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City
Council and Redevelopment
Agency Report |
City Council and
Redevelopment Agency Meeting: August 10, 2010
Agenda Item: 8-E
To: Mayor and City Council
Chairperson
and Redevelopment Agency
From: Andy Agle, Director of Housing and Economic Development
Carol
Swindell, Director of Finance
Subject: Cooperation Agreement for the Agency’s Five-Year
Implementation Plan Projects
Recommended Action
Staff recommends that the City Council (Council):
1) Adopt a resolution (Attachment A) finding the use of funds from the Redevelopment Agency for the Projects to be of benefit to the Earthquake Recovery Redevelopment Project, Downtown Redevelopment Project, and Ocean Park 1A and 1B Redevelopment Projects (collectively, “the Project Areas”); and
2) Authorize the City Manager to execute a Cooperation Agreement between the City and the Redevelopment Agency for payment of the costs associated with the Projects.
Staff recommends that the Redevelopment Agency (Agency):
1) Adopt a Resolution (Attachment
B) finding the use of funds from the Redevelopment Agency for the Projects to
be of benefit to the Earthquake Recovery Redevelopment Project (ERRPA), Downtown
Redevelopment Project, and Ocean Park 1A and 1B Redevelopment Projects; and,
2) Authorize the Executive Director
to execute a Cooperation Agreement between the Redevelopment Agency and the
City for payment of the costs associated with the Projects.
Executive Summary
This staff report recommends the completion of certain
actions by the Council and Agency, as required by California Redevelopment Law,
in order to finance the Projects as described within this report with
redevelopment funds. Specifically, the Council
and Agency must execute a cooperation agreement and adopt resolutions making
certain findings of benefit. The
Cooperation Agreement will
provide for the implementation of redevelopment activities associated with the Projects,
and will allow the Agency to make payments to the City for certain costs
related to undertaking the redevelopment activities on behalf of the Agency.
Background
On November
17, 2009, the Agency adopted its Five-Year
Implementation Plan (the “Plan”) for the period of FY 2009-10 through FY
2013-14, with established goals to support affordable housing, disaster
prevention and mitigation, community revitalization, commercial revitalization,
and institutional revitalization.. To
implement the programs and activities (the “Projects”) associated with each
goal, the Agency made redevelopment fund allocations totaling approximately
$283 million, based on a variety of assumptions regarding growth in tax
increment, borrowing costs, timing of borrowing, State grabs of local funds,
leveraging opportunities and State law.
Discussion
The capital improvements and affordable housing activities associated
with the Projects are considerable undertakings. Specifically, the Projects are
comprised, but not limited to, the following efforts:
·
Affordable Housing: In addition to the Project Areas’ anticipated 20 percent
housing set-aside increment revenues, invest non-housing funds toward the
preservation and production of affordable housing.
· Disaster Prevention and Mitigation: To fund disaster prevention and mitigation programs to meet the City’s seismic retrofit needs and mitigate against effects of future disasters. Funds will be used for rehabilitation of the Santa Monica Civic Auditorium, implementation of the Traffic Signal Master Plan and property acquisition to support the reconstruction and expansion of parking resources called for in the Downtown Parking Strategic Plan.
·
Community Revitalization: To improve, repair, rebuild and provide parks
and community facilities including: the Palisades Garden Walk and Town Square
parks, open space and facilities in the Civic Auditorium District, the Civic
Center early childhood education center, the Pico Neighborhood Library, planning
and design for the Civic Center parks and facilities, and the Memorial Park
expansion.
· Commercial Revitalization: To revitalize and promote economic investment and business expansion in the Project Areas or of benefit to the Project Areas, and preserve the area’s existing employment base by supporting improved access to the Project Areas by employees and customers, primarily by supporting enhancements to the Exposition Light Rail Station Areas.
·
Institutional Revitalization: To help
achieve community goals associated with the Santa Monica-Malibu School
District’s master plan for the Santa Monica High School campus, including
designing and constructing facilities for joint-use between the school and the
broader community.
In considering the Agency’s desire to ensure the timely implementation
and completion of the Projects, the Agency wishes to enter into a cooperation agreement
with the City for the pledge of net available tax increment to finance the
public improvements and affordable housing programs outlined in the Agency’s
current and prospective implementation plans. The Projects outlined above will constitute
the first tier of improvements the Agency wishes the City to carry out. In the event there are sufficient net
available tax increment funds to finance additional improvements, the Agency
wishes the City to carry out the second tier of improvements listed in the
attached resolutions.
Under California Redevelopment Law, section 33220(e), certain
public bodies, including the City, may aid and cooperate in the planning,
undertaking, construction, or operation of redevelopment projects. To carry out
the Projects in accordance with the objectives and purposes of the Plan, the Agency
desires assistance and cooperation in administering the development,
construction, improvement, infrastructure, occupancy, and use requirements
applicable to the Projects. The City agrees
to aid the Agency and cooperate with the Agency to expeditiously implement the
Projects in accordance with the Plan and undertake and complete all actions
necessary or appropriate to ensure that the objectives of the Plan are
fulfilled within the time effectiveness of the Project Areas.
Collectively, the purpose of the Agreement is to facilitate the
implementation of the Projects and to provide funding necessary to effectuate
the completion of the Projects with net available tax increment in this current
fiscal year and forthcoming fiscal years, until the expiration of the
Earthquake Recovery Redevelopment Project area in 2042, the Downtown
Redevelopment Project area in 2029 and the Ocean Park 1A and 1B Redevelopment Project
areas in 2022. Net available tax
increment is defined as any available tax increment, net of statutory pass-through
payments, set-asides for affordable housing, debt service payments, and
existing contractual obligations. The pledge
of net available tax increment will constitute obligations to make payments
authorized and incurred pursuant to Section 33445. The obligations to be set forth in the
Agreement, as recommended in this report, will be contractual obligations
that, if breached, could subject the Agency to damages or other liabilities or
remedies. In this
regard, the Agreement will provide that actual payment for the Projects will be
contingent upon their preparation in accordance with the applicable provisions of federal, state and
local laws, including the obligation to comply with environmental laws such as
CEQA.
The first component of the financing plan associated with the
Agreement will come back to Council for consideration in the Fall. It is anticipated that among various options
to finance the obligations of the Projects, the financing plan will include
pledge of tax increment from the Earthquake Recovery Redevelopment Project Area
to issue bonds. The proceeds of the
bonds secured by a pledge of tax increment will be utilized to make payments on
indebtedness of the Agency or to directly pay the costs of public
infrastructure and other public improvements and activities associated with the
Projects or to refinance the Agency’s contractual obligations in the Agreement.
The Agreement will allow the Agency to record the financial
obligations as indebtedness. The
resolutions must be adopted in order to make the appropriate findings as
required by the Health and Safety Code Section 33445. The attached resolutions find that: 1) the use of these funds is a benefit to the
Earthquake Recovery Redevelopment Project,
Downtown Redevelopment Project, and Ocean Park 1A and 1B Redevelopment
Project areas; 2)
no other reasonable means of financing for the improvements is available; 3)
the payment of funds for the Projects will assist in the elimination of one or
more of the conditions resulting from the Earthquake Recovery Redevelopment
Project, Downtown Redevelopment Project, and
Ocean Park 1A and 1B Redevelopment Project
Areas; and, 4) the Projects are consistent with the Redevelopment
Agency’s Five-Year Implementation Plan.
In accordance with Health and Safety Code Section 33679, the Agency published two public hearing notices, on July 27 and August 3, 2010, in the Santa Monica Daily Press, informing the public about this meeting and the availability of a summary report for review and input. A copy of the summary report is provided in this report as Attachment C.
Financial and Budget Actions
There are no immediate
budgetary impacts associated with the actions recommended in this report. The Agreement is not intended to, and does
not, create any commitment of the City’s General Fund in any manner that would
violate the debt limitations under article XVI, section 18 of the State
Constitution or the fiscal provisions of the City’s Charter.
Prepared by: Nia Tang, Senior
Development Analyst
Approved: |
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Forwarded to Council: |
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Andy Agle, Director Housing and Economic Development |
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Rod Gould City Manager |
Approved: |
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Carol Swindell, Director Finance |
Attachments:
Attachment
A: City Council Resolution for the Projects
Attachment B: Redevelopment Agency Resolution for the
Projects
Attachment C: Section 33679 Summary Report