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RDA Resolution 2003-023RESOLUTION NO. RA 2003-23 A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY REFERRING THE PROPOSED AMENDMENT TO THE REDEVELOPMENT PLAN FOR LA QUINTA REDEVELOPMENT PROJECTI AREA NO. 2 TO THE PLANNING COMMISSION OF THE CITY OF LA QUINTA, APPROVING THE PRELIMINARY REPORT, AND TRANSMITTING THE PRELIMINARY REPORT TO AFFECTED TAXING ENTITIES ON THE PROPOSED REDEVELOPMENT PLAN WHEREAS, the La Quinta Redevelopment Agency ("Agency"), is a redevelopment agency (a public body, corporate and politic) duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Community Redevelopment Law (Part 1 of Division 24 ,commencing with Section 33000) of the Health and Safety Code of the State of California); and WHEREAS, the Redevelopment Plan for La Quinta Redevelopment Project Area No. 2 ("Redevelopment Plan") was adopted on May 16, 1989 by Ordinance No. 139 of th * e City of La Quinta ("City"), which established a redevelopment project known and designated as La Quinta Redevelopment Project Area No. 2 ("Project Area No. 2"); and WHEREAS, the Agency desires to consider an amendment to the Redevelopment Plan that increases the limitation on the number of dollars to be allocated to the Agency from Project Area No. 2, said amendment would not modify the boundaries of Project Area No. 2; and WHEREAS, pursuant to Section 33346 of the Community Redevelopment Law, before a proposed redevelopment plan amendment is submitted to the legislative body the redevelopment agency shall submit the proposed amendment to the Planning Commission for it's report and r ecommendation; and WHEREAS, pursuant to Section 33344.5 of the Community Redevelopment Law, the Agency has prepared a preliminary report (the "Preliminary Report") on the proposed amendment to the Redevelopment Plan for Project Area No. 2 for transmittal to each affected taxing entity as defined in Section 33353.2 of the Community Redevelopment Law. Resolution No. RA 2003-23 Preliminary Report Adopted: December 2, 2003 Page 2 NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE LA QUINTA REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS: 1 . Each of the above recitals is true and correct and this Board so finds and determines. 2. The proposed text amendment to the Redevelopment Plan, in the form attached hereto and incorporated herein as Exhibit A, is hereby referred to the Planning Commission of the City of La Quinta for its report and recommendation. 3. The Agency hereby approves and adopts the Preliminary Report in the form attached hereto as Exhibit B and incorporated herein by reference. 4. The Acting Executive Director is hereby authorized and directed to transmit the Preliminary Report to each affected taxing entity. 5. The Acting Executive Director is h.ereby authorized and directed to make available for public inspection the proposed text amendment to the Redevelopment Plan, and the Preliminary Report. PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta City Council held on this 2nd day of December, 2003, by the following vote AYES: Members Adolph, Osborne, Perkins, Sniff, Chair Henderson NOES: . None ABSTAIN: None ABSENT: None Terry H derson, Chair La Quin Redevelopment Agency ReWution No. RA 2003-23 Praminary Report Adopted: December 2, 2003 Page 3 ATTEST: JGNE §. GREEK, CMC—,A*g'ency Secretary La Quinta Redevelopment Agency (SEAL) APPROVED AS TO FORM: a,__ Id KA-THERIN9 J NSOMiAency Counsel La Quinta Redevelopment Agency Resolution No. RA 2003-23 Preliminary Report Adopted: December 2, 2003 Page 4 EXHIBIT "A" PROPOSED TEXT AMENDMENT TO THE REDEVELOPMENT PLAN Section (702) Tax Increments of the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2 shall be amended as follows: The number of dollars of taxes that may be divided and ailocated to the Agency pursuant to Section 33670 of the Redevelopment Law shall not exceed $260 million del!aFS $1,500,000,000, except by amendment of this Plan. -'W 'I 77W" -%2T- I'&'% WN =3 WMW �NL-M A ��'ALW3�q 010 Note: The strikethrough text would be deleted. . EXHIBIT "B" La Quinta -Redevekpment Project No. 2 ' -J' IT'a '10 1 November2l,2003 IV IMM 217 North Main StreK Suke 300 Santa Ana, Caffornia 92701-4822 Phone: (714) 5414585 Fa)c (714) 836-1748 E4Ad: RSGlncCAOaol.com Table of Contents Introduction .................. Amendment Process Reasons for the Amendment ..... A4 Background.............................................................................................. .......... A-1 Reasonsfor the Amendment .............................................................................. A-1 Agency Tax Incrernent ReoeiPWAffordable Housing ........................................ A-2 A Description of the Physical and Itco'nomic Conditions Existing In the Project Area ............. a .............................................................. gone B11 Rernaining. Blighting Conditions in the Project Area ............................................ B-1 AffordableHousing Needs .................................................................................. E3­2 Proposed Method of Financing the Redevelopment of the Project Area C4 Taxing Agency Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . r-4- 1 A Description of the Projects Proposed by the Agency and How They Will Improve or Alleviate Physical and Economic Conditions of Blight D-1 G,VMWYER\WPDOOs\DOCtjMENTS\RDA PRELIMREPT2.DOC Introdiction Illi I -I-'* - =01 This is the. Prelirrihary Report rReporr) that presents the m*x-W for a to ft -La QUM RmWMWmt Project No. 2. The La ").is prooessh g an anvxxknent to 1he Quirda Redevelmnent Agency ("Agency Redevelopirnent Plan for the La '. O*ft Re&weloprnent Project No. 2 Olwbveloptrwnt Plan") to ;ffxwease ft, cunvAatve tax lifflit from $400,000,000 to $1,5W,000,000 rArnendrwrt). The Agency Is Immstilrig the Arnendmt to irm" fiat there Is wficlent financial aqxkdty to: 'Le 7-17, 17-1 M-1 -�� ! 1;9 Fc s: Z-9-5 77 �,L k 4�-,f 0 1 #A 'A I This Report has been prepared in amdance, wft Me Caldomia CoTwntx* Redevekpm" Law, Health and Sdety Code Section 3=0 M1 sm. (lAvil wW presents the, fdlovft SECTION A. Reasons for the AnxwKknent SECTION B A Description of ft Physical and. Emm-do, Condtions E*Ung in the Project Area SECTION D A Desm"on of the Projects Proposed by the Agency and How They WE InVm or Alleviate Physical and Eoononix ConMons of Blight 9:-" f '�:m 71 f�70-:!J ".6off,1111 J�f 1'0�, 11 !:1 4zw:IQ viie,t I%-0 ROMM SPEVAMK GROIJP. INC. LA CUNTA REDEVEI.OPMENT AGENCY NOVEMBER 21, 2003 1- LA CMANTA REDEVELOPMENT PROJECT NO. 2 PREUMINARY REPORT persistent lighting conditions. The Law prescribes a specific process involving Preparation Of various documents, irxAuding this Report consultation with affected ta)dng, agencies, and participation and input from affected residents, business owners, property owners and other stakeholders. This Report will facilitate Agency consultations *with the community and affected ta)dng entities regarding the scope and impacts of the proposed Amendment The. Planning Commission Of the City of La Quinta will also be requested to review the Amendment as it relates to impacts 'on the Citys General Plan. Follmng these consultations, the Agency Will incorporate comments into a Report to the City Council. The Agency contemplates holding a joint public hearing with the La Quinta City Council on January. 20, 2004 to receive further input on the Amerximent. All property owners, business owners, residential Owner-00cupants and residential tenants within the Project Area No. 2, and goverrirriental agencies that collect property tax 'revenue from Prqect Area No. 2, will receive a mailed notice ot this -public hearing. ROSENOW SPEVACEK GROUP, INC. LA QUINTA REDEVELOPMENT AGENCY NOVEMBER 21, 2003 LA QUINTA REDEVELOPMENT PROJECT NO. 2 PRELIMINARY REPORT ISectibn -A- _� 0 ';1 - 9, X: r-o t I i �_ - G.J I L -7-0 7 T-91 = I � I & 7 W,77179 7 Z77o "t t"Al Ki i7m; wz� I, I'll::" Its A:: I I::, I I No 9: :, izo,",z Area No. 2 erdaft 3,116 acres of property that is developed with Project 1111W01=1 esidendcul ilElld ig the nortiern area NMI tutional uses. of the CAA—y, Project Area No. 2 is bounded by. Averim 50 to the south, Fred and Waring Drive (Avenue 44) lo.the north, Washington Street to the,vi% Jeffers Sheet to the easL Property vied of Wad*xjW StreK north of the of ft future alignment of Avenue 48., propetty surrounding Point Happy, north of Highway 111 and wed of WashiiVon Street and pWmty easterly of Jefferson Street and'north of Higtmay 111 Is also Included in Project Area'No. 2. When the Redevelopment Plan was adopted the Calfornia Community Redevelopment Law reqt*W VW a Wit be e sMshed on the total amount of tax k Kx RX It. revenue the Agency may receive from Project Area No. 2. Fffmcial projections were prepared that assumed average Annual property value growth of 5% during the 50-year term of the Redevelopment Plan. Based upon these ecti6ns, a $400,000,000 tax kicrement revenue limilt was established. During to initial years annual property value growth -in Project Area No. 2 ' was at or below SO/o. During tie latter half of ft 1990s- and two* this fiscal year, annual growth has exopeded 10%. with some yeaesannual growth being in excesso(Mo. This has —Wated tie arnount of tax increment revenue the Ageticy has received from - Project Area No. 2 - and conservative forecasts (30/6 arinual property value Wv*lh inclicate VW tw eAft $400,0009000 tax 101 W KUM` limit Will be adleved by fiscal 2020-21 . or earlier I annual growth exceeds 3%. ROSENOW SPEVAM GROUP. INC. LA CKANTA REDEVELOPMENT AGENCY NOVEMBER 21, 2003 -A-1 - LA QUINTA REDEVELOPMENT PROJECT NO. 2 PREUMINARY REPORT Reaching the tax increment revenue limit impacts the Agency's redevelopment eff,orts in the following ways: e The term of the Redevelopment Plan runs to May 2039. if the tax increment limit is readied before then, the Agency must cease all non -housing redevebpnient activities in Prcject Area No. 2, including repaying outstanding General Fund loans. Project Area No. 2 has two outstanding bond debt obligations: the 1995 Housing Bonds of: which 21.30% of annual debt se - rvice payments are funded by Project Area No. 2 Housing Fund revenue until fiscal year 2025-26, and the 1998 non -housing bonds of which 100'% of annual debt service paynieft are funded by non -Housing Fund revenue until 2033. These bonds must be repaid and N the tax increment limit is riot increased, then the Agency must establish a. sinking fund starting in 2014 to retire these bonds. All non - housing revenue would be encumbered to refire the 1998 Bonds, leaving no funds to repay outstanding General Fund loan obligations due to the City of La Quinta. The Agencys Bond Counsel and Underwriter -have determined that new housing bonds that pledge Project Area No. 2 housing fund revenue cannot be issued, given that the Agency would achieve the e)dsting tax increment revenue limit at least 20 years prior to the term of the Redevelopment Plan. This severely impacts the Agencys ability to achieve its affordable housing Obligations. PrCjed Area No. 2 has the projected capacity to support an adftx'W $57.0 n1illiOn Of housing bonds during the remaining term of the Redevelopment Plan. When the Redevelopment Plan was adopted, the Agency negotiated. ta)dng agency agreements will all of the ta)dng agencies that receive tax increment revenue from Project Arpa No. 2. Through these agreements the taying agencies received 71% of all tax increment revenue generated in Project Area No. 2, with the Agency receiving the remaining 290/6' Of this amount 20% is deposited into the Agencys Housing Fund, and 9% is pleckjed towards non - housing reclevelopment prclects.. Thus, a rTAority of the tax increment revenue the Agency receives from Project Area No. 2 is pledged to* wards increasing and improving the supply of affordable housing. PWertY in Project Area No. 2 is primarily designated for resiclentia I uses generating an acute need to secure affordable housing with long-term covenants. Pursuant to the AgenCY's Second Amended Housing Affordability Qxrokmce Plan, the Agency must secure 636 affordaMe dwellings by 2039,'of which 254 must be -affordable to very low4n6ome households. This is based upon the Laws requirenient that at least 15 percent of all privately developed or substantially rehabilitated units in Project Area No. 2 must be affordable to very low, low and ROSENOW SPEVACEK GROUP, INC. LA OUINTA REDEVELOPMENT AGENCY NOVEMBER 21, 2003 - A-2 - LA OUINTA REDEVELOPMENT PROJECT NO. 2 PRELIMINARY REPORT modmW-income households, and at least 40 percent d Us amount minit be affordable to very low4noome- households. To date, the Agency has secured 420 units of affordable housing in Project Area No. Z of which 75 are affordable to very lowwinoome households. Sinoe a majority d the'tax inaw revenue the AgeM receives from Project Area No. 2 Is ~ bwarcis krdM programs P. - -,q I -A I -AL - and W*ft that pmd" dwellings, the.— u no Irnposed by the e)ds*v tax kxvvnervt.r9vwwe Inrit on the issuance of adffaW housing bonds will impak the Agencys ability to secure Ihese units. and icl� its housing Klates. ROSENOW SPEVAM GFKX)P, INC. LA CXANTA, REDEVELOPMENT AGENCY NOVEMBER 21,2003 A-3 - LA QUINTA REDEVELOPMENT PROJECT NO. 2 PRELIMINARY REPORT iSection - A'Description of the P and ic Conditions Edsting in the Project Area When Project Area No. 2 was established the Law provided that pervasive physical and economic bight and public infrastructure and facility deficiencies, must be present to support establishing a redevelopment project. In conjunction with documenting blight and infrastructure/facilfty deficiencies, a redevelopment agency had to also demonstrate that both the private sector and the community 'acting alone did not have the legal or firm-aal capacity to adequately address these conditions. The Law also requires redevelopment agencies to inwre that at least I 156/o of all privately developed or substantially rehabildated housing units are affordable to very low, low and moderatemincome households. of these, 40% must be affordable to very low4ncome households. in securing affordable housing, a redevelopment agency must gain covenants to insure that the dwellings remain able to the target households for 45 Years, for -single-family dwellings, and affoKk 55 years, for multRamily dwellings. Since Project Area No. 2 was established in 1989, ft Agency has embarked on a multifaceted Program to address blight, correct infrastructure deficiencies, and produce affordable housing. The follovAng narrative summarizes the blighting conditions present in ftlect Area No. 2 when it was established, and those conditions that still e)dst today. This data was cornpiled from the February 1989 Report to Council for the Proposed La Quinta Redevelopment Project No. 2, interviews with City staff and field -surveys conducted by RSG staff in September 2003. The primary purpose for establishing Project Area No. 2 was to assist with funding infrastructure Improvements that stimulat.ed private sector investment in commercial, resort and residential development. Both flood controt and circulation system deficiencies,. and the costs associated with correcfing these deficiencies were dW as major irrpediments to PrivatG sector investment The City Of La '&inta could not adequately fund the required flood control and circulation system knPrOverrielft since it was a low property tax city (the City receives $0-07 Of every $1 -00 Of Property tax revenue paid by Project Area No. 2 Property owners), and did not. have retail Or resort uses that generated sufficient sales and transient occupancy tax revenue. In addition to - infrastructure ROSENOW SPEVACEK GROUP, INC. LA QUINTA REDEVELOPMENT AGENCY NOVEMBER 21, 2003 B-1 - LA QUINTA REDEVELOPMENT PROJECT NO. 2 PRELIMINARY REPORT deficiencies, economic deveWnent activities in Prcject Area No. 2 were irnpacted by parcds subdivided in a manner that limited Vvir development in with the Citys General Plan due to either their unusual configuration atural land forms or features) or Ihelr small size. (to acm i v i rk The Redeveloprnent Plan Included $69.8 MIlion of projects. to address #me P-49— $63.4 million Projects defici.ei i in flood control and sk" system k it ' %IV= I MR R and $6.5 million of ca v v rxx "WrIS (10. address irregularly shapeid properties). Sinice I9Wy Ihe Agency has funded mq�or Inflastruchire II Wq RX R projects efther in . wth ptete developers and land owners, or *0 the CAy of La QuInta. To date, appro)ftat* 70 percent Of #MG om nents have been ' which has irnproved the economic vitality ()of Project Area No. 2. This leaves approWmately $20.9 million d nm4misirV �I nerds that should 1)6 F1 1jr; A q to eliminate the remainkg and property configuration krip"i The existing tax kwatrat limit impacts the Agencys ability to fund these in, nents. The Law provides that the Agency must insure, that 15 peircent of all privately developed or rel-a1bilitE units in Project Area No. 2 must be affordable lo, very low, low and , i eratemincome -households. This mandate must be achie%W during the life of to PAKIevelopment Plan or by 2039. Based upon the cxx itained in the AQ&Ws Second Amerided HouskV Affordability Qx�noe, Plan, the Ager* must tea" 636 affordable -units d which 254 must be affordable to very low4ncome households. To date, ft Agency has secured 420 - units in Project Area No. 2. of which 75 are W to very low�-indomG households. This leaves the need to secure an addWonal 37 units affordable to low and modmW4noom households, and 179 Units afkxdiable to very bw4ncow households. The average Agency per unit to sm re low and nxxlerate4noome units Is $106,000, and the averaw per unit x! A 11 RX IL to some very low4noom units is $175s,000. UsN the remainling nurrber of unfts the Agency mtM secure and the average pw unit cod to obtain each - tst by income, category. the Agemy must Invest a total of $352 million in todays dollars to secure ft mored numbw of afford". units to achim its afford" housing rnandates. The eAsting tax enmit lirrit impacts the alft to *TWy achieve these units bemuse it prohibits the Agency frorn.issuing additional housing bonds in mler to underwrite affordable housing development PMEF40W SPEVACEX GROUP, W. LA OUINTA REDEVELOPMENT AGENCY NOVEMBER 21. 2003 B-2 - LA QUINTA REDEVELOPMENT PROJECT NO. 2 PRELIMINARY REPORT Section C Mediod - of R ng W1 P;i eMeEdOplment of the Project Area Redevelopment of the Project Area has been and will continue to be financed as follows: • Property tax increment; • Agency bonds; • FWkincial ass1sl;ance from the City, State of California arKVor Federal Government and Any other available and appropriate source. Since 1989, the primary means of financing redevelopment and housing activities has been Property tax increment revenue, Agency bonds, and City loians. To date, the Agency has received $68.0 million in total tax increment revenue, of which $53.0 million has been paid to taxing agencies and $15.0 million to the' Agency. Per the Redevelopment Plan, the revenue the Agency receives -and pays to the taxing agencies is included in the cumulative $400.0 million tax increment revenue limit The Agency has secured $112 million in tax allocafm bonds ($6.7 million Of nw-hOuSing bonds and $4.5 million of housing bonds) and approximately $9.57 million of City General Fund bans. The Amendrnent only modifies Me $400,000,000 tax increment limit byfflicreasing this limit to $1 500,000,000. No other provisions of the Redevelopment plan are being modified. The PmPOsed $1,500,000,000 tax increment limit was derived by preparing revenue projec6ons for the remaining 36 years of the Redevebpment Plan that use a 3 percent per annum growth rate. The Agency currently has agreements with all of the taxing agencies that levy property taxes in Project Area No. 2. All of these payments are based upon gross tax increment revenue; the Agency must fund each taxing agencies share of the Housing Fund deposits (200% of gross tax increment revenue) from other retained' tax . increment revenue. The pertinent provisioons of these agreements are summarized below. ROSENOW SPEVACEK GROUP, INC. LA QUINTA REDEVELOPMENT AGENCY NOVEMBER 21, 2003 C-1 LA QUINTA REDEVELOPMENT PROJECT NO. 2 PRELIMINARY REPORT I County of nz The Agencs Cooperafm Agreement with the Counly of Riverside provides. for full payment of to tax kxxerTwt revenue by the County General Fund .(25.MO/*), Ubrary District (2.eW,), andl Fire Mstrict (6.02%) property tax IWGS. Addlitionailly, the Agency Is paying the County $2,050,000 am the ne)d I I years to rekitm U withe County for `tI3X enwt revenue by the Cointys GerxwW Rxid property tax levy the Agency retak-sed durkV to initial years of the Redevelopment Plan. M a C 0 - a- 1 a Valley Comnmft Call"o DistrIct, This agreement provkles that the College District shall receive 50% of the tax revenue by the College DishWs 7.72% property tax levy. MV0 County . B-Inte ift of8chools 17his agreen inimn-At provitles that the SWerirtendent of Schools shall receive, 50%of tax' MCNI revenue Mawd by the Supefteriftt of Schools' 4.18% . germate property tax levy. VaNeywato Dbbict The agree il i MnAt provkbs that to Water District shall receive 100% d the tax revenue wx a -it-, d by the Water D;sbWs 7.67% property tax levy. R acm� 0110 Valley Roacreadon and Pa Disbk9 The agreement provides that the Agency shall retain 100% of the tax increrrtent revenuepwated . by the Park DisWs 2.13% property tax levy. This remuel -related capital however, must be expended on Wentilled park Due to the Agency's expencliture to acquireland acquisition and make park kiqxDvements in Project Area No. 2, the Agency is entitledl to retain the Park DW"s tax hxxement revenue und fiscal year 2003-04. After 2003-04, the Agency M Ad. that it WIN continue to fund park -related pqects with the Park D;sWs share d annual tax increment revenue. Deswit Sutds Urd&W School b1strict The agreement provkles that the Agency shall retain 50% of the tax kwarient revenue gei wa I by the School I)istrids 37.16% property W levy. The remaining -500/o' Is paid to the SchoolUftict. I L W 0 _-VolleyMosquilco- --ste no dl)bbict The agrea i xxi "IL provides that the MoqW Abatement Dai MI shall receive 100% the W KA ement revenue generatod by Its I All % pqxxty tax levy. i-ROSENOW SPEVACEK GROLIP, INC. LA QIANTA REDEVELOPMENT AGENCY NOVEMBER 21, 2003 .0-2- LA QUINTA REDEVELOPMENT PROJECT NO. 2 PRELIMINARY REPORT Section -D- W% - 11 1 11,11 A Description of aid Projects Pr 1111�ii 11111 by 10 C 111 e %erq and How Th6y Will Improve or P , a W I . 0 � Alleviate P ym Mou c Conditions of Blight The Amendment does . not entail adding projects or programs to the Redevelo�ment Plan. Instead, the Amendment would increase the Agencys financial capacity to implement the remaining projects listed in the Redevelopment Plan and to meet its affordable housing mandates. The existing projects listed in the Redevelopment Plan are designed to alleviate physical and economic blight The Agencys affordable housing initiatives are designed to increase and improve the supply of affordable housing in Project Area No. 2. ROSENOW SPEVACEK GROUP, INC. LA QUINTA REDEVELOPMENT AGENCY NOVEMBER 21, 2003 - D-1. LA QUINTA. REDEVELOPMENT PROJECT NO. 2 PRELIMINARY REPORT Resolution No. RA 2003-23 Preliminary Report Adopted: December 2. 2003 Page 6 SECRETARY'S CERTIFICATE RE: ADOPTION OF RESOLUTION STATE OF CALIFORNIA ) )ss. COUNTY OF RIVERSIDE ) 1, JUNE S. GREEK, Secretary of the La Quinta Redevelopment Agency, DO HEREBY CERTIFY that the foregoing Resolution was duly adopted by said Agency at a regular meeting of said Agency held on the 2nd day of December, 2003. JUN&!�. GREEK, CMC Ag ncy Secretary La Quinta Redevelopment Agency- 1. (SEAL% Resolution No. RA 2003-23 Preliminary Report Adopted: December 2, 2003 Page 6 STATE OF CALIFORNIA ) )ss. COUNTY OF RIVERSIDE ) 1, JUNE S. GREEK, Secretary of the La Quinta Redevelopment Agency, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. RA 2003-23 of said Agency and that said Resolution was adopted at the time and by the vote stated on the above certificate, and has not been amended or repealed. Dated: /A -4 2003 141--a — kh�. GREEK, CMd",--A�eency Secretary La Quinta Redevelopment Agency (SEAL)