HomeMy WebLinkAboutAgenda Report - November 7, 2007 K-02we
AGENDA ITEM YN
CITY OF LODI AND
LODI REDEVELOPMENT AGENCY
Tn
AGENDA TITLE: Adopt Resolution Designating a Redevelopment Survey Area for Study
Purposes and Directing that the Planning Commission Select a
Redevelopment Project Area from all or part of the Survey Area
MEETING DATE: November7,2007
PREPARED B Y Blair King, City Manager
RECOMMENDED ACTION: Adopt a Resolution of the City Council designating Survey Area
Option Al as the Redevelopment Survey Area for study purposes
and direct that the Planning Commission select a Project Area from
all or part of the Survey Area.
BACKGROUND INFORMATION: On July 19, 2007, the City CounciilRedevelopment Agency and the
Planning Commission conducted a special joint meeting to consider
the possibility of forming a Redevelopment Project Area. At the
conclusion of the meeting, the Council directed that action be taken to research the formation of a
Redevelopment Project but made no commitment as to the eventual disposition of the formation of a
Redevelopment Project.
According to California Health and Safety Codes, Section 33100, a Redevelopment Agency exists in
every city and county in the State, but lies dormant until activated by ordinance. Although a
Redevelopment Agency may be activated, the ability to benefit from Redevelopment depends upon
forming a Project Area.
Early in 2000, the City Council authorized the formation of a Redevelopment Agency and began the
steps to form a 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 via a RedevelopmentArea. ?n the
spring of 2002, the City Council abandoned its plans to form a Project Area in light of an initiative drive.
Before committing to the time and expense of adopting a Redevelopment plan, many communities
conduct an initial feasibility study, however, it is not required by law. This study is typically conducted
prior to the selection of a survey area and can be used to help select the boundaries of the survey and
the subsequent project areas.
Based upon the Council's July 19, 2007 direction, the City, with the services of GRC Consultants,
prepared a feasibility study. The study explored two alternative Redevelopment Project areas. Both
meet the threshold conditions required to form a project area. One focused on commercial corridors and
the other included residential neighborhoods as well. Survey Area Option A is 1,583 acres and Survey
Area Option B is 732. Financial projections related to tax increment potential were prepared for both
areas. The following table presents the results:
........
... ...
........
............
Scenario Future Dollars
Net Present Value u:
„ Survey Area Option $440.1 Million
5171.1 Million f
Survey Area Option B $277.1 Million
5108.2 Million
APPROVED:
ing, City Manager
The Feasibility Study was reviewed twice with the Budget and Finance Committee. Once on October 23,
2007 and the second on October 27, 2007, at which time the Committee was asked to make a
recommendation to the City Council. The Budget and Finance Committee voted unanimously, with one
absent, to recommend that the Council proceed with the formation of a Redevelopment Project, and afler
conflicts of interests were resolved, and invoking the rule of necessity, the Committee voted 4-0 to
recommend that the Council select Survey Area Option Al .
Based upon comments from the Budget and Finance Committee on October 23,2007, staff modified the
potential survey area by adding 180 acres. This became Survey Area Option A I , which was
recommended by the Budget and Finance Committee on October 27, 2007. Survey Area Option Al is
1,763 acres. No financial projections specific to the area have been prepared. However, one assumes
that the tax increment potential will be slightly higher than Survey Area Option A.
On October 24, 2007, the Feasibility Study and the concept of tax increment were reviewed with the
Planning Commission. The Planning Commission offered no recommendation, but in accordance with
redevelopment law, the responsibility for designating the Project Area boundaries lies with the Planning
Commission. It is anticipated that the Planning Commission will take up the selection of the survey area
on November 14,2007.
Adoption of the attached resolution would establish the boundaries of the Redevelopment Survey Area.
This is the first formal step in the Redevelopment Adoption Process. The resolution calls for the Planning
Commissionto select the boundaries of the Project Area from the boundaries of the Survey area.
It is important to note that the boundaries of the selected Project Area cannot be larger than the Survey
Area. The Project Area maybe smaller than the Survey Area, or the same size, but not larger.
In addition, the Redevelopment Plan will not include eminent domain authority for the Redevelopment
Agency.
Redevelopment will allow the City to fund improvements without raising taxes or creating newfees.
Redevelopment is a powerful housing and economic development tool used throughout California. Of
the State's 478 incorporated cities, 395 have active redevelopment agencies. Every city with a
population over 250,000 has one. 155 cities with populations over 50,000 have active agencies - only
eight do not. Stockton, Manteca, Tracy, and Ripon all have active redevelopment agencies.
Twenty percent of tax increment funds must be used to finance affordable housing in the form of
rehabilitation, homeowner assistance, senior housing or paint-uplfix-up.
FISCAL IMPACT: Option A, afler subtracting mandatory pass-through payments, would
provide an estimated $440.1 million in future dollars ($171.1 million in net
present value). Option B, afler subtracting mandatory pass-through
payments, would provide an estimated $277.1 million in future dollars
($108.2 million in nest present value). Option Al would produce no less
than Option A Funds could be used for affordable housing, street -
sidewalk -curb improvements, installation of water meters, streets, economic
development incentives, Grape Bowl refurbishment, expansion of the
Library, a new community swimming pool or a new fire station.
FUNDING: Not Applicable
Bla' ity Manager
Attachments: Resolution
Feasibility Study
Maps
October 29, 2007
Feasibility Study for a
Potential Redevelopment
Project in East Lodi
LODI REDEVELOPMENTAGENCY
Feasibility Study for a Potential
Redevelopment Project in East
Lodi
LODI REDEVELOPMENTAGENCY
FRASER &ASSOCIA TES
CDC uEDEVELOIDMENT COMULTANT6
701 8. Darker 6treef
GSC
Guile 7400
Orange,CA 92868
TABLE OF CONTENTS
LIST OF TABLES
LIST OF FIGURES
Feasibility Study for a Potential
Redevelopment Project in East
Lodi
Background--------------------------------------------------------------------------------------------- 1
Requirements of State Law....................................................................3
General Observations............................................................................. 7
Survey Area Boundaries....................................................................... 17
Financial Projections............................................................................21
Preliminary Projects and Programs.....................................................29
Recommendation.................................................................................. .31
Table 2 —Tax Increment Projection — Option A .................................. .24
Table 2.1— Tax Increment Projection — Option B ................................ 26
Figure 1— Survey Area — Option A ...................................................... 18
Figure 2 — Survey Area — Option B ...................................................... 19
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Lodi RedevelopmentAgency
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BACKGROUND
There are over 400 redevelopment agencies in charge of nearly 800
redevelopment project areas throughout the State of California. In a
study performed by the Center for Economic Development at
California State University, Chico for the fiscal year of 2002-03,
redevelopment agencies have:
• Increased state income by $16.56 billion
• Created over 300,OOOjobs
• Increased tax revenues for state and local governments by
$1.58 billion
• Constructed over 37,600 new affordable housing units and
rehabilitated nearly 20,000 existing affordable housing units
(in a ten-year period)
With this in mind, the Lodi City Council on July 19, 2007, acting as
the City's Redevelopment Agency (the "Agency"), directed that studies
begin to see if redevelopment is feasible in portions of east Lodi, and to
determine where the initial boundaries should be.
A redevelopment program in the City could help support a number of
goals for improving the community. However, to undertake a
redevelopment plan adoption requires a significant commitment of
time and financial resources. Therefore, the Agency requested this
Feasibility Study to analyze the area before such a commitment.
The analysis included herein provides a generalized discussion of
existing physical and economic conditions as they relate to California
Community Redevelopment Law (Health and Safety Code Section
33000 et seq.; the "CRL"), a general outline of projects and programs,
a potential future work program the adoption process, and financial
projections. Detailed studies and analyses will be provided in
subsequent documents if the formal adoption process begins.
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Lodi Redevelopment Agency
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AM ►IREMENTS OFSTATELI W
Blight Definition
According to the CRL, a city may adopt a redevelopment plan to
address an area that is blighted. A blighted area is an area:
1. That is predominately urbanized;
2. That is characterized by one or more conditions of physical blight
and one ore more conditions of economic blight; and
3. In which the combination of such conditions is so prevalent and so
substantial that it causes a reduction of, or lack of, proper
utilization of the area to such an extent that it constitutes a
serious physical and economic burden on the community that
cannot reasonably be expected to be reversed or alleviated by
private enterprise or governmental action, or both, without
redevelopment.
Urbanization
Section 33320.1 of the CRL requires that the area proposed for
redevelopment be predominantly urbanized. This means that not less
than 80%of the area is either of the following:
• Has been or is developed for urban uses
• Is an integral part of one or more areas developed for urban
uses that are surrounded or substantially surrounded by
parcels that have been or are developed for urban uses.
Physical Blight
According to CRL Section 33031(x), the following conditions are the
physical characteristics that cause blight:
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Lodi Redevelooment Aoencv
• Buildings in which it is unsafe or unhealthy for persons to live
or work. These conditions may be caused by serious building
code violations, serious dilapidation and deterioration caused
by long-term neglect, construction that is vulnerable to serious
damage from seismic or geologic hazards, and faulty or
inadequate water or sewer utilities
• Conditions that prevent or substantially hinder the viable use
or capacity of buildings or lots. These conditions may be caused
by buildings of substandard, defective, or obsolete design or
construction given the present general plan, zoning, or other
development standards
• Adjacent or nearby incompatible land uses that prevent the
development of those parcels or other portions of the project
area
• The existence of subdivided lots that are in multiple ownership
and whose physical development has been impaired by their
irregular shapes and inadequate sizes, given present general
plan and zoning standards and present market conditions
Economic Blight
According to CRL Section 33031(b), the following conditions are the
economic characteristics that cause blight:
• Depreciated or stagnant property values
• Impaired property values, due in significant part, to hazardous
wastes on property where the agency may be eligible to use its
authority
• Abnormally high business vacancies, abnormally low lease
rates, or an abnormally high number of abandoned buildings
• A serious lack of necessary commercial facilities that are
normally found in neighborhoods, including grocery stores,
drug stores, and banks and other lending institutions
• Serious residential overcrowding that has resulted in
significant public health or safety problems.
• An excess of bars, liquor stores, or adult-oriented businesses
that has resulted in significant public health, safety, or welfare
problems.
• A high crime rate that constitutes a serious threat to the public
safety and welfare.
Not every parcel of land in a redevelopment area must be blighted.
Unblighted land may be included if it is necessary for effective
redevelopment and not included solely to collect tax increment
revenue.
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Feasibility 5tudv
The `Five -Part Test"
In conclusion, a redevelopment area must pass five basic tests. Land
being considered for inclusion in a redevelopment project area:
I.) Must be urbanized (as defined above).
2) Must have prevalent physical and economic blight (as defined
above).
3) The blight must cause a lack of proper utilization of the area.
4) The improper utilization must be a serious burden on community.
5) The burden cannot be reversed by private enterprise acting alone,
by the City acting alone, or by both acting together without the
assistance of a redevelopment agency.
The analysis in this Study derived from looking at properties in
eastern Lodi based on these definitions and the "five-part test" on a
general level. If the adoption process is started by the Agency, then
detailed studies will begin to research and document blight and
urbanization. Changes to the boundaries may be needed after
additional study.
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Lodi Redevelopment Agency
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GENERAL OBSERVA TIONS
At first look, the properties in eastern Lodi should, theoretically, have
very few problems. Consider that Lodi is served by a well -traveled
freeway, has an established wine industry, and the nearby population
has a per capita income 8%higher than the County.'
However, when looked at in more detail, portions of the community
appear to be suffering from a variety of adverse conditions. Building
deterioration, obsolete commercial structures, piecemeal development,
antiquated parcel shapes and sizes, junk and equipment openly
stored, and old or nonexistent infrastructure are just some of the
problems that contribute to the overall decline of the community.
To begin the process of preliminarily evaluating existing conditions in
the eastern Lodi area (the "Study Area"), general field surveys were
conducted. Properties in the Study Area were evaluated on a block -
by -block basis, using the blight definitions described in the CRL, as
discussed earlier.
This preliminary research included general observations of conditions
in the Study Area as well as parcel -specific data from the San Joaquin
County Assessor. A database was then prepared to store and retrieve
information. This database will be updated and expanded throughout
the adoption process, if the Agency chooses to begin such an endeavor.
The remainder of this section will discuss initial findings within the
boundaries of the Study Area. These findings are not meant to fulfill
the blight documentation required by law; rather, they are intended to
be used as a general description of existing conditions to determine
Survey Area boundaries and recommendations regarding additional
steps.
1 1999 income, 2000 United States Census and City of Lodi.
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Lodi Redevelopment Agency
Buildings ThatAre Unsafe or Unhealthy
While there is a significant amount of building deterioration in the
Study Area, the bulk of it does not appear to he life-threatening. The
type of deterioration observed is more of a hindrance to the vitality of
current uses, and a virtual roadblock for future improvements because
it is an economic burden. Therefore, it will be discussed in more detail
in the next section.
However, based on construction dates from the Assessor, thousands of
structures in the Study Area are likely to contain asbestos, lead-based
paint, or other common hazardous materials. This does not
necessarily mean that these structures are contaminated, but any
expansion, modernization, or other rehabilitation project is severely
limited due to the costs involved with abating these once -popular
building materials.
These building materials are dangerous enough because of the
inherent health and safety risks, but the related physical and
economic burdens can also force an area into stagnation. This may be
partially to blame for the apparent lack of reinvestment in the Study
Area, However, if the area is included in a redevelopment project,
financial assistance could be available.
Other forms of hazardous materials may exist in the auto -related
businesses along Cherokee Lane and Kettleman Lane, and in the
industrial areas by the railroad tracks and east of Highway 99.
Historically, these types of uses, which include auto repair, body
shops, and light and heavy manufacturing, are notorious for
contaminating air, soil, and groundwater. Additional study would be
required to determine if such problems exist.
Significant code violations in the areas with high concentrations of
deteriorated structures may also show structures that are unsafe or
unhealthy to occupy. Such code violations may include unpermitted
construction, inadequate building materials, unsafe wiring, or other
dangerous problem. Discussions with the City's code enforcement
staff will be necessary to fully characterize this condition.
Conditions That Prevent or Hinder Viable Uses of Buildings or
Lots
There appear to be several conditions that harm the properties in the
Study Area, including building deterioration, commercial
obsolescence, and inadequate infrastructure.
Building deterioration was observed throughout the Study Area, with
a significant number of buildings in need of moderate -to -major repairs
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Feasibility Study
or substantial rehabilitation. The most severe conditions include
damaged roofs and exterior walls, bare plywood or other inappropriate
building material, wood rot, chunks of missing plaster or stucco, and
large areas of peeling paint. These conditions were observed in
commercial and residential portions of the Study Area.
Commercial obsolescence appears to have been a problem in the Study
Area for a long time. Antiquated facades; neighboring buildings with
a variety of setbacks, heights, styles, and exterior treatments; limited
display areas; old motels; and buildings constructed for specific uses
but no longer housing those uses are plentiful.
It is clear that commercial development in the Study Area has
occurred in a piecemeal fashion, and without any coordinated effort.
The hodgepodge development pattern has led to a variety of site
layouts, multiple curb cuts, and signage that creates a visual and
functional chaos. The symptoms of obsolescence are costly to alleviate,
but must be addressed for the overall economic health of the area.
The lack of adequate public facilities also has a major negative affect
on properties in the Study Area. Initial observations reveal the
following problems throughout the Study Area:
• Streets in poor condition
• Curbs, gutters, and sidewalks in poor condition (or non-existent)
• Drainage problems
• Lacy of parking
• Exposed utility lines
• Lack of landscaping
Other infrastructure items that are not visible, but are likely to be
needed, include upgrades to sewer and water lines. These
improvements may require significant amounts of funding, which are
simply not available. The City is not in a financial position to pay for
all of the improvements that are needed in the Study Area, and the
private sector has neither the funds nor the authority to do so.
However, one of the basic elements of improving an area through
redevelopment is the construction of public facilities and
infrastructure. If this project is adopted, funds will be in place to
"bridge the gap" between what is needed and what is available.
Incompatible Uses
The piecemeal development discussed previously creates changing
land use patterns and, in turn, incompatible and nonconforming uses.
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Lodi Redevelopment Agency
This situation is especially pronounced along Cheroltee Lane,
Kettleman Lane, Sacramento Street, Lockeford Street, Stocltton
Street, Lodi Avenue, and Central Avenue. In these areas, residences
are located in commercial and industrial areas, and/or are abutting
commercial and industrial uses with no buffers of any kind.
Without redevelopment, the abatement of incompatible uses is highly
unliltely, because owners, especially absentee owners, are unlikely to
invest money in such properties in such a manner as to eliminate any
incompatibilities by replacing one use for another, through screening,
or through any other means. These lots are themselves relatively
small, malting conversion to more intense use impossible without
parcel assembly. Consequently, the transformation of incompatible
uses and small parcels into an area more easily developed for its
intended uses is infeasible and, therefore, is a substantial burden on
the community.
Irregular Parcels
A significant characteristic of blight in the Study Area is the lack of
adequate commercial land. For example, along Sacramento Street the
average commercial parcel size is only 0.23 acre, and 93% are under
0.50 acre. These are unusually small parcels and not large enough to
accommodate modern development or allow existing businesses to
expand. Industrial uses along Sacramento Street are equally
constricted with an average of 0.58 acre, including 81%that are less
than 1.00 acre. Parcels that are too small result in buildings that are
too small, which does not provide an adequate return of the
investment to the business or property owner.
When these situations occur, stores have minimal setbacks (if any)
with cramped parking lots, multiple curb cuts, and are "wedged into
mid -block locations with no regard for how they look or function with
neighboring properties. This leads to an overall obsolescence of the
Study Area, as discussed earlier. Generally, it is not a particularly
attractive — or convenient — place to shop or do business. Buildings
are poorly maintained, products are difficult to see from the busy
corridors, access and parking are often difficult, signage is out-of-date
and inconsistent, businesses and residences appear to be randomly
placed on their properties without adequate buffers, and pedestrian
amenities are lacking.
Property Values and Lack of Investment
An evaluation of current property values reported by the County
Assessor shows that single-family residential, multi -family residential
and commercial uses in the Study Area are assessed much lower than
those in the rest of the City (see table below). Only industrial uses
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Feasibility Study
were higher, but only by 2%. This may likely be attributed to the fact
that nearly all of the City's industrial uses are located in the Study
Area, thereby making a small sample size for the remainder of the
City.
Use
Study Area
$/Acre
Remainderof City
$/Acre
Commercial
25
36
Industrial
17
15
Single -Family Residential
24
33
Multi -Family Residential
29
83
Additional value analyses are needed to fully characterize this
condition. However, these data prove that properties in the Study
Area are not holding their values, which is indicative of a blighted
area.
Vacancies
Vacant commercial and industrial units were observed throughout the
Study Area, and illustrate the complex nature of blight. Poor physical
conditions lead to decreased values and sales, which, in turn, lead to
poor economic conditions. Vacancies not only give the area a run-
down look and reduce local job opportunities, but they do not generate
sales tax revenue, frequently lower surrounding property values,
increase crime and the risk of fire, and pose hazards to children.
Empty buildings exhibiting characteristics of neglect and
abandonment such as broken windows, abandoned garbage, or other
such indications of neglect, are typically regarded as attractive
nuisances and neighborhood burdens. Additionally, the standard
concept of "The Broken Window Effect", which is widely accepted in
professional planning literature, points strongly to a very high degree
of correlation between apparent building abandonment and crime.
Successful implementation of a redevelopment program can address
vacancies by providing incentives to attract new businesses, or
facilitating parcel assembly, which could create properties that are
viable in today's market.
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Lodi Redevelopment Agency
Lack of Necessary Commercial Facilities
A number of basic neighborhood services appear to be lacking in the
Study Area. For example, there are very few supermarkets and drug
stores located in or near the Study Area. Banks and financial
institutions are slightly more prevalent, but it is clear that the
businesses in the Study Area are oriented more to travelers along
Highway 99 and Kettleman Lane than to the local population.
Additional study will be needed to fully assess this issue.
Residential Overcrowding
Although some signs of residential overcrowding were observed —
converted garages, multiple vehicles parked during the day, etc. — it is
not likely to be a significant problem. A check of census data will be
necessary, but this does not appear to be a condition of blight that
seriously affects the Study Area.
Excess o fA d ul t Businesses
Some drinking establishments were observed along major corridors,
and there is a topless bar and massage parlor on Cherokee Lane. If
the adoption process begins, an analysis will be needed to quantify the
number of adult businesses in the area. In addition, various City
departments will be contacted to see if there is a connection between
such businesses and public health, safety, or welfare.
High Crime
Crime statistics were not analyzed for the scope of this Study, so the
impact of crime on the Study Area is not known. However, the
transient nature of uses along Cherokee Lane and Kettleman Lane
(with a mix of motels, liquor stores, auto repair, etc.) often creates
higher crime. In addition, most, if not all, commercial uses in the
eastern portion of Lodi are likely to be included in any future
redevelopment area. Therefore, the shear number of commercial units
alone would suggest it is one of the higher crime areas of the City.
If the City Council elects to begin the adoption process, details from
the City's Police Department will be important to characterize the
extent of crime in the Study Area.
SUMMAR K OF OBSER VA TIONS
The results of the initial field work show that conditions of blight exist
throughout the Study Area. The matrix below summarizes specific
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Feasibility Study
physical and economic conditions of blight that were found. The
matrix also provides a measure of the extent of each condition based
on initial preliminary observations.
Each characteristic of blight (as defined by the CRL) was evaluated
and given an initial ranking of "minor," "moderate," or "extensive,"
based on the following criteria:
Minor - Of limited extent or importance throughout the entire
area, but may be concentrated in one particular location. Not in
and of itself a significant blighting characteristic, but may
contribute to other conditions of blight.
Moderate - While not widely spread or of major importance, it is
a major blight characteristic in one or a few areas. Contributes
significantly to overall blight, but not a prevalent characteristic of
blight in and of itself.
Extensive - Of widespread extent and importance throughout the
entire area, and is a commonly found characteristic in most, if not
all, of the area. In and of itself can be considered a prevalent
characteristic of blight.
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Lodi Redevelopment Agency
PHYSICAL CONDITIONS OF BLIGHT
PHYSICAL. CONDITION ..
DRESENCE
EXTENT ::
NOTES
Buildings in which it is unsafe or
Yes
Minor/
Severe building dilapidation is relatively
unhealthy for persons to live or
Moderate
minor; however, code violations could be
work. These conditions may be
extensive and there is a significant
caused by serious building code
likelihood of hazardous material presence
violations, serious dilapidation and
with asbestos and lead-based paint.
deterioration caused by long-term
neglect, construction that is
vulnerable to serious damage from
seismic or geologic hazards, and
faulty or inadequate water or sewer
utilities
Conditions that prevent or
Yes
Extensive
Significant commercial obsolescence.
substantially hinder the viable use
Significant infrastructure deficiencies.
or capacity of buildings or lots.
Significant building rehabilitation and
These conditions may be caused by
maintenance needs. Obvious piecemeal
buildings of substandard, defective,
development with no apparent plan.
or obsolete design or construction
Minimal construction and design standards.
given the present general plan,
Lack of landscaping and pedestrian
zoning, or other development
amenities in commercial areas.
standards
Adjacent or nearby incompatible
Yes
Moderate/
Many residences are located adjacent to
land uses that prevent the
Extensive
commercial and industrial uses without
development of those parcels or
adequate buffers. There are also
other portions of the project area
residences located in commercial and
industrial areas.
The existence of subdivided lots
Yes
Moderate/
Many commercial parcels too small or too
that are in multiple ownership and
Extensive
oddly shaped for expansion or new modern
whose physical development has
development.
been impaired by their irregular
shapes and inadequate sizes, given
present general plan and zoning
standards and present market
conditions
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Feasibility Study
ECONOMIC CONDITIONS OFBLIGHT
ECONOMIC;CONDITION
PRESENCE
EXTENT
NOTES
Property values in Study Area are lower
Depreciated or stagnant property
Yes
Moderate/
values
Extensive
than rest of City. Many commercial and
industrial buildings are obsolete and have
not seen much reinvestment, if at all. Lack
of adequate parcel shapes and sizes
hinders economic growth.
Impaired property values, due in
Likely
Moderate/
Number of auto -related business and
significant part, to hazardous
Extensive
manufacturing uses indicates an existence
wastes on property where the
of hazardous materials.
agency may be eligible to use its
authority
Abnormally high business
Yes
Minor/
Number of vacancies appears to be above
vacancies, abnormally low lease
Moderate
normal, and have been vacant for
rates, or an abnormally high
extended periods, which adds to decline of
number of abandoned buildings
area.
A serious lack of necessary
Yes
Moderate
Adequate and modern neighborhood
commercial facilities that are
commercial uses, such as supermarkets
normally found in neighborhoods,
and drug stores, are lacking in the area.
including grocery stores, drug
stores, and banks and other lending
institutions
Serious residential overcrowding
Unlikely, but
Unknown
Residential overcrowding does not appear
that has resulted in significant
possible
to be a problem, but additional study is
public health or safety problems
needed.
An excess of bars, liquor stores, or
Possible
Unknown
Adult uses exist in the form of a topless
adult-oriented businesses that has
bar, massage parlor, and several liquor -
resulted in significant in public
related establishments. Additional study is
health, safety, or welfare problems
needed.
A high crime rate that constitutes a
Likely
Moderatel
Poor building conditions and commercial
serious threat to the public safety
Extensive
uses oriented to travelers often result in
and welfare
higher crime areas. Police statistics will be
needed to fully characterize.
Urbanization
There are only about 84 acres of vacant land in the entire Study Area,
mostly small lots spread throughout. However, most, if not all, of the
vacant land is substantially surrounded by developed urban uses,
which means it is counted as urbanized according to the CRL. The
result is that the Study Area appears to fall safely within the 80%
threshold of urbanized land, and is likely to be 100% urbanized.
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Lodi Redevelopment Agency
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SURVEYAREA BOUNDARIES
After reviewing the properties in the Study Area, it is recommended
that for comparative purposes the Agency consider two boundary
options for the formal Survey Area: One, Option A, includes all
properties that appear to qualify for redevelopment under the CRL
(see Figure 1);and two, Option B, focuses only on the corridors of the
Study Area (see Figure 2).
An analysis of the two options, as well as a recommendation, is
included in the following chapters.
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Lodi Redevelopment Agency
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20
Feasibility Study
This part of the feasibility study includes preliminary tax increment
projections for the two alternative Survey Area boundaries, as shown
on Tables 1 and 2. The property values shown on the tables are based
on the actual 2007-08 secured value for parcels that are in each of the
alternative boundaries. For purposes of the projections, we have
assumed that the City would adopt a Redevelopment Plan by July
2008, which would make 2007-08 the base year. The first year for
receipt of tax increment would be 2009-10. We have shown the
projections over a 30 year period, since this would correspond with the
period when the Plan would be effective. The Agency would also be
eligible to receive tax increment for up to 45 years, but the final 15
years would be limited to the repayment of debt.
The projections are, in part, based on new development/redevelopment
activities that could take place within the Survey Area. The
assumptions for new development are, in part, based on information
provided by City staff. All projections have been made on the basis of
currently allowable development under the City's General Plan.
Should land uses change in the future, the scope and type of
development will be different than that shown used in the projections.
The chart below shows the potential scope of development.
Commercial Square Industrial Square
Footage Footage
666,000 924,800
The other source for tax increment growth would be turnover of
property. In order to evaluate this, we have looked at the growth in
taxable values over the past five years in the general area of the two
21
Lodi Redevelopment Agency
boundary alternative. Overall, taxable values have been growing in a
range of between 5 to 7 percent per year. This has occurred during a
period of rapidly escalating property values. For purposes of the
projections, we have assumed a 5 percent growth in taxable values.
Overall, total cumulative tax increment has been estimated on both a
future dollar basis and on a net present value basis (adjusted for
inflation). The amounts are shown in the chart below:
I
Scenario Future Dollars Net Present Value
Dollars
Survey Area Option A $440.1 Million $171.1 Million
Survey Area Option B $277.1 Million $108.2 Million
We have reduced total tax increment by the following adjustments and
liens.
1. Property Tax Administration Fees: State law allows counties to
charge taxing entities, including redevelopment agencies, for the
cost of administering the property tax collection system. The fees
have been estimated and shown on Tables 1 and 2.
2. AB 1290 Payments: Pursuant to 1994 legislation, Ala 1290, the
Agency would be required to mare payments to the affected taxing
entities from tax increment generated in a project area. The tax
sharing payments are based on a three tier formula. All payments
are made after the Agency's deposit to its housing set-aside. The
chart below shows how such payments are calculated.
22
Feasibility Studv
Tier
Payment Required
Tier 1
25% of total tax increment during the entire term
$331.9 Million
the Agency receives tax increment.
Tier 2
Beginning in the 1Ith year that the Agency
$83.2 Million
receives tax increment, an additional payment
equal to 21 % of the tax increment attributable to
growth above year 10 levels.
Tier 3
Beginning in the 31 st year that the Agency
receives tax increment, an additional payment
equal to 14% of the tax increment attributable to
growth above year 30 levels.
After reductions for the above liens, tax increment under each
alternative is shown in the chart below.
Scenario
Future Dollars
Net Present Value
Dollars
Survey Area Option A
$331.9 Million
$130.9 Mffim
Survey Area Option B
$210.1 Millim
$83.2 Million
The Agency will also be required to use at least 20% of the total tax
increment it receives for affordable housing projects and programs.
The amount available for such activities will range from
$88 million (Option A) to $55 million (Option B), in future dollars. In
present value terms, the range is estimated to be from $34
million (Option A) to $22 million (Option B).
To put these numbers in perspective, five miles of landscaped medians
would cost an estimated $2.5 million, a 10,000 square foot youth or
senior center costs $6.2 to $7.0 million, or street reconstruction for up
to five miles of streets would cost $3.3 million. Five miles of
replacement water mains would cost $6.1 million. Replacing five
miles of sewer mains would cost an estimated $3.4.million.
The above numbers are examples only. Refined program costs will be
developed as part of the detailed area documentation.
23
Lodi Redevelopment Aoencv
Table 1
City of Lodi
Redevelopment Feasibility Study
TAX INCREMENT PROJECTION -SURVEY AREA OPTION A
(000's Omitted)
(4) Total
Escalated (1) Value (3) Property (5) Tax Increment
Fiscal Prior Year New (2) Total Over Base Of Tax Tax Admin. Statutory Retained
Year Value Development Value 780,025 Increment Fees Payments By Agency
2007
- 2008
NIA
NIA
NIA
NIA
NIA
NIA
2008
- 2009
819,026
0
819,026
39,001
NIA
NIA
N/A
NIA
2009
- 2010
859,977
0
859,977
79,953
800
16
126
657
2010
- 2011
902,976
8,391
911,367
131,342
1.313
26
208
1,080
2011
- 2012
956,935
24,760
981,696
201,671
2,017
40
319
1,658
2012
- 2013
1,030,780
32,149
1,062,929
282,905
2,829
57
447
2,325
2013
- 2014
1,116,076
19,060
1,135,135
355,111
3,551
71
561
2,919
2014
- 2015
1,191,892
19,511
1,211,403
431,378
4,314
86
682
3,546
2015
- 2016
1,271,973
18,279
1,290,252
510,227
5,102
102
806
4,194
2016
_ 2017
1,354,765
76,786
1,431,551
651,526
6,515
130
1,029
5,356
2017
- 2018
1,503,129
76,546
1,579,674
799,649
7,996
160
1,263
6,573
2018
- 2019
1,658,658
27,080
1,685,737
905,713
9,057
181
1,431
7,445
2019
- 2020
1,770,024
12,589
1,782,613
002,589
10,026
201
1,713
8,113
2020
- 2021
1,871,744
1,427
1,873,171
,093,147
10,931
219
1,976
8,737
2021
- 2022
1,966,830
0
1,966,830
186,805
11,868
237
2,248
9,382
2022
- 2023
2,065,171
0
2,065,171
,285,147
12,851
257
2,534
10,060
PZIJ
Feasibilitv Studv
(4) Total
Escalated (1) Value (3) Property (5) Tax Increment
Fiscal PriorYear New (2) Total Over Base Of Tax Tax Admin. Statutory Retained
Year Value Development Value 780,025 Increment Fees Payments By Agency
2023
- 2024
2,168,430
0
2,168,430
1,388,405
13,884
278
2,834
10,772
2024
- 2025
2,276,851
0
2,276,851
1,496,827
14,968
299
3,150
11,519
2025
- 2026
2,390,694
0
2,390,694
1,610,669
16,107
322
3,480
12,304
2026
- 2027
2,510,229
0
2,510,229
1,730,204
17,302
346
3,828
13,128
2027
- 2028
2,635,740
0
2,635,740
1,855,715
18,557
371
4,193
13,993
2028
- 2029
2,767,527
0
2,767,527
1,987,502
19,875
398
4,576
14,902
2029
- 2030
2,905,903
0
2,905,903
2,125,879
21,259
425
4,978
15,855
2030
- 2031
3,051,199
0
3,051,199
2,271,174
22,712
454
5,401
16,857
2031
- 2032
3,203,759
0
3,203,759
2,423,734
24,237
485
5,844
17,908
2032
- 2033
3,363,946
0
3,363,946
2,583,922
25,839
517
6,310
19,013
2033
- 2034
3,532,144
0
3,532,144
2,752,119
27,521
550
6,799
20,172
2034
- 2035
3,708,751
0
3,708,751
2,928,726
29,287
586
7,312
21,389
2035
- 2036
3,894,189
0
3,894,189
3,114,164
31,142
623
7,851
22,667
2036
- 2037
4,088,898
0
4,088,898
3,308,873
33,089
662
8,417
24,009
2037
- 2038
4,293,343
0
4,293,343
3,513,318
35,133
703
9,012
25,419
Cumulative
Totals
440,084
8,802
99,329
331,953
Net Present Value (6)
171,074
3,421
36,732
130,921
(1) Future year property values increased at 5 percent per year.
(2) See Report for new development assumptions.
(3) Based on the application of the 1 percent tax rate to incremental value.
(4) Estimated based on 2 percent of tax increment.
(5) Payments per the provisions of AB 1290. Amount shown is net of the City share
(6) Net presentvalue calculated at 5 percent discount rate.
25
Lodi Redevelopment Agency
Table 2
City of Lodi
Redevelopment Feasibility Study
TAX INCREMENT PROJECTION -SURVEY AREA OPTION B
(000s Omitted)
(4)
- 2008
Total
Escalated (1) Value (3) Property
(5)
Tax Increment
Fiscal Prior Year New (2) Total Over Base Of Tax Tax Admin.
Statutory
Retained
Year Value Development Value 369,470 Increment Fees
Payments
By Agency
2007
- 2008
NIA
NIA
NIA
NIA
NIA
NIA
2008
- 2009
387,944
0
387,944
18,474
NIA
NIA
NIA
NIA
2009
- 2010
407,341
0
407,341
37,871
379
8
60
311
2010
- 2011
427,708
8,391
436,099
66,629
666
13
105
548
2011
- 2012
457,904
24,760
482,664
113,194
1,132
23
179
930
2012
- 2013
506,798
32,149
538,947
169,476
1,695
34
268
1,393
2013
- 2014
565,894
19,060
584,953
215,483
2,155
43
340
1,771
2014
- 2015
614,201
19,511
633,712
264,241
2,642
53
418
2,172
2015
- 2016
665,397
18,279
683,676
314,206
3,142
63
496
2,583
2016
- 2017
717,860
76,786
794,647
425,176
4,252
85
672
3,495
2017
- 2018
834,379
76,546
910,924
541,454
5,415
108
855
4,451
2018
- 2019
956,471
27,080
983,550
614,080
6,141
123
970
5,048
2019
- 2020
1,032,728
12,589
1,045,317
675,846
6,758
135
1,150
5,473
2020
- 2021
1,097,583
1,427
1,099,010
729,540
7,295
146
1,306
5,844
2021
- 2022
1,153,960
0
1,153,960
784,490
7,845
157
1,466
6,222
2022
- 2023
1,211,658
0
1,211,658
842,188
8,422
168
1,633
6,620
2023
- 2024
1,272,241
0
1,272,241
902,771
9,028
181
1,810
7,038
2024
- 2025
1,335,853
0
1,335,853
966,383
9,664
193
1,994
7,476
2025
- 2026
1,402,646
0
1,402,646
1,033,176
10,332
207
2,189
7,936
Feasibility Study
(4) Total
Escalated (1) Value (3) Property (5) Tax Increment
Fiscal PriorYear New (2) Total Over Base Of Tax Tax Admin. Statutory Retained
Year Value Development Value 369,470 Increment Fees Payments By Agency
2026
- 2027
1,472,778
0
1,472,778
1,103,308
11,033
221
2,393
8,420
2027
- 2028
1,546,417
0
1,546,417
1,176,947
11,769
235
2,607
8,927
2028
_ 2029
1,623,738
0
1,623,738
1,254,268
12,543
251
2,831
9,460
2029
- 2030
1,704,925
0
1,704,925
1,335,455
13,355
267
3,067
10,020
2030
- 2031
1,790,171
0
1,790,171
1,420,701
14,207
284
3,315
10,608
2031
- 2032
1,879,680
0
1,879,680
1,510,210
15,102
302
3,575
11,225
2032
- 2033
1,973,664
0
1,973,664
1,604,194
16,042
321
3,849
11,872
2033
- 2034
2,072,347
0
2,072,347
1,702,877
17,029
341
4,136
12,553
2034
- 2035
2,175,965
0
2,175,965
1,806,494
18,065
361
4,437
13,267
2035
- 2036
2,284,763
0
2,284,763
1,915,292
19,153
383
4,753
14,017
2036
- 2037
2,399,001
0
2,399,001
2,029,530
20,295
406
5,085
14,804
2037
- 2038
2,518,951
0
2,518,951
2,149,481
21,495
430
5,434
15,631
Cumulative Totals
277,050
5,541
61,393
210,115
Net Present Value (6)
108,222
2,164
22,845
84,213
(1) Future year propertyvalues increased at 5 percent per year.
(2) See Report for new development assumptions.
(3) Based on the application of the 1 percent tax rate to incremental value.
(4) Estimated based on 2 percentof tax increment.
(5) Payments per the provisions of AB 1290. Amount shown is net of the City share
(6) Net present value calculated at 5 percent discount rate.
27
Lodi RedevelopmentAgency
'swru
This page intentionally left blank
1J0z
28
Mif
This section of the report provides information on the types of
activities redevelopment agencies engage in as a means to alleviate
blight and includes a discussion of general methods found for
financing redevelopment.
One set of programs that the Agency may implement would be in the
area of economic development. Adoption of a redevelopment project
area would provide the Agency with the tools to alleviate blight in part
by encouraging new commercial, mixed use, and residential
development in the area through a variety of redevelopment
programs. The Agency may enter into public private partnerships by
assisting with land assembly, site preparation, offsite improvements,
disposition of property, and relocation assistance to existing property
owners and tenants.
The Agency could also encourage existing property owners and
businesses to upgrade the exterior of buildings, correct code violations,
renovate the interior of buildings and assist in installing fire
suppression systems. Such a program could provide deferred payment
and low interest loans to property owners to mare the types of
improvements described above. Expenses could also be reimbursed to
business owners for fagade improvements.
Another major area where projects may be undertaken would be the
installation of needed infrastructure. Projects in this area could
include one or more of the following:
1) Improvements to public streets including the installment of
lighting needed and desired in existing neighborhoods, and the
construction of curbs, gutters and sidewalks.
2) Storm drainage and water quality improvements.
3) Improvements to pedestrian and bicycle facilities and linkage with
other existing bicycle and pedestrian facilities in the community.
29
Lodi RedevelopmentAgency
4) Install and construct other public improvements to eliminate
blight and improve the local economy of the area, including
parking and transit facilities.
Finally, the Agency would lilcely be involved in various types of
programs to create more affordable housing in the area. A variety of
projects may be undertaken, including:
First -Time Homebuyer Assistance Programs: Programs designed to
assist first-time homebuyers to purchase homes. Housing set-aside
monies could be used provide second mortgages to bridge the gap
between the first mortgage and purchase prices.
Match to State and Federal Grants: Funds could also be used to match
other grants to provide a variety of housing opportunities.
Land Banking: Identify and purchase key properties that may not be
suitable for development at this time, but will be suitable for housing
or mixed-use development in the future. In some cases, land banking
and site assembly will be needed to remove constraints to development
on irregularly shaped or configured parcels.
New Housing Development: New housing focused on both affordable
rental and home ownership units developed in conjunction with either
local non-profit or for-profit developers. Housing may be directed at
special needs and/or incorporate self-help or other models.
Rehabilitation Pro rte: Funds to blighted properties to allow
commercial, industrial, and residential property owners and tenants
to rehabilitate, restore, and address code compliance issues.
30
RECOMMENDA TION
The final step in analyzing redevelopment feasibility is to relate
projected revenue to the redevelopment program designed to eliminate
blight. As discussed earlier, such a program could include:
• Various economic development assistance programs designed to
spur private investment
• Business attraction and retention programs
• Rehabilitation loan and grant programs
• Infrastructure upgrades and improvement
• Affordable housing programs
Based on the tax increment projections, it is estimated that the
Agency would have $83 - $131 million in tax increment revenue (in
2007 dollars), depending on the boundary alternative. A
redevelopment project would not be expected to provide the full
funding for all of the above programs, but rather would serve as one
source of funding.
Because the larger boundary provides a significantly higher revenue
stream for improvements, and appears to qualify under the CRI.
requirements, it is recommended that Option A be adopted by the City
Council as the Survey Area. A document called the Preliminary Plan
would then be prepared and submitted to the Planning Commission,
which then selects Project Area boundaries from within the Survey
Area. These actions would formally start the adoption process.
31
••, nuunu -ur•
(a)
(d)
0
Designation of a Survey Area
fb r thal d *1 C
lmpr&em t
unity
Area
Presented: November 7, 2007
Survey Area is the first
formal step in designating
the Project Area
(Health and Safety Code 33310)
• A feasibility study has been prepared to provide
information on the selection of the Survey Area
•fix public meetingsto date regarding Redevelopment
and one city-wide mailing
• Lodi Improvement Committee
• Joint City Council Planning Commission
• Budget & Finance Committee
• Planning Commission
• Budget & Finance Committee
• City Council
June 19, 2007
July 19, 2007
Oct. 23, 2007
Oct. 24, 2007
Oct. 27, 2008
Nov. 6, 2007
Feasibility study considered
two optional areas -the larger
area with additions emerging
asthe preference
Option A
1,583 Acres
$331.9 million
(approximate)
future dollars
$130.9 million
net present
value
ed W*
_l-: �_ - _
-open
PFI. . . . . . JR
ki
EF
J.
err r
. . . . . . . .
T
Ib FGURE 1
A
M Suro"Atea 006n A
ME
U"ft
f
4 W 12W 21100
Orel r roT "ovi
W
Z)
z
W
W
w
Base Value
HOW TAX INCREMENT IS DIVIDED
Base Year 10 Year 20 Year 30 Year 40 Year 45
Yea r
Tax Increment Example
Original property valuation
$500,000
Property tax at 1 % of assessed value
$5,000
City's share at 16% of 1 %
$800
Property upgraded then sold
$750,000
New property tax at 1 %
$7,500
Tax increment $7,500 - $57000)
$2,500
City's share of tax increment at 80%
$2,000
Total Lodi share
$2,800
(without RDA)
$1,200
RESOLUTION NO. 2007-220
A RESOLUTION OF THE LODI CITY COUNCIL DESIGNATING A
REDEVELOPMENT SURVEY AREA FOR STUDY PURPOSESAND
DIRECTING THE LODI PLANNING COMMISSION TO SELECT THE
PROJECTAREA FROM ALL ORA PORTION OF THE SURVEY AREA
WHEREAS, the Lodi Redevelopment Agency has initiated the process to adopt a
Redevelopment Plan; and
WHEREAS, the first formal step in the adoption process is to adopt a Survey Area for study
purposes to determine whether all or a portion of the Survey Area qualifies under State law for
inclusion in a redevelopment area, and if it is feasible, to adopt a Redevelopment Plan for the area;
and
WHEREAS, the Agency will not have eminent domain authority in the subsequent
Redevelopment Plan; and
WHEREAS, the proposed Survey Area is graphically depicted in Exhibit Aattached hereto
ands incorporated herein by reference; and
WHEREAS, in accordance with Section 33322 of the California Health and Safety Code, the
Lodi Planning Commission shall, at the direction of the City Council, select an area (the "Project
Area") from within the boundaries of the Survey Area and formulate a Preliminary Plan for the area
so selected.
NOW, THEREFORE, the Lodi City Council hereby resolves as follows:
SECTION 1: The area depicted in Exhibit A is hereby designated as the Redevelopment
Survey Area for the Lodi Community Improvement Project Area.
SECTION 2: The Survey Area requires study to determine if adoption of a Redevelopment
Plans feasible.
SECTION 3: The Planning Commission is hereby authorized and directed, in cooperation
with the Agency, to select the boundaries of the Project Area from within the Survey Area, and to
formulate in accordance with the law the Preliminary Plan for the selected area.
Dated: November7,2007
I hereby certify that Resolution No. 2007-220 was passed and adopted by the City Council of
the City of Lodi in a regular meeting held November 7,2007, by the following vote:
AYES:
COUNCIL MEMBERS— Hansen, Katzakian, and Mayor Johnson
NOES:
COUNCIL MEMBERS— Mounce
ABSENT:
COUNCIL MEMBERS— None
ABSTAIN:
COUNCIL MEMBERS— Hitchcock
NIFER . PERRIN
eputy City Clerk
2007-220
L----]