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HomeMy WebLinkAboutReso 1998-19049 RESOLUTION NO. 19049 and (Agency Resolution No. 1590) JOINT RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ADOPTING WRITTEN RESPONSE TO WRITTEN OBJECTION TO THE PROPOSED AMENDMENT OF THE TOWN CENTRE I REDEVELOPMENT PLAN WHEREAS, on June 9, 1998, the City Council and Redevelopment Agency held a joint public hearing (the "Joint Public Hearing") on proposed amendments to the Bayfront and Town Centre I Redevelopment Plans; and WHEREAS, at the Joint Public Hearing, the Mayor, as presiding officer, called for public testimony, and all persons present were afforded an opportunity to testify and submit materials; and WHEREAS, no testimony was offered on behalf of the County of San Diego ("County"); and WHEREAS, a letter which had been hand delivered to the Office of the City Clerk between the hours of 4:00 p.m. and 5:00 p.m. on June 9, 1998 (the "June 9 Letter") was distributed to the City Council, and was received into the record as part of the Joint Public Hearing; and WHEREAS, Section 33363 of the Health and Safety Code provides that, where written objections are received at or prior to the hearing concerning the adoption or amendment of a redevelopment plan, the legislative body: "...shall...respond in writing to the written objections...The written responses shall describe the disposition of the issues raised. The legislative body shall address the written objections in detail, giving reasons for not accepting specified objections and suggestions. The legislative body shall include a good-faith, reasoned analysis in its response and, for this purpose, conclusionary statements unsupported by factual information shall not suffice"; and WHEREAS, the Agency staff has reviewed the June 9 Letter, and has participated in the preparation of a response thereto in the form submitted herewith, marked as Exhibit "A" (the "Response"); and WHEREAS, the City Council and the governing board of the Redevelopment Agency have reviewed in detail the June 9 Letter, together with all testimony and reports presented at the Joint Public Hearing and the Response prepared by staff. NOW, THEREFORE, BE IT RESOLVED by the City Council and the Redevelopment Agency of the city of Chula Vista as follows: 1. Each of the City Council and the Redevelopment Agency hereby approve and adopt the Response, in the form submitted herewith, as their findings and response to the June 9 Letter. 2. The June 9 Letter, insofar as it constitutes an objection to the adoption of the proposed Amendment to the Town Centre I Redevelopment Plan, is hereby overruled. Presented by Approved as to form by ChrS~alo~on~" n~. Kaheny , Community Development Director torney Resolution 19049 Page 2 Exhibit A RESPONSE TO JUNE 9, 1998 CORRESPONDENCE Shortly before the June 9, 1998 public hearing conducted by the City Council of the City of Chula Vista and the Chula Vista Redeveloprnent Agency (the "Joint Public Hearing"), the City Clerk had delivered to her office a letter dated June 9, 1998 from Mr. AIfredo Ybarra, Director (Acting), Department of Housing and Community Development, County of San Diego, 3989 Ruffin Road, San Diego, California 92123-1980 (the "June 9 Letter"), a copy of which is attached. Pursuant to its caption, the June 9 Letter purported to address Proposed Amendment No. 5 to the Town Centre I Redevelopment Project and Proposed Amendment No. 5 to the Bayfront Redevelopment Project. No other writings objecting to the Redevelopment Plan for the Towne Center I Redevelopment Project or the proposed amendment to the Redevelopment Plan for the Bayfront Redevelopment Project were received. Each of the City Council of the City of Chula Vista and the Chula Vista Redevelopment Agency have received and reviewed the June 9 Letter. Generally, notwithstanding its caption, the June 9 Letter does not appear to include any material pertinent to the proposed amendment to the Redevelopment Plan for the Town Centre I Redevelopment Project. The June 9 Letter also appears to contain no material objections to the extension of various limits to the Redevelopment Plan for the Bayfront Redevelopment Project. In substance, the only material contained in the June 9 Letter that may constitute a written objection concerns the inclusion of 398 acres of San Diego Unified Port District tidelands (the "Added Area") to the Bayfront Redevelopment Project Area. This draft response (the "Response"), upon approval by the City Council, will constitute the City's response to the written objection contained in the June 9 Letter. Based upon the factual evidence contained in the Report to the City Council on the Amendment No. 5 to the Bayfront Redevelopment Project ("Report") as well as testimony submitted at the joint public hearing, and the nexus between such evidence and the definitions of physical and economic blight detineated in Sections 33030 through 33031 of the California Community Redevelopment Law, it is the Agency's belief that the Added Area is characterized with many blighting conditions, both physical and economic, that can only be alleviated through redevelopment. We have outlined the specific points below that respond to each objection identified in the June 9 Letter. The italicized language reflects the language used in the June 9 Letter. Comment #1: According to the Preliminary Report (page B-10), the B.F. Goodrich Site, located east of Marina Parkway, is described as having an "...older design and lack of visual buffers, [and] the property is unsightly and presents incompatibilities with prospective development in the Added Area." The report also describes the facility as physically unattractive. This description does not make the B.F. Goodrich facility "incompatible" as that term is used in redevelopment law to describe physical blight. The report does not explain how the B.F. Goodrich facility is incompatible with adjacent or nearby uses. Also, the fact that the facility is unsightly does not, by itself, mean it is blighted. Lastly, the Report states that the facility is an economic benefit to the City of Chula Vista. As such, the facility is not blighted because it is not an "economic burden" on Chula Vista. Agency Response: This comment misstates the facts presented in the Report and the California Community Redevelopmerit Law's definition of incompatible use as a blighting condition. According to Section 33031 of the California Community Redevelopment Law, physical conditions that Resolution 19049 Page 3 cause blight include "adjacent or nearby uses that are incompatible with each other and which prevent the economic development of those parcels or other portions of the Project Area." The evidence contained in the Report encapsulates discussions with the City Community Development Department staff, Port District Asset Managers, and local real estate brokers, all of noted the presence of the older industrial portions of the B.F. Goodrich facility (the "B.F. Goodrich facility") as incompatible uses, which discourage the development of new retail and industrial uses in the area. Report, p. B-9, B-12. The Report describes (and depicts in photographs) the physical condition of the B. F. Goodrich facility (constructed over 45 years ago), a defense research and development facility which features older deteriorating buildings and open storage of heavy industrial equipment. Report, pp. B-12 to B-14. Both the physical condition of this facility and its massive size have discouraged development of adjoining vacant properties in the added area. Report, p. B-25. This factor, coupled with other blighting conditions identified in the report, depreciates the economic value of Added Area properties because Added Area properties cannot command rent levels commensurate with other South Bay commercia~ and industrial areas not impacted t~y these conditions. (A specific site-by-site development analysis of these impacts is included on Tables B-4(a) through B-4(g) of the Report at pp. B~18 to B-24. See also Report, pp. B-16, B-25). Oral testimony received at the Joint Public Hearing on June 9, 1998 also included a statement by a local citizen that the entrance to the B. F. Goodrich facility was obviously detracting and a blighting factor. Further testimony included discussion to the effect that the ongoing presence of the B. F. Goodrich facility over several decades has discouraged private investment in the Added Area. The B.F. Goodrich facility is incompatible with adjacent uses and future economic development of the area on the basis of the facility's interrelationship with the existing facilities, including the marina, marina-oriented facilities, and the existing recreational vehicle park, as well as existing land use designations. Report, Blight Map, p. B-6; see also Report p. B-12, This conclusion is further bolstered by the likelihood (expressed by City and Port District staff, as weU as local real estate brokers) that the existence of the IB.F. Goodrich facility would discourage future marine-oriented cornmercial and industrial uses from locating in the area. Report, p. B-9, B-12. Incompatibility of uses can only be determined by examining the area as a whole, not simply examining a single facility and then declaring it to be blighted. The assertion made in the June 9 Letter that the B. F. Goodrich facility is not blighted (and therefore that the Added Area is not blighted) because it provides economic benefits to the City oversimplifies the issue. While it is true that one of the conditions for finding an area blighted is determining that conditions therein constitute a "serious physical and economic burden on the community," it is not true that the jobs provided by a single entity or facility necessarily render the area a benefit rather than a burden on the community. Again, the determination that an area constitutes a physical and economic burden on the community can only be determined by looking at the area as a whole. In the present case, although the B. F. Goodrich facility provides jobs to some individuals in the community, it also adds a number of serious burdens to the community. As an aging industrial facility, the B. F. Goodrich site is likely to need an increasing amount of maintenance, repairs, and upgrades to ensure code compliance; photographs of the B. F. Goodrich facility depict corroded metal structures and rusting equipment on the site. Report, pp. B-13 through B-14. The overall deterioration of the facility is both a physical and economic burden on the community, and particularly on other Added Area properties. As section 33036 of the CRL notes, conditions of blight "tend to further obsolescence, deterioration, and disuse because of the lack of incentive to the individual landowner and his inability to improve, modernize, or rehabilitate his property while the condition of the neighboring properties remain unchanged." Health & Safety Code § 33036. It should be further noted that several governmental agencies have found it necessary to conduct a formal investigative and enforcement process at the B. F. Goodrich facility, as indicated in part by the issuance of Cleanup and Abatement Order No. 98-08 (the "Order") Resolution 19049 Page 4 by the State Water Resources Control Board. The Agency will be required to be continuously involved in the activities mandated by the Order, particularly in evaluating the results of that process, including the steps needed to adequately address the public health and safety risks associated with conditions likely to be identified as part of that process. These actions are further evidence of the physical burden imposed on the community, and the economic and social burden imposed upon local government as a result of conditions within the Added Area. Further, in addition to the Order, the Report notes that underground storage tanks at the site have been reported as leaking. Report, pp. B-7 to B-8. The former owner of the site has also reported releases of oil and hazardous substances. Report, p. B-7. Furthermore, based on known contamination resulting from similar types of operations, the City's redevelopment consultant has predicted a "high likelihood" of soil and/or groundwater contamination "in and around the B.F. Goodrich facility." Report, p. B-7 (emphasis added). The potential hazardous contamination carries with it many adverse physical impacts, which are specified in the Report. See, e.g. Report, p. B-15. Additionally, circulation around the B. F. Goodrich facility is problematic, creating physical constraints to the Added Area. Report, p. B-15. One of the area's major thoroughfares, 'H" Street, terminates at the B. F. Goodrich facility, thus constraining convenient access to other retail and recreational uses in the area. Report, p. B-15. These factors clearly indicate that the area, including the B. F. Goodrich site, is a physical burden to the community, characterized by serious environmental health risks, a poor circulation system, and deteriorated, aging structures. Similarly, regardless of certain economic benefits provided to the community by the B. F. Goodrich facility, the facility and the Added Area are also characterized by serious economic burdens, many of which are actually created or contributed to by the presence of the B. F. Goodrich site. For example, the Report notes, in discussing the potential contamination of soils and groundwater under and around the B. F. Goodrich site that both City Community Development and San Diego Unified Port District real estate staffs agree that "suspected hazardous contamination impairs investments and is among the reasons why developers have avoided pursuing projects in the Added Area .... "Report, p. B-9. It is a well known fact that cleanup of hazardous materials can be quite costly, and can make property development financially infeasible. Even in areas where hazardous materials contamination is only suspected, the "stigma" related to the possible presence of such materials has been known to keep property vacant for years. This is evidenced in the Added Area by the fact that even though the Added Area is a bayfront location, there has been very limited private development in the area for nearly four decades. Report, p. B-12. Indeed, the only development in the Added Area since the early 1980's has been three Port District projects (the Marina, Bayside Park, and Chula Vista Bayfront Park). Report, p. B-12. In addition, the Added Area is in need of extensive circulation improvements, which also create an economic burden on the community. The Report estimates that needed improvements could cost as much as $7.8 million (including relocation costs), not including hazardous waste mitigation which may be required. Report, p. B-15. In conclusion, when viewed in the context of its impact on the physical and economic conditions in the Added Area, the B. F. Goodrich facility is a core component of the overall conditions of blight therein. Comment #2: The B.F. Goodrich Site is not economically blighted due to the possible presence of hazardous substances. There is no evidence that the Redevelopmerit Agency is required to use its authority to remedy or remove the hazardous waste. The Report merely states that the Agency and Port District "may assist prospective developers with their efforts to remediate any hazardous contamination." Also, on March 28, 1998, the State Water Resources Control Board issued B.F. Goodrich a cleanup and abatement order that contains a comprehensive directive to B.F. Goodrich to clean up the waste and the effects of the discharges. Given the fact that this order was Resolution 19049 Page 5 issued less than three months ago, it is far too soon to conclude that Redevelopment Agency authority is required to clean up the waste. Furthermore, a redevelopment agency can take action to clean up hazardous waste only if: no responsible party for the release is identified by the agency; the responsible party fails to agree to a remedial action plan; or the responsible party agrees to a remedial action plan, but fails to implement it in a timely manner. The report contains no evidence of any one of these factors. In light of the recent cleanup and abatement order issued by B.F. Goodrich, and the fact that the responsibly party is known (Rohr Industries/B.F. Goodrich), it is doubtful that there is any such evidence. Lastly, the Report contains no evidence that any potential hazardous waste affects any parcels adjacent to the B.F. Goodrich site. Agency Response: The June 9 Letter has misconstrued the intent of the California Redevelopment Law (Health and Safety Code section 33000 etseq.) with regard to the presence of hazardous waste and the relationship between such waste and a finding of blight· Section 33031(b)(1) of the Health and Safety Code describes an economic condition of blight as "depreciated or stagnant property values or impaired investments, including, but not necessarily limited to, those properties containing hazardous wastes that require the use of agency authority as specified in Article 12·5 (commencing with Section 33459)." In addition to a literal reading of the language of section 33031 (b)(1), a review of the legislative history of the section suggests that the presence of hazardous waste is a blighting condition without regard to whether the Agency is required to use its authority as specified in Article 12.5. Section 33031 (b)(1) was amended in 1993 by A.B. 1290 (Statutes of 1993, chapter 942) to its present form. In addressing section 33031 (b)(1), the Bill Analysis by the staff of the Assembly Housing and Community Development Committee (prior to Assembly Third Reading, July 1, 1993) identified in part, that: "c) The blight categories are as follows: i) Physical conditions which cause blight, including the factors that prevent or substantially hinder the economic viability of buildings, buildings which are unsafe or unhealthy adjacent to the existence of hazardous wastes, or near which are incompatible with each other. ii) Economic conditions which cause blight: a. Depreciated or stagnant property values, including properties containing hazardous waste. b. Abnormally high business vacancies. c. The lack of commercial facilities which are normally found in neighborhoods, including grocery stores, stores, and banks and other lending institutions. d. Residential overcrowding which has led to problems of public safety and welfare. e. A high crime rate which constitutes a serious threat to the public safety and welfare." (Emphasis added.) Note that the Committee treated the inclusion of projects containing hazardous waste as a blighting condition, and did not engraft on the concept asserted by the June 9 Letter - namely, that blight isn't blight unless the host redevelopmerit agency assumes liability for its cleanup. That concept is unprecedented, and is not now nor has it ever been a required element of blight. The June 9 Letter jumps to erroneous conclusions based upon the circumstance that Section 33031(b)(1) contains a reference to Article 12.5, Article 12.5 was enacted ".. . to provide · . . for local agency oversight of redevelopment hazardous waste clean sites." (See Staff Resolution t 9049 Page 6 Report to Assembly Committee on Appropriations for August 7, 1996 hearing on S.B. 1425). The same staff report states: "Redevelopment agencies are often faced with land, located within the project area, that has been contaminated by some form of waste. The agencies and the developers and the financial institutions they work with are reluctant to acquire cleanup and redevelop these contaminated properties because of the costs, potential liabilities, and uncertain reimbursement sources involved." Article 12.5 and section 33031 (b)(1) were fashioned to provide irnrnunity to redevelopment agencies and to encourage their becoming involved on cleaning up hazardous contamination, not to diminish the ability or discourage redevelopment agencies from addressing hazardous contamination. In this regard see Bill Analysis by the staff to the Senate Committee on Judiciary prepared for the June 22, 1993 hearing on A.B. 175 (Polanco), which provided in part as follows: "Existing law, enacted by A.B. 3193 (Polanco) of 1990, authorizes a redevelopment agency to take any action which the agency determines is necessary to clean up a release of hazardous substances within a project area, subi,ect to guidelines provided by the Department of Toxic Substances Control "The purpose of this bill is to extend a law that provides an immunity from future cleanup liability to redevelopmerit agencies, and successor owners of the restored property, when remedial action work on property contaminated with hazardous substances is completed pursuant to specified parameters . . ." "The purpose of AB 3193 was to encourage and enable redevelopcnent agencies to undertake cleanup efforts of contaminated property in order to make the property usable and salable. Without the qualified immunity, redevelopment agencies would not want to undertake a cleanup action and become a 'responsible party' and potential deep-pocket for the entire waste or spill site." Note that contrary to the suggestion by the June 9 Letter that the issuance of an Abatement Order is tantamount to an ipso facto, immediate cure for any hazardous contamination, the staff report to the Senate Committee on Judiciary further noted: "The author's office also asserts that cleanup of contaminated sites is an extraordinarily complex and expensive process. Accordingly, many redeveloprnent agencies have not yet had the opportunity to fully utilize the provisions of AB 3193. Five redevelopment agencies are reportedly in the process of completing plans to undertake an AB 3193 cleanup, depending on completing plans to undertake an AB 3193 cleanup, depending on passage on this measure. Other agencies, which have implemented it, have not yet completed their remedial action, or anticipate that current remedial action plans may have to be expanded to include previously undetected contamination. In either case, the immunity contained in Health and Safety Code Section 33459.3 is critical." The Agency would submit that concerns over hazardous contamination are particular appropriate as to coastal areas, particularly California's tidelands. In addition to taking issue with the County's interpretation of the statutory scheme as it relates to a finding of blight for contaminated property, we also note that the Report describes the fact that the high probability of hazardous contamination has stigmatized Added Area properties, primarily resulting from the use, transport, and generation of toxic substances for nearly five decades at the B. F. Goodrich facility in the Project Area. Report, pp. B-9 and B-10. As the Report notes, "the combination of factors: a World War II era aerospace manufacturer, and environmental laws that assign liability without consideration of actual Resolution 19049 Page 7 responsibility, have resulted in a negative stigma being assigned to properties within the Added Area, regardless of their actual level of contamination." Report, p. B-IO. This circumstance has caused the real estate market to alevalue Added Area properties, impairing investment opportunities, Report, p. B-16. As stated in the Report, more properties in the Added Area are vacant as compared to all other Port District tidelands, and commercial lease rates are well below market averages. Report, p. B-16. The June 9 Letter suggests that Agency assistance to reinedlate hazardous contamination is unlikely because there is a responsible party (13.F. Goodrich) and because the State Water Resources Control Board's Cleanup and Abatement Order (the "Order")) referenced in the Report was issued less than three months ago. This statement seems to imply that the issuance of the Order will most likely result in a thorough, proactive site remediation by B.F. Goodrich. However, there is no assurance that B.F. Goodrich will act on a timely basis to establish and/or implement a remedial action plan. In either of these instances, Agency assistance could be necessary to cleanup any contamination. At the same time, it is hardly necessary or appropriate that the Agency assume responsibility to reinedlate a situation in order for that very situation to be recognized as a problem. Finally, the Report states that while no studies have been conducted (or at least made public) to measure the extent of hazardous contamination in the Added Area, given the long-term industrial operations at the site, and the use of fill, it is a widely held belief that there is a high likelihood of toxic contamination in the Added Area. In discussions with brokers familiar with the Added Area and staff of the Port District who are responsible for the marketing and leasing of projects within the Added Area, these persons have indicated that there is a perception among potential tenants/users that there are problems associated with the projects in the Added Area related to hazardous contamination. Given the decades of heavy industrial use of the B.F. Goodrich facility, the intervention of the State Water Resources Control Board, the fact that substantial Added Area properties remain vacant despite lease rates materially lower than other properties near waterfront in San Diego County and the statements by professionals who make their livelihood marketing and leasing Added Area properties, the inference that the factors described herein are a strong blighting influence that impairs development to a substantial extent is a compelling one. Report, p. B-7. This likelihood has translated into a depreciated market perception of the Added Area that has clearly impaired development feasibility. Report, p. B-9. Comment #3: The Marina, Yacht Club, Jake's Restaurant, Chula Vista Recreational Vehicle Park and the Bayfront Parks do not meet the definition of both physical and economic blight as required by State Redevelopment Law. The Report also fails to explain why inclusion of these non-blighted sites is necessary for the effective redevelopment of the Added Area. The Report must explain a specific connection between the inclusion of these non-blighted sites and the effective redevelopment of the Added Area. Agency Response: Comment #3 ignores the established concept that blight is an area-wide condition. For example, Health and Safety Code Section 33321 notes that "A redevelopment area need not be restricted to buildings, improvements, or lands which are detrimental or inimical to the public health, safety, or welfare, but may consist of an area in which such conditions predominate and injuriously affect the entire area." It should also be noted that the impact of blighting conditions within the project area (for example, lack of private investment resulting from the perception among potential tenants/users - and apparently, the State Water Resources Control Board - that hazardous contamination is present to an extent that discourages investment) has resulted in one of the existing tenants informing Agency staff that they are contemplating leaving the Added Area due to the lack of new investment in the vicinity. Resolution 19049 Page 8 Additionally, as noted in the legislative history for A.B. 1290, "In]on-blighted areas may be included [in a redevelopment project area] if those areas are necessary for effective redevelopment; however, these areas may not be included for the sole purpose of obtaining tax increment moneys." Bill Analysis prepared for May 26, 1993 hearing by Assembly Committee on Housing and Community Development. In examining the properties with which the County takes issue, it is clear that (1) the majority of these properties are owned by the City or another public agency, and thus, no tax increment is generated by them; (2) as to Jake's restaurant, it is unlikely that the value of this property, a fairly small, single user property will increase enough to produce any meaningful tax increment. Thus, the City clearly has not included these properties for the sole purpose of obtaining tax increment, and therefore has complied with the CRL with regard to including non-blighted areas. The Agency believes the Jake's and Marina properties are integral to overall redevelopmerit of the Added Territory because of the certain interrelationship of land uses and infrastructure between these existing uses and expected future land uses. Comment #4: The South Bay Boat Yard on the northwest boundary of the Added Area appears to exhibit deferred maintenance requiring cosmetic improvements and clean-up. This condition, however, does not meet the definition of physical and economic blight, nor is there any explanation for why this site is necessary for the effective redevelopmerit of the Added Area. Agency Response: The reference to the South Bay Boat Yard in the Report to the City Council is in context of examples of older industrial buildings in the Added Area that are incompatible with surrounding commercial recreational uses. Report, p. B-12. Like the B.F. Goodrich property along the Marine Parkway, the South Bay Boat Yard exhibits physical deterioration and unscreened storage, which is clearly visible from adjoining vacant commercial parcels. Report, pp. B-12, B-14. The physical condition of this property discourages the development of newer industrial and commercial uses on the adjacent properties because developers have a higher likelihood to attract tenants at locations where buildings appear to be better maintained. Report, pp. B-12, B-25. It should also be noted that the operators of the South Bay Boat Yard have approached City Community Development staff indicating their intention to relocate from this area due to the lack of complementary commercial uses for the employees and patrons of the Boat Yard. This concern only underscores how the absence of development interest in the Added Area threatens the viability of the existing industrial and commercial uses in the Bayfront. Comment #5: The Report cites low lease rates as a condition of economic blight, but fails to explain why these lease rates are "abnormally low." The Report relies solely on brokers' opinions of the potential Added Area lease rates and fails to compare actual lease rates of developed sites near the Added Area to lease rates in the Added Area. Therefore, the conclusion that the lease rates are low lacks adequate analysis, and there is no analysis to support a determination that the lease rates are abnormally low. Agency Response: Comment #5 erroneously represents the evidence contained in the Report. First, the allegation made by the June 9 Letter that the Report solely relies on the broker's opinion of potential lease rates implies that a broker active in the area is not a reasonable source of information regarding lease rates or that there is some better source of real estate lease rates for the Added Area. Yet, the County does not suggest a more appropriate source. The Agency submits that a local broker who actively works the Added Area, and has an interest in the active marketing of the Area (and consummation of transactions) for his/her livelihood, is an entirely appropriate source of information, and may be the best source. Resolution 19049 Page 9 In fact, the Agency's redevelopment consultant interviewed many local Chula Vista and South Bay real estate brokers "within or in the general vicinity of the Added Area" (Report, p. B-16), including the only commercial real estate broker (Jay Arnett of John Burnham and Company) active in the Added Area. Mr. Arnett was involved in negotiations of two industrial leases at an industrial building on Sandpiper Way in the Added Area. Also, the County comment overlooks Table B-3 in the Report that compares Added Area lease rates with other South Bay rents. Report, p. B*I 6. This data indicates that Added Area rents are as much as 34% below rents in other areas, clearly supporting the Report's finding that Added Area lease rates are abnormally low. Report, p. B-16. In addition, contrary to the assertion contained in the June 9 Letter, the Agency's consultant also interviewed Port District staff. Port District staff provided information consistent with that provided by Mr. Arnett concerning the weakness of lease rates within the Added Area, the market perception concerning hazardous contamination, and further indicated that the Port District had commissioned and obtained independent appraisals which indicated that the phenomenon of low lease rates within the Added Area, nevertheless, did not result in consummation of new leases. The survey of local area brokers, who are professionals working day-to*day with lease rates in the area, would seem to be a highly reliable method for determining whether lease rates in the Added Area are depressed or stagnant. In addition, the redevelopment consultant also assembled several residual land value analyses for the vacant parcels in the Added Area, which demonstrated that development costs for projects in the Added Area would in many cases exceed the value of the completed project, and in all cases, were excessive compared to the rate of return generally accepted by private industry developers. Report, p. B-18 and B-24. This lends support to the finding that abnormally low lease rates have rendered the area infeasible for development without agency assistance. In summary, the methodology used to survey lease rates and determine whether property values were depressed or stagnant was valid evidence of blighting factors. County Comment #6: The Report compares the Added Area to other Port District tidelands and concludes that the Added Area vacancy rates are excessive. The Report fails to state whether the vacancy rate in the Added Area is excessive compared to the vacancy rate for similar land in this area. The fact that Port District tidelands miles away in another city may have a lower vacancy rate does not support a conclusion that the vacancy rate in the Added Area is excessive. Agency Response: Again, the June 9 Letter misstates the facts contained in the Report. The June 9 Letter claims that "the report fails to state whether the vacancy rate in the added area is excessive compared to the vacancy rate for similar land in this area." However, on Page B-10 of the Report, the Agency identifies that "the proportion of vacant properties in the added area is excessive (emphasis added) relative to other Port District tidelands, including the most proximate tidelands, in National City and Imperial Beach." Report, p. B-10. Indeed, the Report notes that, with a forty percent (40%) vacancy rate, the Chula Vista tidelands are "the most underutilized territory of the Port District." Report, p. B-3. Further, the June 9 Letter seems to suggest that comparing the added area to other Port District tidelands is inappropriate, implying that there are other tidelands in closer proximity to the Added Area that should have been used for comparative analysis. This is simply not the case. All San Diego Port District properties were identified in the comparison indicated in Section B of the Report to the City Council. Report, p. B-3. There is no other tidelands area closer to the added area than these Port District tidelands. While the Agency could have elected to use non-tidelands in this comparison, this approach would be faulty because it would not contrast comparable properties. Ironically, since the closest, non-tideland industrial and commercial properties (along Main Street in Chula Vista) Resolution 19049 Page 10 are built out, if the Agency were to have directly compared such properties, this approach would yield an even more dramatic evidence of a disproportionate amount of vacant lots within the Added Area. Moreover, while the June 9 Letter may take issue with the finding of the consultant that the vacancy was excessive, and was caused by 'a combination of market, physical and economic factors." (Report, p. B-4 (emphasis added)), County staff were part of the survey group who helped develop that finding. Report, p. B-4. As also mentioned in the Report, the potential contamination of property within the Added Area may have added an additional "stigma" to the already impaired perception of property within the Area, which has kept much of the commercial and industrial zone property vacant. Report, p. B-9 to B-10. Comment #7: The Preliminary Report cites the blighting factors it previously discussed and concludes that these factors hinder economically viable use of the Added Area, This conclusion is not sul~ported by the analysis in the Report because the analysis of the various blighting factors is inadequate as explained above. Agency Response: For the reasons outlined in the Agency's response herein and detailed in the Report, Comment #7 is not supported. In fact, the blighting conditions described in the documentation indeed have a profound effect on the economically viable use of the added area. The somewhat circuitous dissatisfaction with the finding of blight as contained in the June 9 Letter seems to have little to do with any flaw in the analysis, which utilizes widely accepted survey and research methodologies and clearly documented results, including evidence that economically viable use is hindered by development infeasibility. Report, Tables B-4(a) through B-4(g); see also Report, p. B-25. Thus, although the author of the June 9 Letter may not be pleased with the City's decision to include the Added Area in the Amended Bayfront Redevelopment Plan, the decision was based on sound data which clearly justifies the inclusion of the Added Area therein. Comment #8: Section E of the Preliminary Report lacks specificity in describing the proposed projects to be undertaken by the agency. It currently includes a list of some projects that may be undertaken by the Agency. State Redevelopment Law, Section 33344.5(d), states that a description of specific projects or projects then proposed by the agency must be included in the Preliminary Report. Agency Response: Section E of the Preliminary Report (repeated in Section A of the Report) lists a series of specific projects and programs, supplemented, by specific reference, to other redevelopmerit activities outlined in the current Implementation Plan (included in Section C of the Report). Report, pp. A-9 and A-10, Unfortunately, Comment #8 does not suggest how the Agency could be more specific in identifying its projects or program for the Added Area beyond what is described in the existing Implementation Plan and in Section E of the Preliminary Report, It is the Agency's opinion that the list is quite specific given the unknown nature of many of the potential redevelopment activities. For example, since the extent of hazardous contamination is not specifically known at this time, a more detailed description of the Agency's hazardous material remediation activities would be premature and speculative. Comment #9: The Report fails to explain how the blighting condition that allegeally exist are so prevalent and so substantial that they cause a reduction of, or lack of, proper use of the Added Area to such an extent that it constitutes a serious physical and economic burden to Chula Vista that Resolution 19049 Page 11 cannot reasonably be expected to be remedied by private enterprise, governmental action, or both, without redevelopment. Agency Response: Section D of the Report specifically addresses why private enterprise is unable to eliminate the blighting conditions found in the Added Area. For over the past three decades, private enterprise in the added area has stagnated due to the physical and economic blighting conditions including low commercial lease rates and adequate access, incompatible uses, and impaired investments. Report, p. B-12. Indeed, as the report notes, "there has been virtually no development interest in developing these lots for four decades." Report, p. B-12. These conditions, as described in Section B of the Report, cause development in the Added Area, in the absence of redevelopment, to be infeasible. Further, Section D of the Report analyzes the inability of the City and Port District to fund economic development in the Added Area absent redevelopment. This concludes the response to the various objections raised by the County Department of Housing and Community Development on the inclusion of the added area to the Bayfront Redevelopment Project Area. Resolution 19049 Page 12 PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 16th day of June, 1998, by the following vote: AYES: Councilmembers: Moot, Padilia, Rindone, Salas and Horton NAYES: Councilmembers: None ABSENT: Councilmembers: None ABSTAIN: Councilmembers: None Sh~n, Mayor ATTEST: Beverly ~A~.Autl~elet, City Clerk STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) CITY OF CHULA VISTA ) I, Beverly A. Authelet, City Clerk of Chula Vista, California, do hereby certify that the foregoing Resolution No. 19049 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 16th day of June, 1998. Executed this 16th day of June, 1998. ~uthe~l~t,~