In the fight for municipal redevelopment agencies, Mayor Jean Quan is placing Oakland front and center.

A little more than a week ago, Gov. Jerry Brown essentially abolished municipal redevelopment agencies in California. Brown is planning to use the money - $1.7 billion the first year and $400 million annually after that - to pay for education and other programs.

The legislation, SB 26 and SB 27, which have already been signed by the governor and made law, would require Oakland to kick in $40 million the first year and $24 million annually thereafter if it wants to keep its redevelopment agency.

As a result of these actions, California cities are now set to file a lawsuit against the state, charging among other things a violation of Prop. 22, which prohibits the state from taking certain local funds.

In many respects Oakland has little choice, but to take on the state in the redevelopment battle because the agency's money is deeply interwoven in city services to residents.

"There's no neighborhood, no community that wouldn't be affected," Quan said.

In fact, if the agency is wiped out, Oakland could see the elimination of 171 full-time city staff, including 17 police officers and other key staff, Quan said. In addition, Oakland estimates that the loss will include 7,600 jobs in Oakland.

Visible large projects like the Oakland Army Base, the Broadway Auto Row project and the funds to build a new stadium for the A's would be substantially reduced or eliminated.

Smaller projects also will feel the pain. According to Quan, 25 percent of redevelopment funds are used for affordable housing and already the city has put off a number of projects because of the redevelopment fight. She said if the redevelopment agency goes away about 1,200 affordable housing units planned for the city would be wiped out.

"That is something that's alarming to me because (affordable housing) is what keeps Oakland so diverse where blue collar workers can still afford to live in this city," Quan said. "It's also why we have so many immigrants and why we've been able to retain so many of our seniors. (Affordable housing) gives us so much vitality and character."

Quan, said redevelopment is one of the few tools urban and rural cities can use to revitalized underutilized declining properties. She cited Brown's work in developing the Uptown District when he was Oakland's mayor, as a successful use of redevelopment funds.

For cities like Oakland, the elimination of redevelopment agencies has been a slow moving disaster. In early March, the city began preparing for the possibility when the Oakland City Council voted to fast track funds already in the pipeline for some redevelopment projects.

The Council also voted to both buy and sell some city properties to its redevelopment agency as a way of guarding against the possibility of the state taking control of  the properties if redevelopment is eliminated. Projects that were a part of the transfer include the Oakland Army Base and the headquarters for the Oakland Police Department.

That move by the City Council saved some projects in the pipeline, city officials said, because under the new redevelopment legislation, those projects already in motion with signed contracts are grandfathered in, including the Kaiser center sale to the redevelopment agency.

"It requires an agency to (honor) existing contractual obligations," Daniel Rossi, senior deputy city attorney for Oakland, said.

If the cities lose the fight to keep redevelopment agencies, Quan said it could mean Oakland would have to dip into the general fund to pay the state.

"As you know, (this fiscal year) we're making $58 million in cuts, so basically it would force, if we made that decision (to pay the state of California), to make further cuts," she said.