Economic Development Division

Report to the City Council

Merger of the Northwest

Redevelopment Projects, and

Amendment No. 4 to the Villa-Parke Redevelopment Plan

October 25, 2010

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Economic Development Division

Merger Action

• Approve Resolution adopting Negative Declaration.

• Postpone action to allow for additional analysis on the possible flow of tax increment dollars.

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Economic Development Division

Report to the City Council

• Prior to amending a Redevelopment Plan, California Community Redevelopment Law (CCRL) requires the preparation of a Report to City Council.

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Economic Development Division

Purpose of the Report

• Documents blight conditions on a parcel basis.

• Identifies projects and programs designed to eliminate blight.

• Proposes an increase to the Villa-Parke tax increment cap commensurate with projects and programs.

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Economic Development Division

Villa-Parke Project Area

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Economic Development Division

Findings of the Report

• Analyzed all parcels (1,214) in the five N.W. Redevelopment Project Areas.

• 533 parcels exhibited at least one physical condition of blight.

• All parcels exhibited at least one economic condition of blight.

• CCRL states that the mere existence of blighted conditions is not sufficient to justify an amendment to a redevelopment area.

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Economic Development Division

How Much Blight is Enough?

• Per CCRL the area must have more than just physical and economic blight to justify amending the tax increment cap.

• Blight must also be so problematic that it creates special needs that can only be addressed by the use of redevelopment dollars.

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Economic Development Division

Blight Conditions Summary

• Further analysis of the blighted parcels that have significant remaining blight resulted in 89 that meet the CCRL definition as having a severe combination of unsafe or unhealthy conditions.

• 41 of the 89 parcels are located within Villa-Parke Redevelopment Project Area.

• The Report concluded that the significant remaining blight cannot be alleviated unless the Villa-Parke tax increment cap is amended.

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Economic Development Division

Villa-Parke Amendment

• Current cap is $20.4 million.

• Current cap will be reached by end of Calendar Year 2010.

• Cannot collect tax increment once financial cap is reached.

• Propose an increase of $44.6 million resulting in a new cap amount of $65 million.

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Economic Development Division

Cap Amendment

• Necessary to address significant remaining blight.

• After subtracting $16 million mandated expenses, the Commission will receive approximately $28 million for projects and programs.

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Economic Development Division

Projects and Programs

Business Improvement- $11 million> Façade improvements.> Business attraction/retention.> Business rehabilitation

Housing Rehabilitation- $9.7 million> Replacement of Un-permitted

construction.> Replacement of unsafe stairs and decks.> Installation of bollards at gas meters.

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Economic Development Division

Projects and Programs

Infrastructure- $10 million> Reconstruction of streets, curbs,

gutters, sidewalks (as needed).> Streetscape improvements along

Fair Oaks Blvd., Orange Grove Blvd., and Maple St.

> Upgrades to water, sewer, and drainage system throughout (as needed).

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Economic Development Division

Benefits of the Tax Increment Cap Increase

• The Tax Increment Cap Amendment will help the Villa-Parke Project Area, which has the most remaining blight out of the five project areas.

• Without an increase to the Tax Increment Cap, there will not be enough money to address the $30 million plus worth of significant remaining blight.

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Economic Development Division

Conclusion

Staff Recommendation:>Commission to approve the resolution

transmitting the Report to City Council.>Commission and Council to adopt the

Initial Study and Negative Declaration.>Commission and Council to approve a

resolution adopting Amendment No. 4 to the Villa-Parke Redevelopment Plan.

>City Council conduct the first reading of the ordinance for the Villa-Parke Amendment.

>Continue action on the Merger until December 6, 2010.

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Economic Development Division

Sample Blighted Properties

• Liquor store noted by Police Department as source of several crimes (AB)

• Unsafe bars on windows (BAR)

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Economic Development Division

Sample Blighted Properties

• Multiple loose wires (EH)

• Boarded-up windows (BW)

• Unsafe bars on windows (BAR)

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Economic Development Division

Sample Blighted Properties

• Graffiti indicative of high crime (G)

• Electrical hazards (EH)

• Boarded-up windows (BW)

• Unsafe bars on windows (BAR)

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Economic Development Division

Sample Blighted Properties

• Sealed-up windows (BW)

• Un-permitted room addition (ANPA)