The state Department of Finance has told Bakersfield city administrators it will block repayment of about $28 million in redevelopment debt tied to city projects, including the Rabobank Arena, City Manager Alan Tandy said in his weekly memo to city council members Friday evening.

The city will appeal the state's decision, Tandy said. But if it's not successful, that could mean a $1.7 million annual hit for 10 years to the city's general fund from the largest of these debts, tied to the arena.

In December, state legislators shuttered about 400 redevelopment agencies across the state. Since then, the state Department of Finance has been combing through lists of debts the agencies had on their books for redevelopment projects. The state must approve each debt in order for the entities that monitor remaining redevelopment business and debts to keep getting property tax money to pay the bills.

Earlier this year, the Department of Finance challenged $8 million in redevelopment debt that Bakersfield, as the successor to its dissolved redevelopment agency, held. The city appealed that decision, but lost.

Tandy said the state's appeals process doesn't favor cities that appeal the Department of Finance's decisions on redevelopment debt. If the city loses its appeal, there could be consequences for the remaining projects the city hopes to finish as well.

The 20th Street veterans housing project, for example, could be delayed long-term or cut completely, Tandy said.