SR-414-001 (15)
RMD:Housing:BM:TR:resource/share/staffreports/SB211.doc
City and Agency Joint Meeting: December 16, 2003 Santa Monica, California
TO: Mayor and City Council
Chairperson and Redevelopment Agency
From: City Staff
Subject: Adoption of Ordinance Eliminating the Time Limit for Incurring Debt for the
Downtown Redevelopment Project Area
Introduction
This report recommends that the Redevelopment Agency Board request City Council to
introduce for first reading an ordinance eliminating the time limit for incurring debt for the
Downtown Redevelopment Project Area (?Project Area?), as per Senate Bill 211 (?SB 211?),
in order to ensure that redevelopment activity within the Project Area continues to realize its
potential.
Background
Effective January 1, 2002, SB 211 allows the elimination of the time limit to incur debt for
redevelopment project areas adopted prior to January 1, 1994 through the adoption of a
summary ordinance to that effect. The existing time limit to incur debt for the Downtown
Redevelopment Project Area is January 1, 2004. The elimination of this time limit after the
January 1,2004 time limit has ended is permissible.
Discussion
Adoption of the ordinance will allow the Downtown Project Area (?Project Area?) to continue
incurring debt through the remainder of the Project Area?s life, January 1, 2016. The ability
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to effectively leverage this tax increment to fund redevelopment activities is an integral
component of the Redevelopment Agency?s overall redevelopment strategy. Elimination of
the time limit to incur debt will allow the Agency to secure funding commitments for
continued redevelopment efforts in the Project Area. As such efforts are completed, the
Project Area?s taxable value will increase proportionately. Housing set-aside funds, which
are expended on affordable housing within the City, will increase proportionately.
If a legislative body elects to adopt such an ordinance, the redevelopment agency must
begin making statutory pass-through payments to certain taxing entities based upon a
formula specified within the amended California Redevelopment Law (?CRL?). An estimate
of the statutory pass-through payments resulting from the elimination of the time limit to
incur debt for the Project Area represents approximately five percent (5%)of the gross tax
increment revenue that will be collected for the Project Area.
Budget/Financial Impact
It is estimated that the Project Area will generate approximately $60 million in tax increment
over the remainder of its life. The statutory pass through payments that will be required are
estimated at $3.3 million for the Project Area?s life, or approximately five percent (5%) of the
gross tax increment collected.
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Recommendations
It is recommended that the City Council introduce for first reading the attached ordinance
eliminating the time limit for incurring debt for the Downtown Redevelopment Project Area,
as per SB 211, and that the Agency consent to this action.
Prepared by: Jeff Mathieu, Director Resource Management Dept.
Bob Moncrief, Housing Manager
Tina Rodriguez, Redevelopment Administrator
Marty Kennerly, Administrative Services Officer
Attachment: A ? Ordinance
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ORDINANCE NO._________ (CCS)
(CITY COUNCIL SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF SANTA MONICA
ELIMINATING THE TIME LIMIT ON THE ESTABLISHMENT OF
LOANS, ADVANCES AND INDEBTEDNESS FOR THE
DOWNTOWN REDEVELOPMENT PROJECT
WHEREAS, the Redevelopment Plan (?Redevelopment Plan?) for the Downtown
Redevelopment Project (?Project Area?) was approved and adopted by the City Council of
the City of Santa Monica (?City Council?) on January 13, 1976, by Ordinance No. 1021; and
WHEREAS, Health and Safety Code Section 33333.6 applies to every
redevelopment plan adopted on or before December 31, 1993; and
WHEREAS, the Project Area was adopted on or before December 31, 1993;
WHEREAS, Health and Safety Code Section 33333.6(e)(2) provides that on or after
January 1, 2002, a redevelopment plan may be amended by a legislative body by adoption
of an ordinance to eliminate the time limit on the establishment of loans, advances, and
indebtedness required by Health and Safety Code Section 33333.6 prior to January 1,
2002; and
WHEREAS, the Redevelopment Plan contains a time limit for establishing loans,
advances and indebtedness for the Project Area;
WHEREAS, the Redevelopment Agency of the City of Santa Monica (?Agency?) and
the City Council desire to eliminate the time limit on the establishment of loans, advances,
and indebtedness for the Project Area contained in the Redevelopment Plan; and
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WHEREAS, Health and Safety Code Section 33607.5 provides that the City of Santa
Monica (?City?) can elect to receive its share of payments made pursuant to Section
33607.5. The City desires to make such an election.
NOW, THEREFORE, the City Council of the City of Santa Monica does ordain as
follows:
SECTION 1. Amendment of Redevelopment Plan. In accordance with Health and
Safety Code Section 33333.6(e)(2), the Redevelopment Plan is hereby amended by
adoption of this Ordinance to eliminate the time limit on the establishment of loans,
advances, and indebtedness required by Health and Safety Code Section 33333.6 Law
prior to January 1, 2002.
SECTION 2. City Election. The City hereby elects to receive its share of payments
made pursuant to Health and Safety Code Section 33607.5. The City Council hereby
directs the City Clerk to transmit a copy of this resolution to the County Auditor-Controller?s
Office.
SECTION 3. Application. The limitations established in this Ordinance shall apply to
the Redevelopment Plan for the Downtown Redevelopment Project and may only be
amended in the manner required and to the extent permitted by law.
SECTION 4. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent with the provisions of this Ordinance, to the extent of such
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inconsistencies and no further, is hereby repealed or modified to that extent necessary to
effect the provisions of this Ordinance.
SECTION 5. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court
of competent jurisdiction, such decision shall not affect the validity of the remaining portions
of this Ordinance. The City Council hereby declares that it would have passed this
Ordinance and each and every section, subsection, sentence, clause, or phrase not
declared invalid or unconstitutional without regard to whether any portion of the ordinance
would be subsequently declared invalid or unconstitutional.
SECTION 6. The Mayor shall sign and the City Clerk shall attest to the passage of
this Ordinance. The City Clerk shall cause the same to be published once in the official
newspaper within 15 days after its adoption. This Ordinance shall become effective 30
days from its adoption.
APPROVED AS TO FORM:
_________________________
MARSHA JONES MOUTRIE
City Attorney
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