SR-414-003
F:\Redevelopment\Staff Reports-Final\Implementation Plan\Staff report rev14.doc
Redevelopment Agency Meeting: November 16, 1999 Santa Monica, California
TO: Chairperson and Redevelopment Agency Members
FROM: Redevelopment Agency and City Staff
SUBJECT: Recommendation to: 1) hold a public hearing and adopt the Five-Year
Implementation Plan for Ocean Park 1A, Ocean Park 1B, Downtown and
Earthquake Recovery Redevelopment Project Areas and the Amended Ten-
Year Affordable Housing Compliance Plan; 2) target additional
redevelopment revenues not needed for public safety projects for affordable
housing; and 3) direct staff to identify ways to accelerate the generation of
housing revenues.
INTRODUCTION
This report recommends that the Redevelopment Agency 1) hold a public hearing to
review the consolidated Five-Year Implementation Plan for the Ocean Park 1A, Ocean
Park 1B, Downtown and Earthquake Recovery Redevelopment Project Areas and the
Amended Ten-Year Affordable Housing Compliance Plan and adopt these plans, as
required by Community Redevelopment Law; 2) target redevelopment revenues not
needed for public safety projects for affordable housing; and 3) direct staff to identify
ways to accelerate the generation of housing revenues.
BACKGROUND
Community Redevelopment Law (the Law) requires that the Agency adopt a Five-Year
Implementation Plan (the Implementation Plan) that contains goals, objectives, programs
and estimated expenditures for each redevelopment project area. An adopted
Implementation Plan does not constitute an approval of any specific program, project or
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expenditure; instead, it serves as a planning tool to outline an agencys projected actions
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and programs for the next five years.
The Agency adopted the initial Five-Year Implementation Plan for the Earthquake
Recovery Redevelopment Project Area on June 21, 1994, concurrent with the approval of
the Earthquake Recovery Redevelopment Plan. A consolidated Five-Year Implementation
Plan for the Downtown, Ocean Park 1A and Ocean Park 1B Redevelopment Project Areas
was adopted on November 22, 1994.
In addition to the requirement that redevelopment agencies spend a portion of tax
increment to increase and improve the supply of housing for low- and moderate-income
persons, the Law contains Agency inclusionary and production housing requirements.
These requirements, which are distinct from the City?s inclusionary housing ordinance
requirements, mandate that at least 15% of all new and substantially rehabilitated dwelling
units developed in project areas adopted on or after January 1, 1976, by public or private
entities, are to be available to very low-, low- and moderate-income households. Of these
units, not less than 40% are to be available to very low-income households. The Law
requires that the Agency adopt a ?Ten-Year Housing Compliance Plan? which quantifies its
obligation. The Ten-Year Compliance Plan must be updated every five years. Ocean Park
1A and 1B Project Areas are exempt from the Ten-Year Compliance Plan requirement
because they were adopted prior to January 1, 1976. A current and consolidated Housing
Compliance Plan for the Downtown and Earthquake Recovery Redevelopment Project
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Areas is attached to this staff report.
The Agency issued a Notice of Public Hearing, pursuant to California Community
Redevelopment Law, to review the current Implementation Plans and to consider adoption
of a new, consolidated Five-Year Implementation Plan at the October 12, 1999
Redevelopment Agency Meeting. This item was continued to November 16, 1999 to
incorporate the issuance of the1999 Series Earthquake Recovery Redevelopment Project
Area Tax Allocation Bond (which was approved by the Agency and City Council on
October 26, 1999) in the Implementation Plan?s estimated resources for the next five years.
DISCUSSION
Agency staff has prepared a consolidated Five-Year Implementation Plan covering all four
redevelopment project areas for the period FY 1999-2000 through FY 2003-04 and a
consolidated Amended Ten-Year Affordable Housing Compliance Plan. The consolidated
Implementation Plan quantifies the amount of funds anticipated to be received for the five-
year period form July 1999 through June 2004; identifies and quantifies current
commitments and legal mandates for the use of these funds; and establishes planning
priorities for the use of the balance of anticipated funds. The Implementation Plan
proposes that Earthquake Recovery Redevelopment Project Area uncommitted funds and
funds not legally mandated for affordable housing ($30.9 million) be allocated first for
disaster prevention and mitigation programs to meet the City?s critical seismic needs. The
Plan further proposes that uncommitted funds and funds not legally mandated for
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affordable housing from the Downtown, Ocean Park 1A and 1B Project Areas be allocated
to affordable housing ($5.3 million). In total, for the five-year period, approximately $34.6
million is proposed for seismic and related work and $44.3 million for affordable housing
(including legally mandated and discretionary funds) from all project areas.
Consolidated Five-Year Implementation Plan
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Ocean Park and Downtown Projects
Attachment A provides a summary of the consolidated Five-Year Implementation Plan.
Over the next five years, the new plan proposes to allocate all available funds (net of
administrative expenses and debt service obligations) to affordable housing. This will total
approximately $8.2 million.
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Earthquake Recovery Redevelopment Project
The Agency plans to leverage its tax increment revenue by issuing a series of tax
allocation bonds to the maximum capacity allowed under the Earthquake Recovery
Redevelopment Plan. In implementing this financing strategy, staff anticipates that the
Earthquake Recovery Redevelopment Project Area will generate approximately $120
million (net of administrative expenses and debt service) from a combination of bond
proceeds and tax increment cash flow. Of these project funds, approximately $30.9 million
remains uncommitted, while $89.1 million has been previously approved by the Agency for
(1) capital improvement projects, such as the Pico Streetscape Project, Crosswalks on
Pico Boulevard, Municipal Pool, Fourth Street Parking Structure, Virginia Avenue Park
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Expansion, and Seismic Retrofit of the Public Parking Structures ($14.1 million); (2)
purchase of the RAND property ($53 million) and other projects earmarked for funding with
proceeds of the 1999 tax allocation bond ($3.1 million for affordable housing projects and
$1.7 million for a seismic retrofit study of the downtown parking structures); and (3)
required housing set-aside deposits ($17.1 million).
The new Implementation Plan proposes that projected, discretionary funds generated over
the next five years from the Earthquake Recovery Redevelopment Project Area be
allocated for disaster prevention and mitigation programs ($30.9 million) to meet the City?s
seismic retrofit needs. The City has received time-sensitive funding from FEMA and other
federal sources for seismic safety work, which must be supplemented to meet the
estimated $46 million needed to retrofit parking structures and other City facilities, and to
stabilize the Pacific Palisades bluffs.
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Affordable Housing
The Agency?s second funding priority for the next five years is affordable housing. In total,
the state-mandated set-aside and available discretionary funds will provide an estimated
$44.3 million for affordable housing over the next five years from all redevelopment project
areas:
(1) Ocean Park 1A and 1B Project Areas: $5.5 million
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Housing Set-Aside Funds: $1.8 million
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Discretionary Funds: $3.7 million
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(2) Downtown Project Area: $2.7 million
Housing Set-Aside Funds: $1.2 million
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Discretionary Funds: $1.5 million
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(3) Earthquake Recovery Redevelopment Project Area: $36.1 million
Housing Set-Aside Funds: $17.1 million
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RAND land purchase: $15.9 million
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Other proceeds from 1999 Bond: $3.1 million
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Total: = $44.3 million
Should redevelopment funds designated for capital improvement projects no longer be
required, the Agency can re-designate these funds for affordable housing purposes.
Should tax increment revenues from the project areas exceed the Agency?s projections
(which are based on two percent annual growth), the additional tax increment revenue can
be allocated for affordable housing. Any funds generated by increased bonding capacity,
realized by paying taxing agencies their required pass-through allotments from bond
proceeds can be allocated to housing. Finally, to help address the immediacy of the City?s
affordable housing need, staff will identify ways to make funds available for housing at the
earliest reasonable time, including leveraging available funds through federal programs
such as the Section 108 Loan Guarantee Program.
Re-evaluation of the Implementation Plan
The proposed programs and allocation of resources in the Implementation Plan are guides
to assist the Agency in its expenditure of funds over the next five years. The Agency is
required to conduct another public hearing to review the progress of this Five-Year
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Implementation Plan between the second and third years following the adoption of the
plan. Changes to the Implementation Plan may be made at that time to reflect changes in
policy direction or re-designation of funds. The Agency may review and make changes to
the Plan at more frequent intervals at its discretion.
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10-Year Affordable Housing Compliance Plan
Staff has also prepared an Amended Ten-Year Affordable Housing Compliance Plan
addressing the period FY1994-95 through FY 2003-04, which describes the affordable
housing obligations of the Downtown and Earthquake Recovery Redevelopment Project
Areas. (The Ocean Park 1A and 1B project areas are exempt from this requirement and
were therefore excluded from the Compliance Plan). The Compliance Plan details the
Agency?s existing obligation, based on activity in the project areas over the last five years
(FY 1994-95 through 1998-99) and its projected obligation for the coming five years (FY
1999-00 through 2003-04). The Compliance Plan demonstrates that the Agency expects
to meet its housing obligations over the ten-year period in compliance with the
requirements of redevelopment law.
BUDGET/FINANCIAL IMPACT
There are no budgetary impacts associated with the adoption of the proposed Five-Year
Implementation Plan and Amended Affordable Housing Compliance Plan. Necessary
budgetary adjustments will be made as part of the normal City budget process. The
potential financial impacts resulting from the allocation of future tax increment revenues
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and bond proceeds to meet housing and other priority needs are as set forth in
Attachments B and C.
PUBLIC NOTICING
This hearing was publicly noticed for three weeks in the Argonaut newspaper (September
16, 23 and 30) and posted in four areas within each project area, pursuant to Community
Redevelopment Law, Section 33490 (d). The hearing was continued to November 9, 1999
and again to November 16, 1999.
RECOMMENDATIONS
It is recommended that the Redevelopment Agency take the following actions:
1. Adopt the Five-Year Implementation Plan for the Ocean Park 1A, Ocean Park 1B,
Downtown and Earthquake Recovery Redevelopment Project Areas and the
Amended 10-Year Affordable Housing Compliance Plan.
2. Target additional redevelopment revenues for housing during the period of the
Five-Year Implementation Plan that may become available as a result of: a)
increased tax increment revenue above the Agency?s two percent annual growth
projection; b) an increased bonded indebtedness limit; and c) a decreased need
for funds for public safety projects.
3. Direct staff to identify ways to accelerate the generation of redevelopment
revenues for affordable housing.
Prepared by: Jeffrey P. Mathieu, Director of Resource Management
Robert T. Moncrief, Housing and Redevelopment Manager
Martin Kennerly, Acting Administrative Services Officer
Tina Rodriguez, Redevelopment Administrator
Mona Miyasato, Senior Administrative Analyst-Redevelopment
Coordinator.
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Attachment A: Executive Summary
Attachment B: Five-Year Implementation Plan for the Ocean Park 1A, Ocean Park
1B, Downtown and Earthquake Recovery Redevelopment Project
Areas.
Attachment C: Amended 10-Year Affordable Housing Compliance Plan
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