veto.

In his veto message, Deukmejian said he wanted to dispel any suggestion that his action was meant as a disapproval of the resort project.

‘Local Agencies’

“The local agencies have reviewed it, and it has even been the subject of a local referendum where the voters of Indian Wells have expressed their support,” Deukmejian said.

Sunrise reported that it also contributed $5,000 to Deukmejian in mid-March and hired two former top level advisers to the governor to lobby Deukmejian on behalf of the bill.

In vetoing the measure, the governor took note of a legal opinion by the Legislature’s attorney, which said the bill violated the state Constitution. Legislative Counsel Bion M. Gregory said the measure conflicts with the essential concept of redevelopment, which is to eliminate blight.