HomeMy WebLinkAboutMinutes 033194 Approved as Submitted
Meeting Date: 4/14/94
ATASCADERO CITY COUNCIL
ADJOURNED MEETING
Thursday, March 31, 1994
MINUTES
The Mayor called the meeting to order at 7:00 p.m. Councilperson Bewley led the
Pledge of Allegiance.
ROLL CALL:
Present: Councilmembers Bewley, Borgeson, Luna and Mayor
Nimmo
Absent: One Seat Vacant
Also Present: Lee Price, City Clerk
Staff Present: Andy Takata, City Manager/Director of Community
Services; Henry Engen, Community Development Director;
and Jeff Fredericks, Police Sergeant
A. WORKSHOP AND DISCUSSION ON REDEVELOPMENT:
1. PRESENTATION BY DAVE MORAN (Crawford, Multari & Starr): Definition of
Blight and the Redevelopment Process
Dave Moran, using overhead transparencies, presented an overview of the concept
of redevelopment by highlighting the powers and responsibilities of a redevelopment
agency, explaining the purpose of redevelopment, describing "blight", outlining tax
increment financing and summarizing the steps involved in adopting a redevelopment
plan (see Exhibit "A"). Mr. Moran noted that new State Law requires that twenty
percent of the gross tax increment go towards low- to moderate-income housing. He
then responded to brief questions from the City Council regarding certification of the
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plan, county-city-school distribution of funds and percentage of vacant land that is
allowable (20%).
2. PRESENTATION BY RAY MEADOR (Public Asset Management): Advantages
and Disadvantages of Redevelopment
Ray Meador provided a synopsis of four major concerns: 1) Other Taxing Agencies
(county, special districts, school districts) and how the redevelopment plan will affect
them; 2) Power of Condemnation - will the redevelopment agency grant itself this
power; 3) Growth - an examination of the question: "Is redevelopment growth
inducing?" and 4) Twenty percent of mandatory housing fund for low- and moderate
income housing - how will the redevelopment agency choose to use those funds:
upgrading infrastructure, code enforcement, new development, etc.
Mr. Meador made four specific recommendations for establishing a redevelopment
plan: 1) Hire a professional team that will work well with the community; 2) Provide
adequate legal representation - make legal counsel part of the redevelopment team;
3) Appoint a community advisory group; and 4) Establish early, and keep open, lines
of communication with other taxing agencies.
Council questions ensued regarding property acquisition, determining the size and
boundaries for a redevelopment zone, time estimates for establishing the
redevelopment plan, certification and amendments to the plan and appropriate projects
for low- and moderate-income housing. Mr. Meador recommended defining the largest
possible redevelopment zone as the district has a forty-five year life span.
Public Comments:
The Mayor recognized the presence of City Council candidates for the special election
April 12, 1994 and the regular election June 7, 1994 and indicated it would be
appropriate for them, or other members of the audience, to direct questions to the
consultants.
George Highland asked if a body other than the City Council could be appointed to
administer the redevelopment plan. Mr. Meador noted that although the City Council
usually acts as the redevelopment agency, it can appoint a board of directors with a
minimum of five members.
Ray Johnson inquired how much of the cost goes to establishing the redevelopment
zone. Mr. Moran indicated that it depends on the overall size.
Dale Cradduck voiced concern that redevelopment could drive changes to the General
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Plan. Mr. Meador emphasized that redevelopment is contingent upon the General Plan
and added that it is considered a tool for implementing the General Plan.
Alden Shiers queried if there were any cases where the tax increment was greater
than the start-up costs. Mr. Meador indicated that he was not aware of any such
cases. Mr. Shiers asked if the city would be obligated to use General Fund monies
for redevelopment. The consultant confirmed that General Fund monies would be re-
couped after the agency is functioning. In closing, Mr. Shiers asked for additional
clarification regarding amending the redevelopment plan. Mr. Meadow reported that
the forty-five year redevelopment period would not be extended if the plan is
amended.
Hal Carden asked if any portion of the twenty-percent set aside for low- and
moderate-income housing can be used in other areas of the redevelopment zone. Mr.
Meador indicated that those funds can only be used for purposes of preserving
existing low- and moderate-income housing, correcting remedial problems and/or
creating new housing stock. He added that ten percent of the total amount set aside
for low- and moderate-income housing can be charged back to administration.
Mr. Carden's second question related to property value increases and how the tax
increment is distributed if assessments rise. Mr. Meador reported that the same tax
increment formula would apply.
George Schroff inquired as to who was involved with litigation proceeds in the City
of Grover Beach. Mr. Moran remarked that another taxing agency (the County) had
initiated the litigation and provided brief background.
Joseph Roy Curtis asked how the idea of redevelopment had gotten started and who
sets the rules. It was explained that redevelopment legislature was first adopted in
the late 1940's and that current laws are set forth in the State Health and Safety
Code. Mr. Curtis also wondered if the concept has ever gone to the vote of the
general public. Mr. Meador stated that while it is not common, it has happened.
Dale Cradduck asked how low- and moderate-income housing can be preserved. Mr.
Meador responded that preservation could be accomplished by any of the following:
code enforcement and correction, providing loans to commercial property owners for
purposes of bringing sub-standard housing up to code, provide second mortgages for
homeowner repairs, and approving the acquisition of, relocation of, or replacement of
existing housing stock.
---End of Public Testimony---
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In response to query from Councilman Luna, Mr. Meador reported that a board of
directors for a redevelopment agency would be subject to the Brown Act (Open
Meeting Law).
AT 8:40 P.M, THE CITY COUNCIL ADJOURNED TO ITS NEXT REGULAR MEETING,
WHICH, DUE TO THE SPECIAL MUNICIPAL ELECTION ON TUESDAY, APRIL 12TH,
WILL BE THURSDAY APRIL 14, 1994, 7 P.M.
MINUTES RECORDED AND PREPARED BY:
LEEP ICE, City Clerk
Attachment: Exhibit "A" - (Moran: Crawford, Multari & Starr)
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EXHIBIT "A••
Powers and Responsibilities of A Redevelopment Agency
Responsibties
• Alleviate 'blight".
• Improve the amount of affordable housing. (May be provided in areas outside the
Redevelopment Project Area)
• Provide relocation assistance for persons displaced by redevelopment activities
Powers
A Redevelopment Agency may:
+ Sue and be sued
Make and execute contracts
+ Acquire land or buildings
+ Improve public infrastructure (water lines,roads, sewers,etc.)
• Obtain loans and incur debt
Buy, rent, maintain, manage and repair property
+ If it elects to do so, use the power of eminent domain to acquire private
property for private purposes
• Use tax increment financing to finance redevelopment activities
Z
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EXHIBIT "A"
"Blight" As Defined By The Community Redevelopment Law ;
• 'Blight" is either physical or economic, as described below, and Project Area must
contain at least one characteristic from each category:
Physical Blight
Unsafe or unhealthy buildings that may result from code violations,
dilapidation and deterioration, defective design or physical construction,
faulty or inadequate utilities, or other similar factors.
-- Conditions preventing or substantially hindering the effective use or
capacity of buildings or lots which may be caused by substandard design,
inadequate size given present market conditions, lack of parking, or
similar factors
- Adjacent to uses that are incompatible with each other.
-- Lots of irregular shape and size for beneficial use.
Economic Blight
Depreciated or stagnant property values or impaired investment.
Abnormally high business vacancies,low lease rates,high turnover rates,
and vacant lots.
-- Lack of support services in area (groceries, drug stores,banks,etc.)
Residential overcrowding that has led to public safety and welfare
problems.
High crime rates.
• Excludes areas with inadequate infrastructure. The absence of adequate
infrastructure by itself does not constitute blight.
2'
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EXHIBIT "A°
Tax Increment Financing: An Example
Existing (Pre-Redevelopment) Conditions:
Vacant Land Valued at: $10,000
Property Tax (1% of assessed value): $100
Amount Distributed to the City (usually about 30%) $30
Time Marches Chi...
Shopping Center is Built, Raising Assessed Value to: $1•000,000
Property Tax (1% of assessed value): $10,000
Amount to City: $3,000
The increase in tax revenue attributable to the new development (or"tax increment")is:
Tax revenue from new assessed value: $10,000
Tax revenue from previous assessed value: -$100
Tax Increment: $9,
If the property is not within a Redevelopment Project Area, the entire increment
continues to be distributed to the other taxing agencies (the state,county,school
districts, others) as before.
If property is within a Redevelopment Project Area, the Redevelopment Law
allows a portion of this increment to go to the Redevelopment Agency. The
portion is calculated by the following formula:
1. During each year the Agency receives tax increment, an Agency will be
required to pay the other taxing agencies 20%of the gross' tax increment.
2. In addition to the payment described above,beginning in the 11th fiscal
year that the Agency receives tax increment and continuing so long as the
Agency receives increment, the Agency will be required to pay the
affected taxing agencies 16.8% of the gross tax increment generated by
increases in the project area assessed value occurring after the 14th fiscal
year in the agency receives tax increment.
3. In addition to the payments described in 1.and 2.,above,beginning in the
31st fiscal year that the Agency receives tax increment and continuing so
long as the Agency receives tax increment,the Agency will be required to
pay the affected taxing agencies 11.21/6 of the gross tax increment
generated by increases in the project area assessed value occurring after
the 30th fiscal year in which the Agency receives tax increment.
1 Gross tax increment refers to the increment collected before payment into the 20%mandatory Housing
Fund for low-and moderate-income housing.
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EXHIBIT "A"
Steps (Greatly Simplified) Leading to Adoption Of A Redevelopment Plan
Step 1: Form a Redevelopment Agency
Step 2: Make sure you have an adopted General Plan (all seven elements,
including Housing)
Step 3: Designate a"survey area" and begin collecting blight documentation.
Step 4: Prepare a"Preliminary Redevelopment Plan" that designates one or more
Project Areas that have the following characteristics:
-- Predominantly urbanized (at least 80% of the land is developed
with urban uses, or if vacant, is an "...integral part of..." an area
devoted to urban uses.
-- Must be within the survey area.
Step 5: Prepare a "Preliminary Report" that documents blight conditions, the
redevelopment projects to be undertaken,methods to finance the projects
(such as tax increment financing), and a discussion of how the projects
will alleviate blight and further the goals of the General Plan.
Step 6: Begin preparation of an Environmental Impact Report (EIR)
Step 7: Begin discussions with other taxing agencies regarding the Redevelopment
Plan to determine their concerns and how they might be alleviated.
Step 8: Prepare Final Redevelopment Plan which contains:
• Specific findings that the area is blighted and in need of
redevelopment.
• Administration by-laws for Redevelopment Agency
• A full description of the redevelopment projects and financing
mechanisms
• A statement that the Plan is consistent with the General Plan
• A statement that at least 209/6 of all redevelopment monies will be
spent to increase the supply of affordable housing
Step 9: Prepare "Agency Report to the City Council" which contains Agency's
justification for adoption of the Redevelopment Plan.
Step 10: City Council receives Agency's Report and holds public parings to
consider Plan adoption. Council certifies the Final EIR and adopts the
Plan by ordinance.
Step 11: Once adopted, amendments to the Plan (project area boundary changes,
etc.) can be accomplished by repeating Steps 3. through 10.
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EXHIBIT "A"
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