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HomeMy WebLinkAboutAgenda Report - July 19, 2007 B-01 SMCITY OF LODI / LODI REDEVELOPMENT AGENCY / LODI PLANNING COMMISSION COMMUNICATION •• FM AGENDA TITLE: Consider Presentation on Tax Increment and Redevelopment with Possible Action by the City Council/Redevelopment Agency to Direct the City Manager/Executive Director to Enter Into Professional Service Contracts for the Purpose of Conducting Various Tasks Over Time Related to Establishing a Redevelopment Project Area MEETING DATE: July 19,2007 City Manager RECOMMENDED ACTION: Consider presentation on Tax Increment and Redevelopment, receive question and answers, and for City Council 1 Redevelopment Agency, and consider directing the City Manager/Executive Director via resolution to enter into professional service contracts for the purpose of conducting various tasks over time related to establishing a Redevelopment Project Area. BACKGROUND INFORMATION: This Special Joint Meeting of the City Council/ Redevelopment Agency, and Planning Commission will consist of a presentation concerning the possibility of forming a Redevelopment Project in Lodi, a question and answer period, and the opportunity for the City Council/Redevelopment Agency to take action by directing the City Manager/Executive Director. The meeting will open with a presentation by staff consisting of a PowerPoint presentation explaining the need for funding, the mechanics of tax increment revenue, and the process that is required to establish a Project Area. Comments will then be provided by guests from the cities of Merced and Healdsburg on their communities' experience in using redevelopment. Questions and answers will be provided in a panel format; and finally, there will be an opportunity for action by the City Council/Redevelopment Agency. A brief paper titled "Introduction to Tax Increment and Redevelopment" is attached and will provide more background information. The paper includes four and one-half pages of narrative regarding why redevelopment is a tool that might be considered, questions and answers, a proposed timeline for action, and finally, a budget broken out among three different professional organizations. APPROVED: ;l BlaiWOAg, City Manager If the Council, after receiving the presentation, wishes to proceed with exploring the possibility of the formation of a Redevelopment Agency, it is recommended that the Council direct the Manager to enter into several professional service agreements. The law is complex and very structured with regard to the process of forming a Project Area. Extra temporary help with specific expertise is needed to perform a variety of tasks prescribed by law. The timeline proposed for consideration is approximately two years with heavy public participation. During this period of time, both the City Council/Redevelopment Agency and the Planning Commission will be asked to take action. Entering into the agreements does not mean the formation of a Project Area. Several decision points exist in the future to proceed or terminate. The first proposed task is conducting an initial feasibility study. This is not required bylaw. But it will help to identify the area for a Redevelopment Project. The Manager is contemplating requesting that the Budget and Finance Committee work with the Manager in the preparation of this study and the identification of what is referred to as the survey area, the first step in forming the boundaries of a Redevelopment Project. FISCAL IMPACT: The City incurred $320,021 in costs attempting to form a Project Area in 2001/02. It is estimated that the current costs to form a Project Area, if the Council wishes to proceed, will be in the above range. Three distinct professional services agreements are recommended in the following not -to -exceed amounts: Fraser& Associates — tasks related to financial analysis and feasibility - $40,500; Stradling Yocca Carlson & Rauth —special legal counsel — $37,750; GRC Consultants — EIR, preparation of reports and documents, conditions analysis - $177,000. The above firms were selected for recommendation based upon the Manager's experience with the above firms and nearly every major firm providing the required services in the State. Potential revenues are unknown at this time. However, based on the revenues received by other San Joaquin Valley cities last year, annual revenues could range between $2,802,727 (City of Ripon) to $12,039,513 (City of Stockton). Blair Kin , y Manager Attachment Introduction to Tax Increment and Redevelopment July 19, 2007 Introduction to Tax Increment and Redevelopment Introduction Lodi needs more safe affordable housing for senior citizens. The City should help low-income homeowners pay for water meters. Motel business along Cherokee Lane is declining; the City should do something. Alleys are deteriorating. Lodi needs a new library. Lodi needs a new animal shelter. The Grape Bowl is a regional asset that if used correctly could spur economic development. The east side of Lodi needs a new community center and more parks. Why can't the Blakely Park Pool look nicer? Lodi should preserve older historic buildings. The storm and wastewater collection system is aging, obsolete and inadequate; why isn't the City doing anything? Overhead power lines should be buried underground. Lodi needs to improve its tax base and create more jobs. These are just a sample of comments from Lodi residents about what they want and need from the City. The City constantly examines the range of services it provides and analyzes how to pay for and improve these services. With one major exception, Lodi fully utilizes the many forms of taxes and fees it receives. Lodi works closely to obtain funding from the State and Federal governments and the private sector to offer the range of services a "full-service city" provides. The one major source of revenue that Lodi does not currently use is tax increment, which state law makes available to cities as outlined in the Health and Safety Code. Approximately 80 percent of all cities in California use tax increment revenue to meet the local needs of their residents and businesses. For every program, facility and service desired in the list above, tax increment is a tool that could be used to meet the need. It is a revenue source that does not raise taxes. Tax increment is a component of the California Redevelopment Law. Over the next several months, the City Council will examine how tax increment can help Lodi. This may result in action to form a Redevelopment Project Area in Lodi. This paper is intended to provide a brief overview of tax increment and redevelopment and assist the Council and community members in further understanding this powerful locally -driven economic tool. 1 What is tax increment? Tax increment is the amount of property tax revenues attributed to the incremental increases in tax value that are generated from development activity or transfers of property above a base amount within a designated redevelopment area called a project area.' It does not change the amount of taxes a property owner is required to pay. It does change how the extra property tax generated, "the increment," is distributed. Lodi typically receives approximately 16 to 17 cents from every dollar of property tax paid. With tax increment, Lodi would be able to receive up to 75 cents from every dollar of new property tax generated above the base assessment; money that would otherwise go to the State of California or agencies that are the responsibility of the State of California. Under the state's tax increment rules, Lodi retains tax increment funds it must spend according to a plan, referred to as a Redevelopment Plan. The Redevelopment Plan can allow for expenditures for programs ranging from major rehabilitation of water, wastewater, and storm drain infrastructure to building a new library. There is only one absolute requirement with regard to the expenditure of tax increment funds: 20 percent of tax increment revenue must be spent on affordable housing. Tax increment is only generated within a designated Redevelopment Area. This is a distinct geographic area. Although there are some exceptions, tax increment funds are spent within the Redevelopment Area. A defined and specific process must be followed in order to establish a Redevelopment Area. Certain conditions must exist and findings must be made. The area must be predominantly urbanized, and certain adverse physical and economic conditions must also be identified and exist to the point that they are a significant burden to the community. Again, it is important to note that tax increment does not raise taxes. Tax increment is not an assessment or lien on property. Property taxes within the Redevelopment Area are governed by the same laws that limit property tax increases outside of the Area. 'For example, tax on a property assessed at $500,000 is $5,000, with the City's share (17 percent) amounting to $850. Within a redevelopment project area, if the property is upgraded and sold for $750,000, the new annual tax would be $7,500. The city would receive 80 percent of the $2,500 increase ($2,000), plus the original $850, amounting to $2,850. Outside a redevelopment project, the city's share would be $1,275. 2 Other entities that are the financial responsibility of the State of California -- such as the county and school districts and other local special districts -- continue to receive all the tax revenues they were receiving before the tax increment was generated. Tax increment financing does not reduce revenue allocated to school districts. In fact, school districts and community college districts receive a portion of the redevelopment tax increments.2 Existing State school funding formulas negate any gain or loss in property tax revenue, guaranteeing the state maintains a school's funding level, no matter what happens to the area's property taxes. Additionally, a large portion of the money the Agency shares with the School District will go to new facilities. This money would not be available otherwise. In a nutshell, tax increment, through the adoption of a Redevelopment area, is an economic tool that could assist Lodi in addressing financial needs currently beyond the City's ability. It is a unique partnership that encourages economic stimulation so that growth in the tax base can provide funding for local improvements, create jobs, and improve health, safety, and quality of life in Lodi. The History of tax increment and redevelopment in Lodi A Redevelopment Agency must be formed to create a Redevelopment Project and collect tax increment. According to California Health and Safety Codes,3 a Redevelopment Agency exists in every city and county in the State, but lies dormant until activated by ordinance. Early in 2000, the City Council authorized the formation of a Lodi Redevelopment Agency and began the steps to form a Redevelopment Project area. At that time, the City Council recommended establishing a project area in the oldest commercial and industrial areas of Lodi. Approximately 1,184 acres were identified as meeting the requirements that would allow the City to collect incremental taxes in exchange for stimulating growth and development in the area. In the spring of 2002, the City Council abandoned its plans to form a Project Area in response to citizen concerns and an initiative drive to put the project's future on the ballot. 2 For redevelopment projects that were adopted before AB 1290, or January 1, 1994, the Agency negotiated separate agreements with each taxing entity. For those projects adopted on or after January 1, 1994, the total amount distributed to each entity is the same 3 Section 33100 of Health and Safety Code 3 It is interesting to note that, according to calculations prepared for the formation of the project area at that time, if the project would have been formed and if the development occurred in the fashion envisioned, the City would now have over $400,000 in new revenue for this current fiscal year 2006-07. For comparison's sake, this would be like the city's share from $40 million of new taxable sales. One of the concerns expressed with redevelopment and tax increment in 2002 was a fear of eminent domain, the power to force someone to sell his property against his will. In order to address this concern on the part of members of the public and City Council, in 2006, the City Council adopted Ordinances 1775 and 1776 that eliminated the ability of the Lodi Redevelopment Agency to engage in the use of eminent domain for private use. It is expected that the City Council, if a project is adopted, will enact further restrictions and eliminate eminent domain by the Redevelopment Agency. The Lodi Redevelopment Agency is still activated, but there is no project area and no change in the way property tax is distributed. The City Council will soon consider again exploring an area for a redevelopment project. How and when will this occur? It is anticipated that if the Council wishes to explore a Redevelopment Project Area, the public will have ample opportunity to voice opinions on what projects or activities should be funded with tax increment, how it could improve the community, and the project area boundaries. State law requires an environmental impact report on the project area and that several hearings by the Planning Commission and City Council be held prior to the area's adoption. Currently, no boundary has been proposed for the Project Area. It is anticipated that an initial feasibility study will be conducted that will help select the boundaries of an area and prioritize activities before fully committing to the time and expense of adopting a Project. It is anticipated that the entire process, if approved by the Agency, will take from 12 to 24 months. Attached is "Exhibit A". It is a generalized preliminary schedule and listing of major work products required for plan adoption. It provides a detailed breakdown of the tasks required to form a project area. 2 What are the safeguards? Because tax increment is a powerful tool, safeguards have been developed to ensure that activities are appropriate before receipt of tax increment funds. A report must be presented to the legislative body each year and an annual audit is required. An annual report must be submitted to the California Department of Housing and Community Development and other state agencies. Redevelopment agencies must show that they have a financial obligation (debt) prior to the receipt of tax increment. This information is collected and transmitted to their counties in a document and is known as the Redevelopment Agency's "Statement of Indebtedness" or SOI. Without an SOI, the State would have no way to prevent any local agencies from collecting the increment and pocketing the money. An Agency can incur an obligation in a number of different ways: it can borrow money from investors; it can borrow money from the City or engage in an agreement with the City; and/or it can incur obligations with private development interests. Debts of the Agency are not debts of the City. Questions and Answers Question: Who oversees the expenditure of tax increment and redevelopment? Answer: The members of the elected City Council serving in the capacity as the governing board of the Redevelopment Agency. The community has full local control of additional revenues raised locally. Question: Will being in a Redevelopment Area depress my property values? Answer: There is no evidence that property values will be depressed. In fact, one might expect the opposite. With the possibility of greater revenue available for the area in certain circumstances, one might expect that property resale value could increase. Consider: if tax increment is used to improve water, sewer, or storm drains, does that seem likely to lower or increase property values? Would a new library help or hinder property values? The 1998 Dardia Report asserts that assessed valuation in Project Areas go up about twice the rate as similar uses outside the project area. 5 Question: Does shifting property tax in the way tax increment works hurt schools? Answer: No. While school finance is complicated and can be confusing, the essentials are that the state provides funding based on average daily attendance. Additionally, the Agency shares a part of its tax increment with school districts which is "new" money to the schools and goes to school facilities. Question: How can I be sure that the City is not after my property? Answer: The City Council adopted ordinance 1775 and 1776 based upon local concerns to limit eminent domain. The City Council has not budged on the policies and provisions to protect property rights. Will adoption of a redevelopment plan change this policy direction? No. In fact, if a redevelopment plan is adopted that follows ordinances 1775 and 1776, it will be very difficult and costly to change from this existing policy direction. Also, new state law that became effective Jan. 1, 2007 requires redevelopment agencies to state their intentions regarding the use of eminent domain. The Redevelopment Agency will not use eminent domain to acquire property. Question: What about the small business? Answer: A small business can benefit from improved infrastructure. The Redevelopment Agency can absorb costs of building new parking lots, sidewalks and signs. The Agency can adopt programs specifically targeted to assist small businesses. The Redevelopment Agency has a specific obligation to give a preference to existing businesses and residents in development opportunities. Question: Will I have extra property maintenance obligations? Answer: No. Most redevelopment plans do not add to property maintenance requirements. 2 Question: Is this more government regulation? Answer: No. The redevelopment plan will not change zoning or development standards — these will be, as they are now, covered by City ordinances. Redevelopment would provide funding and tools to assist with the funding of public improvements; tools to work voluntarily with property owners. Question: Doesn't the Redevelopment Agency just siphon money off the City that could have gone to the police and fire departments? Answer: No. The community will receive a greater amount of revenue with redevelopment than without redevelopment. By having the Agency bear the cost of public improvements, more of the City's General Fund can be made available for police, fire, and other services. Currently, the City is paying approximately $1.7 million in debt service for public improvements that could have been financed via tax increment. If tax increment money would have been available, these financial resources would be supporting additional on-going services. Question: Will the City's General Fund backstop the Redevelopment Agency if it goes broke? Answer: No. The obligations of the Agency are not the obligations of the City. Debt issued by the Redevelopment Agency is evaluated on its on credit merits. The Agency must be able to prove its ability to pay its own debts. Investors in redevelopment agency debt understand and agree that the Agency must pay its own way and do not expect the City to provide relief. Question: How can redevelopment help provide affordable or senior housing? Answer: State law requires redevelopment agencies to spend at least 20 percent of the tax increment on affordable housing for seniors, the disabled and low- to moderate -income families. A redevelopment agency in Lodi could use that money to provide housing, subsidize rents, pay for repairs and help eligible residents become homeowners. 7 Question: Doesn't the Redevelopment Agency take all the increases in property taxes from the County? Answer: No. State Law, (Health and Safety Code Section 33607.6) requires a percent of the growth in property tax within the Redevelopment Area be passed through to other taxing entities. The pass through amount is increased in three stages. The pass through begins at 25 percent of the total tax increment after the required amount for housing purposes is accounted for. On average, the taxing entities receive about 35 percent of the tax increment in a Project Area. It is interesting to note that on April 17, 2007, during a discussion of the Grape Bowl, Board of Supervisors Chairman Victor Mow said, "They (Lodi) have an opportunity of a redevelopment project. They have not done so. This is a classic case of where redevelopment money might be the answer to do those things." Question: Does the Redevelopment Project end or sunset? Answer: Yes. The Agency cannot collect Tax Increment from the project for any longer than 45 years. It loses it authority to act after 30 years. Between 30 and 45 years the agency can collect debt only to fund housing programs and make payments under its obligations. Exhibit "A" An underlying assumption in the following schedule is that the redevelopment plan will have no eminent domain authority at all pursuant to Ordinances 1775 and 1776. GENERALIZED PRELIMINARY SCHEDULE (DISCUSSION PURPOSES ONLY) Item Approximate Activity Date 1. July 2007 City Council and Planning Commission hold a joint project kick- off and community forum. The forum intended to explain the Tax Increment redevelopment planning process, provide general background, get guidance from policy makers, and identify Study Area for the feasibility study. City Council may authorize execution of consultant contracts to commence study process or choose not to proceed. 2. 8/1/07 Initial field work and feasibility study started. 3. 9/6/07 First newsletter sent. This newsletter will announce the study and generally explain redevelopment and what it accomplishes. 4. 9/20/07 Hold first community meeting to explain redevelopment and how it works. Ask community to identify issues. 5. 10/3/07 City Council may formally adopt Survey Area after reviewing feasibility study recommendations, or may choose to terminate process. 6. 1/23/08 Planning Commission adopts Preliminary Plan. 7. 1/30/08 Agency prepares projections of the change in the number of residents and students within the Project Area. 8. 1/30/08 School district data requested by Agency. The districts prepare projections of any change in the need for school facilities within the Project Area over the lifetime of the plan. 9. 2/13/08 Project Area legal description and map prepared by civil engineer. 10. 2/20/08 • Agency sets base year for calculating tax increment. • Second newsletter sent out. 0 Item Approximate Activity Date 11. 2/27/08 • Preliminary plan circulated to taxing entities. • Legal description and map sent to taxing entities and State Board of Equalization. • School impact reports sent to State Department of Finance. 12. 5/12/08 County Auditor -Controller submits "base year" assessed valuation report to Agency and other taxing entities. 13. 5/21/08 Agency board authorizes circulation of Preliminary Report, Draft Redevelopment Plan and Draft EIR to taxing agencies. 14. 6/4/08 Preliminary Report, Draft Redevelopment Plan and Draft Program EIR circulated to taxing agencies and made available to the general public. 15. 7/21/08 End of Draft Program EIR review period. 16. 8/20/08 Agency re -sets base year for calculating tax increment revenues to FY2008-09. 17. 10/22/08 New "base year" assessed valuation report received from the County Auditor -Controller. 18. 1/7/09 • Agency Board sets joint public hearing date. • Agency Board adopts Relocation Method and Owner Participation Rules. • City Council agrees to joint public hearing date. 19. 1/14/09 • Planning Commission makes finding on whether the proposed Redevelopment Plan is consistent with the Lodi General Plan. • Planning Commission makes recommendation on proposed Redevelopment Plan. • Planning Commission could adjust (make Project Area smaller) boundaries at this point. 20. 1/16/09 Notice of public hearing and preliminary report sent to State Departments of Finance and Department of Housing and Community Development. 21. 2/2/09 • Report to City Council, Final Draft Redevelopment Plan and Final EIR available for public review. • Public hearing notices mailed out with newsletter. 22. 2/9/09 State Departments of Finance and Department of Housing and Community Development submit their comments if necessary. 10 Item Approximate Date Activity 23. 2/16/09 Final round of community meetings to explain the proposed Redevelopment Plan and explain the hearing process. 24. 3/4/09 Joint City Council/Redevelopment Agency public hearing held. 25. 3/18/09 Ordinance approving plan introduced after the Agency responds to written objections from the public. 26. 4/1/09 Second Reading. 27. 5/1/09 Ordinance approving plan is effective. 28. 6/30/09 End of legal challenge and referendum circulation period. 11 Major Reports and Work Products The redevelopment planning process includes a number of major reports and work products before the City Council can go ahead with adopting the plan. Some of these are required by State law, while others are necessary for community involvement. For the most part, the Major Reports are required by the Community Redevelopment Law, while many of the Work Products are voluntary but necessary to a successful plan adoption program. The following table shows major reports and work products, plus the estimated budget for each by involved firm. The Specialist category includes civil engineers, traffic studies, and other necessary special studies for the environmental impact report. 12 Estimated Budget by Firm Report or Product Description Fraser & GRC Assoc SYCR Specialist Total Major Reports Feasibility Study This report assesses the overall $14,000 $7,500 $4,000 0 $25,500 feasibility of undertaking a redevelopment plan, taking into consideration the presence and extent of blight, financial feasibility, and community acceptance. Recommendations include initial boundaries, basic plan policies and whether to proceed. Preliminary Plan This is the formal initiation of the $3,500 0 $700 0 $4,200 redevelopment planning process. The Preliminary Plan includes initial goals and objectives of the plan, initial detailed project area boundaries, and preliminary land use data. If Planning Commission adopts the Preliminary Plan, but the Agency decides whether to set a base year and formally circulate the Preliminary Plan. 12 4 Includes the cost of civil engineer to prepare legal descriptions and maps. 13 Estimated Budget by Firm Report or Product Description Fraser & GRC Assoc SYCR Specialist Total School Impact Study The school impact study is an $1,500 $2,500 $750 0 $4,750 estimate of the number of students to be generated during the lifetime of the redevelopment plan and an estimate of the new school facilities necessary. The Agency provides estimates of the number of new students, and the school districts are responsible for estimating facilities needs. This report is new in 2007. Legal Description Often overlooked, the legal $2,500 0 0 $17,500 $20,000 and Map4 description and map is prepared by an engineer, usually costs $10,000 to $20,000, and is critically important in determining which land is inside and outside the project area. A poorly prepared map can keep a project from going ahead. Preliminary Report This is the major factual document $42,000 $7,500 $8,500 0 $58,000 for the whole redevelopment planning program. It includes lot -by - lot and building -by -building research evaluation of physical and economic conditions in the proposed project area. 4 Includes the cost of civil engineer to prepare legal descriptions and maps. 13 14 Estimated Budget by Firm Report or Product Description Fraser & GRC Assoc SYCR Specialist Total Preliminary Report The report also contains detailed (cont'd) economic data and fiscal projections for the project. The proposed redevelopment program is also outlined. Redevelopment Plan The Redevelopment Plan is a $5,000 $1,500 $2,000 0 $8,500 document that regulates the operations of the redevelopment agency in the Project Area, sets detailed goals for the redevelopment program, authorizes specific projects, and sets various limits and caps. Minimum plan limits include the time limit for the effectiveness of the plan, not to exceed 30 years, the time limit for receiving tax increment (not more than 15 years longer than the plan's effectiveness, and the maximum amount of outstanding debt at any one time. Much of the plan's content is mandated by the Community Redevelopment Law. 14 5 Includes estimated costs of specialist studies that may be required as part of CEQA analysis. 15 Estimated Budget by Firm Report or Product Description Fraser & GRC Assoc SYCR Specialist Total Program Environmental impact reports are $35,000 0 $5,000 $15,000 $55,000 Environmental required for redevelopment plan Impact Reports adoptions. Given the long-term character of the redevelopment program, the EIR would look at the cumulative effects of the whole program, rather than the impacts of individual projects such as road construction or a new housing tract. The EIR is distributed at the same time as the Preliminary Report and the draft Redevelopment Plan, and analyzes the impacts of the overall program contained in the Redevelopment Plan. Relocation Method As part of the redevelopment plan $4,500 0 $850 0 $5,350 adoption program, the Agency has to adopt a set of guidelines for relocating individuals, families and businesses that may be dislocated as a result of redevelopment agency activities. The Agency has to have these guidelines whether or not any displacement is anticipated. They would be based upon and would be consistent with both State and Federal requirements. 5 Includes estimated costs of specialist studies that may be required as part of CEQA analysis. 15 16 Estimated Budget by Firm Report or Product Description Fraser & GRC Assoc SYCR Specialist Total Owner Participation Redevelopment agencies are required $2,000 0 $1,500 0 $3,500 Rules to give preference to existing owners in participating in redevelopment activities. This document details how the Agency would solicit participation, and how it would evaluate participation proposals. Report to City This very large document is the final $12,500 $5,000 $6,500 0 $24,000 Council report to the City Council from the Redevelopment Agency. It combines all the above reports, plus a record of all meetings and communications with others such as other taxing agencies, community meetings, interest group meetings and the like. Work Products Newsletters At least three, and possibly four, $7,500 0 $800 0 $8,300 newsletters will be mailed out to every known resident, property owner and business in the project area. The mailings can be expanded to include all of Lodi. Community Community input and education is $12,000 $8,000 0 0 $20,000 Meetings critically important to the success of a redevelopment planning program and to the ultimate success of the program's implementation. As such, the community meetings are a central 16 17 Estimated Budget by Firm Report or Product Description Fraser & GRC Assoc SYCR Specialist Total Community element in the overall redevelopment Meetings (cont'd) planning program. The meetings will include Power Point presentations, information packages for participants, maps, presentations, and question and answer sessions. Community Group These meetings are presentations to $5,000 $2,000 0 0 $7,000 Meetings individual community organizations. The groups could include almost any interested organization, from service organizations and business organizations to church groups and fraternal organizations. Presentation materials and handouts will be prepared for each meeting. Commission Representatives from City $5,000 $1,000 0 0 $6,000 Representative commissions or committees would Meetings meet on the planning program periodically. The purpose here is to get input from each City service group, to help identify programs, and to communicate with the overall City family. Planning The Planning Commission will meet $2,500 $1,000 $1,250 0 $4,750 Commission about the redevelopment planning Meetings program at least two to three times. This includes adopting the Preliminary Plan, reviewing the 17 W. Estimated Budget by Firm Report or Product Description Fraser & GRC Assoc SYCR Specialist Total Planning proposed Redevelopment Plan and Commission supporting documents, evaluating Meetings (cont'd) consistency with the Lodi General Plan, making recommendations to the City Council/Redevelopment Agency, and initiating boundary changes as necessary. City As the community's elected $7,500 $3,000 $5,400 0 $15,900 Council/Agency representatives, the City Meetings Council/Redevelopment Agency meet a number of times during the redevelopment planning program. At a minimum, major meetings include: • Kick -Off forum • Setting of base year • Adoption of Relocation Method and Owner Participation Rules • Setting of joint City Council/Agency public hearing • Joint public hearing • Ordinance adoption Expenses Includes the cost of supplies, $15,000 $1,500 $500 $1,000 $18,000 databases, printing, mailing, and other purchased items. Does not include travel -related costs. Total $177,000 $40,500 $37,750 $33,500 $288,750 W. RESOLUTION NO. RDA2007-02 A RESOLUTION OF THE LODI REDEVELOPMENTAGENCY AUTHORIZING THE CITY MANAGER/EXECUTIVE DIRECTOR TO EXECUTE PROFESSIONAL SERVICE AGREEMENTS FOR THE PURPOSE OF CONDUCTING VARIOUS TASKS RELATEDTO FORMING A REDEVELOPMENT PROJECTAREA WHEREAS, the City Council/Redevelopment Agency and the Lodi Planning Commission conducted a special joint meeting on July 19, 2007, for the purpose of discussing the possibility of forming a Redevelopment Project Area in Lodi; and WHEREAS, should the City Council/Redevelopment Agency wish to proceed in forming a Redevelopment Agency, it is recommended that the City Manager/Executive Director be authorized to enter into professional service agreements with the following agencies due to the complex and structured regulations associated with the process of forming a Project Area: Fraser & Associates —tasks related to financial analysis and feasibility: Stradling Yocca Carlson & Rauth — special legal counsel; and GRC Consultants — Environmental Impact Report, preparation of reports and documents, and conditions analysis. WHEREAS, entering into the agreements does not mean the formation of a Project Area, and several decision points exist in the future to proceed to terminate. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of Lodi that the City Manager/Executive Director is hereby authorized and directed, for and on behalf of the Redevelopment Agency, to execute professional service agreements with the following agencies for the purpose of conducting various tasks related to forming a Redevelopment Project Area: Fraser & Associates — not to exceed $40,500 Stradling Yocca Carlson & Rauth — not to exceed $37,750 GRC Consultants — not to exceed $177,000 Dated: July 19,2007 I hereby certify that Resolution No. RDA2007-02 was passed and adopted by the Redevelopment Agency cf the City cf Lodi in a special joint meeting with the Lodi City Council and Planning Commission held July 19, 2007, by the following vote: AYES: MEMBERS — Hansen, Katzakian, Mounce, and Chairperson Johnson NOES: MEMBERS— None ABSENT: MEMBERS — Hitchcock ABSTAIN: MEMBERS — None A IIJOHIL Agency Secretary Redevelopment Agency of the City cf Lodi RDA2007-02 • -'edevelopment. For a Better Lodi California has nearly40.Q acfive redevelopment agencies in communities throughout the state, includ- ing five cities in San Joaquin County. While they are probably the least understood local government entities, redevelopment agencies represent the most important tool a community has to help breathe new life into areas in need of revitaftatlon,.; economic development and new opportunity. Redevelop- ment activities create jobs and expand apportunities for business, provide affordable housing and homeownership opportunities for families most in need, reduce crime, improve infrastructure and lead CE-anup of run-down areas. Below are some key facts albout redevelopment agencies and their con- tributions to California communities. Wdevelopment Wi E �r�k Mj community projects don't get done. An abandoned gas station doesn't tum into retail space over- nigt� hr#f�idble hosing doesn't build itself, Revitalization of `Wbesn'ttust happen —someone has to ma# tt _!rE :a gre;rt�tion Qf redevelopment agencies `moi I¢ation projects in 51, which the Pn of be involved.- Reflecting i�e 11`' Redevelopment I 0.66 o6v6mmeint entities us ly ` controlled by thetlrraclralyFrd of Sutors or a separate appointed boa a i-ttpilol tot pub 1) cause they are locally governed red pment agencies are in: the best position to ideritir krt M- unity needs and to wo,k. with private investors on local projects to meet those needs. How it works: Redevelopmenf By The Numbers 8. Numberof the 163 California cit- ies with populations greater than 50,000 that do not have redevelop- ment agencies, of which Lodi is one. $8.7 billion. Redevelopmentagen- cies' revenue in fiscal year 2005- 2006, up from $7.2 billion the previ- ous year. $14. Every$1 of redevelopment agency spending generates nearly $14 in total economic activity. $38I billion. Increase in property I b b I I • va ues a ove ase -year eves. When redevelopment agencies make improvements to tar- geted areas, property values within those areas rise, resulting Ira $693 million. Amount spent by state ;an increase in pro perty tax revenues. State law allows redevel= redevelopmentagencies in 2005- opment agencies to use a portion of this increase to repay=� 2006 in low- andmoderate=income noticial obligotions they m ust incur in order to rehabilitate an housing. area' i ecle Iopment agencies use these funds to build publt improver nt gndinfrostructure, clean up contaminated soil 20 percent. Amount of property tax and do crtl�er things necessary to improve the conditions of the revenues generated from redevel- pr©perty edev�loprrlt's commitment of funds attracts pri opment activities that must be vate inve$lmie at.pnd)Veates a chain reaction, such as job crew spent to increase the supply of af- tton, whets' thel ateecpnomic output is larger than the air fordable housing. r}ai pu; bk,v-ester e Fire aryl prrlid­estqtior s; tM other :public facilities " . {C)OMMuriif S # t, l i flevisrt fihe aff [able,ho using possibilities in the urban core.'ttevrratig already -used land r�educea "the need to sprawl onto farms or wetlands and vises ,p6M1poct growth to stop sprawl. Redevelopment in cities uses existing resourcesrattter than forcing faxpayers fo subsidize the building of new roods or sewer lines." 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I rrn 56 aT^ lg1 f� In 5 K -ZIT. -r-, Sr^,O m -',O ^,ry'r''r �jd 6'; Kfill-n' 6,jr 16< rr °rlr' 5%P �+1 rrlco l arcs"+ r6ns t—_ .�6r �x.r�s+ �61a,�' 6T\:2 6 *6c car !c<Icl^ cCi 1 r� rF _ m -,l 2 56 <s t Krv- g+ ores✓ h&r r$-+ q r6(#vy'R' a-. rI� c;5r ;v <6'°r Krh-o I6< 61:r T {T' q' Ir ' S`�' -�1^Stiy m -61r Sl <s q'6f 1' mTS� .� n 56 ftrc(r 5 f��l nsn. of 51Sid4,05`�51- 51 6-rr 361WIP M2 Grl-6c 51016n,rn.rs, 51 .c 5l mr'`1^rlc � alfs6n �r6n rc �rl< rrrn cr S1 lm* ncof m �.s� 1<;S, r'+r ' c�'a' cis 1_ <s 1 I 'cr ' c -61r, ; rf+n _ <5, �zi6rv, t, inn �6r!-�-i r� r< nS-, a l<56 r�-r�' r � i+i t6n KeUeveiopmenu ine unmown tsovernment Page l of 2 Redevelopment: The Unknown Government Whatlt Is. What Can Be Dots er A Report to the People of California August,1998 Second Edition Redevelopment: The Unlmnwa Government is published by Municipal Gals for RedevelopmentReform OCIRR) , through a grarTt Brom the Fleldstead Institute, Irvine, CA. I D1 110 W N M 0 :f•'1 Director: Chris Kerby City Councilman, City of RAl,erbm Fullerton, CA 2L: (714) 871-9756 Associates: Sherry Curtis Consultant, Paul Gann's Citizens Committee Sacramento, CA 21: (209) 754-4530 Ruth Gflm City Councilwoman, City of Bellflower Bellflower, CA Ph.: (562) 866-1998 Jean Rein/ Offifmd United for Redevelopment Frbmticn (CURE) South Gate, CA W. (213) 567-6737 http://www.rodevelopmenteom/norby/indicx.html 7/12/2007 L%GUGYGI%jjUU%oUL. LLLG LjIMLUUW.0 kSWVV.LIALUV-LH ragv6 VA G Dome" KSPIM School BmW Member, Pajaro Valley U.S.D. Watsonville, CA Ph.: (831) 476-3627 Dr. Ralph Shaffer Member, Los Angeles Camty Grand Jury, 1993-4 Chair, Grand Jury SubcomrnIHBe on Redevelopment Professor of History (Ret.), Cal Poly Pomona Covina, CA Ph.: (626) 9664304 Christopher Sutton Attorney -at -Law Pasadena, CA Ph.: (626) 683-2500 Illustrations by Llan Minamide Ph.: (714) 992-0848 Redevelopment: The Unknown GoyexrnentOriginal Edition First Printing: x,1996 Second ng: May, 1997 Second IIhtim Third Printing: August, 1998 Any part of this book uw be repnntedfor public educationpuxpose For additional copies, call, write or FAX: Mmticipal Officials fx Redevelam-eitRefbrm (MORR) 214 N. Yale Ave., Fullerton, CA 92831 PH.: (714) 871-9756 FAX (714) 992-6627 E-Mail:R.dvrefonn&aol. com Web Page: www.redevelopment+eorn Table Of Contents http: /h&w. reclevelcpwat. =n/norby/irxbx.html 7/12nW7 Redevelopment: The Unknown Government, TQC Page I of I Table Of Contents i. Preface to tbe__Second Edition 1. The.Unknown Government 2. Blight_ Makes_Righl 3. Taa Inere ent Div rsion o Ta b I e_ I, Property Taz Increment as a Percentage of To til Property Tax Revenues statewide 4. Debt: Play Now, --Pa o Table`Il, Total Redevelopmentlndebtednw Statewide o Table III, Top 10 Cities by Total Redevelopment Indebtedness o Tab ie IV, Top 10 Per -Capita Redevelopment Indebtedness by City 5. Corporate Welfare 6. PredatD_ry__Re.d_evelop.m_ent: Sq.]es m 7. The Myth Economic Development o Tab.le_V, Per -Capita Income Growth Redevelopment Non•Redevelopment o Table VI, Personalloe�Dme Growth Comparison Ppetw "n Cities With and Without Redevelopment & Eminent Domain For Private Gain 9. The Redevelopment Establishment 10. WlwtYou Can Do 11. Re cl.a im i n a Redevelopment Revenue o Tab[e: VII, Annual Revenue Gains by Public Entity o Table VIII, Current Per- Strident Ex-p-enditures(1996+-97) o Table_lx, Pre- Student Expenditnres, with Restored Property 7mm ,& Return to Unknown Government Home Page or Redevelopment Home Page http://www.red-velopm=Lcom/norby/toc.htm 7/12/2007 i,rVWVGAVFLLLrAAL. AAAG ULUL LVVVAA UVVGiliMUILL I4%%; 1 Vi 4 Redevelopment: The unknowngovernment Preface to the Second Edition When Bmt, published in October, 1996, Redevelopment. The Unknown GovernmentvYes intended to be a concise, user-friendly guide for both concerned citizens and elected officials. The tremendous response has surpassed am most hopeful expectations. Requests have come from every comer of California, quickly exhausting our initial printing of 3,000 and our reprinting of 5,400 copies in May, 1997. Eran the State Capitol to the city halls, from news reporters to civic leaders, Redevelopment: The Unknown Governmenthas become an kEum ;al resource for fiscal reform. Of course, the redevelopment establishment is not pleased. The California RedevelopmentAssoeiatim's monthly newsletter created the caustic acronym "RUG in referring to Redevelopment: The Unknown Government, but they cannot ignore its influence. Their only factual criticism has been the claim that we exaggerated redevelopment debt by including outstanding interest with principal. Only principal should be considered, they say, when looking at redevelopment debt Our tai and graphs, however, make it clear that our figures include both principal and interest, with numbers lifted directly flan the State Controller's Office. The CRA's comments have, however, causedus ].oak at debt in a new way. Wlile long-term interest payments w i I I consume an ever -greater share of properly taxes, the principal alone could be paid cad' from existing agency assets. Avoiding future interest, debts of all agencies could be paid off now, thus freeing up property taxes for mal public needs. The Second Edition's major change is anew chapter -Chapter 11 which proposes to pay off redevelopment debt by liquidating assets, and freeing $1.5 billion in annual tax increment for public schools and local government. Properly taxes now subsidizing commercial development would fiffid our children's education and public safety. In addition, graphs have been updated and the latest redevelopment bills in the legislature have been added. New Tables VISI, and IK have been added to show the impact of using redevelopmentna ey 5a public education. A nrme concise bibliography has also been added. Tbrough its publications and conferences, Municipal Cels for RedevelopmentReform (MOR.R) has helped enable cidzm to challenge redevelolrmcnt pcwer,and emboldened public officialsto look beyond narrow special interests to see a broader public constituency. Our next semi-annual conference will be October 10, 1998, at the San Francisco Airport Westin Hotel. Call 714-871-9756 for details. Many thanks to State controller Kathleen Connell, who provided much of the information in this book throughher office's annually published reports. Thanks to Michael Dardia of the Public Policy Institute, whose SubsidizingRedevelopment in California (1998) is an exhaustive analysis of tbehm cost of redevelopment. Special thanks to SacramentoBee columnist Dan Walters and Riverside Press - Enterprise investigative reporter Dave Danelski, for making redevelopment more understandable to tine general public. Thanks, too, to the many friends and supporters whose i v#ft, dedication and encouragementhave made tris book possible. bitp:lhvww.redevelopment.com/norbylpmface.htm 7/12/2007 Redevelopment The Unknown Government Page 2 of2 Redevelopment thrives on public igaoraaee. Both lay people and elected officials are cftsi intimidated by the complexity ofredevelopment law, its specializedjargon and mini -numbing financial figures. Redevelopment is, however, easy to understand, if presented in an organized way and using plain Mnglish. From understandiryg comes knowledge. From knowledge comes power the power tD change. ChrisNorby Fullerton, CA July, 1998 The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Pale, http://www.redevelopment.com/norby/preface.htrn 7/121M07 A VG1VFLLW L. 111G VL1W1V VV1L %JV V C111111G111 Redevelopment: The Unknown Government The Unknown Government Chapter 1 There is an unknown layer of government in California, which few understand. 1"Sv, 1 VlL This unknown government currently consumes 8 percent of all property taxes statewide, $1.5 billion in 1997. It has a total indebtedness of over $41 billion. It is supported by a powerful Sacramento lobby, backed by an army of lawyers, consultants, bond bmdaers and land developers. Unlike new counties, cities and school districts, it can be created without a vote of the citizens affected. Unlike other levels of government, it can incur bonded indebtedness without voter approval. Unlike other government entities, it may use the power of eminent domain to benefit private interests. This unknown governmentprovides no public services. It does not educate our children, maintain our streets, protect us from crime, nor sods our libraries. It claims to eliminate blight and promote economic development, yet there is no evidence it has done so in the half century since it was created. Indeed, it has become a rapidly growing drain on California's public resources, amassing enormous power with little public awareness o -r ouesight. This unknown government is Redevelopment. It is time Californiansknew more about it. State law allows a city council to create a redevelopment agency to administer one or more "project areas" within its boundmics, An area may be small, Cr it can encompass the e4e city. These project areas are governed by a redevelopment agency with its own staff and governing board, appointed by the city council. Thus, an agency and city may appear to be one entity. 08m city councils appoint themselves as agency members, with council meetings doubling as redevelopmentmeetings. Legally, however, a redevelopment agency is an entirely separate government authority, with its own revenue, budget, staff and expanded powers to issue debt and condemn private property. Out of California's 471 cities, 359 have created redevelopment agencies. No vote of the residents affected was relired.No review by the Local Agency Formation Commission (LAFCO) was done. Californians often confuse redevelopment with federal "urbanrenewal" projects typical of large eastem cities of the 1940s --'60s. Sadly, the methods and results are often similar. Yet redevelopment is a staff http:/hvww.redevclopment.com/norby/chol.htm 7/12/2007 Redevelopment: The Unknown Government Page 2 of 2 authorized layer of government without federal bids, rules cr requirements. It is entirely within the power of the California legislature and voters to control, reform, amend or abolish. "rm IMM "rm from itedm1opment ed pm heat to kelp yow, The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Page, http:/twww.redevelopment.eom/noft/ch0l.htm 7/12/2007 r%Z=YGIUFLUQLLL. lur. VLLLLLVWLL UUYGi1U15JW LL i crbv s ori � Redevelopment: The Unknown Government Blight Makes Right Chapter 2 All a city need do to justify creation or expansion of a redevelopment area is to declare it "blighted". This is easily done. State law is so vague that most anything has been designated as "blight". Parkland, new residential areas, professional baseball stadiums, oil fields, shopping centers, orange groves, open desert and dry riverbeds have all been designated as "blight" for redevelopment purposes. 'It's easy ...blight Is whatever we say n iaf' To make a fiiq of blight, a consultant is hired to omxkr-t a study. New redevelopment areas are largely driven by city staff, who choose the consultant with the approval of the city council. Cxsdta t s know their j ob is not to determine if iber is blight, but to declare blighted wbatever community conditions may be. Blight has been discovered in some of California's most affluent cities. Indian Wells, a guard -gated community with an average $210,000 household income, has two separate redevelopment areas. Understandably, many homeowners fear an official designation of blight will hurt property values. S m a I I property owners fear redevelopment's use of eminent domain. B.nkkg permits can also be denied if an applicant does not conform precisely to the redevelopment plan. So, local citizen groups often challenge the blight findings in court. Others are challenged by counties and school districts which stand to lose major property tax revenue if a new redevelopment area is created. Recent state legislation has tightened definitions of blit, particularly those involving open and agricultural land. Yet, enforcement is ]-v, legal challenges costly and most agencies were already created long before recent reform attempts. http://www.redevelqment.cam/mrby/chO2btm 7/12/2007 Redevelopment The Unknown Government Page 2 of 2 Once the wwWtant's blight findings are ratified, a city may createor expand a redevelopment area, Voter approval is never asked. Citizensns can force a vote by gathering 10% of the signatures of all registered voters tdthin 30 days of the council actin. Where this has occurred, redevelopmentnearly always loses by wide margins (rejected in Montebelloby 82%, La Puente by 67%, Los Alamitos by 55%, Half Moon Bay by 76%, for example). The requirements to force a vote are difficult to meet, however. In the vast majority of cases, a popular vote is never held. Rather, the consultant's findings ofblight are quickly a xtiEfisdA law firm is then retained to drawup the paperwork and defend against legal challenges, A growing number of law fums specialize in redevelopment. Like the consultants, they are members of the California Redevelopment Association, a Sacramento-b+d lobby. They are listed in the CRA's directory and advertise in its newsletter, Meir livelihood depends on the aggressive use of redevelopment and increasingly imaginative definitions of blight. To eliminate alleged blight, a redevelopment agency, once created, has four exuaordinary powm held by no other government authority: 1, ) Tax Increment: A redevelopment agency has the exclusive use of all increases in property tax revenues ("tax increment") generated in its desedoject ate, 2. ) Bonded Debt: An agency has the power to sell bonds secured against Nt= twc increment, amd nay do so without voter approval. 3. ) Bsiness Subsidies: An agency has the power to give public naW directly to developers and other private businesses in the form of cash grants. tax rebates, free land or public improvements. 4. ) Eminent Domain: An agency has expanded powers to condemn private property, not just for public use, but to 1- - - fier to other private owners. These four powers represent an enormous expansion of government intrusion rota our txaditional system of private property and free enterprise. Let us caref Aly considerthe costs of this power and if it has done anything to eliminate Heal blight. I& The Table Of Contents, return to Unknown Government Home Pae or Redevelopment Home Pte, http: //www.redewelcpmt. ccm/norby/chO2.htm 7/12/2007 iii LGVG1VPLLLCLLL- JL LM V LLiLU 7 V LL V V V GL L Redevelopment: The Unknown Government Tax Increment Diversion Chapter 3 4&+rF7V ail Cwt 1 "OW ► Y- 1 Once a redevelopment project area is created, all property tax imxementwithin it goes directly to the agency. This means all increases in properly tax revenues are diverted to the redevelopment agency and away from the cities, counties and school districts that would normally receive them. While inflation naturally forces up expenses for public services such as education and police, their property tax revenues within a redevelopment area are thus frozen. All new revenues beyond the base year can be spent only for redevelopmentpurposes In 1997, this revenue diversion was just over $1,5 billion statewide. This means 8% of all property taxes was diverted from public services to redevelopment schemes. Even with modest ki atim, the percent taken has roughly doubled every 15 years. At c=ent trends, redevelopment agencies will consume 64% of all statewide property taxes by 20401 If redevelopment were a temporary measure., as advocates once claimed, this diversion might be ,sustainable. Once arca agency is disbanded, all the new property tax revenues would be restored to local governments. Legally, agencies are supposedto sunset after 40 years, but the law contains many exceptions and is easily circumvented. Of 359 redevelopment agencies created by cities statewide, only four have ever been disbanded. http://www.reck"lopmt.codnorby/chO3itm 7/12/2007 Redevelopment: The Unknown Government lam 80% 00% 70% @D% 50% 40% 30% 20% 10% 0% Table PropertyTax Increment es a Percerr ale of Total PropertyTax Revenuer Statewide �rrwat o� Pratwr�r tlaaoos Oiwiiwlm fiwlaaAla'naeuq 1870 1980 1985 2010 2026 2040 Page 2 of 3 Finally, hard-pressed counties are well arware of the cost ofth is diversion, and often go to court to challenge new redevelopment areas. In 1994, the los teles County Grand Jury rely its exboad e report on redevelopment, calling for more public accountability and citing its negative effects on county services. The Los Angeles County Fire Dept stated that it lost $16 million to redevelopment diversions in 1994 alone. School districts have also responded with lawsuits, sometimes forcing "pass-through"moments to restore part of their lost revenue. They have levied new builder fees on residential develgmmt, thus passing the burden of redevelopment on to new rags and homeowners. Cities themselves are impacted by redevelopment diversions. That part of the tac increment that would have gone to the cities' general fund (averaging 110/6) is lost, and can now be used on ly by redevelopment agencies. Thus, there is now money to build auto mal Is and hab]s, but less forpdUm, fire fighters and librarians. Cities cannot use redevelopment money to pay for operations, public safety or maintenance, which are by far the largest share of municipal budgets. http://wwwJedevelopment.coan/norby/ch03.M 7/12/2007 PJ=VVIfJPI11GI1L: 1116 Vi11LIWW11 %JWVG1'LLLLW iL "A litdE diversion won't hurt, will it?" A mew ✓ - ✓ The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Pa e, httpJtwww.lopmen.com/norby/ch(13.htm 7/12x"7 The Unknown. Government, Table I IM 80% e0% 70% 60% 50% 40% 30% 20% 10% 0% Table PropertyTax Increment= a Percentage afTotal Property Tax Rwonves Statewide f %FCW sf Propsrt1 TWMDin W 1W NwfwelWOO 1970 1980 1995 MO 2026 2040 Page 1 of 1 The Table Of Contents., return to Unknown Government Home Page or Redevelopment Home Pa?e, http:lhz w..wr oiby/tabie 11im 7/1212007 xeaeveiopmem: t ne unKnowu vovernment rage x ut j Redevelopment: The Unknown Government Debt: Play Now, Pay Later Chapter4 It is t mdDlirg enough that redevelopment agencies divert property taxes from real public needs. But timet is only part of the story. By law, for a redevelopment agency to begin receiving properly taxes, it must first incur debt. In fact, property tax revenues may only be used to pay cf'outstanding debt. Pay-as-you-go is not part of redevelopment ]aa or philosophy. Debt is not just a temptation. It is a requirement. That is why redevelopment hearings inevitably feature tl-iim groups of outside "experts": the blight axisltaats,the lawyers, and the bond brokers who help the agency incur debt so it can. surf receiving the tax increment. http://www.redevelqmmt.=Wnor-by/d-D4.htin 7/12/2007 Redevelopment: The Unknown Government 'Ws easy.,. when you don't have to ask the voters!" Page 2 of 5 The bond bwhers and debt consultants are easily located. They are listed in the California RedevelopmentAssociation Directory. From city to city they phone, fax, travel and make presentations to sell additional debt. Naturally, redevelopment staffs are supportive. Mme debt means j ob security xd larger payrolls. QzTMtly, trial redevelopment indebtedness in Californiatops $41 billion, a figure that is doubling every five years (Table II). Debt levels vary widely among agencies, but all must have debt to receive the tax increment. Table III shows those cities with the highest trial redevelopment indebtedness. Debt levels have no relation TAd h acbjal blight, as many affluent suburban towns have higher indebtedness than older urban -core cities. Table IV shows outstanding indebtednessper-capita. This is the amount of per -capita property taxes that must be paid to cover the principal and Merest of existing debt. This amountnu& be diverted from the cities, counties and school districts before these http://www.redevelopment.com/norby/ch04.htm 7/12/2007 itCUCVCIVPR11C11l. 1112U11f VWilldVVCI11111G111 A-abi..] -I ,) redevelopment agencies can shut down and restore the properly taxes to those entities. One would expect that ifredevelopment agencies had been successful in eliminating "blight," they would now be scall n g back their activities and reducing debt. In fact, redevelopment indebtedness is growing rapidly, drairffig investment money that could have gone to buy other government bonds of into the private sector. There are frac) reasons redevelopment debt is so attractive: development agencies may sell bonded debt without voter approval. Unlike the state, counties and school districts, the debts need not be justified to, or approved by, the taxpayers. A quick mai ority vote by the agency is all test is needed. Second, bond brokers love to sell redevelopment debt. The commissions are high and the buyers plentiful. Since the debt is secured against B±a-eproperty tax revenue, dwy are seen as secure and lucrative. If an agency over -extends, then surely the city's general fund will cover the debts. Mrt agencies project that ever -rising property tax incrementswi I I cover bihme debt service. During the 1990s. however, much of California's commercial and residential nal estate declined in value. Property owners sought and received lower assessments, creating a crisis for those agencies banking on ever - rising property taxes. Some cities raided their general finds to service redevelopment debt. Iecgally, it is unclear whether the state or individual cities are liable to bail out actually bankrupt agencies, but the expanding bubble of redevelopment debt must be a concern to all. Redevelopment agencies typically issue new bonds to pay off existing ones, thus rolling over and compounding interest payments. This cannot go on indefinitely, Eventually, all existing debt rmistbe paid with real tax dollars. Every dollar ftt must pay for this debt is a dollar that will not be spent on police, education and other pressing public needs. The only tray to avoid these ballooning interest payments is to stop issuing new debt and pay off existing principal as soon as possible. Chapter 11 explains exactly how this could be done. http://www.redeveloprnent.com/norby/Ch04.htm 7/12/2007 Redevelopment The Unknown Government Figures in Billions $a- Table II TABLE III Top 10 Cities by Total RedevelopmentlndeMednesa (Includes principal and interest af all outstanding debt) 1 San lose $2,205,140,180. 2 Los Angeles $2,010,052,149. 3 Fontana $1,509,941,789. 4 Lancaster $1,176,635,953. 5 Industry $952,810,685. s" TABLE III Top 10 Cities by Total RedevelopmentlndeMednesa (Includes principal and interest af all outstanding debt) 1 San lose $2,205,140,180. 2 Los Angeles $2,010,052,149. 3 Fontana $1,509,941,789. 4 Lancaster $1,176,635,953. 5 Industry $952,810,685. 6 West Covina 7 Chico 8 Burbank 9 Brea 10 Huntington Park $805,019,621. $795,797,760. $749,356,165. $661,976,870. $653,090,326. TABLE IV Top 10 Per -Capita Redevelopment Indebtedness by City (Includes outstanding pdrcipal and interest) Page 4 of 5 http://www.redevelopment.com/norby/ChO4.htm 7/12/2007 Meaevejopment. Inc unKnown UOV=umeut Per -Capita Redevelopment Indebtedness $194019192. 303,632. 47,384. 37,382. 19,132. 16,412. 16,085. 15,688. 14,589. 14,368. City/Agency Industry Irwindale Brisbane Indian Wells Brea Chico Emeryville Commerce Etntana Sand City 48,450 795,797,760. 6,500 104,552,578. 12,000 188,263,953. 103,500 1,509,941,789. 200 2,873,567. SOURCE: California Shy. Controller's Office; Fiscal Yaw 1993-94 The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Page, http: //www. redevelgmmt. can/norby/chN .htm 7/12/2007 TOTAL Population Redevelopment Indebtedness 680 $952,810,685. 1,080 328,144,953. 3,130 146,889.850. 3,100 115,886,139. 34,600 661,976,870. 48,450 795,797,760. 6,500 104,552,578. 12,000 188,263,953. 103,500 1,509,941,789. 200 2,873,567. SOURCE: California Shy. Controller's Office; Fiscal Yaw 1993-94 The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Page, http: //www. redevelgmmt. can/norby/chN .htm 7/12/2007 The Unknown Government, Table H Figures in Billions Table II In"M Wa.4WsmM!t.2W=49"9"11:.7 Page 1 of 1 The Table Of Contents, return to Unknown Government Home Pale or Redevelopment Home Page, http://www.redevelopment.com/norby/table-2.htm 7/12/2007 X11.1 In"M Wa.4WsmM!t.2W=49"9"11:.7 Page 1 of 1 The Table Of Contents, return to Unknown Government Home Pale or Redevelopment Home Page, http://www.redevelopment.com/norby/table-2.htm 7/12/2007 The Unknown (iovernment, Table ill TABLE III Top 10 Cities by Total Redevelopment Indebtedness (Includes principal and interest of all outstanding debt) 1 San Jose $2,205,140,180. 2 Los Angeles $2,010,052,149. 3 Fontana $1,509,941,789. 4 Lancaster $1,176,635,953, 5 Industry $952,810,685. 6 West Covina $805,019,621. 7 Chico $795,797,760. 8 Burbank $749,356,165. 9 Brea $661,976,870. 10 Huntington Park $653,090,326. rage i or i The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Page, http://www.redevelopment..eom/norbyAable-3.htm 7/12/2007 The Unknown Government, Talale IV TABLE IV Page 1 of 1 Top 10 Per -Capita Redevelopment Indebtedness by City (Includes outstanding principal and interest) Per -Capita TOTAL Redevelopment City/Agency Population Redevelopment Indebtedness indebtedness $1,401,1912. Industry 680 $952,810,685. 303,632. Irwindale 1,080 328,144,953. 47,384. Brisbane 3,130 146,889.850. 37,382. Indian Wells 3,100 ]]5,886,139. 19,132. Brea 34,600 661,976,870. 16,412. Chico 48,450 796,757,760. 16,085. Enwryviile 6,500 104,552,578. 15,688. Commerce 12,000 188,263, 953. 14,589. Fontana 103,500 1,509,941,789. 14,368. Sand City 200 2,873,567. SOURCE:California State Controller's Office; Fiscal Year 1993-94 The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Page, http:Nwww.redevelgm ent.ccm/norbyhble-4.htm 7/12/2007 tceaeveiopmem; Ifie uaKnown VovGrnr"VLu 1 o5wo i •Z i, Redevelopment: The Unknown Government Corporate Welfare Chapter 5 The consultant has found the blight. The lawyers have drawn up the papers and defended the agency from suits. The bond brokers have created the debt, to be paid by the tax increment that will surely flow. Now should be the time to begin eliminating "blight," as required by state law. In reality, very little is ever beard again about blight. Redevelopment agencies are driven primarily by creating new revenue. Since most cities with redevelopment have little or no real blight anyway, creating new government revenues becomes their prime goal. They do so in two ways: Debt: As we have seen, an agency incurs debt to be paid by f±meproperty tax diversions. In ttris way, it can perpetuate its own activities indefinitelyby amtirniingto borrow: Sales tax: Bpi promoting commercial development, a redevelopment agency can claim to be stimulating new sales taxes th�-- benefit the city's general fund. In this way, it tries to justify itself to the citizenry and council mks=rs who usually double as agency directors. By state ]aa,a city's sales tax share is 1% of all taxable purchases. Salestaxes are site-based. If you live in Sacramentoand buy a car in Folsom, all of the sales tax share from the carwill go to Folsom, none to Sacramento. Cities have long been motivated to attract sales tax generators. City officials and chambers of commerce have touted their location, city services, and across to nmiwts. New department stores and auto dealers have long been greeted with ribbon cuttings and proud announcements in the local paper. Redevelopment has escalated this to a new level. With redevelopment, cities have the power to directly subsidize commercial development through cash grants, tax rebates, or free la -d Spelled out in a "Dispositionand Development Agreement" (DDA) a developer receives lucrative public funding for projects the agency favors. Some receive cash up front from the sale of bonds they will never have to repay. Others receive raw acreage or land already cleared of inconvenient small businesses and homes. They purchase the land at substantial discountfinm the agency. Sometimes it is fes. Redevelopment subsidies are not distributed evenly. Favored developers, giant discount stores, hotels and auto dealers receive most of the money. Small business owners, already burdened by regulations and taxes, now must face giant new competitors funded by their own government. Redevelopment has accelerated the centralization of economic power among ever -fewer corporate chains at the expense of locally -based independent businesses. Certain large ntai 1 such as Costo, Home Iqot� and Walmart provide valuable service and have every right to compete. But are they entitled to government subsidies? http: //www. redmlc Orient. can/mrby/diOS.htm 7/12007 Redevelopment: The Unknown Government L� "Some arc more equal than otfiers!" Page 2 of 2 This costly &sb tim of the free enterprise system is justified as the only way to boost local salestaxes (ending "blight" has, by now, been long forgotten). cif new developments are justifiedby market demand, they will be built anyway. If mt, they will fail, regardless of the subsidies, Redevelopment has mallted in a vast overbuilding of vacant �,-ommercial space stimulaw nre by tax subsidiesthat by acbml consumer demand. As cities become more predatory, financial "incentives" are needed not just to attract new businesses, but to keep long-time retailers from moving away to neighboring cities. Large retailers routinely play one city off against another fixthe greatest pay-off. WhshaU bidding wars among cities escalate. Particularly avaricious are professional sports f vadiiees. Teams ranging from the San Francisco'44ers to the Lake Elsinore Sbonnhave demanded new publicly-fmsnced stadiums. dim, Los Anger, Inglewood, Oakland and San Diego have also committed vast s u m s of redevelopment money for new faalities demanded by fin ehise owners. InMcrjor Lague Losers (Basic Books,199'7), econanistMw Ros+entraub sham that the tax cb11 lavished on professional sport teams and stadiums never produce the payoff promised by their promoters, but are a net drain on municipal budgets and Imal economies. Redevelopmenthas become a massive wealth -transfer machine. Cash and land go to powerful developers and corporate retailers while smallbusiness owners and taxpayers must pay the bill. The Table Of Contents, return to Unknown Government Home_PaV or Redevelopment Home Page, http:/hvww.re&velopment.con/norby/chO5.htm 7/12/2007 tceaeveiopmem: ine unKnown uovemmem r48c i Vl c Redevelopment: The Unknown Government Predatory Redevelopment: Tax Shell Game Chapter 6 A drive north on the SantaAna Freeway from Disneyland toward L.A. reveals the chaos redevelopment has wreaked. Theme is the Buena Park Auto Square, built around dealerships ]ml from nearby Fullerton. Just north is the old Gateway Chevrolet site. Where did it go? Just across the county line to La Mirada, which lured it from Buena Park with its own publicly -financed auto mall (on land conveniently designed as "blight"). Still further north is another auto rrrall in Santa Fe Springs, with numerous long -vacant parcels waiting for the dealerships that w i I I rever come. To the west is Cerritos, who's giant redevelopment -funded "Auto Square" became a pioneer in auto dealer piracy, draining off dealerships -and sales tax revenue - from its neighbors. Nearby Lakewood lost so many car dealers that its city manager labeled Cerritos the "Darth Vader of cities." Drive any stretch of freeway in San Diego, Los Angeles, Santa Clara or other urban counties and you'll we redevelopment -funded auto m a I Is, with theii hopeful reader boards and carefully graded -and vacant - dealer sites. They're a product of a bitter fiscal free-for-all, as cities coax each other's dealerships away with ever -sweeter giveaways. Cir dealers, of course, are loving it. They no longer have to make a profit from mere customers. They can now play one city cff against another for cheap ]aid, tax rebates and free public improvements. You cant blame them„ But you can blame the laws that encourage this shell game. The same pattem is repeated with department A - -- - , discount chains, home improvement centers and even sports franchises (the Los Angeles Redevelopment Agency has committed a $60 million bond to lure the IalaeYs and Kings I'mm Inglewood), Corporate decisions once based on market forces are now determined by which city's redevelopment agency will cut the best deal. The California Redevelopment Association encourages developers to expectpublic handouts. On June 11, 1998, the CRA and the Inteznational, Council of Shopping Centers co -hosted a conference bringing city officials and developers together to promote "public-private " i,e., public subsidy of private development. The Long Beach confab ended with a "Meet the Cities Deal -Making Reception" where developers could feel out public officials for generous hand-outs. Some cities are winners. Some are losers. Some are just able to stay even. Per -capita sales tax revenues vary widely among cities. Even frrthe winners, however, there are pitfalls. A major new retailer will, after all, draw many customers away from existing businesses within the same city. Iater, it may hold the city hostage, threatening to move away unless even more subsidies are provided. Is this good public policy? Is it good economics? The problem is not limited to1('�ifrwma. It is past of a troubling national trend by which states outbid each other to attract new indstry. The "economic incentives" often bear ]i#tlerelation to the bmel'its realized. When considering plant location, foreign companies now routinely play one state against another for the biggest subsidy package. A Ford Foundation -sponsored conference on "The Economic http: IMm. redevelgmmt. can/mrby/ch06.htm 7/12/2007 Redevelopment: The Unknown Government Page 2 of2 IW Among the Sta s was held in D.C. on May 21-22,1996, on this problem, with as economic truce being proposed among the states. Such leadership is needed here to halt California'sown redevelopment revenue wars. It t ironic that, just as we encourage fom er Soviet -block countries to privatize their anemic state -nm industries, we increasingly entangle our local and state governments in subsidizing private business, all in the name of "economicdevelopment"policies that have repeatedly failed elsewhere. • ,%VhafN ya bid for this sift. deslership7" The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Pag.e_, http://www.redevelopment.com/norby/ch06.htm 7/12/2007 tCeQevelolJri=: 1nG unKnuwn uuvcruuu~sa ..,5- . — Redevelopment: The Unknown Government The Myth Of Economic Development Chapter 7 "Economic Development" is a common cliche among city governments and redevelopment agencies. It refers to a belief that tax subsidies to selectedprivate businesses can stimulate the local economy. It assumes that the free enterprise syskvn alone is inadequate. It presumes that governmentplanners can allocate resources more efficiently than can the free market. The legal purpose for redevelopment remains the elimination of blight. All economic development activities must pay lip service toward that goal. Behind this #'made, redevelopment has subsidized giant retailers, luxury hotels, golf courses, stadiums and even gambling casinos. Ho redevelopment succeeded in reducing true blight? By what objective standard can this be measured? "Isn't economic development great?" Any definition of blight must include depressed local economies and pockets of poverty. If redevelopment is working, then surely poverty is being reduced and the general standard of Iiving improving. Is there any evidence d - As is happening? Are residents of cities v� redevelopment better off compared to residents of cities without redevelopment? They arent, Are the 359 cities that have created redevelopment agencies any bell cff than those 102 cities that have not? If redevelopment is eliminating blight, then certainly comparisons between such cities could prove http: //www. redevelq m ent. can/mrby/ch07 .htm 7/12/2007 Redevelopment: The Unknown Government Page 2 of 4 it. They can't. If redevelopment was improving local economies, then such a mr.1- ri nwould show greater personal income growth in cities that do have redevelopment relative to those cities that do not. It doesn't. Table V is a comparison of combined average income growth among all cities with redevelopment and those without it, between the years 1979-89. As can be seen, thm is no correlationbetween redevelopment activity and personal income growth. Table VI directly compares five pars of cities of similar sine, region and economic level. Again, there. is no correlation between g rowth antes and redevelopment activity. Both Tables V and VI demonstrate that cities without redevelopment either match or actually exceed those cities that do, in terms of personal income -growth. There is no evidence to show that a I I the billions spent on redevelopment has done anything to improve the lives of peop le in those cities. There is no evidence tYft redevelopment is a positive factor m the elimination of blight. http://www.redevelopment.com/norby/ch07.htm 7/12/2007 xeaevewpmem: ine unknown uovernment Table V Per -Capita Income Growth Redevelopment vs. lion -Redevelopment Cities 100% l Cities Cities With Redevelopment Without Redevelopment This survey reflects the 313 cities with redevelopment agencies, and the 101 cities without redevelopment agencies, from 1979-89. Cities incorporated after 1979 are not included. SOURCE: Urx ted States Cerus Bureau, State Controller, TABLE VI Personal Income Growth Comparison Between Cities With and Without Redevelopment A Region -by -Region Per -Capita Income Growth survey Amoung Cities of Comparable Size and Socio-Econmomic Levels, 1979-1989 Los Angeles Basin: Status City 1979 1989 Growth rugv ;),UA -r http://www.redevelopment.com/notby/ch07.htm 7/12/2007 Redevelopment: The Urflmmm Government NO Redevelopment Gardena $7,911 $14,601 85% HAS Redevelopment Hawthorne $8,097 $14,842 83% NO Redevelopment Artesia. $6,520 $12,724 95% HAS Redevelopment Inglewood $6,962 $11,899 71% Bay Area: Status Chi 1979 1989 Growth NO Redevelopment Bonier $9,312 $20,663 1220/6 HAS Redevelopment Alameda $9,288 $19.833 114% Central Valley: Status Chi 1979 1989 Growth NO Redevelopment Lodi $7,691 $14,638 900/0 HAS Redevelopment Chico $6,065 $10,584 74% Small Cities: Status Chi 1979 1989 Growth NO Redevelopment Etno $4,812 $9,333 94% HAS Redevelopment Industry $4,539 $7,853 73% SOURCE: U.S. Cbns3s Bureau, State Owaller's0fte Page of I& The Table Of Contents, return to Unknown Government Home Pag or Redevelopment Home Page, http: //www. lament. c cm/mrby/ch07htm 7/12/2007 xeneveiopment: i ne unmown uovernmem, i avic v Table V Per -Capita Income Growth Redevelopment vs. Non -Redevelopment Cities 1M ,n% In% Glues Chies With Redevelopment WlthwA Redevelopment ia51-W a -z• This survey reflects the 313 cities with development agencies, and the 101 citieswithout redevelopment agencies, fezm 1979-89. Cities incorporated after 1979 are not included. SOURCE: United States Census Bureau, State ControDer. The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Pam, http://www.redevelopment.cDm/norby/table-S.htm 7/12/2007 The Unknown Government, Table VI TABLE Vi Personal Income Growth Comparison Between Claes With and Without Redevelopment A Region -&Region Per -Capita Income Growthsurvey Amoung Cities of Comarable size and Socio-Econmomic lemis. 1979-1989 Los Angeles Basin: Status City 1979 1989 Growth NO Redevelopment Gardena $7,911 $14,601 85% HAS Redevelopment Hawthorne $8,097 $14,842 83% NO Redevelopment Arftelia $6,520 $12,724 95% HAS Redevelopment '� $6,962 $11,899 71% Bay Area: Status City 1979 1989 Growth NO Redevelopment Benicia $9,312 $20,663 122% HAS Redevelopment Alameda $9,288 $19,833 114% Central Valley: Status City 1979 1989 Growth NO Redevelopment Lod] $7,691 $14,638 90% HAS Redevelopment Chico $6,065 $10,584 740/6 Small Cities: Status City 1979 1989 Growth NO Redevelopment Etna $4,812 $9,333 94% HAS Redevelopment Industry $4,539 $7,853 73% SOURCE U,S, Census BMeaui, State CaMollces Office Page 1 o f2 The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Page, ON http://www.redevelqmmt.nm/norby/table-6.htm 7/12/2007 I 11 UIILUUWJI VUVCrnMUIUy IILvIC V I rigG Z. Ui 'r. hap:/Avwwxe&velopment-comhmby/UM"Jitm 7/12/2D07 Redevelopment: The Unknown Dover mentt Page 1 of 2 Redevelopment. The Unknown Government Eminent Domain For Private Gain Chapter 8 "Nor shall private property be taken for public use without just compensation<" Thus the Bill of Rights specifies the only purpose for eminent domain: "public use!'. Since then, governmenthas used eminent domain to acquire land for public use. Rbacls, schools, parks, military bases, and police sbatirns were essential public facilitiesthat tockpriority over individual property rights. Private real estate transactions, on the other hand, were always voluntary agreements between individuals. Redevelopment has changed all that. Under redevelopment, "public use, now includes privately owned shopping centers, auto malls and movie theaters. "Public use" is now anything a favored developer vats to do with another individual's tarn. Eminent domain is used to effect what once were purely private transacdons. Its use nearly always favors large developers at the expense of small property owners. In a typical redevelopment project, a developer is given an "exclusivenegotiating agmemcvi ," or the sole right to develop property still owned by odors. Once such an agreement is made, s m a I I property owner s are pressured to sell to the redevelopment agency, which acquires the Lrd on behalf of the developer. If refiised, the agency holds a public hearing to determine "publicneed and necessity" to impose eminent domain. By law, this must be an impartial hearing. In reality, the agency has already committed itself to acquire the property for the developer, so these is liflle doubt of the outcome. Whole areas of cities have been acquired, demolished and handed over to developers to recreate in their own image. Historic buildings, local businesses and unique neichborhoods are rqa acedby generic developments devoid of the special flavor that once gave communities their identity. Typical is the experience of Anaheim. Having demolished its historic central business district in the mid -1974x, the redevelopment agency reomtly hired consultants to help resbom the identity of a downtown tl-ft- no longer exists. "The complete eradication of the traditional business district bas left natbkq for the community to relate to as their downtown," admits an internal city memo. Small business owners are compensated and relocated, but omen in distant areas far from their established customer base. Cut cff fmn the community that nurtured them,they often cannot survive. Small property owners have little chance to participate in redevelopment projects. Consultants and redevelopment planners prefer to work with one huge parcel under a single ownership. Entrepreneurs and homeowners just get in the way. Indeed, one of the definitions of blight is that of "irregularly shaped lots with multiple ownerships," t D be solved by "consolidatingparcels" for an outside developer to control. The variety of land owners and uses that gives cities their individuality becomes an excuse for expropriation. http:/Avww.redeveloptnent.com/norby/Ch0g.htn 711212007 1(eucvclup wt� I IM UU LIIUWU %jOVt:KUU xIU a ab%, A. va d. Legislativeatiempts inprotect small property mum have all been derailed by pro- redevelopment forces sl Sacramento.Eminent domain is defended as a tool of "last resort" Yet eminent domain lies at the heart of the coercion that makes redevelopment possible -and destructive. 'What's mine Is mine ... and what's yours is mine!" The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home ePage, http : /lwww. redevelopment. wdnozby/ch08 . htin 7/12/2047 Redevelopment: The Unknown Government Page 1 of 2 Redevelopment: The Unknown Government The Redevelopment Establishment Chapter 9 Redevelopment is an entrenched special kWLwt. It thrives on contributions from its beneficiaries and from lads of awareness of the general public. Its advocate is tine California Redevelopment Association, a Sacramento -based lobby that seeks to protect and expand redevelopment power. The CRA claims to represent the intamsts of cities. It is, in fact, a sell' -perpetuating money machine ti -Et reacts against any reforms *at would ckTiish its power. The CR.A's annual budget now tops $1.6 mUlicn. Its Executive Director draws $156,200 annually in total compensation. Its contract lobbyistwW be paid $122,800 this year, though the CRA is only one of his several clients. The public has no voice in CRA operations or policies. The CRA is governed by its seven officers and a 12-memberboard. All are redevelopment agency adm&&ft-tss. Nom are elected officials The CRA is operated by redevelopment insiders to serve their kbwmts. Good public policy is ft last of its concerns. The real beneficiaries of redevelopment are not local communities, which mst bid against each other for corporate retailers. They are not individual citizens, who have seentheir property rights eroded as public debts mount. The real beneficiaries are those employed by redevelopment agencies. Redevelopment staff wntrols agency agendas and recommends agency actions. Agency members -usually elected city councils -often rely more on their staff than on their own judgement. Though simple to understand, redevelopment is oftEn presented as too complex for ordinary elected officials -and citizens -to comprehend. The real beneficiaries, too, are the consultants, lawyers, bond brokers and developers who create, fm ne, advise, build and otherwise make vast sums from redevelopmentpm jeets. They are easy to find. The California RedevelopmentAsmdatim's 1996 Directory lists as ns - : : 25 camiercial development companies, 26 bond brchers, 37 law effiand 101 separate consulting firms. Together, they form redevelopments core constituent► and its only profit -center. http://www.redevelopment.c:am/norby/ch09. 7/12/2007 1,%A=VVIVP"IQ1A. 1116 LJLUUWWAI IIVVGIIn"C u "Follow me, boys ... another town needs swing!" Among these companies are California's biggest developers, priciest law firms and some of Wall Street's mc.1 powerful brokerage houses. They are relied onby public officials for "expertise" which is always geared to eigwkUngredevelopment power. They are the donors to the CRA`s political actim ©ommitlir, which supports compliant state and local lawmakers. Inas, the tax increment is recycled ir1b p014cal contributions. What also allows mdevolqmica to thrive is the lack cf public ming of what t is and how it operates. By law, redevelopment agencies are an arras of state government, and t m are not subj ectto the same public overview as are those of the counties, school districts and cities. This isolatimbas spawned activities tld--would never be tolerated by any other government agency. The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Page, http:/iwww.rcdevelopmmt.com/norbylch49.htm 7/1212007 Redevelopment: The Unknown Government Redevelopment. The Unknown Government What You Can Do Chapter 10 "Your gravytrain ends here!" Clearly, redevelopment is out of control. I 01 Page l of 3 Under the thin guise of eliminatingblight, it consumes a growing share of property taxes, incurs ever burgeoning debt, spawns sales tax wars among cities and tramples on property rights. Originally created as a temporary measure following World Ww 11, it threatens to become a permanent cancer on California's political aril economic life. Ending redevelopment abuses can be approached on four levels: LOCAL ACTIVISM If your city has redevelopment, learn more about it arra help educate your fellow citizens. Monitor agency agendas, challenge new debt issuances and expansion of project areas. Support local small businesses threatened with eminent domain and facing giant tax -subsidized o3g3et =. If your city has no redevelopment, use the examples of abuse to keep it out of your city. Wherever you live, support officeholders and candidates who understand redevelopment and can make their ownjudgements independent of those who profit by it. 0A. 0 00i e0l .5 = 4 e PF -W-4LEGAL CHALLENGE. Cb my and school officials must be more aggressive in appealing redevelopment tax diversions. Grand Juries must broaden ftir probes into redevelopment. As the California Staff Supreme Cwt becomes more protective of property rights, eminent domain abuses http://www.rt,dt,-Yelopme.nt,con-i/norby/ch10.htm 7/12/2007 tceaevetopmeni. ine unKnovm uove=em can be more successfully challenged. A growing number of public interest lawyers am willing to defend small property owners against redevelopment agencies. STATE LEGISLATION Redevelopment is a layer of governmentcreatedby the state, and has no powers other thm those granted by the state. Led by Senator Quentin Kopp (I -San Francisco), numerous redevelopment reform bills have been introduced into the legislature. The following reforms must continue to be addressed: Eminent Domain. Controls must be p i aced on the widespread abuse of eminent domain. Sales TarDisbursement. Some type of per -capita sales tax disbursementwould end predatory redevelopment and return cities to an equal footing. Assured of a stable revenue flow based on its population size, cities could concentrate on providing basic services, rather than subsidizing new businesses. Debt Control. Make redevelopment debt subject to voter approval. This would limit debt issuance and make agencies more publicly accountable. redevelopment abuse: Mandatory Sunsets The 40 -year sunset law must be given teeth and enforced. If redevelopment agencies truly have eliminated blight, then there should be no further need for them. Comprehensive Fiscal Reform. A rational and stable method of fimdirg local government mst be found, shifting cities back to greater reliance on property taxes and less on sales taxes. Unfortunately boo many legislators and their staffs still do not fully understand redevelopment and see little political gain in challenging it. Its opponents are many, but s t 111 scattered and unorganized, while its beneficiaries are vocal and well -funded. A fhm:y of redevelopment bills were introduced into the California State Legislature during the 1997-8 session, including three important curbs on AB 939, authored by Assemblyman Tom McClintock (R -Northridge), This would place mandatory sunsets on agency operations. Redevelopment agencies would be allowed to finish all existing projects, but not commence new ones not already started. Upon completing existing projects, agencies would stay active only to pay off all existing debt, then shut down. All property taxes diverted would then be restored to the cities, counties and school districts. Hundreds of supporting letters from citizen activists poured in, but the CRA orchestrated strong opposition from redevelopment agencies and developers. The bill died in the Assembly ' Local Government Committee, but only after a lively hearing that observers noted was one of the longest and frankest exchanges on redevelopment abuses the Capitol had ever witnessed. http://www.redevelcpnent.ccm/norby/ch]D.htm 7/12/2007 Redevelopment: The Unknown Government Page 3 of 3 AB 1677, also by McClintock, thisbill would require voter approval of al I new redevelopment bonds. T h i s would close the legal loophole which exempts agency debt from voter approval, which does apply to city, school and state bonds. Opposition to tis came from the CRA, the League of California Cities and fnan major bond brokerage. fim s tib stood to lose huge eamissionsfiom bond sales. The bill also died in the Assembly Local Government Committee. AB 1835, authoredby AssemblymanTom Tortakson (D -Martinez), this bill would ban wAngpublic maney to lure an existing business to move from one city to another. The bill struck at the heart of sales tmc piracy, intending to end the corporate extortion that pits one city against another for maj or retailers. Under CRA pressure, the bill was watered down and contained a number of loopholes, but was s t i I I strongly supported by MORR as an important first step. AB 1835 passed the Assembly, 48-23, but failed narrowly in the Senate Local Government Committee. Opposition was intense fmm lobbyists representing developers and neWlers who stood to lose millions in public subsidies. Many legislators still need to be educated about redevelopment by t -E it constiianvU through letters, phone calls, faxes and testimony before key committees. As new term limits take effect, legislators v11 hopefully focus more on doing the right thing, and long-term relationships with lobbyists will be less important. Wft I Equally important w i I I be the impact of education advocates, once they n W ire how redevelopment revenues can be redirected into California's public sdmols. The combined V%1 political clout of the California Teachers Association and the California School Boards .Association dwarfs that of the redevelopment establishment. . STATEWIDE INITTATTVE: A ballot measure requiring voter approval of redevelopment debt looks likely by the �.. June, 2000, primary. Proposed by the Paul Crann's Citizen Committee, it would require the same voter approval for redevelopment bonds that exists for school bonds. The ultimate goal of any initiative ms-- be to disband the redevelopment agencies and return the property taxes to schools, counties and cities. Opposition to redevelopment is growing and cuts across partisan lines. It includes pro -property rights Republicans and anti-corporatewelfare Democrats. It includes conservatives opposedto growing public debt, and liberals opposed to the destruction of poor neighborhoods. It includes free market libertarians and civil rights activists fighting the displacement of minority communities. It includes environmentalists concerned about suburban sprawl and preservationists lamenting the demolishing of historic downtowns. At The Table Of Contents, return to Unknown Government_ Home_Pag or Redevelopment Home page, http://www.redevelopment.com/norby/chlO.htrn 7/12/2007 =Ur.Vrr1VFLLW4LL: IUV Li li[1Vw11 WVVLLUUV11L rU*Q L V1 u Redevelopment: The Unknown Government Reclaiming Redevelopment Revenue Chapter 11 Public money should be spent to serve and protect the public, not enrich private interests, The $1.5 billion in property taxes currently diverted by redevelopment agencies can be reclaimed to meet real human needs. And there is no greater need than that of ax school children. State government has full powers over all 359 redevelopment agencies in California. Though administered locally, these agencies are legally and collectively an arm of state government, and can be reformed directly by the legislature or statewide initiative. Building shopping malls, auto dealership and pro sports stadiums is a proper function of the free market. If there is a market for them, they will a I I be built, with or without government subsidy. Public education and public safety, however, are a state responsibility. We, the voters of California, have the power to redirect redevelopment funds back into serving the public, either through our legislative or ballot initiative. We should do so. Redevelopment debt could be paid off by liquidating agency assets, thus freeing up the property taxes to improve local schools and services. RETIRE DEBT While long-term indebtedness exceeds $41 billion the actual principal on outstanding tax allocation bonds is only $8.5 billion, and could be paid c£f completely by liquidating existing agency assets (including cash, investments and real estate). Thus, the debt could be retired now, avoiding http://www.redevelopment.ccm/norby/chLhtm 7/12/2007 Redevelopment: The Unknown Government exorbitant fugue interest payment Page 2 of 6 PROPERTY TAX RESTORATION: With all redevelopment obligations met, the property taxes ($1.5 billion annually) could 13e. returned to public education and local government. Cixtly Public Schools receive 57 percent of all property taxes statewide, Counties receive 21 percent, Citiesreceive 12percent and Special Districts receive 10 percent (before redevelopment takes its stoma). Without redevelopment, the restored tax revenues would then be shared accordingly: TABLE VII Annual Revenue Gates by PubHe Entity With Restored Ptvsrty Taxes K-12 Public Schools: 57%=$855rmllirn Counties: 21% = $315 mLUim Cities: 12%= $180 million Special Districts: 10%= $150 million $1.5 ffi]]im Divided among our 5.6 million public school lids, this $855 million boast would lift per-st udbr t spending by $153 per year. CaUtcYa's armual per -pupil spending would jump from $ 5,284 to $5,437; from 32nd to 28th nationally pushing us past Kentucky, Montana, Illinois and Florida. Funding would flow to buy new textbooks, hire more teachers and expand after school programs. With an added $495 million, cities aryl counties could hire 7,000 more police and sheriff's officers, buy 20 million ncze library books, improve paramedic se n i cc or expand youth programs. Special di oicts could upgrade our aging water and sewer systems. This restoration of revenues fix local needs could be done on a per -capital basis, so as not to lock in current county -by -county disparities in properly tax allocation. Added, too would be additional property taxes fixm long -held agency properties now sold and returned to the tax rolls. The original rationale of redevelopment was to eliminate. blight. It was a temporary fix frr a temporary problem. Redevelopment agencies were never supposed to hoard an ever-growing slice of property taxes indefinitely. Iet them share it now. More importantly, how better will blight really be eliminated?By building more commercial development? By encouraging California consumers to buy evermore merchandise? Or by lir educating ox children? What good are new NFL s4idiums in San Francisco, Los Angeles or San Diego, if our kids can't read, write, add or subtract? There is growing bi-partisan consensus for reform in how local government is funded in California. A nrs�e rational apportionment of sales and property taxes would end current inter -governmental http://www.redevelopmenteorn/norby/chl 1.htm 7/12/2007 xeaeveiopmenu iae unKnown %rovemment rabc a Vx u competition, and seMbilize the current creaky system. It would compel commercial development to pay its own way thus reducing fees on new housing. Reclaiming property taxes long diverted to nxie- velopment is an essential part of this reform. When redevelopment is fully understood, change will come quickly. When it is no longer The Unknown Government policies promoting fiscal rqxnsib; lity and free enterprise and fair play for a I I Californians will finally be restored. Table VIII Current Per -Student Expenditures (1996-97) 1. New Jersey $9,455 2. Alaska. 8,900 3. New York 8,658 4. Connecticut 8,376 5. Rhode Island 7,665 6. Delaware 7,086 7. Massachusetts 7,069 8. Pennsylvania 6,967 9. Michigan 6,954 10. Maryland 6,547 11. Wisconsin 6,521 12. Ven nt 6,503 13. West Virginia 6,406 14. Maine 6,385 15. Mumesota 6,041 16. Wyoming 6,036 17. New Hampshire 6,014 18. Oregon 5,988 19. V i a 5,920 20. Indiana 5,886 21. Washington 5,805 22. Hawaii 5,720 23. Iowa 5,720 24. Georgia 5,585 25. Texas 5,551 26. Clhio 5,527 http: //www. redevelopment. cm/norby/chl htm 7/12/2007 Redevelopment: The Unknown Government Page 4 of 6 27. Kansas 5,493 28. Florida 5,427 29. Illinois 5,423 30. Nbntana 5,380 31. Kentucky 5,346 32. California 5,284 33. Alabama 5,255 34. Nebraska 5,250 35. Colorado 5,147 36. South Carolina 5,105 37. North Carolina 5,028 38. Nevada 4,998 39. Missouri 4,949 40. New Mexico 4,927 41. Tennessee 4,898 42. South Dakota. 4,860 43. North Dakota 4,867 44. Louisan& 4,527 45. Idaho 4,500 46. Mississippi 4,269 47. Oklahoma. 4,187 48. Arkansas 4,172 49. Arizona 4,048 50. Utah 3,837 SOURCE: California Teachers' Association Table IX Per -Student Expenditures with Restored Property Taxes 1. New Jersey $9,455 2. Alaska 8,900 3. New York 8,658 4. Connecticut 8,376 5. Rhode Island 7,665 6. Delaware 7,086 7. Massachusetts 7,069 8. Pennsylvania 6,967 http : //w�vw. redevel opment, cominorby/ch 1 l.htm 7/12/2007 mcuevc1upment. Inc UnKnown uUvernmcm rages ui o 9. Michigan 6,954 10. Maryland 6,547 11. Wisconsin 6,521 12. Vermont 6,503 13. West Virginia 6,406 14. Maine 6,385 15. Minnesota 6,041 16. Wyoming 6,036 17. New Hampshire 6,014 18. Oregon 5,988 19. Virginia 5,920 20. Indiana 5,886 21. Washington 5,805 22. Hawaii 5,720 23. Iowa 5,720 24. Georgia 5,585 25. Texas 5,551 26. Chio 5,527 27. Kansas 5,493 28. California 5,284 29. Florida 5,427 30. Illinois 5,423 31. Montana 5,380 32. Kentucky 5,346 33. Alabama 5,255 34. Nebraska 5,250 35. Colorado 5,147 36. South Carolina 5,105 37. North Carolina 5,028 38. Nevada. 4,998 39. Missouri 4,949 40. New Mexico 4,927 41. Tennessee 4,898 42. South Dakota 4,860 43. North Dakota 4,867 44. Louisana 4,527 45. Idaho 4,500 http: lhnrww. redevplapa?nt. aan/norby/chll.htm 7/12/2007 Redevelopment The Unknown Government 46. MWssippi 47. Oklahoma 48. Arkansas 49. Arizona 50. Utah 4,269 4,187 4,172 4,048 3,837 SOURCE California Teachers' Association Page 6 of 6 The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Page, http;//www.mdevelopm=rLoom/norby/ch 11.htm 7/12/2007 r C%G 1 v1 x Annual Revenue Gains by Public Entity "k Restored Property Tames K-12 Public Schools: 57% _ $855 million Counties: 21% _ $315 million Cities: 12% = $180 million Special Districts: IM/a =$150 million $1.5 Billion The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Pae, http://www.redcwlopumt.com/norbyAable-7.htm 7/12/2407 The Unknown Government, Table VIII Page 1 of 2 Table VIII Current Per -Student Expenditures (1996-97) 1. New Jersey $9,455 2. Alaska 80900 3. New York 8,658 4. Connecticut 8,376 5. Rhode Island 7,665 6. Delaware 7,086 7. Nbssadmsetts 7,068 8. Pennsylvania 6,967 9. Michigan 6,954 10. Maryland 6,547 11. Wisconsin 6,521 12. Vermont 6,503 13. West Virginia 6,406 14. Maine 6,385 15. Minnesota 6,041 16. Wyoming 6,036 17. New Hampshire 6,014 18. Oregon 5,988 19. Virginia 5,920 20. Indiana 5,886 21. Washington 5,805 22. Hawaii 5,720 23. Iowa 5,720 24. Georgia 5,5x5 25. Texas 5,551 26. Ohio 5,527 27. Kansas 5,493 28. Florida 5,427 29. Illinois 5,423 30. Montana 5,380 31. Kentucky 5,346 32. California 51284 33. Alabama 5255 34. Nebraska 5,250 http://www.redevelopment.com/norby/table-8.htm. 7/12120Cr7 1 ne unknown asovernmrcm, t now v m 35. Colorado 5,147 36. South Carolina 5,105 37. North Carolina 5,028 38. Nevada 4,998 39. NEissouri 4,949 40. New Me2dco 4,9Z7 41. Tennessee 4,898 42. South Dakota 4,860 43. North Dakota 4,867 44. Louisana 4,527 45. Idaho 4,500 46. Mississippi 4,269 47. Cklabara 4,187 48. Arkansas 4,172 49. Arizona 4,048 50. Utah 3,837 SOURCE California 2edWs Association A C%%1 6 vl 4. The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Page, http://www.redevelopment.com/norby/table-8.htm 7/12/2007 The Unknown Government, Table IX Table IX Per -Student Expenditures with Restored Property Taxes 1. New Jersey $9,455 2. Alaska 8,900 3. New York 8,668 4. Connecticut 8,376 5. Rhode Island 765 6. Delaware 7,086 7. Massachusetts 7,069 8. Pennsylvania 6,967 9. Michigan 6,954 10. Maryland 6,547 11. Wisconsin 6,521 12. Vermont 6,503 13. west Virginia 6,406 14. Maine 6,385 15. Minnesota 6,041 16. Wyoming 6,036 17. New Hampshire 6,014 18. Oregon 5,988 19. vu4xia 5,920 20. Indiana 5,886 21. Washington 5,805 22. Hawaii 5,720 23. Iowa 5,720 24. Georgia 5,585 25. Texas 5,551 26. Ohio 5,527 27. Kansas 5,493 28. California 5484 29. Florida W 30. Illinois 5,423 31. Montana 5,380 32. Kentucky 5,346 33. Alabama 5,255 34. Nebraska 5250 Pagel of 2 http:/h.redevelopment.com/norby/table-9btm 7/12/2007 The LTrflaxmn Government, Table IX 35. Colorado 5,147 36. South Carolina 5,105 37. North Carolina 5,028 38. Nevada 4,998 39. Missouri 4,949 40. New Mexico 4,927 41. Tennessee 4,898 42. South Dakata 4,860 43. North Dakota 4,867 44. Louisana 4,527 45. Idaho 4,500 46. Mississippi 4,269 47. Oklahoma 4,187 48. Arkansas 4,172 49. Arizona 4,048 50, Utah 3,837 SOURCE California ms's Association rages 0L L. The Table Of Contents, return to Unknown Government Home Page or Redevelopment Home Page, http://wwwxedevelopment.com/norbyhable-9Jnm 7/12/2007 Redevelopment: A tool to build a better Lodi The City of Lodi has many needs, from more affordable housing to fixing aging buildings and stimulating business on Cherokee Lane. The City constantly examines the range of services it provides and bow to pay for and improve them. Like every other California city, Lodi has a tool available to reach some of those unmet needs, but unlike most other cities, it's unused at the moment. That tool is redevelopment, which allows cities to keep a greater share of property taxes paid when values climb. State redevelopment law allows the city to use tax generated from higher property values to pay for repairs and improvements that would otherwise require higher fees on ratepayers or drain funds fnan other city services. With a redevelopmentplan, Lodi would keep five times as much property tax generated by higher values than without, freeing up more money for services such as police protection and park maintenance. Redevelopment does not raise taxes, it merely changes the way a portion of the tax revenue is distributed. Four of the county's six other cities have active redevelopment agencies, ranging from the largest, Stockton, to one of smallest, Ripon (population 14,575) . At 6 p.m. Thursday, July 19, the Lodi City Council will have a special meeting at the Lodi Boys & Girls Club, 275 E. Poplar St., to discuss the possibility of creating a redevelopment project in Lodi. In the meantime, the following may help answer some questions you may have about the process: Question: What's in it for me? Answer: If you own property within a redevelopment area, redevelopment funds could go toward street and sidewalk upgrades, underground pipe repairs, and assistance programs to improve your home, building or surrounding properties. State law requires redevelopment agencies spend at least 20 percent of their funds on affordable housing. The list of eligible programs hasn't been established yet, so your participation is valuable as the community considers how redevelopment may benefit Lodi. Question: Where is the redevelopment area? AMFMM Answer: If the City Council decides to pursue a redevelopment project, that JULY 2007 Introduction to Tax Increment and Redevelopment July 19,2007 Introduction to Tax Increment and Redevelopment Introduction Lodi needs more safe affordable housing for senior citizens. The City should help low-income homeowners pay for water meters. Motel business along Cherokee Lane is declining; the City should do something. Alleys are deteriorating. Lodi needs a new library. Lodi needs a new animal shelter. The Grape Bowl is a regional asset that if used correctly could spur economic development. The east side of Lodi needs a new community center and more parks. Why can't the Blakely Park Pool look nicer? Lodi should preserve older historic buildings. The storm and wastewater collection system is aging, obsolete and inadequate; why isn't the City doing anything? Overhead power lines should be buried underground. Lodi needs to improve its tax base and create more jobs. These are just a sample of comments from Lodi residents about what they want and need from the City. The City constantly examines the range of services it provides and analyzes how to pay for and improve these services. With one major exception, Lodi fully utilizes the many forms of taxes and fees it receives. Lodi works closely to obtain funding from the State and Federal governments and the private sector to offer the range of services a "full-service city" provides. The one major source of revenue that Lodi does not currently use is tax increment, which state law makes available to cities as outlined in the Health and Safety Code. Approximately 80 percent of all cities in California use tax increment revenue to meet the local needs of their residents and businesses. For every program, facility and service desired in the list above, tax increment is a tool that could be used to meet the need. It is a revenue source that does not raise taxes. Tax increment is a component of the California Redevelopment Law. Over the next several months, the City Council will examine how tax increment can help Lodi. This may result in action to form a Redevelopment Project Area in Lodi. This paper is intended to provide a brief overview of tax increment and redevelopment and assist the Council and community members in further understanding this powerful locally -driven economic tool. Whatis tax increment? Tax increment is the amount of property tax revenues attributed to the incremental increases in tax value that are generated from development activity or transfers of property above a base amount within a designated redevelopment area called a project area.' It does not change the amount of taxes a property owner is required to pay. It does change how the extra property tax generated, "the increment," is distributed. Lodi typically receives approximately 16 to 17 cents from every dollar of property tax paid. With tax increment, Lodi would be able to receive up to 75 cents from every dollar of new property tax generated above the base assessment; money that would otherwise go to the State of California or agencies that are the responsibility of the State of California. Under the state's tax increment rules, Lodi retains tax increment funds it must spend according to a plan, referred to as a Redevelopment Plan. The Redevelopment Plan can allow for expenditures for programs ranging from major rehabilitation of water, wastewater, and storm drain infrastructure to building a new library. There is only one absolute requirement with regard to the expenditure of tax increment funds: 20 percent of tax increment revenue must be spent on affordable housing. Tax increment is only generated within a designated Redevelopment Area. This is a distinct geographic area. Although there are some exceptions, tax increment funds are spent within the Redevelopment Area. A defined and specific process must be followed in order to establish a Redevelopment Area. Certain conditions must exist and findings must be made. The area must be predominantly urbanized, and certain adverse physical and economic conditions must also be identified and exist to the point that they are a significant burden to the community. Again, it is important to note that tax increment does not raise taxes. Tax increment is not an assessment or lien on property. Property taxes within the Redevelopment Area are governed by the same laws that limit property tax increases outside of the Area. Other entities that are the financial responsibility of the State of California -- such as the county and school districts and other local special districts -- continue to I For example, tax on a property assessed at $500,000 is $5,000, with the City's share (17 percent) amounting to $850. Within a redevelopment project area, if the property is upgraded and sold for $750,000, the new annual tax would be $7,500. The city would receive 80 percent of the $2,500 increase ($2,000), plus the original $850, amounting to $2,850. Outside a redevelopment project, the city's share would be $1,275. receive all the tax revenues they were receiving before the tax increment was generated. Tax increment financing does not reduce revenue allocated to school districts. In fact, school districts and community college districts receive a portion of the redevelopment tax increments.' Existing State school funding formulas negate any gain or loss in property tax revenue, guaranteeing the state maintains a school's funding level, no matter what happens to the area's property taxes. Additionally, a large portion of the money the Agency shares with the School District will go to new facilities. This money would not be available otherwise. In a nutshell, tax increment, through the adoption of a Redevelopment area, is an economic tool that could assist Lodi in addressing financial needs currently beyond the City's ability. It is a unique partnership that encourages economic stimulation so that growth in the tax base can provide funding for local improvements, create jobs, and improve health, safety, and quality of life in Lodi. TheHistory of tax increment and redevelopment in Lodi A Redevelopment Agency must be formed to create a Redevelopment Project and collect tax increment. According to California Health and Safety Codes: a Redevelopment Agency exists in every city and county in the State, but lies dormant until activated by ordinance. Early in 2000, the City Council authorized the formation of a Lodi Redevelopment Agency and began the steps to form a Redevelopment Project area. At that time, the City Council recommended establishing a project area in the oldest commercial and industrial areas of Lodi. Approximately 1,184 acres were identified as meeting the requirements that would allow the City to collect incremental taxes in exchange for stimulating growth and development in the area. In the spring of 2002, the City Council abandoned its plans to form a Project Area in response to citizen concerns and an initiative drive to put the project's future on the ballot. It is interesting to note that, according to calculations prepared for the formation of the project area at that time, if the project would have been formed and if the 'For redevelopment projects that were adopted before AB 1290, or January 1, 1994, the Agency negotiated separate agreements with each taxing entity. For those projects adopted on or after January 1, 1994, the total amount distributed to each entity is the same 3 Sechon 33100 of Health and Safety Code development occurred in the fashion envisioned, the City would now have over $400,000 in new revenue for this current fiscal year 2006-07, For comparison's sake, this would be like the city's share from $40 million of new taxable sales. One of the concerns expressed with redevelopment and tax increment in 2002 was a fear of eminent domain, the power to force someone to sell his property against his will. In order to address this concern on the part of members of the public and City Council, in 2006, the City Council adopted Ordinances 1775 and 1776 that eliminated the ability of the Lodi Redevelopment Agency to engage in the use of eminent domain for private use. It is expected that the City Council, if a project is adopted, will enact further restrictions and eliminate eminent domain by the Redevelopment Agency. The Lodi Redevelopment Agency is still activated, but there is no project area and no change in the way property tax is distributed. The City Council will soon consider again exploring an area for a redevelopment project. How and when wM this occur? It is anticipated that if the Council wishes to explore a Redevelopment Project Area, the public will have ample opportunity to voice opinions on what projects or activities should be funded with tax increment, how it could improve the community, and the project area boundaries. State law requires an environmental impact report on the project area and that several hearings by the Planning Commission and City Council be held prior to the area's adoption. Currently, no boundary has been proposed for the Project Area. It is anticipated that an initial feasibility study will be conducted that will help select the boundaries of an area and prioritize activities before fully committing to the time and expense of adopting a Project. It is anticipated that the entire process, if approved by the Agency, will take from 12 to 24 months. Attached is "Exhibit A". It is a generalized preliminary schedule and listing of major work products required for plan adoption. It provides a detailed breakdown of the tasks required to form a project area. What are the safeguards? Because tax increment is a powerful tool, safeguards have been developed to ensure that activities are appropriate before receipt of tax increment funds. A report must be presented to the legislative body each year and an annual audit is required. An annual report must be submitted to the California Department of Housing and Community Development and other state agencies. Redevelopment agencies must show that they have a financial obligation (debt) prior to the receipt of tax increment. This information is collected and transmitted to their counties in a document and is known as the Redevelopment Agency's "Statement of Indebtedness" or SOI. Without an SOI, the State would have no way to prevent any local agencies from collecting the increment and pocketing the money. An Agency can incur an obligation in a number of different ways: it can borrow money from investors; it can borrow money from the City or engage in an agreement with the City; and/or it can incur obligations with private development interests. Debts of the Agency are not debts of the City. Questions and Answers Question: Who oversees the expenditure of tax increment and redevelopment? Answer: The members of the elected City Council serving in the capacity as the governing board of the Redevelopment Agency. The community has full local control of additional revenues raised locally. Question: Willbeing in a RedevelopmentArea depress myproperty values? Answer: There is no evidence that property values will be depressed. in fact, one might expect the opposite. With the possibility of greater revenue available for the area in certain circumstances, one might expect that property resale value could increase. Consider: if tax increment is used to improve water, sewer, or storm drains, does that seem likely to lower or increase property values? Would a new library help or hinder property values? The 1998 Dardia Report asserts that assessed valuation in Project Areas go up about twice the rate as similar uses outside the project area. Question: Does shifting property tax in the way tax increment works hurt schools? Answer: No. While school finance is complicated and can be confusing, the essentials are that the state provides funding based on average daily attendance. Additionally, the Agency shares a part of its tax increment with school districts which is "new" money to the schools and goes to school facilities. Question: How can I be sure that the City is not after my property? Answer: The City Council adopted ordinance 1775 and 1776 based upon local concerns to limit eminent domain. The City Council has not budged on the policies and provisions to protect property rights. Will adoption of a redevelopment plan change this policy direction? No. In fact, if a redevelopment plan is adopted that follows ordinances 1775 and 1776, it will be very difficult and costly to change from this existing policy direction. Also, new state law that became effective Jan. 1, 2007 requires redevelopment agencies to state their intentions regarding the use of eminent domain. The Redevelopment Agency will not use eminent domain to acquire property. Question: Whatabout the small business? Answer: A small business can benefit from improved infrastructure. The Redevelopment Agency can absorb costs of building new parking lots, sidewalks and signs. The Agency can adopt programs specifically targeted to assist small businesses. The Redevelopment Agency has a specific obligation to give a preference to existing businesses and residents in development opportunities. Question: Willi have extra property maintenance obligations? Answer: No. Most redevelopment plans do not add to property maintenance requirements. Question: Is this more government regulation? Answer: No. The redevelopment plan will not change zoning or development standards — these will be, as they are now, covered by City ordinances. Redevelopment would provide funding and tools to assist with the funding of public improvements; tools to work voluntarily with property owners. Question: Doesn't the Redevelopment Agency just siphon money off the City that could havegone to thepolice and fire departments? Answer: No. The community will receive a greater amount of revenue with redevelopment than without redevelopment. By having the Agency bear the cost of public improvements, more of the City's General Fund can be made available for police, fire, and other services. Currently, the City is paying approximately $1.7 million in debt service for public improvements that could have been financed via tax increment. If tax increment money would have been available, these financial resources would be supporting additional on-going services. Question: Will the City's General Fund backstop the Redevelopment Agency if itgoes broke? Answer: No. The obligations of the Agency are not the obligations of the City. Debt issued by the Redevelopment Agency is evaluated on its on credit merits. The Agency must be able to prove its ability to pay its own debts. Investors in redevelopment agency debt understand and agree that the Agency must pay its own way and do not expect the City to provide relief. Question: How can redevelopment helpprovide affordable or senior housing? Answer: State law requires redevelopment agencies to spend at least 20 percent of the tax increment on affordable housing for seniors, the disabled and low- to moderate -income families. A redevelopment agency in Lodi could use that money to provide housing, subsidize rents, pay for repairs and help eligible residents become homeowners. Question: Doesn't the Redevelopment Agency take all the increases inproperty taxesfrom the County? Answer: No. State Law, (Health and Safety Code Section 33607.6) requires a percent of the growth in property tax within the Redevelopment Area be passed through to other taxing entities. The pass through amount is increased in three stages. The pass through begins at 25 percent of the total tax increment after the required amount for housing purposes is accounted for. On average, the taxing entities receive about 35 percent of the tax increment in a Project Area. It is interesting to note that on April 17, 2007, during a discussion of the Grape Bowl, Board of Supervisors Chairman Victor Mow said, "They (Lodi) have an opportunity of a redevelopment project. They have not done so. This is a classic case of where redevelopment money might be the answer to do those things." Question: Does the Redevelopment Project end or sunset? Answer: Yes. The Agency cannot collect Tax Increment from the project for any longer than 45 years. It loses it authority to act after 30 years. Between 30 and 45 years the agency can collect debt only to fund housing programs and make payments under its obligations. Re-desarrollo: Una herrarnienta para construir una mejor Lodi La ciudad de Lodi tiene muchas necesidades, desde viviendas mas costeables hasta la reparaci6n de edificios viejos y el estimulo de negocios en Cherokee Lane. La ciudad constantemente estudia la gama de servicios que proporciona y la forma de pagarlos y mejorarlos. Al igual que cualquier otra ciudad de California, Lodi cuenta con una herramienta para cubrir algunas de esas necesidades, pero que a diferencia de la mayoria de las ciudades, en este momento no se usa. Dicha herramienta es el re- desarrollo, que permite a las ciudades conservar una mayor participation de los impuestos de propiedades cuando aumenta el valor. La ley estatal de redesarrollo permite a la ciudad usar los impuestos generados de valores de propiedades mits altos para pagan reparaciones y mej oras que de otro modo requeririan cuotas mas altar de los contribuyentes o fondos para desagile de otros servicios de la ciudad. Con el plan de redesarrollo, Lodi conservaria cinco veces mas del impuesto de propiedades generado por valores mas altos que sin ellos, liberando mas capital para servicios como la proteccibn polieiaca y el mantenimiento a parques. Con el redesarrollo no aumentan los impuestos, simplemente cambia la proporcibn en que se distribuyen los ingresos tributarios. Cuatro de las seis ciudades del condado tienen oficinas activas de re-desarrollo que van desde la rags grande en Stockton hasta una de las mas pequefias en Ripon (14,575 habitantes). El Jueves 19 de Julio a las 6 p.m., el Ayuntamiento de Lodi 11evard a Cabo una junta especial en el Boys & Girls Club, 275 E. Poplar St., para estudi.ar la posibilidad de crear un proyecto en Lodi. Mientras tanto, las siguientes respuestas pueden ayudarle si tiene dudas respecto al proceso: Pregunta: 4Qu6 gano con el re-desarrollo? Respuesta: Si tiene una propiedad en un 6rea dere-desarrollo, los fondos para el re-desarrollo irAn a la modernizacion de calles y banquetas, reparaciones de tuberias subterraneas y programas de asistencia para mejorar su casa, edificio o propiedades circundantes. La ley estatal requiere que las oficinas de re-desarrollo gaste por to menos 20 por ciento de los fondos en vivienda costeable. Todaviano se establece la lista de programas a elegir, por to que su participacidn es valiosa ya que la comunidad toma en consideracibn la forma en que el re-desarrollo puede beneficiar a Lodi. Ask Pagina 1,/JULIO 2007 "M1111IM1111111p, Re-desarroilo: Una herrarnienta para construir una mejor Lodi (cont.) Pregunta: LCuAl es la zona de re-desarrollo? Respuesta: Si el Ayuntamiento de la ciudad decide buscar un proyecto de re- desarrollo, sera algo que se decida con la ayuda del publico. Una propuesta de 2002, en la que se identific6 la mayor parte del este de Lodi en la zona del proyecto propuesto, podria ser un punto de partida de la discusi6n. De hecho, la recaudaci6n fiscal sobre ventas, indicador de fuerza econ6mica, ha disminuido en afios recientes en esa zona geogrdfica. Pregunta: ZNo es algo mas del gobierno? Respuesta: Es una oficina independiente, aunque son los miembros del Ayuntamiento de la ciudad de Lodi que toman las decisions, por ej emplo, en Como se Basta el dinero, sorneten su opini6n ante el publico durante unajunta abierta. Pregunta: ZLa oficina de re-desarrollo podria quedarse con mi casa a oombre de uu desarrollador particular? Respuesta: En Lodi, no. La ciudad tiene un decreto de ley que le prohibe usar poderes de dominio eminentes para incautar una propiedad para beneficio de un particular. Si se adopta un proyecto de re-desarrollo, se establecera aplicando esa prohibici6n, que un futuro Ayuntamiento no podrd revertir sin un proceso largo ni participaci6n del phblico. Pregunta: ZLa ciudad no estaba preparada para el proyecto en 2002? Respuesta: Casi. Se dio inicio al proceso y luego se detuvoporque un grupo ciudadano oblig6 que se sometiera a votaci6n. El Ayuntamiento de la ciudad de Lodi decidio que no era el momento adecuado y dej aron el tema. Pero, de haber continuado con el proyecto, la oficina de re-desarrollo de Lodi (Lodi Redevelopment Agency) recibiaria aproximadamente $500,000 al alto por proyectos locales. Pregunta: GQue tan pronto puedo esperar ver cambios en mi vecindario? Respuesta: No serA de la noche a la maftana. La ciudad recibe mds d6lares solo cuando aumentan el valor de la propiedad. Pero con el tiempo, conforme se invierten m;hs fondos, se compensarA el efecto del beneficio. Para rwls informacl6n, comuniquese a la oficina del administrador de la cindad al 333-6700. Pagina 2/JULIO 2007 Introduccion al redesarrollo a incremento de impuestos 10 de Julio de 2007 Yntroduccion al redesarrollo a incremento de impuestos Introduccion Lodi necesita viviendas mas costeables y seguras para los ciudadanos mayores. La ciudad deberia ayudar a las propietarios de bajos ingresos a pagar por los medidores de agua. El negocio de los hoteles en Cherokee Lane esta disminuyendo; la ciudad deberia hacer algo. Los callejones se estdn. deteriorando. Lodi necesita una nueva biblioteca. Lodi necesita un nuevo refugio para animales. Grape Bowl es un recurso regional que podria estimular el desarrollo economico si se to utiliza de manera adecuada. El lado este de Lodi necesita un nuevo centro comunitario y mas parques. ,Por que no puede verse mejor la piscina del parque Blakely? Lodi deberia preservar los edificios historicos mas antiguos. El sistema de recoleccion de residuos hidricos y drenajes es viejo, obsoleto e inadecuado; �por que no hace nada la ciudad? Las lineas de energia aheas deberian estax bajo tierra. Lodi debe mejorar su base de impuestos y crear mas empleos. Estos son solo algunos ejemplos de los comentarios de los habitantes de Lodi sobre to que quieren y necesitan de la ciudad. La ciudad evalua constantemente la gama de servicios que brinda y analiza como pagar y mejorar estos servicios. Con una importante excepcion, Lodi utiliza al maximo las diversas formas de impuestos y cargos que recibe. Lodi trabaja estrechamente para obtener financiacion de los gobiernos estatales y federales y el -sector pri v do a fin de ofreeer la gama de-- servicios que brinda una "ciudad de servicios completos". La mayor fuente importante de ingresos que Lodi no utiliza actualmente es el incremento de impuestos, que la ley estatal pone a disposicion de las ciudades como se establece en el Codigo de Salud y Seguridad. Aproximadamente 80% de las ciudades de California usan los ingresos del incremento de impuestos para satisfacer las necesidades locales de sus residentes y negocios. El incremento de impuestos es una herramienta que podria utilizarse para satisfacer sada programa, instalacion y servicios deseados de la lista anterior. Es una fuente de ingresos que no aumenta los impuestos. El incremento de impuestos es un componente de la Ley de Redesarrollo de California. En los proximos meses, el ayuntamiento de la ciudad evaluara la forma en que el incremento de impuestos puede ayudar a Lodi. Esto puede conllevar 1 rnedidas para formar un area de proyecto de redesarrollo en Lodi. Este documento tiene el fin de ofrecer un breve resumen del redesarrollo e incremento de impuestos, y ayudar a los miembros de la comunidad y el ayuntamiento a cornprender mejor esta poderosa herramienta economica dirigida localmente. Qu' es el incremento de impuestos? El incremento de impuestos es la canti dad de ingresos por impuestos a la propiedad que se atribuyen a los incrementos del valor de los impuestos generados por la actividad de desarrollo o por transferencias de propiedad por encima de un monto base dentro de una area de redesarrollo designada, llamada area del proyecto'. El incremento de impuestos no rnodifica el monto de impuestos que un propietario debe pagan por su propiedad. Si modifica la forma en que se distribuyen los impuestos a la propiedad adicionales que se generan, es decir, "el incremento". En general, Lodi recibe aproximadamente entre 16 y 17 centavos por cada dolar de impuestos a la propiedad. Con el incremento de impuestos, Lodi podria recibir hasta 80 centavos por cada dolar de nuevos impuestos a la propiedad generado por encima de la valuacion base; dinero que, de otra forma, se destinaria al Estado de California o a organizaciones que son responsabilidad del Estado de California. Segun las normas de incremento de impuestos del estado, Lodi retiene fondos provenientes del incremento de impuestos que debe gastar de acuerdo con un plan, llamado plan de redesarrollo. El plan de redesarrollo puede permitir gastos en prograrnas que van desde la rehabilitacion fundamental de la estructura del agua, Jos residuos hidricos y los desagiies hasta la construccion de una nueva biblioteca. Solo existe un requisito absoluto con respecto al gasto de los fondos del incremento de impuestos: 20% de Jos ingresos del incremento de impuestos deben gastarse en viviendas costeables. Otras entidades que son responsabilidad financiera del Estado de California — corno los distritos de escuelas y condados, y otros distritos locales especiales 'Por ejemplo, los impuestossobre unapropiedad valuada en $500,000 sonde $5,000, y el - porcentaje de la ciudad (17%) equivale a $850. Dentro de un area de proyecto de redesarrollo, si la propiedad asciende de categoriay se vende a $750,000, el nuevo impuesto anual sena de $7,500. La ciudad recibirfa 80% del aumento de $2,500 ($2,000), ademas de los $850 originales, to que equivaldria a $2,850. Fuera de un proyecto de redesarrollo, el porcentaje de la ciudad sena de $1,275. 2 continuan recibiendo todos los ingresos de impuestos que recibian antes de que se generara el incremento de impuestos. La financiacion del incremento de impuestos no reduce los ingresos asignados a los distritos escolares. De hecho, los distritos de las escuelas y universidades comunitarias reciben una parte del incremento de impuestos para el redesarrolloz. Las f6rmulas de financiacion de las escuelas estatales existentes anulan cualquier p6rdida o ganancia en los ingresos de los impuestos a la propiedad, to que garantiza que el estado mantiene el nivel de financiacion de la escuela, sin importar to que suceda con los impuestos de propiedad del Area. En resumen, el incremento de impuestos, a travb de la adoption de un area de redesarrollo, es una herramienta economica que podria ayudar a Lodi a resolver las necesidades financieras que actualmente se encuentran mas alis de la capacidad de la ciudad. Se trata de una asoclac16n Unica que estimula el desarrollo economico, de modo que el crecimiento de la base impositiva pueda generar fondos para mejoras locales, crear empleos y mejorar la salud, seguridad y calidad de vida en Lodi. La historia del redesarrolloy el incremento de impuestos en Lodi Para crear un proyecto de redesarrollo y recaudar el incremento de impuestos, debe formarse un organismo de redesarrollo. Segue los Codigos de Salud y Seguridad de-California3-existe un._organi.sma._de _ redesarrollo en todos los condados y ciudades del estado, pero permanece inactivo hasta que se to activa con una ordenanza. En la primera parte del aiio 2000, el ayuntamiento de la ciudad autorizo la formaei6n de la agencia de redesarrollo y tomo los pnmeros pasos de formar una area de proyecto. En aquel entonces, el ayuntamiento de la ciudad recomendb establecer un area de proyecto en las areas industriales y comerciales ma's antiguas de Lodi. Se identif co que aproximadamente 479 hectareas cumplian con los requisitos que permitirian que la ciudad recaudara impuestos incrementales a cambio de estimular el Z Para los proyectos de redesarrollo que se adoptaron antes de AB 1290, o el 1 de enero de 1994, el organismonegocM acuerdospor separado con cada entidad impositiva. Para los proyectos adoptados en o a partir deli de enero de 1994, el monto total distribuido a cada entidad es el mismo. s Section 331oo delCodigo de Saludy Seguridad. 3 crecimiento y desarrollo en el area. A mediados de 2002, el ayuntamiento de la ciudad abandon6 sus planes para formar un Area de proyecto en respuesta a las preocupaciones de los ciudadanos respecto del dominio eminente y a una iniciativa para someter a votac16n el futuro del proyecto. Es interesante seiialar que, segun los calculos preparados para la formacion del area de proyecto en aquel entonces, si el proyecto se hubiera formado y si el desarrollo hubiera sucedido de la manera prevista, ahora la ciudad tendria cerca de $400,000 de nuevos ingresos para el aiio fiscal actual de 2006-07. En tkrminos comparativos, esto sena como el porcentaje que recibiria la ciudad de $40 millones de nuevas ventas gravables. Una de las preocupaciones expresadas respecto del incremento de impuestos y redesarrollo en 2002 fue el temor del dominio eminente, la capacidad de obligar a alguien a vender su propiedad contra su voluntad. A fin de resolver esta preocupacion de parte de los miembros del publico y el ayuntamiento de la ciudad, en 2006 el ayuntamiento de la ciudad adopt6 las Ordenanzas 1775 y 1776 que eliminan la capacidad del organismo de redesarrollo de Lodi de participar del use del dominio eminente para use privado. Se espera que, si se adopta un proyecto, el ayuntamiento de la ciudad promulgue ma's restricciones y elimine el dominio eminente de la agencia de redesarrollo. La Agencia de redesarrollo de Lodi aun esta activado, pero no existe un Area de proyecto ni se modifico la forma en que se distribuyen los impuestos a la propiedad. El ayuntamiento de la ciudad pronto volvera a considerar la exploracion de un area para el proyecto de redesarrollo. Z Cudndo y como sucederd esto? Se anticipa que si el ayuntamiento desea explorar un area de proyecto de redesarrollo, el publico tendra amplias oportumdades de expresar su opinion sobre los proyectos y actividades que deberian financiarse con el incremento de impuestos, la forma en que esto mejoraria la comunidad y los limites del area de proyecto. La ley estatal requiere que se presente un informe del impacto ambiental sobre el area de proyecto y que el comite de planificacion y el ayuntamiento de la ciudad celebren varias audiencias antes de la adopcion del area. Se anticipa que todo el proceso, si recibe la aprobacion del organismo, Ilevara entre 12y 24 meses. 4 G Cuales son las garantias? Dado que el incremento de impuestos es una herrami.enta poderosa, se han desarrollado garantias para asegurar que las actividades sean apropiadas antes de que se reciban los fondos del incremento de impuestos. Todos los aiios debe presentarse un informe al cuerpo legislativo y debe realizarse una auditoria anual. Debe presentarse un informe anual al Departamento de Desarrollo Comunitario y Viviendas de California y a otros organismos estatales. La Agencia de redesarrollo deben demostrar que tienen una obligacion financiera (deuda) antes de la recepcion del incremento de impuestos. Esta informacion es recopilada y transmitida a los condados en un documento, y se la conoce como "Declaracion de adeudamiento" de la Agencia de redesarrollo o SOI (Por su sigla en ingles). Sin las SOI, el estado no tendria forma de impedir que las Agencias locales recaudaran el incremento de impuestos y se queden con el dinero. Preguntasy Respuestas Pregunta: Z QuieK supervisa los gastos del incremento de impuestos y el redesarrollo? Respuesta: Los miembros electos del ayuntamiento de la ciudad que se desempeiian como directorio la Agencia de redesarrollo. La comunidad tiene absoluto control local de los ingresos adicionales que se recaudan localmente. Pregunta: IMi propiedad perdera parte de su valorpor encontrarse en un area de redesarrollo? Respuesta: No existen pruebas de que se reduzcan los valores de las propiedades. De hecho, cabria esperar to contrario. Con la posibilidad de mayores ingresos disponibles para el Area en ciertas circunstancias, cabria esperar que aumentase el valor de reventa de la propiedad. Considere to siguiente: si el incremento de impuestos se usa para mejorar el agua, las cloacas o los drenajes, i,le parece probable que eso reduzca o aumente el valor de la propiedad? Una nueva biblioteca, �ayudaria o perjudicaria al valor de la propiedad? El Informe Dardia de 1998 asegura que la valuacion de un area de proyecto aumenta alrededor de dos veces ma's que otros usos similares fuera del area de proyecto. 5 Pregunta: LEI cambia de los impuestos a la propiedad que conlleva el incremento de impuestosperjudica a las escuelas? Respuesta: No. Si bien las finanzas de las escuelas son complicadas y pueden ser confusas, to fundamental es que el estado provee la financiacion segun la asistencia diaria promedio. Pregunta: LComo puedo estar seguro de que la Ciudad no quiere mi propiedad? Respuesta: El ayuntamiento de la ciudad adopta las ordenanzas 1 775 y 1776 basandose en las preocupaciones locales para limitar el dominio eminente. Ademb, una nueva ley estatal que entro an vigencia el 1 de enero de 2007 requiere que las Agencias de redesarrollo declaren sus intenciones respecto del use del dominio eminente. El organismo de redesarrollo no utilizara el dominio eminente para adquirir propiedades. Pregunta: G Que hay de las pequenas empresas? Respuesta: Una pequeiia empresa puede beneficiarse de la mejora de infraestructura. La Agencia de redesarrollo puede absorber los costos de construir nuevos estacionamientos, aceras y seiiales. La Agencia puede adoptar programas especificamente destinados a ayudar a pequeiias empresas. La Agencia, de redesarrollo tiene la obligacion especifica de otorgar preferencia a los residentes y empresas existentes en las oportunidades de desarrollo. Pregunta: g Tendre que asumir obligaciones adicionales de mantenimiento de propiedad? Respuesta: No. La mayoria de los planes de redesarrollo no agregan requisitos de mantenimiento de propiedad. Pregunta: � Esto implica una mayor regulacidn de gobierno? Respuesta: No. El plan de redesarrollo no cambiard la division en zonas ni las pautas de desarrollo: estos se encontraran, al igual que ahora, a cargo de las ordenanzas de la Ciudad. El redesarrollo brindaria financiacion y herramientas para contribuir con la financiacion de las mejoras rol publicas, herramientas para trabajar voluntanamente con los duenos de las propiedades. Pregunta: � La Agencia de redesarrollo nose limita a sacar din erode la ciudad que podria haberse destinado a los departamentos de bomberos y policia? Respuesta: No. La comunidad recibird una mayor cantidad de ingresos con el redesarrollo que sin el. Si un Agencia se hace cargo del costo de las mejoras publicas, la policia, los bomberos y otros servicios pueden disponer de una mayor parte del fondo general de la ciudad. Pregunta: GEI fondo general de la ciudad respaldard al la Agencia de desarrollosi este se declara en quiebra? Respuesta: No. Las obligaciones de la Agencia no son las obligaciones de la ciudad. La deuda emitida por la Agencia de redesarrollo se evalua segun sus meritos de credito. La Agencia debe ser capaz de demostrar que puede pagar sus propias deudas. Pregunta: ZComo puede el redesarrollo ayudar a ofrecer viviendas costeables o viviendaspara los ancianos? Respuesta: La ley federal requiere que las agencias de redesarrollo gasten al menos 20% del incremento de impuestos en viviendas costeablespara los ancianos; los rrfiffu1Aos—y 1w fannilias de- irigresas-rajas- o moderados. Una agencia de redesarrollo en Lodi podria utilizar ese dinero para ofrecer viviendas, subsidiar alquileres, fnanciar reparaciones y ayudar a los residentes que reunan los requisitos a convertirse en propietarios. Pregunta: i,La Agencia de redesarrollo no se lleva todos los incrementos de impuestos a lapropiedad del condado? Respuesta: No. La ley federal, (Codigo de Salud y Seguridad, Secci6n 33607.6) requiere que un porcentaje del crecimiento de los impuestos a la propiedad dentro del area de redesarrollo se traslade a otras entidades tributanas. VA Es interesante seiialar que el 17 de abril de 2007, durante una discusion del Grape Bowl, el presidente del directorio de supervisores, Victor Mow, dijo: "[Lodi] tiene la oportunidad de [establecer] un proyecto de redesarrollo. No to ha hecho. Este es un caso tipico en que el dinero de redesarrollo podria ser la respuesta a estas cosas". Pregunta: � El proyecto de redesarrollo finaliza o concluye? Respuesta: Si. El organismo no puede recaudar incrementos de impuestos del proyecto durante mas de 45 anos. Pierde el poder para actuar luego de 30 aiios. Entre los 30 y 45 aiios, La Agencia puede recaudar deudas solo para financiar programas de viviendas y realizar pagos segun sus obligaciones. 8 33607.6 oz,� job L5 sLo U w s U_q. s wbj s *--"5 t59 U.0 Lr,US "I.I;L-> us Vo r- t",4c '3 S� l ilylSJQ-,oUpgS�y,l�lUTA ul ga 's x ,{5 , \S .9q I L" -A 2007 61 17 ,,S -4 ,,hy Uo 4J L§ cib 9 >--G-qa gi j, (g5 iS� g5 ui nS Loi 4 su sts9 v 0 >>9? ),I9>" W .U -W pl.xUswl > �+ rip & LJ->wI LS PSL) LP05-a A j 'o -C, 9 r. i w rw July 9, 2007 Bob Johnson Honorable Mayor of Lodi & Lodi City Council Members Dear Community Leaders: The Chamber's Board of Director's have heard an overview of the City Manager's ideas and preliminary plan for the activation of Lodi's Redevelopment Agency. The Chamber Board urges your support to proceed with direction to determine how activation of this plan can best benefit our community. We feel the economic impacts, revitalization of the eastside and so many other currently "unaffordable projects" make this a very attractive prospect for community development. With the elimination of the "eminent domain" provision this seems to be more readily accepted by a vast majority of Lodi's citizenry. It is time Lodi be returned the incremental tax gain on our own property. Please vote to support Mr. King and to move forward with redevelopment. r wm Pat Patrick President & CEO Lodi Chamber of Commerce Cc: Mr. Blair King, Lodi City Manager July 9, 2007 Bob Johnson Honorable Mayor of Lodi & Lodi City Council Members Dear Community Leaders: On June 18th Mr. Blair King, Lodi City Manager, made a presentation about his plans and ideas concerning Redevelopment. His presentation was to the leadership of the Hispanic Business Committee (HBC), a committee within the Lodi Chamber of Commerce. The HBC believes the economic well-being that will accrue to Lodi's eastside, the businesses there, and its residents will create tremendous goodwill and will be greatly appreciated. We would anticipate many improvements as a result of this program. We see this as an improvement from what we see today. We want to see the eastside improve as a place for investment, greater safety and general well-being. We applaud the removal of the "eminent domain" language as property rights are important to all Lodi residents. We urge your support of Mr. King's proposal to develop a workable design for redevelopment in Lodi. Thank you for your consideration. Cordially, Mirna Ruiz Committee Chair Hispanic Business Committee Cc: Mr. Blair King, Lodi City Manager