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HomeMy WebLinkAboutRDA WORKSHOP 08-30-82DATE: August 19, 1982 REDEVELOPMENT AGENCY WORKSHOP 8-30-82 Inter-Corn FROM: SUBJECT: REDEVELOPMENT AGENCY BOARD OF DIRECTORS BILL HUSTON, EXECUTIVE DIRECTOR AUGUST 30, 1982 WORKSHOP - ESTABLISHING AGENCY PROJECT PRIORITIES The purpose of the workshop is to establish the Agency's priorities in order that the Agency's consultant can complete the financial plan. As pointed out during the presentation regarding the first phase of the financial plan, the consultant's recommendations with regard to the type of financing will depend upon the projects selected. This memorandum includes a general description of projects identified to date (through the Agency's five year capital improvement plan and previous workshops) and staff's recommendation regarding project priorities. In considering its priorities, the Agency should take into account two general criteria: 1. Will the project result in additional tax increment to the Agency? This criterion relates to the basic purpose of the Agency which is to eliminate blight and stimulate and facilitate economic development within the Town Center Project area. The basic policy issue is to what extent should the Agency become involved in guiding the land use patterns and quality of development in the project area. The intent of appropriating Agency funds for this purpose would be to maximize tax increment income through leverage. Use of Agency funds to acquire land for subsequent resale to a developer is an example of how the Agency can affect the type and quality of development in the project area and increase tax increment revenue. 2. Does the project benefit the project area or the immediate neighborhood in which the project is located? This criterion relates to public improvement projects funded through the Agency. Potential public improvement projects should be assessed from the standpoint of their benefit to the project area and the balance of the community where it serves a need outside the project area. Although public improvement projects do not directly affect tax increment to the Agency, they can indirectly where the project stimulates or facilitates a private improvement. The Agency should also utilize its Statement of Agency Policies, a copy of which is attached, adopted on November 2, 1981, in determining its priorities. POTENTIAL PROJECTS Listed below are projects included in the Agency's capital improvement program and projects discussed ~t previous workshops: 1. City Hall Expansion * Estimated Cost: $2,900,000 DESCRIPTION: Acquisition of land and expansion of the City Hall complex, including the Police facility, to accommodate future growth. 2. Undergrounding Utilities * Estimated Cost: $1,568,800 DESCRIPTION: Undergrounding of utility lines and new street lights at five locations within the project area. 3. Columbus Tustin Park Comunity Center * Estimated Cost: $2,000,000 DESCRIPTION: Construction of a community center. The Agency has retained an architect who is working with City staff and a Citizen's Committee in assessing the components of a Community Center facility and developing a site plan. Additional monies are available through the General Fund and a State bond program. The cost of this project will depend upon the size of the facility and whether it will be phased due to the physical' constraints of the site. 4. Senior Citizen Center Estimated Cost: Not available. DESCRIPTION: Acquisition of an existing structure and its rehabilitation for use as a senior citizens center or construction of a building on an existing City site or one acquired for this purpose. The City Council has allocated revenue sharing funds for the purpose of determining the options. For planning purposes, an estimated cost of one million dollars should be used. 5. Peppertree Park Expansion * Estimated Cost: $200,000 DESCRIPTION: Acquisition of School District property adjacent to Peppertree Park. To date, the intended use would be public parking, however, other potential uses include a senior citizens center and/or expansion of the park. 6. Prospect Avenue Improvements * Estimated Cost: $489,000 DESCRIPTION: Street widening and reconstruction (between Main and First), new signals at First St. and a storm drain. Alley - Bonita from Newport Ave. t~ Orange * Estimated Cost: $28,500 DESCRIPTION: Reconstruction of an existing alley. 8. Public Par~ing Facilities Estimated Cost: Not available. DESCRIPTION: Construction of public parking facilities in the Old Town area. It has been suggested that up to three additional parking facilities be constructed (either joint public-private or entirely public parking). For purposes of comparison, the cost of the City's portion of the parking facility, not including land, at the Stevens Square development will be approximately $675,000. The cost of additional parking facilities would be a function of land acquisition and type of facility (at grade vs. decked). A possible cost offset would be the ability to sell parking spaces to developments benefiting from the facility. For example, a particular development could be permitted a higher density through waived or reduced parking with the condition that parking spaces be purchased or leased from the Agency. An alternative is the financing of parking facilities through an assessment district. An important consideration is projected demand for parking which will be dependent upon the type of development in the project area. 9. Senior Citizen~using Estimated Cost: Not available. DESCRIPTION: Purchase of land for subsequent re-sale or long term lease to, a developer under the condition that the property be used for senior citizen housing. The developer would covenant that the land be for senior citizen housing for a term prescribed by the Agency. The cost would depend upon the amount of land purchased. If the land were acquired by the Agency for resale, the cost of initial acquisition would be recovered less any relocation expenses of the Agency. The Agency has received an opinion from the City Attorney's office regarding this potential project. Newport Avenue Extension Estimated Cost: $1,000,000 DESCRIPTION: Extension of Newport Avenue to Edinger Avenue. An environmental impact report regarding the traffic impact of an at-grade crossing is being prepared for submittal to the State Public Utilities Commission which must approve the project. 11. Acquisition and Sale of land Estimated Cost: Not available. DESCRIPTION: Acquisition and sale of land within the project area. At this point, the Agency will be dealing with the policy issue of whether it should acquire and sell land within the project area in order to stimulate and facilitate development which is consistent with agency goals and policies. It is not necessary to identify specific parcels for acquisition when determining Agency project priorities. Decisions about what land should be acquired and for what specific purpose can be made after the Agency has sold bonds and has considered its options and the benefits associated with each possible acquisition. The cost depends upon the amount of land acquired and as a practical matter upon the availability of funds. 12. Repayment of General Fund Loan Estimated Cost: $1,125,000 DESCRIPTION: Repayment of the loan from the General Fund to the Agency made when the Agency was established. The loan was made in order for the Agency to incur debt (a requirement of State redevelopment law) and to cover Agency expenses at a time when its tax increment flow was minimal. The Agency borrowed an additional $450,000 from the Genera] Fund in 1981-82, however, a repayment schedule was committed to through an Agreement between the Agency and City. * Indicates projects included in the Agency's current five year capitel improvement plan. STAFF RECOMMENDATION: It is important to keep in mind that issuance of tax allocation bonds by the Agency at this time does not preclude it from funding other projects in the future. This will be the case even if the maximum amount of bonds are issued based upon 1982-83 tax increment revenue. As discussed at the August 16, 1982 Agency meeting, the financial consultant will present the results of a trend analysis at the August 30 workshop. The trend analysis will illustrate to the Agency the difference in future tax increment income between the 2% growth rate (which is in addition to projects anticipated to be constructed) and a higher growth rate based upon past trends. This will provide the Agency greater flexibility in determining its project priorities since it can expect additional income (the amount of annual tax increment received which exceeds the annual cost of paying off the bonds) to be available in future years for projects not funded through the initial sale of bonds. Listed below are the projects recommended by staff to be included in the Agency's 1982-83 bond program: 1. Newport Avenue Extension Amount: $1,000,000 DESCRIPTION: Extension of Newport Avenue to Edinger Avenue by construction of an at-grade crossing at the Southern Pacific Railroad tracks. As indicated above, the EIR for the project is currently being prepared. Construction of the extension is dependent upon approval by the State PUC. If federa] funds are also available for the project, RDA funding would be reduced correspondingly and reallocated for other Agency projects. Including this project assumes that the EIR will substantiate that extension of Newport Avenue will provide traffic relief on Red Hill Avenue. 2. Repayment of General Fund Loan Amount: $1,125,000 DESCRIPTION:. Repayment of the loan from the General Fund will provide the flexibility to finance other projects outside the Town Center Project Area. The Water Fund has a $900,000 bond principal payment due in 1985 yet does not have funds reserved for the payment. Staff would recommend that after repayment of the General Fund loan from the proceeds of the Agency's bond sale, that the General Fund loan $900,000 of the repaid amount to the Water Fund to be reserved for payment of the 1985 principal amount. The loan could be made with a fixed repayment schedule from the Water Fund to the General Fund. As the loan is paid off, the General Fund will have resources available for capital improvement projects notwithstanding whether or not they are located in the Town Center Project Area. 3. Recreation Center/senior Citizens Center Amount: $1,000,000 DESCRIPTION: This amount would be allocated for either of these projects once decisions have been made by the City Council regarding the location, scale and timing of recreation center and senior citizen facilities. The Columbus-Tustin Site Plan, Parks and Recreation Master Plan and Senior Citizens Center Site Location projects will be completed this fiscal year. These projects will provide the City Council the necessary information (needs assessment, options, cost, etc.) to make its decisions regarding recreation center and senior citizen facilities. The Citizen Advisory Committees will also have provided their recommendations to the City Council. The recommended amount of $1,000,000 can be combined with $572,000 currently allocated in the General Fund for a recreation center and $125,000 in State bond funds currently allocated for Columbus-Tustin Park. The City Council could choose to construct or purchase and rehabilitate a structure within these dollar parameters (total of $1,697,000) or supplement that amount with additional funds (General Fund, future tax increment, etc.). 4. Cit~ Hall Expansion Amount: $500,000 DESCRIPTION: Space needs studies completed to date demonstrate that the civic center complex will have to be expanded in the future through land acquisition or building additions within the existing site. In either case, the recommended amount of $500,000 will not cover the full cost of expanding the civic center. However, because of the limited bonding capacity of the Agency at this time and other important priorities, it is felt that other means of financing will have to be explored to supplement the recommended amount. Staff will be recommending to the City Council at a later date that an architect be retained to prepare recommendations regarding an expansion program. Options would include additions to the existing building, construction of a new Police facility (and expanding City Hall into the present Police facility) and others identified as the evaluation is commenced. 5. Land AcquisitJon Amount: $2,000,000 DESCRIPTION: This amount would enable the Agency to acquire sites (and related costs of relocation, etc.) which it determines present the best opportunities to maximize the commercial potential of the Town Center Project Area. As indicated above, the process of identifying specific sites and means of conveying the properties and for what purpose can be-initiated after bonds have been sold. A land acquisition program would operate on a revolving basis, i.e., as land is sold income will accrue to the Agency. A dollar for dollar return more than likely will not be realized since the Agency will incur relocation and other costs associated with land acquisition. The Agency will also want to consider the possibility of participating in projects by, for example, constructing off-site improvements if a particular project warrants Agency financial participation. It should be expected that a substantial portion of the $2,000,000 will be returned to the Agency for additional land acquisition or other Agency projects. And as indicated above, the Agency will realize additional tax increment revenue as private development occurs through its efforts. SUMMARY: Listed below are the potential Agency projects and staff recommendations: Potential Projects City Hall Expansion Undergrounding Utilities Columbus-Tustin Center Senior Citizen Center Peppertree Park Expansion Prospect Avenue Improvements Alley - Bonita Public Parking Facilities Senior Citizen Housing Newport Avenue Extension Land Acquisition Repayment of Agency Loan Total $2,900,000 1,568,800 2,000,000 200,000 489,000 28,500 1,000,000 1,125,000 $9,311,300 Staff Recommendation Newport Avenue Extension Loan Repayment Recreation Center/Sr. Citizen Center City Hall Expansion Land Acquisition 1,000,000 $1,125,000 1,000,000 500,000 2,000,000 Total $5,625,000 The Agency's consultant has determined the Agency's current net bonding capacity to be $5,431,000. However, the Agency has a current fund balance of approximately $338,000 which can be used to'supplement the net bond amount. WH: dmt TUSTIN REDEVELOPMf~T AG~INCY STATEMENT OF AGf~CY POLICIES Priority for the expenditure of tax increment revenue will be given to projects whid~ stimulate and facilitate sales tax generating con~nercial projects. e Agency funded capital iaprovements within public rights-of-way (infrastructure) should be integrated with private developments which are consistent with the Agency's adopted redevelotx~ent project area plans. e Agency funded capital .improvements within public rights-of-way should be prioritized and scheduled so as not to preclude the option to finance critical non-capital improvement projects. Consistent with California Redevelolmnent Law, the A~ency will exercise its ~owers of eminent domain, condemnation, or negotiated acquisition and sale of land where such actions result in achievement of objectives set forth in r~development project area plans. These powers shall only be exercised where it cs be demonstrated that without Agency participation, a development (consistent with the objectives of the project area plan) would not otherwise proceed. A financial analysis will be prepared which identifies the most appropriate means of financing Agency projects. The financial analysis will be prepared taking into account State law~ concerning debt (incurring debt to receive annual tax increment) and the Agency's project plans (level arzt rate of Agency expenditures). 6. Land use, economic base and financial feasibility studies will be prepared for the Irvine land to determine the need for Agency participaticn in development of this area. 7. Project area plans will be prepared for the Bonita/B~ya~t area and the South Tustin area (hounded by Newport Avenue and Highways 5 and 55). A legal and financial analysis will be prepared concerning the use of Town Center Project Area tax increment funds for public improvements (e.g. Newi~rt Avenue extension) outside the Project Area but which benefit it (e.g. improved traffic circulation).