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SR-121785-p \'~ L, i ~ ~~ ~ ~~ ~I~ DEC 17 t~5 C/ED:EDD:EF:SW:mb Council Meeting of 12/17/85 Santa Monica, California TO: Redevelopment Agency/City Council FROM: City Staff SUBJECT: Recommendation to Adopt Resolutions to Determine Third Street Mall Parking and Public Improvements. to be of Benefit to the Downtown Redevelopment Project INTRODUCTION This report recommends the Agency/Council adopt resolutions which find certain Third Street Mall parking and public improbements to be of benefit to the Downtown Redevelopment Project Area. BACKGROUND. The Third Street Mall Preliminary Plan was presented to the City Council for comments and review on October 1, 1985. As part of the Plan, a Mall Parking and Public Improvement Program was pres- ented, and the possible use of tax increment funds from the Down- town Redevelopment Project was proposed. While the City Council took no formal action to allocate Downtown tax increment for the Mall Project at that time, it is recommended that the flexibility to do so be preserved. For that reason, and to meet the techni- cal requirements of recent State Legislation, the Redevelopment Agency and City Council are requested to take various technical actions prior to January 1, 1986. DISCUSSION Recently, the State Legislature passed and the Governor signed AB 265, an act to amend Section 33334.3 and to add Sections 33334.6 ~~ ~~ 1 - 1 - QFC i ~ iy95 and 33334.7 to the Health and Safety Codes. The new statute re- quires that, unless Redevelopment Agencies take certain actions prior to January 1, 1986, twenty percent of the annual tax incre- ment must be set aside for the purpose of increasing and improv- ing the supply of low and moderate income housing for all proj- ects adopted prior to 1977. The Downtown Redevelopment Project was adopted January 13, 1976 and therefore the future use of Downtown tax increment will be subject to the limitations set forth in AB 265. If in the future the Agency wishes to set aside less than the required twenty percent for housing, the Agency must take action by January 1, 1986 to find the Mall Parking and Public Improve- ment Program to be of benefit to the Agency. Agency Counsel has determined that adoption of a Cooperation and Reimbursement Agreement for the Third Street Mall Project will fulfill the technical and legal requirements of AB 265 and also assure that the Agency/City will have the future option to ex pend Downtown tax increment for the Third Street Mall Plan or to dedicate such funds for the production of low and moderate income housing. The actions recommended in this report maintain the Redevelopment Agency/City Council's ability to annually allocate Downtown. tax increment funds based on future community needs. Under California Redevelopment Law, Health and Safety Code, Sec- tion 33445, redevelopment agencies may use tax increment funds to finance any publicly owned improvements or facilities inside or outside the project area if a finding is made that the improvements are of benefit to the project or the immediate neighborhood - 2 - and that no other reasonable means of financing is available. ThPSe of-benefit findings provide the basis for the Cooperation and Reimbursement Agreement between the Redevelopment Agency and the City of Santa Monica. Technically, the Redevelopment Agency and the City Council must earn adopt a resolution that determines the Third Street Mall Parking and Public Improvement Plan to be of benefit to the Downtown Redevelopment Project and authorizes. the Cooperation Agreement to establish a funding relationship between the Agency and City. Summary reports documenting the of benefit findings as well as necessary Agency/Council resolutions adopting these findings are attached to this report for Agency/ Council action. BUDGET/FISCAL IMPACT Adoption of the attached resolutions will not result in fiscal impact prior to formal Agency/Council adoption of a financing program for the Third Street Mall Parking and Public Improvement Plan. 'T'his action will follow a complete financial analysis as part of the Third Street Mall Specific Plan adoption process. RECGPIMENDAT IGNS Staff recommends that the Agency: 1. Adopt a resolution of the Redevelopment Agency to deter- mine the Third Street Mall Parking and Public Improve- ment Plan to be of benefit to the Downtown Project Area, that no other reasonable means of financing is avail- able, and approving and authorizing the execution of a cooperation and reimbursement agreement between the City and Agency. Staff recommends that the City Council: 1. Adopt a resolution of the City Council to determine the Third Street ~~lall Parking and Public Improvement Plan to - 3 - be of benefit to the Downtown Project Area, that no other reasonable means of financing is available, and approving and authorizing the execution of a cooperation and reimbursement agreement between the City and Agency. Prepared by: Ernesto R. Flores, Manager Sidney L. White, Senior Administrative Analyst Economic Development Division Community and Economic Development Department Attachments: 1. Agency Resolution 2. Council Resolution 3. Exhibit A to Resolutions: Cooperation and Reimburse- ment Agreement 4. Exhibit B to Resolutions: Summary Report 5. Exhibit A to Summary Report: Cooperation and Reim- bursement Agreement 6. Exhibit B to Summary Report: Site ~Kap 7. Exhibit C to Summary Report: Construction Cost Estimates ps2sr - 4 - Reference Contract No. 4624 (CCS).