HomeMy WebLinkAbout1993-01-27 - AGENDA REPORTS - REDEVELOPMENT (2)CITY OF SANTA CLARITA
INTEROFFICE MEMORANDUM
TO: *eorgeC-araovralaho nd embers of the City Council
FROM: �Cji anager
DATE: January 27, 1993
SUBJECT: REDEVELOPMENT
BACKGROUND
The Community Redevelopment Law was adopted by the State Legislature In 1952 as a local
government tool to rid communities of blighting conditions and to revitalize deteriorating areas in
communities throughout the state. Redevelopment legislation was designed to allow a public
redevelopment agency to take private property through eminent domain for the purpose of
eliminating blight. As the City Council Is aware, local governments have the authority to activate
redevelopment agencies and initiate tax Increment financing, thus allowing the agency to receive
property tax revenues and create a base for innovative public financing.
In November 1989, under state law requirements; the City Council declared itself the Redevelopment
Agency. Further, in accordance with state law, the City Council adopted a redevelopment survey
area consisting of approximately 38 square miles (25,000 acres) including the entire City limits
(excluding future annexation areas) with the exception of the residential communities of Valencia
and Sand Canyon. No further action was taken by the Redevelopment Agency at that time.
The City's first Community Strategic Plan was finalized In August 1991. Within this plan, community
Issues, such as redevelopment activities, were Identified and an action pian was formulated to
Implement specific community needs. Action Item No. 4 of this Strategic Plan calls for the
completion of a redevelopment survey area to initiate the operation of the redevelopment agency.
In response, staff was directed to Initiate studies for determination of whether It would be feasible
to create a redevelopment Project Area from all or part of the survey area. These studies provide
the basis for determining the legal feasibility of redevelopment In the City.
STUDY AREA REPORT
A draft study area report is completed and ready for review by this Council. The City's
Redevelopment Consultant focused the study on approximately 8,000 acres within the survey area
(excluding conforming residential units, churches and mobilehome parks). The purpose of this
report Is to determine If there Is evidence that blight exists within the study area that conforms to
the state redevelopment law guidelines. The consultant found that 88% Is urbanized and 56.9% of
the parcels under review are blighted. (State law requires that the project area include 80%
urbanized land.) The Consultant has recommended that the study area as a whole does exhibit
areas of blighting conditions and is justifiable In terms of pursuing a project area formation. It Is
Important to note that if this present redevelopment project area Is adopted, it would comprise one
of the largest project areas within the history of Los Angeles County.
Agenda Item: -3
LOS ANGELES COUNTY POLICY ON REDEVELOPMENT
Although Santa Ciarita exhibits characteristics favorable for initiating local redevelopment activity,
the County of Los Angeles has attempted to curtail the establishment of redevelopment agencies
as a means to reduce revenue losses resulting from tax Increment financing. L.A. County and
County controlled agencies such as the Flood Control District and Sanitation District control
approximately 60% of the property tax dollar. This contrasts to the situation in Ventura and Orange
Counties where the counties receive 30-33% of the property tax.
The Los Angeles County Policy regarding City redevelopment project is to require a full "pass
through" of all County revenues. Although the exact agreement Is negotiated between the city and
County, the County's position is that must receive the full "share of all property taxes that would
have occurred within a Community Development Agency project had there been no project."
CURRENT STATE ISSUES PERTAINING TO REDEVELOPMENT
The state has adopted policy requiring payment of funds from local redevelopment agencies. On
September 14, 1992, Governor Wilson signed Senate Bill 844, reducing redevelopment agencies'
property tax Increment revenues In 1992-1993 by $205 million for schools. Each redevelopment
agency must pay Its statewide proportionate share using 1990-91 statewide tax Increment revenues.
For example, if a redevelopment agency's share is 1% of the statewide total property tax revenues
In 1990-91, It would then be required to pay $2,050,000.
The Governor's proposed budget for 1993-94 Is proposing to reduce property tax Increment
revenues by $300 million, an Increase of 68%.. According to the Community Redevelopment
Association (CRA), a reduction on tax Increment revenues could be expected to occur every fiscal
year for an indefinite time period.
REDEVELOPMENT BUDGET ASSUMPTIONS
Should redevelopment activities be pursued, the Community Development Department would need
to proceed with obtaining an appropriate budget adjustment. Estimated consultant fees would cost
the City approximately $190,000 (excluding any additional variable fees) to complete the
redevelopment plan adoption process. Additional legal fees have not been factored into these
estimates.
Once a redevelopment plan is adopted, the program would require additional operating funds.
Consideration for FY 93.94 budget commitments for program funding, potential legal fees and a
professional redevelopment position should be considered.
RECOMMENDATION
Staff recommends that the City Council discuss the feasibility of pursuing a redevelopment project
within the context of Los Angeles County policy and recent State legislature. If redevelopment Is
recommended to be pursued, the City Council should also discuss the next steps in the process
Including:
1. Budget considerations for $190,000 adjustment and
year;
2. City staffing resources; and
3. Establishment of a City Council sub -committee to
Angeles County.
.d"&d*
additional funding for 1993.94 fiscal
participate in negotiations with Los