It would appear that Davis will continue its Redevelopment Agency, at least if council passes, which it undoubtedly will, an ordinance drafted by Ken Hiatt, Deputy Executive Director of the Redevelopment Agency, and Katherine Hess.
Staff recommends the council “introduce Ordinance providing for the continuation of the Redevelopment Agency and its ability to collect property tax increment.”
The Redevelopment Agency collects roughly $10.5 million in tax increment revenue each year with more than half going to debt service and pass-through payments.
This action, as we have been covering, is necessary due to the fact that the Governor signed the state budget that included two measures that deal with the dissolution of Redevelopment Agencies, but also a special provision in AB1X 27 which, “provides an alternative to dissolution through payment from a City/Agency to school districts and special districts.”
According to city staff, “Cities opting to make the payment must adopt an ordinance stating such commitment by October 1, 2011. The first payment is due January 15, 2012.”
For the Davis Redevelopment Agency, the projected 2011-12 payment totals approximately $3.5 million, half in January and half in May.
Payments in future years are estimated by city staff to be at $815,000 for 2012-13.
Writes City Staff, “If the Davis Redevelopment Agency is dissolved, it will no longer collect tax increment. All Agency assets would be transferred to a “successor agency” for liquidation.”
However, it is pointed out that the California Redevelopment Association is preparing to file a law suit against the legislation and it will likely be some time before any litigation is resolved. Writes city staff, “Even if CRA’s request for a stay is granted, delaying the requirement for continuation payments, redevelopment agencies’ future status will remain in limbo until the final court resolution.”
The lawsuit claims that the Legislature violated Proposition 22 when it approved a pair of bills to eliminate the agencies and require them to make additional payments to schools if they want to continue operating.
Proposition 22 was passed just last November, and prohibits the state from raiding redevelopment, transportation or other local money.
“We’re deeply disappointed that the governor has joined the Legislature in blatantly violating the California Constitution because it was just seven months ago that the voters of California said that redevelopment funds should be spent for redevelopment and not diverted by the state for other purposes,” said Chris McKenzie, president of the League of California Cities in a statement late last week.
In particular, Mr. McKenzie criticized the provision that allows redevelopment agencies to continue if they agree to divert money to schools and other local government.
“The governor provided the elimination bill,” Mr. McKenzie continued. “What the Democrats did is they added a gun-to-your-head provision. The second one said, ‘Oh, but if you pay the extortion – the $1.7 billion – you won’t be eliminated.’ “
Monterey-area cities made news this week as they joined in the lawsuit.
“These bills are unconstitutional, plain and simple,” said Monterey Mayor Chuck Della Salla. “They violate numerous provisions of the California constitution… Unless overturned, these bills will destroy one of the strongest local tools we have as cities to generate jobs and to revitalize older, downtrodden neighborhoods in need.”
Salinas’ Mayor Dennis Donohue called the payments “extortion” which he said was “unlawful, illegal, and unconstitutional.” He added, “The elimination of redevelopment will destroy approximately 386 construction jobs and 100 new permanent jobs in our city.”
The lawsuit, which is being filed directly with the State Supreme Court, alleges that the change in redevelopment was in direct violation of November 2010 Proposition 22. That ballot initiative, colloquially known as Stop State Raids, was officially titled by then-Attorney General Jerry Brown “(Prohibit) The State From Borrowing Or Taking Funds Used For Transportation, Redevelopment, Or Local Government Projects And Services. Initiative Constitutional Amendment.”
“Proposition 22 couldn’t be more clear. But the politicians in Sacramento aren’t listening,” said Scotts Valley Councilmember Stephany Aguilar. “So now cities are forced to sue in the Courts to uphold the constitution and the will of the voters.
Davis City Council’ actions would allow it to retain the agency should the lawsuit being filed by the League of Cities and the Redevelopment Association prove unsuccessful.
The city staff report explains that the two calculation “differ based on which section of the legislation is applied for the distribution of the Agency’s tax increment.”
City staff argues, “Although Agency funds have less flexibility than property tax flowing to the City’s General Fund, the Agency would retain double to triple the amount of money that the City would gain if the Agency is dissolved.”
A critical for the city is maintaining the pass-through agreement with the county, in which just under $3 million of that $10.5 million is “passed through” to the county in exchange for the county’s agreement not to develop on Davis’ periphery.
According to the staff report, “The Pass-Through Agreement with Yolo County provides that the Agency will pass the County’s share of property tax revenues back to the County. The Agreement provides that the Agency may stop making these payments, estimated at $2.7 million for FY 2011-12, if the County approves urban development near Davis over the objections of the Agency.”
However, the statute appears to have conflicting sections regarding pass-through agreements.
Writes city staff, “One section indicates that pass-through payments to other taxing jurisdictions continues upon dissolution of the Agency. The other section appears to place a cap in the amount of such payments.”
City staff states, “Our fiscal consultant has estimated that the latter provision of the legislation could reduce the pass-through to the County from $2.7 million to $700,000. However, it is not clear whether our Agency, if dissolved, would have the ability to invoke the land-use provisions of the Pass-Through Agreement. Making the continuation payment would preserve the Agency’s rights and obligations under the Pass-Through Agreement.”
So, for those concerned about the pass-through agreement, under the second interpretation that agreement is now in question even with the continuation of the RDA.
For those concerned about affordable housing, “If the Agency is dissolved, there would be no obligation to continue setting aside funds for affordable housing. The City may choose to assume the assets of the Agency’s housing program (and the City has already assumed the DACHA homes). If the City does not so choose, the housing assets will be transferred to the local Housing Authority.”
The staff report continues, “If the continuation payment is made, the Agency would continue to be required to use twenty percent of its gross tax increment for affordable housing. The legislation does not allow use of the housing fund balance to make this year’s continuation payment, but does provide that the 2011-12 housing contribution ($2.1 million) may be used for a portion of the continuation payment. Future housing fund revenue and fund balance may not be used for subsequent continuation payments. For future years, therefore, the proportion of Agency discretionary resources dedicated to affordable housing will increase.”
They add, “In September, staff will return with a recommendation on the proportion of the continuation payment that should come from the housing set-aside. The decision will be informed by the status of the New Harmony project and the status of the former DACHA homes.”
Finally the city has authorized several major capital projects in anticipation of the elimination of RDA money.
They write, “Staff’s understanding is that the downtown parking structure and the hotel/conference facility continue to be the two biggest priorities for the Agency. At this time, staff believes that Agency resources, even after the continuation payment, may be sufficient for those two projects.”
We continue to find these priorities questionable and ask that the council reconsider moving forward at this time, in light of the likelihood that the redevelopment agency will apparently move forward in one way or another.
—David M. Greenwald reporting
Are you then against the staff recommendations?
If the staff recs are not approved, what is the status of the bond loans the CC incurred several months ago.
Could this be ‘caught between a rock and hard place’?
I urge the city council to dissolve the RDA and allow the property tax increment funds to go to the general fund. Downtown projects can compete with other funding needs in the city.
I remind readers that the RDA board is composed of the city council members. So the same people will be making these funding decisions either way, and none of the money will be siphoned off to pass-through agreements unless the council decides so. If the RDA is dissolved, none of the money will be mandated to the school district or other state-ordered uses. There will be more money available if the RDA is dissolved, and it can be used city-wide.
Presently the RDA directs all these South Davis property tax (increment) funds to downtown projects. Those are nice, and some going forward may prove worthy such as the parking structure. But there is no blight downtown, and there is no reason downtown should reap all the benefit of these funds in these times of limited fiscal means.
The Davis RDA was never about blight. There is virtually no blight in the RDA area. There is blight elsewhere in Davis.
Anybody care to take a tour of east Davis to see where some pedestrian bulbouts, visioning workshops, retail enhancements, city easement improvements, and other blight-fighting projects could be beneficial?
[quote]We continue to find these priorities questionable and ask that the council reconsider moving forward at this time in light of the likelihood that the redevelopment agency will apparently move forward in one way or another.[/quote]
Why do you find the priorities questionable? Nor is it clear what you mean by “ask the council reconsider moving forward at this time in light of the likelihood that the redevelopment agency will apparently move forward in one way or another”…
[quote]That ballot initiative, colloquially known as Stop State Raids, was officially titled by then-Attorney General Jerry Brown “(Prohibit) The State From Borrowing Or Taking Funds Used For Transportation, Redevelopment, Or Local Government Projects And Services. Initiative Constitutional Amendment.”[/quote]
Sounds like Brown was for stopping such raids, and is now against it? Or did Brown just have to name the bill, but did not necessarily support or oppose the bill? Does anyone know?
[quote]I urge the city council to dissolve the RDA and allow the property tax increment funds to go to the general fund. Downtown projects can compete with other funding needs in the city.
I remind readers that the RDA board is composed of the city council members. So the same people will be making these funding decisions either way, and none of the money will be siphoned off to pass-through agreements unless the council decides so. If the RDA is dissolved, none of the money will be mandated to the school district or other state-ordered uses. There will be more money available if the RDA is dissolved, and it can be used city-wide.
[/quote]
I agree with Don’s comments above. I know there is an argument that we need RDAs because otherwise infrastructure will be ignored, but this council has at least shown that it recognizes we cannot ignore infrastructure. It also makes no sense to me that infrastructure should be limited to South Davis.
Many RDAs statewide are boondoggles and Brown is right to cut them off, imho.
[quote]I agree with Don’s comments above. I know there is an argument that we need RDAs because otherwise infrastructure will be ignored, but this council has at least shown that it recognizes we cannot ignore infrastructure. It also makes no sense to me that infrastructure should be limited to South Davis.
Many RDAs statewide are boondoggles and Brown is right to cut them off, imho.[/quote]
I respect your point of view, but think about the following:
1) The next city council may not be as responsible about infrastructure;
2) Instead of throwing out RDAs altogether bc there have been SOME abuses, redefine them more appropriately to remove the incentive for such abuses.
Actually, Elaine, I don’t consider the Davis RDA to be a case of abuse. I just think RDA’s in general are misleading: in many cases there is no blight involved in the formation of the RDA nor the projects funded. Certainly there is no blight in Davis that is being addressed by the Davis RDA. The history of the RDA is that it was created essentially to provide guaranteed funding for freeway infrastructure and the pass-through agreement with the county. And they are simply unfair: funds from South Davis (and downtown) property owners are being used exclusively to fund downtown projects.
I have no problem with many of the projects that the Davis RDA has funded. I do think that going forward there may be better uses for that money.
In fact there is no specific obligation to fund infrastructure projects. Here are some examples from the current projects being considered:[img]http://peoplesvanguard.com/RedevelopmentAgencyBondIssue1.jpg[/img]
Since I have not discussed the pass-through agreement implications at a public meeting, I think it prudent to refrain now (Brown Act). However, I will have a lot to say about it at the meeting Tuesday, and will be happy to report what I have said on the Vanguard after the meeting.
“Why do you find the priorities questionable?”
Why are you using RDA money to put parking on the EF/ 34 street project, when you have a half empty parking structure on G St a block away (quite literally). If you want to add parking, why not build up at the railroad station. Why would you want to divert all the traffic towards that part of the core?
Interesting point about the rail station. I wonder how much sense that would make. I suspect it would be only marginally more used than the G St. However, geographically, there isn’t much of a difference between there and the current project.
To Don Shor: If RDAs were reformed to include only true blight – in other words change the definition of blight – then there would be the change you want to see…
[quote]Why are you using RDA money to put parking on the EF/ 34 street project, when you have a half empty parking structure on G St a block away (quite literally). If you want to add parking, why not build up at the railroad station. Why would you want to divert all the traffic towards that part of the core?[/quote]
Are you talking about the half empty garage at the movie theater near the train station? I agree with you – I am not convinced we need another parking garage downtown IF AND ONLY IF the current one is being underutilized. Are you certain that is the case? Also, is the new proposed one only ONE block away from the old one?
Don has the right approach. Get completely out of the RDA business ASAP! While there might not be certifiable abuse in the Davis history, there certainly has been something close to fraud, favoritism and serious waste.
Has anyone reported who is PAYING (property owners in the “blighted” area) and who is BENEFITING (county government employees, downtown businesses, imported affordable-housing program participants who’ve already left town with their profits, insiders who get sweetheart development deals without fair competition, etc.)
In my view, the affordable housing program is the closest thing to true abuse in the RDA funding episodes. In addition, the projects have have been incredibly ineffective. For more than a year, I’ve been asking those involved if anyone can point to a Davis affordable project for which they’d declare their unqualified pride. No takers so far.
How many millions of Davis “blight area” tax dollars have been siphoned off to Yolo County coffers in an attempt to keep developments away from our borders because we’re afraid expanding our area of influx might increase our responsibilities. How have “blight area” residents benefitted from this official multi-million dollar blackmail waste?
How did “blight area” laundered money do anything for that area when our city council spent it on Zipcar subsidies, Hanlees’ loans, Mishika’s new home (with a new $100,000 bill to restore a water pump house that likely would have been fine if not moved), underused public facilities (Bicycle HoF building stolen from our youth, etc.), financing other proposals brought in by business owners and funded without competition, and on and on….
California’s RDA association has down an excellent job lobbying to redirect ever-increasing tax revenues into the RDA pot, to expand the eligibility to non-blight purposes so every community can get big pieces of the action and to keep legislators aware of any challenges to the bonanza.
The acknowledged expert of California state funding told our council that the RDA program has directly reduced the amount of taxes that would have gone to our schools and our city’s general fund. Argue the point if you want, but he did write the book. Please list your credentials or sources if you want to pick away at this.
RDA funding also brings unhealthy dimension to any spending debate. Look up any discussion on any controversial project to see how many times advocates use, “well, it has to be used for RDA purposes anyway,” as though it isn’t real money. I certainly trust our city council decisions on general fund spending much more than ANY purpose for which someone wants to spend RDA money.
Finally, if we get out of the program before Gov. Brown forces us to, we’re bound for Heaven*.
– – – – – – – – –
*Because more deserving, more blighted, poorer communities will have additional “blight” funds to fix real problems.
[i]”If you want to add parking, why not build up at the railroad station. Why would you want to divert all the traffic towards that part of the core?”[/i]
Putting a multi-story parking garage on the SP Depot lot does make some sense. It is already over-subscribed and it’s further from the lot at 4th and G than the E-F proposed lot would be.
I think one of the main reasons the city is going for the E-F lot is because it is the biggest core area lot west of F Street.
If a smaller footprint could be made to work, I think the lot south of the E Street Plaza (the pay lot) makes more sense. It is more central to the core area.
Another spot I have fancied, but likely is impractical is the southeast corner of 2nd and B Streets, where Jim Kidd’s strip-mall is located. My vision for that space is a 4 story stepped back building, with the first floor being retail out to 2nd Street and out to B Street. The upper three floors, accessed by a ramp on 2nd Street behind the sorority house, would be for parking.
The reason I favor that location is that part of the core area has the greatest imbalance of supply and demand for parking. Because of people who cannot park on campus but want to park nearby, it is very hard to find a free parking space anywhere in that neighborhood.
Yet I concede it is impossible. The neighbors would probably have a cow over a four-story building there, even though it would add a lot of new retail and it could not be any uglier than what is there. Also, I doubt Kidd would go for it, even if it made his property worth more.
It’s amazing to me that the biggest impact of the removal of RDA funding, as far as I’m concerned, would be the two seconds it would take the county to rip up the pass-through agreement… yet nobody talks about it. Odd.
JustSaying: In defense of the actions with the cycling HoF, the youth center was quite underutilized, largely due to the utilization of on-campus after-school programs.
Re: youth center — underuse was claimed at the time, but based on very limited information, by staff in support of the bicycle hall of fame moving to that facility. The way it was handled was a travesty.
Re: 3rd & B — that building combines the best of both worlds: incredibly ugly architecture mixed with a terribly wasteful interior design. Good job, city planners who approved that piece of dreck. It’s only saving grace is that it’s only a hundred yards from the L&S piece of concrete sh!t on campus.
Davis and Woodland are blessed with a number of very good architects, including especially Richard Berteaux in Davis and McCandless and Assoc. in Woodland. I’m also a big fan of Betty Woo’s work. Maria Ogrydziak (esp. The Co-op on G) and Bob Lindley (esp. The Roe Building) have done some nice projects.
Yet looking at 3rd & B and the USDA disaster and esp. the concrete monster on A Street, one really would not know that Davisites have any aesthetic taste in building design. It’s a shame we are stuck with those eyesores.
[quote]It’s amazing to me that the biggest impact of the removal of RDA funding, as far as I’m concerned, would be the two seconds it would take the county to rip up the pass-through agreement… yet nobody talks about it. Odd. Justin Kudo[/quote]I will speak to this Tuesday night.
Rich,
Any parking lot close to campus will be used for campus parking. Even two hours is enough time to get to class and back from B Street, and the idea of a parking structure is to allow shoppers more than two hours downtown without worrying about a ticket. It is amazing how quickly the campus destination parking falls off the further you get from campus. People won’t walk very far.
A have always said that we don’t have visible enough signage directing cars to the 5th and G lot. I made a big issue about this a few years ago tasteful but invisible signs were added. I have always said that we need the fairly ugly blue signs the the big white P, even if it doesn’t look great.
But the fatal flaw with the 5th and G parking structure is that we don’t own it. Just prior to 2000 when I got on the council, the previous council helped finance the 5th and G parking structure but left the ownership in the hands of the Yackzans — something I would never have voted for. The city only has a lease on it, which will expire.
We are not going to get another RDA, so this is our chance to build a parking structure that we actually own. Ken Hiatt also figured that if we worked with the Yackzan’s on the project, it would be contingent on extending our lease on the 5th and G project for many decades.
I haven’t seen any plans for the proposed parking structure, and interested in seeing it and also in the public feedback. I am not wedded to it, but our merchants do need parking.
[i]”I haven’t seen any plans for the proposed parking structure, and interested in seeing it and also in the public feedback.”[/i]
Katherine Hess showed the preliminary plans for the E-F garage to the HRMC maybe 3 months ago. It will have new retail on the ground floor facing both E Street and F Street (if I recall correctly). The plan is for the retail portions of the building to be sold off to private landlords. The garage is going to be 4.5 stories. That is, four stories on one side, five on the other.
[i][quote]”JustSaying: In defense of the actions with the cycling HoF, the youth center was quite underutilized, largely due to the utilization of on-campus after-school programs.”[/quote][/i][b]Justin[/b], you may well have been much closer to and involved with the youth center than I was.
But, I saw groups of kids there when I was at the building for various programs and events. Some of them probably felt more welcome at the center than at the on-campus, after-school programs. In addition, the building was used by various groups for training sessions and meetings.
I also remember folks speaking out against the take-over, but it was too late by the time word of the plans got around town.
What numbers of youth served in a year would have been adequate for you feel the facility was a worthy enough investment to maintain for our children?
How much did the city program suffer from inadequate funding and make it difficult to draw more kids to that great location? What part did imposing admission fees play? David has been on top of this story for quite awhile:[quote][u]Vanguard[/u] Flashback:[i] “However, due to budgetary problems this year, City Staff is recommending that the Golden Heart Award and our “commitment to the youth of our community” be canceled.”[/i] (1/27/09)[/quote]I’m not sure what part of kicking out the kids Don calls a travesty, but the message that the actions by staff/council sent to all residents about their priorities for our city really sucked.
I’ve stopped at the [s]Youth Center[/s] Bicycle Museum several times this past year; it’s never been open when I’ve meandered by and wanted to get in ($5 or $3 for kids) to see if the Pierce Miller Collection of antique bicycles ever got moved over from UCD. Guess I’ve never happened by Wednesday 4-8 p.m. or Saturday 10-2. [b](Talk about “under-utilized”!)[/b]
By contrast, the Bicycle Museum of American is open 11 a.m. weekdays and 11-2 on Saturdays ($3 or $1 for kids). But, it takes time to check out the 300 bikes they’ve put on display, with 700 more stashed away for future viewing.
I love the fact that we were successful in getting the HoF&Museum to our town and hope it’ll grow into an important destination that will draw visitors. I hate the price we paid, especially when more suitable facilities could have been obtained or built. Is it even possible that RDA funds were involved here–first, to build a center for our youth in a prime spot…and/or, later, to kick them out?
I’m pleased that the city maintains “Youth Center activities” at various venues, including The Vault (bring $1 a day or $25 for the summer). (Could Andrew appreciate the irony of the Youth Center program ending up at MLK High? RIP.)
[b]Rich[/b], why are you so testy tonight? Have you contemplated what could be done with our major downtown “dead zone”? The [u]Enterprise[/u] buildings also won’t show up in any quality design magazines.
More serious, though, is the way the newspaper complex space “cuts” those blocks instead of being a continuation of “active” downtown stores, eateries, etc.
Depending on how things are going on any given day, I expand my “dead zone” designation to include Davis Hardware’s building collection. But, if they moved out, where would we buy our underwear?
[b]Sue[/b], why are you so testy tonight? For what reason(s) do you call the lease agreement with the Yackzan Group “the fatal flaw with the 5th and G parking structure….” How did what was seen as a win-win by members of that council become a flaw (a fatal one, at that) and “something I would never have voted for”?
As I remember, the developer needed to guarantee on-site parking for the building tenants for the life of the their long lease. The city benefited by the agreement to add parking for city use in the structure. You sound so determined about this issue, but what benefit would have come to the city to build/own/manage that structure? [quote]”Ken Hiatt also figured that if we worked with the Yackzan’s on the (new parking) project, it would be contingent on extending our lease on the 5th and G project for many decades.”[/quote]If it’s important for the city to get a longer-term lease (and big blue and white P signs) at this point, couldn’t you just call up a Yackzan and ask to renegotiate, rather than threaten them with loss of the new project?
[quote]”It’s amazing to me that the biggest impact of the removal of RDA funding, as far as I’m concerned, would be the two seconds it would take the county to rip up the pass-through agreement… yet nobody talks about it. Odd.”[/quote]Excellent point, [b]Justin[/b]. I’m not sure I’ve seen much reference to this either–except in the fairly frequent RDA discussions in the good ol’ [u]Vanguard[/u]. I’m not even sure there’s a real written agreement that legally keeps the county from approving developments next door to us. It may just be an understanding that we’ve threatened to stop the pass-through millions if the county starts messing with our city borders.
If it’s the right thing to keep Davis from growing outwards, why should we have to pay off the county to assure they do right? As you suggest, will the county really quit caring as soon as the money stops? Or, have the many millions we’ve already sent north bought enough goodwill and consideration to last many years? At least, we got Don Saylor in the room to protect our no/slow growth interests.
“It’s only saving grace is that it’s only a hundred yards from the L&S piece of concrete sh!t on campus. “
So is it okay to say piece of shit on here or does it depend on who is saying piece of shit.
If you are not calling someone a pos.
[quote]Re: youth center — underuse was claimed at the time, but based on very limited information, by staff in support of the bicycle hall of fame moving to that facility. The way it was handled was a travesty.[/quote]
Completely agree!
[quote]Davis and Woodland are blessed with a number of very good architects, including especially Richard Berteaux in Davis and McCandless and Assoc. in Woodland. I’m also a big fan of Betty Woo’s work. Maria Ogrydziak (esp. The Co-op on G) and Bob Lindley (esp. The Roe Building) have done some nice projects.
Yet looking at 3rd & B and the USDA disaster and esp. the concrete monster on A Street, one really would not know that Davisites have any aesthetic taste in building design. It’s a shame we are stuck with those eyesores.[/quote]
Completely disagree!