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HomeMy WebLinkAbout2011/08/02 Item 08CITY COUNCIL & REDEVELOPMENT AGENCY AGENDA STATEMENT ~~ C1TY OF - = CHULAVISCA AUGUST 2, 2011, Item 8 ITEM TITLE: ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE CITY OF CHULA VISTA TO PARTICIPATE IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM, PURSUANT TO PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE, SUBJECT TO CERTAIN CONDITIONS AND RESERVA NS SUBMITTED BY: ASSISTANT CITY MANAGE IRECTOR OF DEVELOPMENTSERV CES REVIEWED BY: CITY MANAGER 4/STHS VOTE: YES ~ NO ^X SUMMARY The Governor has signed two related redevelopment bills (AB xl 26 and AB xl 27) that (1) dissolve redevelopment agencies and (2) provide fora "voluntary" alternative redevelopment program, whereby a redevelopment agency will be exempted from the legislation that dissolves redevelopment agencies if the City Council enacts an ordinance before November 1, 2011, to comply with the new legislation and make payments to the County Auditor-Controller as required by new legislation. ENVIRONMENTAL REVIEW Under Title 14 of the California Code of Regulations, Section 15378(b)(4), the proposed Ordinance is exempt from the requirements of the California Environmental Quality Act ("CEQA") in that it is not a "project," but instead consists of the creation and continuation of a governmental funding mechanism for potential future projects and programs, and does not commit funds to any specific project or program. RECOMMENDATION It is recommended that the Council adopt the Ordinance authorizing the City of Chula Vista to participate in the Alternative Voluntary Redevelopment Program, pursuant to Part 1.9 of Division 24 of the California Health and Safety Code, subject to certain conditions and reservations. 8-1 AUGUST 2, 2011, Item 8 Page 2 of 7 BOARDS/COMMISSION RECOMMENDATION On July 28, 2011, the Chula Vista Redevelopment Corporation recommended that the City Council adopt the Ordinance to participate in the Alternative Voluntary Redevelopment Program pursuant to Part 1.9 of Division 24 of the California Health and Safety Code DISCUSSION In January 2011, Governor Brown proposed eliminating redevelopment agencies and redirecting the tax increment, which agencies receive, back to the State and other taxing entities as a means to balance the State's budget. Over the last five months, significant discussion has taken place regarding the continued existence of redevelopment agencies across the state. On June 28, 2011, the California Legislature adopted AB xl 26 and AB xl 27. On June 29, 2011, the Governor signed several budget-related bills including AB xl 26, which eliminates redevelopment agencies and prohibits agencies from entering into new obligations upon the effective date of the bill and Assembly Bill xl 27 which provides agencies with an option to become exempt from AB xl 26 by participating in a alternative redevelopment program and making a required "voluntary" payment to the State beginning Fiscal Year 2011-2012 ("FY 11-12") and each subsequent year. AB xl 26-Redevelopment Elimination This bill eliminates Redevelopment Agencies as of October 1, 2011, and prohibits agencies from taking any actions other than payment of existing indebtedness and performing on existing obligations. On October 1, 2011, all property and obligations of an agency would be transferred to a successor entity, except for assets of the Low and Moderate Income Housing Fund ("Low- Mod Housing Fund''). All assets transferred to the successor entity would be overseen by an oversight board. Assets in the Low-Mod Housing Fund would be transferred to the San Diego County Auditor-Controller for distribution to the various taxing entities. Successor entities would have the responsibility of paying existing indebtedness, performing on existing contractual obligations, preserving agency assets for the benefit of the taxing entities, liquidating assets of the agency and disbursing any remaining funds to the various taxing entities. Effects of AB xl 26 on Redevelopment Projects AB xl 26 allows an oversight committee to review any Agency actions taken after January 1, 2011. The oversight committee would be empowered to nullify previous actions within a broad range of redevelopment activities at their discretion. The committee would have up to two years to review these Agency activities. On March 8, 2011, the Agency entered into Cooperation and Public Improvements Agreements for the Bayfront Master Plan, Third Avenue Streetscape Master Plan, and the Main Street Streetscape Master Plan. As AB xl 26 prohibits agencies from entering into new obligations, these Agreements are nullified by the State, which will result in these three significant projects being severely reduced or eliminated: 1 Bayfront Master Plan Public Improvements In 2002, the San Diego Unified Port District ("District") and the Chula Vista City Council and Redevelopment Agency began work to create a master plan for development of the approximately 556-acre Chula Vista Bayfront (the "Chula Vista Bayfront") located on the southeastern edge of San Diego Bay in the City of Chula Vista. The purpose of the master plan is to reconfigure the 497 acres of land and 59 acres of water uses which comprise the Chula Vista Bayfront by connecting the land and water acres in a way that will promote public access to, and 8-2 AUGUST 2, 2011, Item 8 Page 3 of 7 engagement with, the water while enhancing the quality and protection of key habitat areas, with the ultimate goal of creating aworld-class bayfront through strong planning and design, economic feasibility and community outreach. 2 Third Avenue Streetscape Master Plan Public Improvements The 2005 General Plan and the 2007 Urban Core Specific Plan (UCSP) identify Chula Vista's older downtown core, Third Avenue Village, as an urban center with great emphasis placed on linking higher density housing and mixed uses around a new hierarchy of transportation modes; pedestrians, transit, bicyclists and cars. As a key activity center, the Third Avenue Village area plays a critical role in activating Chula Vista's Urban Core. Plans for pedestrian improvements and traffic calming elements were introduced along Third Avenue in the Village District to slow traffic and create a more pedestrian-friendly environment. Improvements such as bulbouts (sidewalk extensions), narrowed and/or reduced travel lanes, special paving at crosswalks and median refuge islands, paseos linking public parking to the main commercial corridor and pedestrian walkways aze emphasized for this area. Bicycle transit and upgraded bikeway facilities throughout the area are recommended for both recreational and commuting users. A Transit Focus Area at Third Ave and H Street provides multi-modal opportunities for both local and regional transit stations located at I-5/H Street and I-5/E Street which link to the San Diego Trolley's Blue Line. 3 Main Street Streetscape Master Plan Public Improvements The Chula Vista 2005 General Plan designates the Main Street District as one of the five "areas of change." The General Plan vision for the Main Street District is the continued development of the azea with industrial uses to become the primary industrial area of Southwest Chula Vista. One of the General Plan's implementing tools is a Streetscape master plan for the Main Street corridor between Industrial Boulevard and I-805. Staff initiated work on the Main Street Master Plan in July 2009, by conducting urban workshops to gather input from the area's stakeholders and to develop a needs assessment to ultimately design a master plan that meets the community's needs and the vision identified in the General Plan. The Main Street Streetscape Master Plan will provide detailed planning and identify capital improvements to the existing infrastructure system by improving the drainage system, beautifying the streets with landscape, and creating multi-modal and complete streets by balancing the needs of pedestrians, bicyclists, vehicles, and public transportation. Additionally, many other projects would have to be deferred for several years until such time as the limited post-dissolution tax increment monies have grown to a point to accommodate the projects. Many of the projects and programs approved in the Five Year Implementation Plan for 2010 to 2014 (Attachment A) may be eliminated, reduced or deferred. Effects of AB xl 26 and AB xl 27on Affordable Housing AB xl 26 would severely impact the future development of affordable housing in Chula Vista. Any existing balance in the Low-Mod Housing Fund would be distributed to schools, counties and special districts, and there would be no future allocation of tax increment revenue (20% set- aside) for the development of affordable housing. This would essentially reduce the affordable housing program to whatever it could fund through the federal funding we receive annually of $1.9 million in Community Development Block Grant and $900,000 in HOME Investment Partnership ("HOME") funds. Over the last ten years the Housing Authority has invested 8-3 AUGUST 2, 2011, Item 8 Page 4 of 7 approximately $15.5 million in the construction of affordable housing through the Low-Mod Housing Fund and HOME for a total of 431 affordable housing units. AB x1 27-Voluntary Alternative Redevelopment Program This bill provides the option to redevelopment agencies to become exempt from AB xl 26 and continue to carry out redevelopment with their project areas. Agencies would be required to make a "voluntary" payment to the State beginning in FY 11-12 and for each year thereafter. The legislative body that formed the Agency, in this case the City of Chula Vista, would have to adopt a nonbinding resolution by October 1, 2011, and a binding ordinance by November 1, 2011, stating the agency's intent to make the required "voluntary" payment to the State. A preset and complicated formula factoring in the payments to taxing entities and amount of principal and interest on outstanding debt is used to determine an agency's share of the $1.7 billion in FY 11- 12 and the $400 million in subsequent years. Should an agency fail to make the required "voluntary" payment on the date prescribed in AB xl 27 (50 percent due no later than January 15, 2012 and the remaining 50 percent due no later than May 15, 2012), then the Agency would be eliminated under AB xl 26. The State Director of Finance is required to notify the City of the actual voluntary payment amount due by August 1, 201 L The City can appeal the amount due by August 15, 2011, if we believe the amount is incorrect based on the calculations contained in AB lx 27. Staff estimates the FY 11-12 payment will be $4.1 million. Payments for FY 12-13 and beyond will change, but the FY 12-13 payment is estimated at $1.2 million. ABxl 27-Low Moderate Income Housing Fund AB xl 27 allows the Agency to reduce its allocation of tax increment to the Low- Moderate Housing Fund for the FY 11-12 yeaz only, if the City complies with the provisions of AB xl 27 and the Agency finds that there are insufficient other moneys to meet its debt and other obligations, current priority programs or its obligations under the Remittance Agreement. Staff has reviewed the Agency's debts, obligations, current priority programs, and obligation under the proposed Remittance Agreement and has determined that there are insufficient monies to fund those items. Staff is preparing to bring forward a resolution for City Council/Redevelopment Agency action, including making the requisite findings, at the August 9, 2011, City Council/Redevelopment Agency meeting to utilize the FY 11-12 Low-Mod Housing Fund allocation with no repayment clause for the required "voluntary" payment. Staff has received several letters requesting that the Agency repay the Low-Mod Income Housing Fund within three years. However, based upon the existing repayment obligations of the Agency, this is not financially feasible. Staff anticipates that State clean-up language will include repayment requirements for the use of these funds. By taking the FY 11-12 Low-Mod Housing allocation to assist in paying the required "voluntary" payment, the ability to develop new affordable housing projects will be impacted in the short-term. However, in the long term, no current projects are impacted. The proposed reduction of $2.8 million equals a loss of approximately 20 to 25 new affordable units. The Low-Mod Housing Fund is anticipated to have an ending fund balance of $5.9 million as of June 30, 2011. This fund balance is sufficient to begin one project this fiscal year and there will be ample fund balance to initiate other affordable housing projects by FY-15- 16 as the Supplemental Education Revenue Augmentation Financing ("SERAF") loan payments of nearly $5 million must be completely repaid by FY 16-17. 8-4 AUGUST 2, 2011, Item 8 Page 5 of 7 Complying with AB x1 26 and AB xI 27 Under AB xl 26, should the City elect not to pay the required "voluntazy" payment to continue the Redevelopment Agency, the County Auditor-Controller will redistribute tax increment funding to school districts, county offices of education, charter schools, and community college districts based upon information provided by the County Superintendent of Schools. Cities would also receive a shaze of the reallocation calculated at an estimated 18.4% of the Trust Fund Balance of their respective Redevelopment Agency. Under AB xl 27 the Agency could submit a required "voluntary" payment to continue the Redevelopment Agency. Estimates of the required "voluntary" payment for FY 11-12 aze $4.1 million, which is approximately 29 percent of the estimated fiscal yeaz's tax increment revenue. Estimates of the annual required "voluntary" payment is $1.2 million or approximately 9 percent of estimated tax increment for every year thereafter. The chart below provides a financial comparison of complying either with AB xl 26 or AB xl 27. The revenue estimates are based upon a IS-year period with a 1% increase annually in tax increment. The estimated 1 % annual increase is a conservative estimate. This amount will likely be higher over that 15-year period. 15 YEAR PROJECTIONS (FY 11-12 to FY 24-25) AGENCY Revenues with AB Xl 26 Eliminate RDA) Revenues with AB Xl 27 (Continue RDA Ci $16.8 million $ 6.5 million Redevelo ment Agency $0 $157.8 million Low-Mod Housin Fund (20% Set-Aside) $0 $ 42.2 million Oversight Agency (Statuto and Ne otiated Obli ations) $72 million $ 0 State ofCalifomia $ 0 $13.9 million As the chart above indicates, should the City elect not to pay the estimated $41 million required in the "voluntary" payment to maintain the Agency, the City would receive approximately $16.8 million in additional property tax revenue over 15 years. However, should the City pay the required "voluntary" payment, the Agency estimates it will have approximately $85.8 million in available revenue after paying all statutory and negotiated obligations ($72 million), including the annual AB xl 27 transfer of $14 million to the State. The staff recommended Ordinance would limit the City's commitment to make these "voluntazy" payments to net tax increment funds and other funds or assets that the Agency transfers to the City for this purpose. The City's general fund would not be pledged to make these payments. The proposed Ordinance further reserves all rights to challenge the validity of the legislation and reserves the right of the City Council to repeal the Ordinance at any time in the future, at the City's sole discretion. To effect payment, the City and the Agency would enter into a "Remittance Agreement" as contemplated by the legislation. By this agreement, the Agency vt~uld commit to transfer sufficient funds to the City to make the required payments. Such an agreement is necessary for the Agency to transfer funds to the City to comply with the legislation. Staff is preparing to 8-5 AUGUST 2, 2011, Item 8 Page 6 of 7 bring forward a resolution to approve such Remittance Agreement for City Council/Redevelopment Agency action at the August 9, 2011, City Council/Redevelopment Agency meeting. CRA and League Lawsuit On July 18, 2011, the California Redevelopment Association and the League of California Cities filed a lawsuit, asking the California Supreme Court to overturn AB 1X 26 and AB 1X 27 because they violate the Constitution. The Cities of San Jose and Union City have joined as plaintiffs against the State of California. They also requested a stay in the State Supreme Court to enable agencies to continue operating without opting in to the alternative voluntary redevelopment program while the case is being decided. DECISION MAKER CONFLICT Staff has reviewed the decisions contemplated by this item and have determined that the actions contemplated are not site-specific and, consequently, the 500-foot rule found in California Code of Regulations section 18704.2(a) is not applicable. CURRENT YEAR FISCAL IMPACT Staff estimates that the FY 11-12 payment will be $4.1 million. Funds identified to make that payment are recommended to come from the following sources: 1. $1.3 million from Redevelopment Agency Tax Increment Revenue (Third Avenue Streetscape Master Plan) 2. $2.8 million from the FY 11-12 Low-Mod Housing Fund AB xl 27 allows the Agency to reduce its allocation of tax increment to the Low-Mod Housing Fund for the FY 11-12 year only if the City complies with the provisions of AB xl 27 and the Agency finds that there are insufficient other monies to meet its debt and other obligations, current priority programs or its obligations under the Remittance Agreement. The estimated fund balance for the Low-Mod Housing Fund as of June 30, 2011 of $5.9 million is not sufficient to support the budgeted expenditures of $6.8 million for this fund in FY 11-12. However, the FY 11-12 budget for the Low-Mod Housing Fund can be reduced by $0.8 million without impacting any current projects. As part of a future Council action, the budget for the Low and Mod Fund would need to be reduced but there is no anticipated impact resulting from this change. The projected fund balance for the Low-Mod Housing Fund does not reflect the transfer of funds to the Chula Vista Housing Authority approved as part of previous Agency/Housing Authority resolution. The fiscal year Redevelopment Agency budget includes approximately $585,000 for personnel services which includes funding for 4.0 permanent positions and hourly personnel. Further, the Agency and Low-Mod Housing funds include $465,000 and $419,000 respectively for staff time reimbursement costs which are used to reimburse the General Fund, Chula Vista Housing Authority, and the Development Services Fund for time spent working on Agency projects. These funds would also be impacted by the elimination of the Agency. a-6 AUGUST 2, 2011, Item 8 Page 7 of 7 On March 8, 2011 the City Council and the Redevelopment Agency approved a number of resolutions that resulted in appropriations that transferred funds from the Low and Mod Fund to the Chula Vista Housing Authority and from the Redevelopment Agency to the General Fund. Staff is recommending that the appropriations approved with these resolutions be eliminated, which will allow the funds previously proposed to be transferred to remain in Low and Mod Fund and the Redevelopment Agency. In the neaz future staff will return with the actions to appropriate the funds for the required "voluntary" payment and eliminate the appropriations resulting from the Mazch 8`" Council and RDA resolutions. ONGOING FISCAL IMPACT To participate in the Voluntary Redevelopment Program the projected annual payment is $1.2 million. The annual payment will greatly impact the Agency's ability to fund both existing and new public infrastructure projects and programs over the next three years. The Agency anticipates that for FY 12-13 through FY 15-16 there will be less than $500,000 dollars available for projects due to the on-going repayment of $1.5 million to the General Fund, $1.5 million to repay the Low-Mod Housing Fund for the Supplemental Educational Revenue Augmentation Fund (SERAF) payment to the State and the additional ongoing $1 million to fund payment of the "opt in" program. However, after repayment of the SERAF loan from the Low-Mod Housing Fund and retiring the 2003 Certificates of Participation ("COP") in FY 16-17 the Agency anticipates that its resources for projects and programs will increase to approximately $2.5 million annually through FY 18-19 and increasing to over $4 million annually by FY 20-21. ATTACHMENTS A. Five Year Implementation Plan 2010 to 2014- Appendix B: Redevelopment Work Programs B. Ordinance authorizing the City of Chula Vista to participate in the Alternative Voluntary Redevelopment Program, pursuant to Part 1.9 of Division 24 of the California Health and Safety Code, subject to certain conditions and reservations Prepared by: Diem Do, Senior Project Coordinator, Development Services Department 8-7 Attachment A REDEVELOPMENTPROJECT AREAS five Year Implementation Plan 201o to zola APPENDIX B'REDE/ELOPMENT WORK 1'ROC.RAMS (20:10,2014) During the next five years, the Agency will undertake certain projects and activities in the redevelopment project areas in accordance with the strategie objectives described in this Plan: (1) Plans & Policies, (Z) Public Infrastructure & Amenities, and (3) Key Catalyst Projects. The following work programs are organized by redevelopriient project areas: Bayfrontffown Centre 1 Project Area and Merged Project Area. PROJECT DESCRIPTIONS, BENEFITS AND TIMELINE .~ .. •. .~ ~ . .t • ,. ~: Bayfront F t' Support approval and implement the Chula Continue funding staff ,E+ t~ ~', s ,~G , , ~, E ~ :.e ~. Vista Bayfront Master to implement the ~ © ( ,. g~+~ ~ i, Plan (CVBMP), including Bayfront Master Plan. _ ~~, ~ •~" { s " certification of the The Plan is a result of a ©~ ,~ , ,: + + - r 6ayfront EIR, Local multi-year ~ Coastal Program comprehensive £'" , Amendment, and Porf Planning effort. , Master Plan Amendment Finance public infrastructure + Finance Public improvements and • ~ Infrastructure remediation erc[ivities Improvements that will facilitate ~ , redevelopment of tfie ~<,` Ba ront ' Enter into an Ownership Enter into Development Participation Agreement ®~ K~ (OPA) that ensures the . ~ Agreement with Pacifica orderly and timely i •_ ` ,, ; ;: Companies development of this ~ !II ~ ;"+ mixed-use project .~ Prepare plan ~ 0 " ~,,~ amendmentto extend = , Amend Original the timeline to collect ~ ~. Bayfront Project Area Tax Increment 6y 10 years Page 21 S-8 REDEVELOPMENT PROJECT AREAS five Year Implementation Plan 2010 to 2014 Co-market with Port District Resort Conference Center development opportunity Finance completion of Third Avenue Streetscape Master Plan (iASMP) Improvements Implement Agreement with Sweetwater Union Higb Schoat District to redevelop site on Third Avenue Sell grid redevelop Agency-owned site at Third and E Enter into a DDA with Voyage LLC for development of Agency- owned sites Pursue development opportunities for Vogue Theatre site Collabofate on incentive (~ Q package for marketing the RCC site for ~ !~ development ~.. Total capital improvement budget is $6 million. Additional monies from the RDA to fund the current shortfall for construction The Agency has an agreement with SUHSD to develop the former U~indrnill farm site. The Agreement requires. .SUHSD to develop offices or a mixed-irse project.. This is an entryway site to the Third Avenue District and is a mixed use development opportunity. Coustruc[ a residential/live-work development, in accordance with the UCSP Determine Eeasihility of developing Vogue Theatre site Third Avenue Q Q 0 a ~', Page 22 8-9 REDEVELOPMENT PROJECTAREAS Five Year Implementation Plan 2010 to 2014 E Street Trolley Station Market and. develop the former City Corp yard site at F an[I 4Voo[Ilawn for development Actively seek potential developers through a RFQ/RFP and work toward redevelopment of the site ~~~Q 0 '1':'- Implement Gateway DDA Implement development agreement with Scripps to develop medical office building at current site Work with General Growih Properties (GGP) on Chula Vista Center opportunities Implement the existing Disposition and Development Agreement. Upon completion the project will provide more than 300,000 SF of Class A Office Space agreement which obligates Scripps to build medical offices. and a Cancer facility on its property along H Street The owner of Chu a Vista Center declared bankruptcy in. early 2004. The Agency and the ED divisiai will work with GGP to develop short and long-term goals for improving this Center H Street Corridor Q ®_ ®~~Q 01:tf Page 23 e-io REDEVELOPMENT PROJECT AREAS Five Year Implementation Plan 2070 to 2074 Contract. with ULI National to studq E Finance and complete Street, H Street, and a A ULI National Study Third Avenue which {~ are primary links between downtown CV and the bayfront. Southwest Southwest Specific Southwest Specific Plans Plans provide land use designations, for Palomar, West ~ _ z Fairfield, Main Street, development r ~ = • • r Third Avenue and standards and identify ® ~,y necessary ',~r' # d Broadway mBastruMure ~ ~~ improvements Prepare Main Street Develop a Streetscape Streetscape Master Plan Plan for Main Street .w. Develop a Streetscape *x ~ ~ r<I plan for South Third ; E ; Pre are South Third and p and Broadway based Q ` ' e ' 6roadway Streetscape on the Urban Core , ~ • • ~ • Master Plan Specific Plan and `, 6roadway and South Third Avenue Specific Plans _ Issue debt fo fund Issue Debt to Finance infr astnicture Main Street, South Third p im ravements ~ © • and Broadway identified in the _; Improvements Streetscape master ~ ~ ~ ` plans .~ Page 24 8-~~ REDEVELOPMENT PROJECT AREAS Five Year 6nplernenlation Plan 2010 to 2014 Stippor[ existing Participate in discussion efforts, facilitated by regarding reuse options SANDAL, to scope for historic Salt Works development ~+ site alternatives for the site The Agency will work to acquire property Acquire for-sale for the purpose of /~ residential property in consolidating l!VVY~/'f West Fairfield Area properties to create. a ,~ larger development area. Complete Please I Implement assessments and Environmental apply for additional Remediation Program funding_opportunities for assessments aril uow cleanup. Otay Valley Prepare economic ConducC feasibility feasibility study fof study for new Eco- developing an eco- friendlyindustrial .., ~{ i - ~' technology industrial park on the 54-acre ... park site adjacent to Hie existing landfill Evaluate potential far t•~ `J '~ Expand Chula Vista growth in the ® ~ ~ t'{ ~ ~ Autopark existing specific plan A * , _ areas ~pl~ 3 ~. 4 .~ -~- - Build a new Peaker t ` ` New Peaker Plaut Facility along Energy Q ~ , r, * ~ Facility on Energy Way 14~ay in place of the. ~ ~"" ~ ~ and remove facility on existing Peaker Plant ... -, ~ ~ Main Street facilit)~ on Blain , ,,,, Street Page 25 a-i2 .REDEVELOPMENT PROJECT AREAS Five Year Implementation Plan 2010 to 2074 Programs Implement 6roadtvay partner with the BBA Economic to implement Development Strategy and Collaborate will} programs that • • • • • enltancedte the Broadway commercial corridor business Association The BIG Program '~ ~ ; , .• provides up TO ,_ ^ i ~ 9. Fund and hnplemetit 000 to elFgibte $20 - ,, ~ ''~ business Improvement , property and ~~ ,• } ~~" • • • , • Grant Program business owners for o z ~~ ~ r s € " s ea exterior (a4ade w `, t im rovements r -`~ ^` -."-' The EZ Program ` ' provides a state tax ~ , credit to eligible `t ~' ~ ~ ` Market San Diego employers and ~- ~ ~- i v Regional Enterprise employees (or hiring ~ • , , • r ,' • f 4 ~~ r• Zone local residents, ~ try + ~~; purchase of ~ ' equipment and ', " ~ ; ~ t machiner - .etc. Page 26 8-13 ORDINANCE NO ORDINANCE OF THE CITY OF CHULA VISTA AUTHORIZING THE CITY OF CHULA VISTA TO PARTICIPATE IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM, PURSUANT TO PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE, SUBJECT TO CERTAIN CONDITIONS AND RESERVATIONS WHEREAS, the Redevelopment Agency of the City of Chula Vista, ("Agency") is a community redevelopment agency organized and existing under the California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ("CRL") and has been authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council ("City Council") of the City of Chula Vista ("City"); and WHEREAS, the City Council of the City of Chula Vista ("City") approved and adopted a Redevelopment Plan ("Redevelopment Plan") covering the Merged BayfronUTown Centre I and Merged Chula Vista project azeas (the "Project Areas") within the City of Chula Vista; and WHEREAS, since adoption of the Redevelopment Plan, the Agency has undertaken redevelopment projects in the Project Areas to eliminate blight, to improve public facilities and infrastructure, to renovate and construct affordable housing, and to enter into partnerships with private industries to create jobs and expand the local economy; and WHEREAS, over the next few yeazs, the Agency hopes to implement a variety of redevelopment projects and programs to continue to eliminate and prevent blight, stimulate and expand the Proj ect Area's economic growth, create and develop local j ob opportunities and alleviate deficiencies in public infrastructure, to name a few; and WHEREAS, as part of the 2011-12 State budget bill, the California Legislature has recently enacted and the Governor has signed, companion bills AB 1 X 26 and AB 1 X 27, requiring that each redevelopment agency be dissolved unless the community that created it enacts an ordinance committing it to making certain payments; and WHEREAS, AB 1X 26 prohibits redevelopment agencies from taking numerous actions, effective immediately and purportedly retroactively, and additionally provides that redevelopment agencies aze deemed to be dissolved as of October 1, 2011; and WHEREAS, AB 1X 27 provides that a community may participate in an "Alternative Voluntary Redevelopment Program," in order to enable a redevelopment agency within that community to remain in existence and carry out the provisions of the CRL, by enacting an ordinance agreeing to comply with Part 1.9 of Division 24 of the Health and Safety Code and this Ordinance is intended to meet that requirement; and WHEREAS, ABxl 27 requires the City to notify the County Auditor-Controller ("County"), the State Controller, and the State Department of Finance on or before November 1, 2011, that the City will comply with Part 1.9 and this Ordinance is intended to be such notice; 8-14 Ordinance No. Page 2 and WHEREAS, ABxl 27 authorizes the City to enter into an Agreement with the Agency, whereby the Agency may transfer a portion of its tax increment to the City for the purpose of financing certain activities within the City's redevelopment areas, as specified in Part 1.9; and WHEREAS, ABXl 27 imposes specified sanctions on the City in the event that the City fails to make the required remittances, as determined by the Director of Finance; and WHEREAS, the Alternative Voluntary Redevelopment Program requires that the community agree by ordinance to remit specified annual amounts to the county auditor-controller and this Ordinance is intended to be such agreement to make the required remittances; and WHEREAS, under the threat of dissolution pursuant to AB 1X 26, and upon the contingencies and reservations set forth herein, the City intends to make the Fiscal Year 2011- 2012 community remittance, currently estimated to be Four Million Two Hundred Thousand Dollars ($4,200,000), as well as the subsequent annual community remittances pursuant to the CRL; and WHEREAS, the City reserves the right to appeal the California Director of Finance's determination of the Fiscal Year 2011-12 community remittance, as provided in Health and Safety Code Section 34194; and WHEREAS, City understands and believes that an action challenging the constitutionality of AB 1X 26 and AB 1X 27 will be filed on behalf of cities, counties and redevelopment agencies; and WHEREAS, while the City currently intends to make these community remittances, they shall be made under protest and without prejudice to the City's right to recover such amounts and interest thereon, to the extent there is a final determination that AB 1X 26 and AB 1X 27 are unconstitutional; and WHEREAS, the City reserves the right, regardless of any community remittance made pursuant to this Ordinance, to challenge the legality of AB 1X 26 and AB 1X 27; and WHEREAS, to the extent a court of competent jurisdiction enjoins, restrains, or grants a stay on the effectiveness of the Alternative Voluntary Redevelopment Program's payment obligation of AB 1X 26 and AB 1X 27, the City shall not be obligated to make any community remittance for the duration of such injunction, restraint, or stay; and WHEREAS, all other legal prerequisites to the adoption of this Ordinance have occurred. 8-15 Ordinance No. Page 3 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA DOES ORDAIN AS FOLLOWS: Section 1. Recitals. The Recitals set forth above aze true and correct and incorporated herein by reference. Section 2. Participation in the Alternative Voluntary Redevelopment Program. In accordance with Health and Safety Code Section 34193, and based on the Recitals set forth above, the City Council hereby determines that the City shall comply with the provisions of Part 1.9 of Division 24 of the Health and Safety Code, as enacted by AB 1 X 27. This ordinance is that ordinance referred to in CRL Section 34193. Section 3. Community Remittance. To the extent permitted by law, the City Council hereby determines that the City shall make the community remittances set forth in Health and Safety Code section 34194 et seq. Section 4. Effect of Stay or Determination of Invalidity. City shall not make any community remittance in the event a court of competent jurisdiction either grants a stay on the enforcement of AB 1X 26 and AB 1X 27 or determines that AB 1X 26 and AB 1X 27 are unconstitutional and therefore invalid, and all appeals therefrom are exhausted or unsuccessful, or time for filing an appeal therefrom has lapsed. Any community remittance shall be made under protest and without prejudice to the City's rightto recover such amount and interest thereon in the event that there is a final determination that AB 1X 26 and AB 1X 27 are unconstitutional. If there is a final determination that AB 1 X 26 and AB 1 X 27 are invalid, this Ordinance shall be deemed to be null and void and of no further force or effect. Section 5. Implementation. The City Council hereby authorizes and directs the City Manager to take any action and execute any documents necessary to implement this Ordinance, including but not limited to notifying the County Auditor-Controller, the Controller of the State of California, and the California Department of Finance of the adoption of this Ordinance and the City's agreement to comply with the provisions of Part 1.9 of Division 24 of the Health and Safety Code, as set forth in AB 1X 27. Section 6. Additional Understandings and Intent. It is the understanding and intent of the City Council that, once the Agency is again authorized to enter into agreements under the CRL, the City will enter into an agreement with the Agency, as authorized pursuant to Section 34194.2, whereby the Agency will transfer annual portions of its tax increment to the City in amounts not to exceed the annual community remittance payments. Section 7. CE A. The City Council finds, under Title 14 of the California Code of Regulations, Section 15378(b)(4), that this Ordinance is exempt from the requirements of the California Environmental Quality Act ("CEQA") in that it is not a "project," but instead consists of the creation and continuation of a governmental funding mechanism for potential future projects and programs, and does not commit funds to any specific project or program. The City Council, $-~6 Ordinance No. Page 4 therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of San Diego in accordance with CEQA Guidelines. Section 8. Custodian of Records. The documents and materials that constitute the record of proceedings on which these findings aze based are located at the City Clerk's office located at 276 Fourth Avenue, Chula Vista, CA 91910. Section 9. Severability. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are severable. The City Council hereby declares that it would have adopted this Ordinance irrespective of the invalidity of any particular portion thereof. Section 10. Certification; Publication. The City Clerk shall certify to the adoption of this Ordinance and cause it, or a summary of it, to be published once within 15 days of adoption in a newspaper of general circulation printed and published within the City of Chula Vista, and shall post a certified copy of this Ordinance, including the vote for and against the same, in the Office of the City Clerk in accordance with Government Code § 36933. Section 11. Effective Date. This Ordinance shall become effective thirty (30) days from its adoption. Presented by Approved as to form by Gary Halbert, P.E., AICP Assistant City Manager/Development Services Director /~ ~. Glen RG1en R. Googins City Attorney 5-17 I - ~-I • I'~' I SAN DIEGO HOUSING FEDERATION ~ dal i I _ ~~,,-, ~ add-~1-r~~~ Tn-forvn~v~ '107Jesl C Street. Suite 1Ct3 San Diego, CA 92101-390E Phone: (619123&6633 Fax'f619i 239-5523 Infowfiousingearidiegc org Promoting Quality Affordable Housing and Community De~~elopment Throughout San Diego County July 20, 2011 Board of Directors Evan Becker. Presdent Hon. Cheryl Cox Evan Becker Consulting Mayor Ginger Hkzke. I/ice President Hkzke Development CCrporation City of Chula Vista Rebecca Louie. cFO 276 Fourth Avenue Wakelantl Housing & Development Corporation Chula Vista, CA 91910 Jahl Akobundu Strategic Consulting In Ria[ive Dear Mayor Cox and Members of the City Council: Tim baker Chelsea Investment Corporation Charles Davis On Tuesday, August 2 we understand that the City Council will consider an ordinance Jacobs Center For Neghborhootl Innovation to continue its Redevelopment activities by "opting-in" pursuant to the requirements of Jpn Derryberry ABx127. Tovunspeople Aruna Dorltlapanenl BR~D6E Heusing corporation While ABX1 27 allows cities to utilize affordable housing funds to fulfill their funding Mare Jane Jagodzinaki obligations to the state, we believe that this option should only be considered as a last Community HousingWOrks resort. It is our understanding that the City may tap as much as $2.8 million from the Ma"oeaou~ eKa~h Low-Mod set aside. In light of the enormous affordable housing needs facing the City, Housing Fountlatian we cannot afford to lose further revenues to provide affordable homes to the City's Barry Weber Wenners Multi Family Corporation residents. snsanRiggsTmsky secrera,y Furthermore, to the extent that revenues are "borrowed" from the low-mod funds, we Executive Director ask the City Council to make a commitment to repay these funds as soon as feasible, but in no case, more than three years. This will ensure that the City of Chula Vista will be able to continue pursuing additional affordable housing opportunities. We thank you for your consideration. Sincerely, ~~~! Susan Tinsky Executive Director CC: Members of the City Council Jim Sandoval. Citv Manaeer Advocating forAKordable Nomes in San Diego County Since 7990 D c cQ c N N O H) 00 11. a0 Q •• • • s� �e €E r, v_. r� ? i � B S l i E si 3 'mm _ �s r, v_. Financial Impacts of AB 26 or AB 27 Bayfront 30,953,428 Town Centre I 37,240,633 Otay Valley 34,533,609 Town Centre II 20,902,778_ Southwest 56,698,388 Added Area 30,539,624 Tax Increment Revenue CI) 210,868,461 Allocation.: Statutory Passthrough (AB1290/S1321 1) (�> 14,208,860 Contractual Passthrough (Southwest) <�) 21 ,965,325 E:)ebt Service 73,1 57,337. Total Passthroughs 8& Cebt Service 109,331,521 Available Resources 101,536,939 County Auditor Controller Admin_ Cost 3,080,000_ Successor A enc A. clmin. Cost (2) 6,608,201 Tota 1 Administrative Costs 9,688,201 NOTES FY 2011 -12 based on budget_ FY 2012 -13 and forward based on a 1% increase. (2) FY 20'11 -12 based on 50/o of tax increment. FY 2012 -13 and forward based on 3`. Bayfront 0) Town Centre l 0 Ofay Valley', Town Centre II Southwest Added Area 0) Uses of Money & Property Other Rev Tax Increment Revenue & Other Rev Allocation Statutory Passthrough (AB 1290/SB21 1) Contractual Passthrough (Southwest) (') Debt Service s ABX1 27 Transfer to State 3 Total Passthroughs, Set - Aside, Debt Svc & ABX1 27 TO Available Resources County Auditor & Controller Admin. Cost Agency Personnel Costs Total Administrative Costs 30,953,428 37,240,633 34,533,609 20,902,778 56,698,388 30,539,624 210,000 4;111,359 215,189,820 14,208,860 21,965,325 73,157,337 16,710,850 126,042,371 89,147,449 3,080,000 10,096,730 13,176,730 Bayfront Town Centre I Otay Valley (') Town Centre II Southwest (') Added Area Uses of Money & Property Other Rev Tax Increment Revenue & Other Revenue Allocation Statutory Passthrough (AB1290/SB211) Contractual Passthrough (Southwest) Debt Service z Low and Moderate ABX1 27 Transfer to State 3 Total Passthrouqhs, Set - Aside, Debt Svc & ABX1 27 2,133,569 2,566,935 2,380,344 1,440,794 3,908,126 2,105,046 15,000 266,381 14,816,195 2,154,904 2,592,605 2,404,148 1,455,202 3,947,207 2,126,096 15,000 271,708 14,966,870 979,393 2,070,821 2,091,529 2,112,444 $ 1,068,743 1,529,174 2,491,442 2,516,356 2,541,520 2,906,963 $ 220,000 721,195 2,310,339 2,333,442 2,356,777 968,745 13,747,451 1,398,420 1,412,405 1,426,529 3,793,189 3,831,120 3,869,432 2,043,137 2,063,568 2,084,204 15,000 15,000 15,000 321,016 287,677 261,157 $ 14,443,363 $ 14,551,098 $ 14,667,062 $ 950,589 960,.095 969,696 1,469,506 1,484,201 1,499,043 6,860,489 7,286,854 7,307,698 2,849,684 2,878,181 4,117,165 1 968,745 968,745 Td 13,397,748 1 13,549,580 1 13,623,363 2,133,569 2,566,935 2,380,344 1,440,794 3,908,126 2,105,046 15,000 266,381 14,816,195 2,154,904 2,592,605 2,404,148 1,455,202 3,947,207 2,126,096 15,000 271,708 14,966,870 979,393 $ 1,045,615 989,187 1,514,034 $ 1,068,743 1,529,174 7,378,317 $ 220,000 721,195 5,829,437 2,906,963 $ 220,000 721,195 2,936,032 968,745 $ 941,195 968,745 13,747,451 $ 941,195 12,252,575 Available Resources $ 1,045,615 $ 1,001,518 $ 1,043,699 $ 1,068,743 $ 2,714,295 County Auditor& Controller Admin. Cost A enc Personnel Costs $ 220,000 721,195 $ 220,000 721,195 $ 220,000 721,195 $ 220,000 721,195 $ 220,000 721,195 Total Administrative Costs $ 941,195 $ 941,195 $ 941,195 $ 941,195 $ 941,195 $ 104,420 $ 1 127,548 1 $ 1,773,100 , a x � O rlet R°It o let w +1 C � � O C ��r� � o� ���� �z � � �a� r IN I-OL, 0 m Al wn, 7f�g p ti) SAM B i S k ( t � f v got, 1 now E 6 , E ; f ..�..... ... q�'{ 3 %3 wii IHR SAM B i t � f � 1 .5 s ..�..... ... q�'{ 3 %3 wii 1+� ISO a VA 4 9 f 3 U 6f 4 T € C' IN �a E Adopt a non - binding Resolution of Intent to 10 /1 /2011 Adopt an Ordinance Remit Payments 1/15/2011 & 5115/2011; annually thereafter 3 Beginnina Fund Balance $ 8,473,109 $ 5,780,884 $ 5,226,8371 $ 8 754372 $ 12 821 260 $ 17,028,097 Average Administrative xoenditures 597,747 615,680 634150 653,174 672,77 692 95 andinas II Loan 1, 4,000,000 ,l-,