§ 33471 Project Area Debt Priority

• •If a redevelopment agency owes money for a project area before merging it with another, the taxes from that area must first pay off that debt.
• •The taxes from the merged area can't be used for anything else until the old debt is fully paid or refinanced.
• •This rule makes sure that old promises to pay back money are kept, even after areas are combined.

A city has two project areas, Area A and Area B. Area A has old debt from building a park. The city merges Area A and Area B into one big project area.

The taxes from the old Area A must first go to paying off the park debt. Only after that debt is paid or refinanced can the taxes be used for new projects in the merged area.