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HomeMy WebLinkAbout2007-06-12 - AGENDA REPORTS - SCRDA REAL PROPERTY PGM (2)Agenda Item: `j CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR City Manager Approval: Item to be presented by: Christopher Price DATE: June 12, 2007 SUBJECT: FIRST READING OF AN ORDINANCE DESCRIBING THE REDEVELOPMENT AGENCY'S PROGRAM TO ACQUIRE REAL PROPERTY FOR THE NEWHALL REDEVELOPMENT PROJECT AREA DEPARTMENT: Community Development RECOMMENDED ACTION City Council conduct first reading and pass to second reading an ordinance entitled: "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, CONTAINING A DESCRIPTION OF THE SANTA CLARITA REDEVELOPMENT AGENCY'S PROGRAM TO ACQUIRE REAL PROPERTY BY EMINENT DOMAIN FOR THE NEWHALL REDEVELOPMENT PROJECT AREA" BACKGROUND California Community Redevelopment Law provides a redevelopment agency the authority acquire real property by eminent domain to assist with the elimination of blight and to provide affordable housing. State Senate Bill 53 was recently passed and took effect January 1, 2007, which requires all Redevelopment Agencies to adopt an ordinance on or before July 1, 2007, that contains a description of the Agency's program to acquire real property by eminent domain should that authority be deemed necessary to fulfill the stated goals of a particular project area. Specifically, the program details that in the event eminent domain is necessary, the Santa Clarita Redevelopment Agency is required as a public agency to follow a process by state law before a property can be acquired. The property acquisition process is included in the attached Exhibit "A" which describes the Agency SB53 program. Ordinance passed to Second reading No specific properties within the Newhall Redevelopment Project Area are identified within the Agency's SB53 program. Additionally, the program re -states that the Agency does not have residential eminent domain authority. Certain conditions are also identified within the program and must be met before the Agency can initiate property acquisitions. The SB53 Program does not require a public hearing and is adopted by an ordinance. In order to meet the state mandated requirements, the second reading and recommended adoption of this ordinance is scheduled for the June 26, 2007 City Council meeting. ALTERNATIVE ACTIONS Other action as determined by the City Council. FISCAL IMPACT No fiscal impact. ATTACHMENTS Ordinance Exhibit A SANTA CLARITA REDEVELOPMENT AGENCY 23920 Valencia Boulevard Santa Clarita, CA 91355 SENATE BILL 53 PROGRAM Newhall Redevelopment RSG 1NTKLLj4t T'C4AffVN4Tf PEVOLCPM00' Proj ect Adopted June , 2007 14911EN6W d6CVACEK 4RDUP IMG. i01f;44E5T 4lHS`REE7. SAP#IAANA,Vr� P-OK141A 9;701-4GD2 r 714 $41 UAR F 114541 `7T5 "._ . 6 4N.ati?t•'ItLL�liSta.::iJN tl: EBP. SG.CC N; SENATE BILL 53 PROGRAM Newhall Redevelopment Project INTRODUCTION This document is the Senate Bill 53 Program ("SB 53 Program") for the Newhall Redevelopment Project ("Project") of the Santa Clarita Redevelopment Agency ("Agency'). Section 33342.7 of the California Community Redevelopment Law, Health and Safety Code ("Law"), requires the City Council to prepare and adopt this SB 53 Program by ordinance. The purpose of this SB 53 Program is to describe the Agency's program to acquire real property by eminent domain. BACKGROUND The Agency was created by the City of Santa Clarita ("City') City Council on November 28, 1989 by Ordinance No. 89-27 to undertake redevelopment activities that remove physically and economically blighted conditions that inhibit and continue to plague economic growth in the City. The Agency`s first and only redevelopment project area to date was established by the City Council on July 8, 1997 by Ordinance No. 97-12. The Redevelopment Plan for the Newhall Redevelopment Project ("Redevelopment Plan") has not been amended since its original adoption. The Redevelopment Plan governs the use of redevelopment tools within the 913.63 -acre Newhall Redevelopment Project Area ("Project Area"), as shown in Exhibit 1 below. The Project Area contains retail, industrial, public and residential properties generally located along the Lyons Avenue and San Fernando Road corridors. The historic Downtown Newhall area, nearly 2,000 residential units and the Metrolink station are also within the Project Area boundaries. RSG Page 1 SENATE BILL 53 PROGRAM Newhall Redevelopment Project EXHIBIT l: NEWHALL REDEVELOPMENT PROJECT AREA ORSG Page 2 SENATE BILL 53 PROGRAM Newhall Redevelopment Project GOALS OF THE NEWHALL REDEVELOPMENT PLAN The Newhall Redevelopment Plan sets out certain redevelopment goals for the Project Area and to encourage the use of financial, land use, and land assembly tools to achieve these goals. The following strategies and objectives are those relevant to land assembly activities authorized in the Plan: ■ Develop programs and incentives for the rehabilitation of old, obsolescent, and deteriorating structures in the Project Area. • Promote the comprehensive planning, redesign, replanning, reconstruction, and/or rehabilitation in such a manner as to achieve a higher and better utilization of the land within. the Project Area. ■ Provide for adequate parcels and required public Improvements to induce new construction and/or rehabilitation by private enterprise. ■ Consolidate parcels as needed to induce new or expanded, centralized, commercial development in the Project Area. ■ Remove economic impediments to land assembly and in -fill development in areas that are not properly subdivided for development or redevelopment. EMINENT DOMAIN AUTHORITY IN REDEVELOPMENT PLAN The Newhall Redevelopment Plan authorizes the Agency to acquire property by a number of means including gift, negotiated purchase, or under certain circumstances eminent domain (also known as condemnation). Specifically, Section 321 of the Newhall Redevelopment Plan reads: `The Agency may acquire, but is not required to acquire, any Real Property located in the Project Area by gift, devise, exchange, purchase or any other lawful method, including eminent domain. The eminent domain provisions of this Plan do not apply to any Real Property which has been continuously occupied as a residence during the 90 -day period preceding the adoption by Agency of a resolution of necessity for acquisition of the property. Eminent domain proceedings, if used, must be commenced within twelve (12) years from the effective date of the ordinance adopting this Plan. Such time limit may only be extended by further amendment to this Plan. The Agency is authorized to acquire structures without acquiring the land upon which those structures are located. The Agency is also authorized to acquire any interest in Real Property less than a fee. : RSG ~ Page 3 SENATE BILL 53 PROGRAM Newhall Redevelopment Project Properties may be acquired and cleared by the Agency if a determination is made that one or mon; of the tbllowing conditions exist. 1. The buildings and/or structures must be removed in order to assemble land into parcels of reasonable size and shape to eliminate an impediment to optimal land development, 2. The buildings and/or structures are substandard as demonstrated by an inspection of the property by the Building and Safety Division of the City of Santa Clanta; 3. The buildings and/or structures must be removed in order to eliminate an environmental deficiency, including, but not limited to, incompatible land uses and small and irregular lot subdivisions; 4. The buildings and/ or structures must be removed to provide land for needed public facilities, including among others, rights-of-way, public parking facilities, open space, or public utilities; 5. The acquisition of property is allowed by the Calfomia Community Redevelopment Law and will promote the implementation of the Plan. Other provisions of this section notwithstanding, the Agency shall not acquire from any of its members or officers any property or interest in property except through eminent domain proceedings. The Acquisition of Personal Property is discussed in Section 322 of the Plan. "Generally, personal property shall not be acquired. However, where necessary for the execution of this Plan, the Agency is authorized to acquire personal property in the Project Area by any lawful means." WHY IS EMINENT DOMAIN NEEDED BY THE AGENCY? Though it has never been used by the Agency, eminent domain is an essential component of the Agency's redevelopment program, where consolidation of undeveloped and underdeveloped lots is one of the many reasons why redevelopment exists in the City. The Project Area is fraught with numerous instances of conflicting land uses and undersized parcels under multiple ownership that make it very difficult for the private sector to invest in redevelopment projects. By today's standards, larger parcels are needed to achieve successful development in this area. The Agency has had eminent domain authority as an option to address projects in the Project Area since 1997. Under the Law, the time limit on eminent domain lasts for 12 years, unless extended by amendment. The time limit will expire on July 8, 2009. Under the Redevelopment Plan, occupied residential property is exempt from eminent domain. This is true even in areas when residential uses exist in commercial zones in which long-term, recycling of these nonconforming residential uses in commercial zones is a possibility. The goals of the Redevelopment Plan cannot be addressed without the ability to acquire and assemble property. With eminent domain, the Agency has the ability to become more involved in achieving the Redevelopment Plan goals, by removing fractured ownership, creating larger, more developable parcels, and removing incompatible and conflicting uses. While relatively few CSG Page 4 SENATE BILL 53 PROGRAM Newhall Redevelopment Project acquisition projects may require the Agency to implement its eminent domain authority, the ability to use this tool can also be essential In negotiations to acquire property. This program is not proposing that any particular property be acquired through the use of eminent domain at this time. Simply because properties are located in an area where the Agency is permitted to use eminent domain does not necessarily mean that a property will in fact be acquired by the Agency. PROPERTY ACQUISITION PROCESS In the event that eminent domain is necessary, the Agency is required as a public agency to follow a process prescribed in state law before a property can be condemned. At present, the process Involves the following major steps and actions: • If property is offered for sale (by owner or through a broker/agent) the Agency may discuss and negotiate the purchase with the owner (or broker/agent) as any other buyer. ■ If the property is not for sale but the Agency is interested in buying the property, the Agency must undertake certain steps before it can acquire the property: ■ The Agency must appraise the property. A written "notice to appraise" must be sent to the property owner and the property owner has the right to accompany the appraiser on a site visit. ■ If the Agency decides to make an offer, the Agency must offer the appraised value and provide the property owner with certain information concerning how the appraised price was determined. • The Agency must offer to pay the reasonable costs, not to exceed $5,000, of an independent appraisal ordered by the owner of the property that the Agency offers to purchase under a threat of eminent domain, as specified, at the time the Agency makes the offer to purchase the property. ■ Once the offer is made, the Agency and property owner are to negotiate for a reasonable period of time, usually up to 30 days, to see If the parties can arrive at a negotiated agreement. ■ If a negotiated agreement cannot be reached, the Agency cannot acquire the property unless the Agency has current condemnation authority in its Redevelopment Plan. ■ If the Agency has condemnation authority and desires to consider acquisition by condemnation, the Agency must first hold a hearing and give notice of that hearing to the property owner who has the right to appear and be heard concerning the proposed acquisition by condemnation. • If after the conclusion of the hearing the Agency desires to proceed with the acquisition by condemnation, it cannot do so unless it adopts, by a 213 "super majority' of the Agency board, a "resolution of necessity" that Identifies the public use for the property and make other findings required by California Eminent Domain Law. ■ If the resolution of necessity is adopted, the Agency may then proceed to file a court action seeking acquisition of the property by condemnation, but must also at that time deposit in court the full amount of probable compensation to be paid to the property owner (normally the appraised value). a G r;, ^ Page 5 SENATE BILL 53 PROGRAM Newhall Redevelopment Project The Agency, when it files the condemnation action or later, may seek an order of possession so it can gain possession of the property while the litigation proceeds concerning the value of the property. The owner may also challenge the Agency's right to use its condemnation authority. ■ The condemnation litigation then proceeds until its conclusion (or until a settlement is reached). If a court finds, on motion of the defendant, that the offer of the Agency was unreasonable and the offer of the defendant was reasonable In light of the evidence admitted and the compensation awarded in the proceeding, then the costs allowed shall include the defendant's litigation expenses. Litigation expenses are defined in Section 1250.410 (e) as "the party's reasonable attorneys fees and costs, Including reasonable expert witness and appraiser fees." Because condemnation involves purchasing private property for a public purpose, federal and state laws offer the following benefits to the owner whose property is acquired through condemnation: ■ The redevelopment agency must pay cash unless the owner desires otherwise. The property owner receives certain tax benefits, such as a right to reinvest the sale proceeds within 2 calendar years (3 years for business property) before incurring capital gains liabilities, and the property owner may transfer the assessed value of the property purchased through condemnation to a new property acquired by the property owner, provided that the value of the new property does not exceed 110% of the value of the condemned property. Page 6