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ROBERT SIEGEL, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, HOST:

And I'm Melissa Block.

And this week, we're beginning the NPR Cities Project.

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BLOCK: Today, we go to California to talk about how a city can be revitalized and the problem of who pays for it.

SIEGEL: Cities all over depend on state money. But right now, most states are tight on cash. Oakland, California, is a perfect example of that tension. The city has long been associated with urban decay and, recently, with violent protests tied to the Occupy movement.

BLOCK: Yet, The New York Times listed Oakland as number five among its top places to go in 2012. Oakland has been experiencing a resurgence, but it's comeback. And the revival of other cities in California may be threatened by that state/city dynamic. We sent NPR's Richard Gonzales out to learn why.

RICHARD GONZALES, BYLINE: I'm standing near the corner of 17th Street and Telegraph Avenue in the uptown neighborhood of Oakland where there's a lot of life on the street. It's a Friday evening, and the local bars and restaurants are filling up. And one of the signature spots of this neighborhood is called Cafe Van Kleef. And let's check it out.

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GONZALES: Van Kleef is a dark hole in the wall where you'll meet everyone from lawyers to longshoremen. Is this seat open?

TOM HAMMIT: That seat is open. Wide open.

GONZALES: We're sitting next to Tom Hammit. He's a private investigator in his late 50s. And since he's an Oakland native, he's seen the slow rebirth of this neighborhood in the last decade.

HAMMIT: It really did start, I think, with Peter opening up this place and making it a comfortable environment.

GONZALES: He's talking about the tavern owner Peter Van Kleef. When he opened his bar 10 years ago, everyone said he was crazy.

PETER VAN KLEEF: At 5 o'clock, the streets here were absolutely empty. Everybody vacated Oakland. There was nobody here. You could park anywhere you wanted. You could park a fleet of taxis if you wanted to.

GONZALES: But Van Kleef, an artist and former rock impresario, had a different vision for Uptown Oakland.

KLEEF: I saw a - the last geographical possibility for an arts and entertainment district.

GONZALES: So Van Kleef opened this bar just a block from city hall.

KLEEF: Lovers, hookers, muggers, thieves and homeless were rampant on the street where I am now on Telegraph Avenue. I suddenly felt like a paramedic pounding the chest of Oakland with some vision of breathing life into this dead thing. And it worked. The city revitalized. The heart started beating again.

GONZALES: But Van Kleef didn't do it alone. Just a couple of blocks away, I'm going to see Phil Tagami. He's a local developer who had his own vision for re-invigorating this part of Oakland. We're walking through the lobby of the landmark Fox Theater.

PHIL TAGAMI: Well, this theater was really designed after a Bhramin Temple. It's a little bit of an eclectic architecture.

GONZALES: With its massive dome, opulent terra-cotta tiles and gold leaf, the Fox looks like something out of medieval India or Morocco. This theater has been shuttered for more than 40 years. Tagami spearheaded a drive to refurbish and reopen the Fox as a state-of-the-art live music venue. Today, it's the anchor for a revitalized Uptown Oakland.

TAGAMI: Since the Fox opened in February 2009, there have been approximately 18 restaurants and about 20 bars or, you know, nightclub establishments that have opened up in a surrounding three-block radius from the building and has led to a real transformation of this neighborhood.

GONZALES: But Tagami says it might not have happened without the active support of then-mayor and now Governor Jerry Brown.

TAGAMI: The mayor set forth, I think, a pretty clear objective and vision of what he wanted.

GONZALES: Mayor Brown revitalized Uptown Oakland using a common approach in most states called redevelopment. It was an arcane financial tool that allowed cities like Oakland to invest in blighted neighborhoods. The payoff came when the neighborhood improved, property tax revenues would go up.

That so-called tax increment was captured by the city to pay for more land and infrastructure improvement that would attract developers. It was a way to keep property taxes local and away from state coffers. Mayor Brown called the plan his 10K Initiative.

GABRIEL METCALF: And the idea was to bring 10,000 people - 10,000 new people - to live in Downtown Oakland. Those people would then provide pedestrian activity, would provide a base of support for restaurants and stores...

GONZALES: I'm talking with Gabriel Metcalf, executive director of SPUR, an urban policy think tank based across the bay in San Francisco.

METCALF: ...leading to more private investment, leading to more life. And I think in large part, it succeeded.

GONZALES: But Metcalf says that as governor, Jerry Brown was confronted with a different problem. The state faced a massive $20 billion budget deficit. Local redevelopment agencies had amassed a treasure chest of several billion dollars. And so Brown killed redevelopment in California and seized the money to pay for the state's struggling schools.

Is there any irony that he used that tool as a mayor and then, as a governor, decided to eliminate it?

METCALF: There is a terrible irony in the fact that Jerry Brown, as governor, fought to get rid of the tool he used so effectively as mayor of Oakland. From the outside, it makes no sense.

GONZALES: Lawmakers in Sacramento are looking at any number of new ways to help cities finance urban development. But it could take years for this to shake out. What's that mean for Oakland? On a quiet Sunday morning, inside Oakland's ornate city hall, I posed that question to Mayor Jean Quan.

MAYOR JEAN QUAN: It takes away our opportunity to do development in very tough neighborhoods. And I have neighborhoods where other people won't invest. And really, redevelopment is how we pulled together the investments for that neighborhood.

GONZALES: So, like in many cities, there's still a lot of work to be done in Oakland. But the seeds that were planted 10 years ago are spouting up, and there's no denying there's a new buzz here. The question remains: How can Oakland keep the pace without the redevelopment money? Can the city maintain its momentum? I'll step back into the cafe to pose that question to owner Peter Van Kleef.

So there is something happening here, huh?

KLEEF: There's an undeniable exuberant energy that started, but it's spontaneous combustion. So, yeah, its hot. It's relevant. Do I think it has any sustainability? Absolutely. I think it's something that grows stronger.

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GONZALES: But Van Kleef might be right. Just outside of his cafe, there's live music on the street. And judging by the energy here tonight, you'd be blind not to see the spark of a regeneration here and that maybe at least one neighborhood in Oakland has turned a corner. The question is, can it spread to other neighborhoods? And who will pay for it? At 1621 Telegraph Avenue in Uptown Oakland, I'm Richard Gonzales for the NPR Cities Project.

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