HomeMy WebLinkAbout- - Extension of Downtown Redevelopment Proj - 11/16/2010CITY COUNCIL AGENDA REPORT
MEETING DATE: NOVEMBER 16, 2010 ITEM NUMBER:
SUBJECT: EXTENSION OF DOWNTOWN REDEVELOPMENT PROJECT REDEVELOPMENT
PLAN LIMITS
DATE: OCTOBER 20, 2010
FROM: DEVELOPMENT SERVICES DEPARTMENT
PRESENTATION KIMBERLY BRANDT, DEVELOPMENT SERVICES DIRECTOR AND
BY: REDEVELOPMENT AGENCY EXECUTIVE DIRECTOR
FOR FURTHER INFORMATION CONTACT: KIMBERLY BRANDT (714) 754-5270
RECOMMENDED ACTION
Conduct public hearing and introduce for first reading an ordinance authorizing the extension of
the Costa Mesa Redevelopment Agency Downtown Redevelopment Project time limit for
redevelopment activities and the time to collect tax increment by two years.
BACKGROUND
The Costa Mesa Redevelopment Agency was required to make certain payments to the
County's Educational Revenue Augmentation Fund ("ERAF") in fiscal years 2004-05 and 2005-
06. The total ERAF amounts paid by the Agency in 2004-05 and 2005-06 were $529,407.
The State Legislature provided for an extension of time limits for certain redevelopment plans as
a result of the ERAF requirement. An amendment to the redevelopment plan for the Agency's
Downtown Redevelopment Project is required to extend the time limit for both redevelopment
activities and the time to collect tax increment and repay Agency indebtedness, following a
public hearing.
If approved, the ordinance would extend the effectiveness of the Redevelopment Plan by two
years, and extend the time that the Agency is authorized to collect tax increment by two years.
ANALYSIS
Redevelopment Plans are required to contain a time limit on redevelopment plan activities and a
time limit for collection of tax increment and repayment of debt.
When ERAF payments were required to be paid by redevelopment agencies in fiscal year 2004-
05 and 2005-06, the State Legislature adopted Senate Bill 1096 ("SB 1096"), allowing
redevelopment agencies to extend their plan time limits under certain circumstances. SB 1096
allows the City Council to adopt an ordinance extending the time limit on redevelopment
activities, collection of tax increment and repayment of debt by two years based on the 2004-05
and 2005-06 ERAF payment if the redevelopment plan had less than 20 years of effectiveness
remaining when the payments were made.
SB 1096 requires that the City Council hold a public hearing prior to the first reading of the
ordinance extending the plan limits. It also requires that taxing entities that share in the
Agency's tax increment (such as the County, school and community college districts) be notified
of the date and time of the public hearing at least 30 days prior to the public hearing. Notices
were mailed to such taxing entities on October 15, 2010. The notice was also published in the
Daily Pilot on November 2, 2010, at least ten days prior to the date of the public hearing as
required by SB 1096.
After adoption of the ordinance, the time limits for the redevelopment project will be:
Plan
Effectiveness
December 24, 2016
Collect Tax Increment
and Repay Debt
December 24, 2026
In implementing its 2009-10 budget, the State Legislature adopted Assembly Bill 26 4x ("AB
26"). AB 26 required agencies to pay certain amounts in Fiscal Year 2009-10 and 2010-11 to
the County's Supplemental Educational Revenue Augmentation Fund ("SERAF"), which the
State used to offset its payments to school and college district. The Agency's obligations under
AB 26 totaled over $1.7 million. AB 26 also provided for a one year extension of
redevelopment plans for agencies making a SERAF payment.
The California Redevelopment Association and several cities filed a lawsuit against the State,
alleging that the AB 26 demanding the SERAF payment violated several provisions of the State
Constitution. A judge ruled in May 2010 in favor of the State. An appeal of the May 2010
decision has been filed. The California Redevelopment Association is recommending that
agencies delay adopting a redevelopment plan extension under AB 26 until the appeal process
has been completed.
FISCAL REVIEW
The plan extension will result in the Agency's collection of an estimated additional $8 million of
gross tax increment, which will provide $6.4 million for repayment of Agency debt and $1.6
million for Low and Moderate Income Housing projects or programs.
LEGAL REVIEW
The City Attorney has reviewed and approved the attached ordinance as to form.
CONCLUSION
The attached ordinance is recommended for first reading after a public hearing is conducted.
KIMBERLY BRANDT
Development Services Director
And Redevelopment Agency Executive Director
Attachments: 1. Proposed Ordinance
BOBBY YOUNG
Budget and Research Officer
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ATTACHMENT 1
ORDINANCE
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
COSTA MESA, CALIFORNIA EXTENDING THE TIME LIMIT OF
THE EFFECTIVENESS OF AND THE REDEVELOPMENT PLAN
FOR THE DOWNTOWN REDEVELOPMENT PROJECT AREA;
EXTENDING THE TIME LIMIT FOR PAYMENT OF
INDEBTEDNESS AND RECEIPT OF PROPERTY TAXES
UNDER THE REDEVELOPMENT PLAN FOR THE DOWNTOWN
REDEVELOPMENT PROJECT AREA; AND MAKING OTHER
FINDINGS IN CONNECTION THEREWITH
WHEREAS, the Costa Mesa Redevelopment Agency ("Agency") is a community
redevelopment agency duly created, established and authorized to transact business and
exercise its powers, all under and pursuant to the California Community Redevelopment Law
(Part 1 of Division 24, commencing with Section 33000, of the Health and Safety Code of the
State of California) ("CRL"); and
WHEREAS, the Agency is engaged in activities necessary and appropriate to carry out
the Redevelopment Plan ("Redevelopment Plan") for the Downtown Redevelopment Project
("Project Area") which was adopted by the Agency's legislative body, the City Council of the City
of Costa Mesa ("City Council"), by Ordinance No. 73- 74 on December 24, 1973, and thereafter
amended by Ordinance No. 77-27 on July 5, 1977, Ordinance No. 80-22 on November 18,
1980, Ordinance No. 86-24 on December 15, 1986, Ordinance No. 94-15 on November 7, 1994
and Ordinance No. 03-13 on November 17, 2003; and
WHEREAS, Ordinance No. 03-13 extended the original time limit on the effectiveness of
the redevelopment plan of December 24, 2013 to December 24, 2014, and also extended the
period for payment of indebtedness and receipt of property taxes from December 24, 2023 to
December 2024 each by one year pursuant to Section 33333.6 of the CRL as amended by SB
1045; and
WHEREAS, pursuant to CRL Section 33333.6, Ordinance No. 94-15 established a time
limit on the effectiveness of the Redevelopment Plan and a time limit on the period for payment
of indebtedness and receipt of property taxes under the Redevelopment Plan, which limits were
subsequently amended by Ordinance No. 03-13; and
WHEREAS, Section 33681.12 was added to the CRL by Senate Bill 1096, enrolled on
July 29, 2004 and chaptered on August 5, 2004 ("SB 1096"), which required the Agency during
the 2004-05 and 2005-06 fiscal years to make a payment for deposit in the Orange County
Educational Revenue Augmentation Fund ("ERAF"); and
WHEREAS, with respect to redevelopment plans adopted on or before December 31,
1993 for which the time limit for the effectiveness of the redevelopment plan is less than 10
years, or, under certain conditions, is more than 10 years but less than 20 years, from the last
day of the fiscal year in which an ERAF payment is made pursuant to CRL Section 33681.12,
Section 33333.6 of the CRL was amended by Senate Bill 1096 to provide that when a
redevelopment agency is required to make a payment pursuant to Health and Safety Code
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Section 33681.12, the legislative body may amend the redevelopment plans to extend by one
year for each ERAF payment made pursuant to CRL Section 33681.12 the time limit on the
effectiveness of the redevelopment plan and the limit to repay indebtedness or receive property
taxes pursuant to CRL Section 33670 by adoption of an ordinance, without the necessity of
compliance with CRL Section 33354.6 or Article 12 (commencing with CRL Section 33450) or
any other provision of the CRL related to the amendment of redevelopment plans, including, but
not limited to, the requirement to make the payment to affected taxing entities required by CRL
Section 33607.7 provided the City Council makes certain findings with respect to the
Redevelopment Plan; and
WHEREAS, the Agency made the Fiscal Year 2004-05 ERAF payment to the Orange
County Educational Revenue Augmentation Fund pursuant to CRL Section 33681.12 on or
before May 10, 2005; and
WHEREAS, the Agency made the Fiscal Year 2005-06 ERAF payment to the Orange
County Educational Revenue Augmentation Fund pursuant to CRL Section 33681.12 on or
before May 10, 2006; and
WHEREAS, the time limit for the effectiveness of the Redevelopment Plan was
December 24, 2014 at the time that each payment ERAF payment was made, which time limit
was less than 10 years from the end of the each fiscal year in which the ERAF payments were
made; and
WHEREAS, the City Council desires to adopt this ordinance to amend and extend
certain time limitations of the Redevelopment Plan, as more particularly set forth below, in
accordance with CRL Section 33333.6(e)(2)(D)(i) as added by SB 1096; and
WHEREAS, the enactment of this Ordinance is exempt from the California
Environmental Quality Act (Public Resources Code Section 21000 et seq.) ("CEQA") pursuant
to CEQA Guidelines Section 15378(b) (4) because it is a fiscal activity which does not involve
any commitment to any specific project which may result in a potentially significant physical
impact on the environment; and
NOW THEREFORE, the City Council of the City of Cost Mesa hereby ordains as follows:
1. The current time limit on the effectiveness of the Redevelopment Plan is hereby
extended by two years (from the existing time limit of December 24, 2014) to December 24,
2016, and the Costa Mesa Redevelopment Agency is hereby authorized to act with respect to
the Redevelopment Plan at any time during which the Redevelopment Plan is effective.
2. The current time limit on paying indebtedness or receiving property taxes
pursuant to the Redevelopment Plan and CRL is hereby extended by two years (from the
existing time limit of December 24, 2024) to December 24, 2026, and the Costa Mesa
Redevelopment Agency is hereby authorized to act with respect thereto during such extended
period.
3. Except with respect to the amendments set forth herein, the Redevelopment
Plan, as amended, is and shall remain unchanged and in full force and effect in accordance with
its terms.
4. The Deputy City Clerk is hereby authorized to file a Notice of Exemption with the
County of Orange pursuant to CEQA Guidelines Section 15094.
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5. This Ordinance shall go into effect and be in full force and operation from and
after thirty (30) days after its final passage and adoption. The City Clerk shall certify to the
passage and adoption of this Ordinance and shall cause this Ordinance to be published as set
forth below.
6. At least five (5) days prior to its final adoption, copies of this Ordinance shall be
posted in at least three (3) prominent and public locations in the City; and a notice shall be
published once in the Daily Pilot, a newspaper of general circulation in the City of Costa Mesa,
setting forth the title of this Ordinance, the date of its introduction and the places where this
Ordinance is posted in accordance with Government Code Section 36933. Within fifteen (15)
days following final adoption, a summary of the Ordinance with the names of the council
members and votes shall be published in a newspaper of general circulation.
PASSED AND ADOPTED this day of ,
ATTEST:
Mayor of the City of Costa Mesa
APPROVED AS TO FORM:
Deputy City Clerk of the City of Costa Mesa City Attorney
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STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF COSTA MESA )
I, JULIE FOLCIK, Deputy City Clerk and ex -officio clerk of the City Council of the City of
Costa Mesa, hereby certify that the above and foregoing Ordinance No. was introduced
and considered section by section at a regular meeting of said City Council held on November
16, 2010, and thereafter passed and adopted as a whole at a regular meeting of said City
Council held on the day of by the following roll call vote:
AYES:
NOES:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Seal of the City
of Costa Mesa this day of
Deputy City Clerk and ex -officio Clerk of the City
Council of the City of Costa Mesa
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