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RDA Resolution 2004-001RESOLUTION NO. RA 2004-001 A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY APPROVING THE REPORT TO COUNCIL FOR THE PROPOSED AMENDMENT TO THE REDEVELOPMENT PLAN FOR LA QUINTA REDEVELOPMENT PROJECT NO. 2, AND TRANSMITTING THE TEXT OF THE PROPOSED AMENDMENT AND THE REPORT TO COUNCIL TO THE CITY COUNCIL OF THE CITY OF LA QUINTA REPORT TO COUNCIL WHEREAS, the La Quinta Redevelopment Agency ("Agency") is a public body, corporate and politic, duly created, established, and authorized to transact business and exercise its powers, 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 No. 2 ("Redevelopment Plan") was adopted on May 16, 1989 by Ordinance No. 139 of the City of La Quinta ("City"), which established a redevelopment project known and designated as La Quinta Redevelopment Project No. 2 ("Project No. 2"); and WHEREAS, the Redevelopment Plan was amended by a technical amendment thereto by Ordinance No. 259, adopted on December 20, 1994, to conform the Redevelopment Plan to the requirements of State law, Assembly Bill 1290, Ch. 942 of Stats. 1993 ("AB1290 Amendment"); and WHEREAS, the Redevelopment Plan as amended by the AB1 290 Amendment is hereinafter referred to as the "Plam" and WHEREAS, the Plan delineates a redevelopment project area known and designated as "Project Area No. 2;" and WHEREAS, the Agency desires to consider an Amendment to the Plan that increases the limitation on the number of dollars that may be allocated to the Agency from Project No. 2 pursuant to Health and Safety Code Section 33670(b) ("Amendment"),; and WHEREAS, the proposed Amendment would not modify the boundaries of Project Area No. 2 nor any other provision of the Plan other than as set forth in the previous Recital; and Resolution No. RA 2004-001 Report to Council - Amendment to Redevelopment Plan Project No. 2 Adopted: January 20, 2004 Page 2 WHEREAS, pursuant to Sections 33346 and 33356 of the Community Redevelopment Law, before a proposed redevelopment plan amendment is submitted to the legislative body of the community the Redevelopment Agency shall submit the proposed Amendment to the Planning Commission for its report and recommendation; and WHEREAS, on December 9, 2003 the Planning Commission of the City of La Quinta reviewed the Amendment and adopted its report that recommended that the City Council of the City of La Quinta ("City Council") approve the Amendment; and WHEREAS, pursuant to Section 33356 of the Community Redevelopment Law, the Redevelopment Agency is required to submit the proposed Redevelopment Plan Amendment to the legislative body; and WHEREAS, pursuant to Section 33352 and 33356 of the Community Redevelopment Law, every Redevelopment. Plan or Amendment to a Redevelopment Plan submitted by a Redevelopment Agency to the legislative body shall be accompanied by a report to the legislative body on the Redevelopment Plan or the Redevelopment Plan Amendment; and WHEREAS, the Agency has caused the Report to City Council on the Amendment to be prepared in accordance with Section 33352 of the Community Redevelopment Law. NOW, THEREFORE, THE LA QUINTA REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, ORDER, AND DETERMINE AS FOLLOWS: Section 1. Each of the above recitals is true and correct and are incorporated herein. Section 2. The text of the proposed Amendment, in the form attached hereto and incorporated herein as Exhibit A, is hereby transmitted to the City Council for its review and consideration. Section 3. The Report to Council, in the form attached hereto and incorporated herein as Exhibit B, is hereby approved and is hereby transmitted to the City Council for its review in conjunction with its consideration of the proposed Amendment. Resolution No. RA 2004-Wl Report to Council - Amendment to Redevelopment Plan Project No. 2 Adopted: January 20, 2004 Page 3 PASSED, APPROVED and ADOPTED by the La Quinta Redevelopment Agency Board at a regular meeting held this 20th day of January 2004, by the following vote: AYES: Members Adolph, Osborne, Sniff, Chair Henderson NOES: None ABSENT: Member Perkins ABSTAIN: None Terry Hel(91-erson, Chair La Quinta Redevelopment Agency ATTEST: JUWS/GREEK, CMC, Agerdcy Secretary La Quinta Redevelopment Agency (AGENCY SEAL) APPROVED AS TO FORM: M. KATI-JER"INE JENSON, )(*gency Couns La Quinta Redevelopment Agency Resolution No. RA 2004-001 Report to Council - Amendment to Redevelopment Plan Project No. 2 Adopted: January 20, 2004 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 No. 2 shall be amended as follows: The number of dollars of taxes that may be divided and allocated to the Agency pursuant to Section 33670 of the Redevelopment Law shall not exceed $250 Fnil!OGA A-11- 1,500,000,000, except by amendment of this Plan. W. M .7 z r.w T. MIMI F.1 .1 . T- Note: The stfik ethrough text would be deleted. EXHIBIT "B" La Quinta Redevelopment Project No. 2 Amendment January 14,2004 Rosemw Spevaa* Grotw� Ine- 217 North Main Street, Sufte 300 Santa Ana, California 92701-4822 Phone: (714) 541-4585 Fax: (714) 836-1748 E-Mail: info@webrsg.com Table of Contents Introduction ...................................................................... Intro-1 Reasons for the Amendment ................................................. A-1 Background................................................................................................. A-1 Reasons for the Amendment ..................................................................... A-1 Agency Tax Increment Receipts/Affordable Housing ............................ A-2 A Description of the Physical and Economic Conditions ExistingIn Project Area No. 2 ............................................... B-1 Remaining Blighting Conditions in Project Area No. 2 .......................... B-1 Five -Year Implementation Plan ............................................. C-1 An Explanation of Why the Elimination of Blight and the Redevelopment of the Project Are ' a cannot Reasonably be Expected to be Accomplished by Private Enterprise Acting Alone or by the Legislative Body's Use of Financing Alternatives other than Tax Increment Financing ................ D-1 Method of Financing and Economic Feasibility of the Plan ... E-1 Taxing Agency Agreements ...................................................................... E-2 Method of Relocation .............................................................. F-1 An Analysis of the Preliminary Plan ...................................... G-1 The Report and Recommendations of the Planning Commission .............................. ............................................. H-1 The Report and Recommendations of the Project Area Committee.............................................................................. A Statement of Conformance to the General Plan ................. J-1 The Mitigated Negative Declaration ...................................... K-1 Report of the County Fiscal Officer ........................................ L-1 Neighborhood Impact Report ................................................ M-1 ProjectArea Demographics ...................................................................... M-1 Relocation................................................................................................... M-1 Traffic Circulation ...................................................................................... M-2 EnvironmentalQuality ............................................................................... M-2 Availability of Community Facilities and Services .................................. M-2 Effect on School Population and Quality of Education ......................... M-3 PropertyTaxes and Assessments ........................................................... M-3 Low- and Moderate -Income Housing Programming .............................. M-3 A Summary of the Agency's Consultations with Affected Taxing Entitles ....................................................................... N-1 Ow" 0 0 &T:� =� ;101:11;9 IOX001,1:01 ff-H � I I '10 � 0 , 0 11 4� 0-191, i , This document is the Report to the City Council ("Reporf') that describes the reasons for the proposed amendment to the La Quinta Redevelopment Project No. 2 ("Project No. 2"). The La Quinta Redevelopment Agency ("Agency") is processing an amendment to the Redevelopment Plan for the La Quinta Redevelopment Project No. 2 ("Redevelopment Plan") to increase the cumulative tax increment limit from $400,000,000 to $1,500,000,000 ("Arnendment"). The Agency is pursuing the Amendment to insure that there is sufficient financial capacity to: 9 Continue implementing projects and programs that eliminate blight; Accommodate repayment of existing bond and other debt obligations; and 0 Facilitate new affordable housing opportunities. No other changes to the Redevelopment Plan or to the boundaries of the La Quinta Redevelopment Project Area No. 2 ("Project Area No. 2") are being proposed by this amendment This report has been prepared in accordance with the California Community Redevelopment Law, Health and Safety Code Section 33000 gt seq. ("Law") and presents the following information: SECTION A. Reasons for the Amendment. SECTION B. A Description of the Physical and Economic Conditions Existing in Project Area No. 2. SECTION C. Five -Year Implementation Plan. SECTION D. An Explanation of Why the Elimination of Blight and the Redevelopment of. the Project Area cannot Reasonably be. Expected to be Accomplished by Private Enterprise Acting Alone or by the Legislative Body's use of Financing Alternatives other than Tax Increment Financing. ROSENOW SPEVACEK GROUP, INC. PAGE INTRO-1 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PRQJECT NO. 2 AMENDMENT SECTION E. Method of Financing and Economic Feasibility of the Plan. SECTION F. The Method of Relocation SECTION G. An Analysis of the Preliminary Plan. SECTION H. The Report and Recommendations of the Planning Commission. SECTION 1. Report and Recommendation of the Project Area Committee. SECTION J. A Statement of Conformance to the General Plan. SECTION K. The Miti gated Negative Declaration. SECTION L. Report of the County Fiscal Officer. SECTION M. Neighborhood Impact Report SECTION N. A Summary of the Agency's Consultations with Affected Taxing Entities The Law permits redevelopment agencies to amend redevelopment plans to. modify limitations, expand boundaries, add public facility and infrastructure projects, and merge redevelopment project areas to facilitate the elimination of persistent blighting conditions. The Law prescribes a specific process involving preparation of various documents, including this Report, consultation with affected taxing agencies, and participation and input from affected residents, business owners, property owners and other stakeholders. The Amendment is scheduled for consideration by the Agency and City Council at a joint public hearing on January 20, 200 1 4. All Project Area No. 2 property owners, business owners, and affected taxing agencies have been notified of this joint public hearing by mail. ROSENOW SPEVACEK GROUP, INC. PAGE INTRO-2 Section -A- Reawns fbr the Amendment The Redevelopment Plan was adopted in 1989 and subsequently amended in 1994. to incorporate modifications required by AB 1290. The purpose for this redevelopment project was to stimulate economic development through primarily funding street and drainage improvements, and to assist the City of La Quinta with achieving its housing mandates through funding affordable housing projects and programs. The Redevelopment Plan established Project Area No. 2, which entails 3,116 acres of property that is developed with commercial, residential, and institutional uses. Encompassing the northern area of the City, Project Area No. 2 is bounded by Avenue 50 to the south, Fred Waring Drive (Avenue 44) to the north, Washington Street to the west, and Jefferson Street to the east. Property west of Washington Street, north of the prolongation of the future alignment of Avenue 48; property surrounding Point Happy, north of Highway 111 and west of Washington Street; and property easterly of Jefferson Street and north of Highway 111 is also included in Project Area No. 2. When the Redevelopment Plan was adopted, the California Community Law required that a limit be established on the total amount of tax increment revenue the Agency may receive from Project Area No. 2. Financial projections were prepared that assumed average annual property value growth of 5% during the 50-year term of the Redevelopment Plan. Based upon these projections, a $400,000,000 tax increment revenue limit was established. During the initial years, annual property value growth in Project Area No. 2 was at or below 5%. During the latter half of the 1990s and through this fiscal year, annual growth has exceeded 10%, with some year's annual growth being in excess of 26%. This has accelerated the amount of tax increment revenue the Agency has received from Project Area No. 2 and ROSENOW SPEVACEK GROUP, INC. PAGE A-1 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT conservative forecasts (3% annual property value growth increases) indicate that the existing $400,000,000 tax increment limit will be achieved by fiscal 2020-21, or earlier if annual growth exceeds 3%. Reaching the tax increment revenue limit impacts the Agencys redevelopment efforts in the following ways: The term of the Redevelopment Plan runs to May 2029; the Agency has an additional 10 years to receive tax increment revenue or until 2039. If the tax increment limit is reached before then, the Agency must cease all non -housing redevelopment activities in Project 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 21.3% of annual debt service payments are funded by Prqect Area No. 2 Housing Fund revenue until fiscal year 2025-26, and the 1998 non -housing bonds of which 100% of annual debt service payments are funded by non -Housing Fund revenue until 2033. These bonds must be repaid and if the tax increment limit is not increased, then the Agency must establish a sinldng fund starting in 2014 to refire these bonds. All non -housing revenue would be encumbered to retire the 1998 Bonds, leaving no hinds to repay outstanding General Fund loan obligations due to the City of La Quinta. The Agency's 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 existing tax increment revenue limit at least 20 years prior to the term of the Redevelopment Plan. This severely impacts the Agency's ability to achieve its affordable housing obligations. Project Area No. 2 has the projected capacity to support an additional $57.0 million of affordable housing bonds during the remaining term of the Redevelopment Plan. When the Redevelopment Plan was adopted, the Agency negotiated taxing agency agreements will all of the taxing agencies that receive tax increment revenue from Project Area No. 2. Through these agreements, the taxing agencies received 71 % of all tax increment revenue generated in Project Area No. 2, with the Agency receiving the remaining 29%. Of this amount, 20% is deposited into the Agencys Housing Fund, and 9% is pledged towards non -housing redevelopment projects. Thus, a majority of ROSENOW SPEVACEK GROUP, INC. PAGE A-2 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT the tax increment revenue the Agency receives from Project Area No. 2 is pledged towards increasing and improving the supply of affordable housing. Property in Project Area No. 2 is primarily designated for residential uses generating an acute need to secure affordable housing with long-term covenants. Pursuant to the Agencys Second Amended Housing Affordability Compliance Plan, the Agency must secure 636 affordable dwellings by 2029, of which 254 must be affordable to very low-income households. This is based upon the Law's requirement 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 moderate - income households, and at least 40 percent of this amount must be affordable to very low-income households. To date, the Agency has secured 420 units of affordable housing in Project Area No. 2, of which 75 are affordable to very low-income households. Since a majority of the tax increment revenue the Agency receives from Project Area No. 2 is pledged towards funding programs and projects that produce affordable dwellings, the constraints imposed by the existing tax increment revenue limit on the issuance of additional housing bonds will impair the Agency's ability to secure these units and achieve its housing mandates. ROSENOW SPEVACEK GROUP, INC. PAGE A-3 section 8- 04 M When Project Area No. 2 was established, the Law provided that pervasive physical and economic blight, and public infrastructure and facility deficiencies, must be present to support establishing a redevelopment project. In conjunction with documenting blight and infrastructure/facility deficiencies, a redevelopment agency had to also demonstrate that both the private sector and the community acting alone did not have the legal or financial capacity to adequately address these conditions. The Law also requires redevelopment agencies to insure that at least 15% of all privately developed or substantially rehabilitated housing units are affordable to very low, low and moderate -income households. Of these, 40% must be affordable to very. low-income households. In securing affordable housing, a redevelopment agency must gain covenants to insure that the dwellings remain affordable to the target households for 45 years, for singlefamily dwellings, and 55 years, for multi -family dwellings. Since Project Area No. 2 was established in 1989, the Agency has embarked on a multifaceted program to address blight, correct infrastructure deficiencies, and produce affordable housing. The following narrative summarizes the blighting conditions present in Project Area No. 2 when it was established, and those conditions that still e)dst today. This data was compiled 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 stimulated private sector investment in commercial, resort and residential development. Both flood control and circulation system deficiencies, and the costs associated with correcting these deficiencies, were cited as major impediments to private ROSENOW SPEVACEK GROUP, INC. PAGE B-1 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT sector investment. The City of La Quinta could not adequately fund the required flood control and circulation system improvements 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 deficiencies, economic development activities in Project Area No. 2 were impacted by parcels subdivided in a manner that limited their development in accordance with the City's General Plan due to either their unusual configuration (to accommodate natural land forms or features) or their small size. The Redevelopment Plan includes $69.8 million of projects to address these deficiencies; $63.4 million in flood control and street system improvement projects and $6.5 million of community development programs (to address irregularly shaped properties). Since 1989, the Agency has funded major infrastructure improvement projects either in conjunction with private developers and landowners, or with the City of La Quinta. To date, approximately 70 percent of these improvements have been implemented, which has improved the economic vitality of Project Area No. 2. This leaves approximately $20.9 million of non -housing improvements that should be addressed to eliminate the remaining infrastructure deficiencies and property configuration impediments. The existing tax increment limit impacts the Agency's ability to fund these improvements. The Law provides that the Agency must insure that 15 percent of all privately developed or substantially rehabilitated units in Project Area No. 2 must be affordable to very low, low and modbrate-income households. This mandate must be achieved during the life of the Redevelopment Plan or by 2029. Based upon the projections contained in the Agencys Second Amended Housing Affordability Compliance Plan, the Agency must secure 636 affordable units of which 254 must be affordable to very low-income households. To date, the Agency has secured 420 affordable units in Project Area No. 2, of which 75 are affordable to very low-income households. This leaves the need to secure an additional 37 units affordable to low and moderate -income households, and 179 units affordable to very low-income households. The average Agency per unit investment to secure low and moderate -income units is $106,000, and the average per unit investment to secure very low-income units is $175,000. Using the remaining number of units the Agency must secure and the average per unit cost to obtain each unit by income category, the Agency must invest a total of $35.2 million in today's dollars to secure the required number of affordable units to achieve its affordable housing mandates. The existing tax increment limit impacts the ability to timely achieve these ROSENOW SPEVACEK GROUP, INC. PAGE 13-i . ' REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT units because it prohibits the Agency from issuing additional housing bonds in order to underwrite affordable housing development. Project No. 2 has $42.0 million of pending funding obligations it must address (not including interest expense on outstanding bonds and loans) to complete its non -housing redevelopment obligations. These are comprised of: $20.9 million of non -housing redevelopment projects to achieve to Redevelopment Plan's objectives; $10.6 million of outstanding bond debt; and approximately $10.5 million in outstanding loans due to the General Fund of the City of La Quinta. These loans represent advances the City made to fund operations and non -housing redevelopment projects for Project No. 2. With the current $400,000,000 tax increment limit, the Agency will have the capacity to repay the bond debt, but it will not have the capacity to complete the $20.9 million of non -housing redevelopment projects nor retire the City general Fund loans. This is because if the current tax increment limit remain in place, the Agency is forecasted to retain $28.9 million in non -housing tax increment revenue (after payments are made to taxing agencies) by the time the $400,000,000 tax increment limit is achieved in fiscal 2020-21. Remaining non -housing bond debt service payments are projected to total $12.9 million leaving only $16.0 to fund the remaining $20.9 million of redevelopment projects, and retire the $10.5 million of outstanding General Fund debt. ROSENOW SPEVACEK GROUP, INC. PAGE B-3 Section -C Five -Year Implementalfion Plan The amended Redevelopment Plan will continue to utilize the existing Five -Year Implementation Plan ("Implementation Plan") to guide redevelopment activities in Project Area No. 2. This Implementation Plan was adopted in July 1999, was updated on May 15, 2002 and remains in effect through June 30, 2004. ROSENOW SPEVACEK GROUP, INC. PAGE C-1 Section D '72:� FL7, I WS'J& TI IMAK I I - V1.1[918" - L7 L ---I AL A I I 'L 7M TO.; 'S' 0 The primary purpose for establishing Project Area No. 2 was to assist with funding infrastructure improvements that stimulated private sector investment in commercial, resort and residential development. Both flood control and circulation system deficiencies, and the costs associated with correcting these deficiencies, were cited as major impediments to private sector investment. The City of La Quinta could not adequately fund the required flood control and circulation system improvements 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 deficiencies, economic development activities in Project Area No. 2 were impacted by parcels subdivided in a manner that limited their development in accordance with the City's General Plan due to either their unusual configuration (to accommodate natural land forms or features) or their small size. Since the Redevelopment Plan was adopted, the Agency has worked with property owners and developers to fund some or all of the costs associated with constructing infrastructure improvements. The Agency took this path because property owners and developers demonstrated that without public investment they could not economically build the on -site improvements required for their development proposals and adequately fund off -site infrastructure improvements required to service these developments. In addition, rising housing costs limited the private sectors ability to address the community's affordable housing needs without public investment. Thus, the Agency has aggressively invested Project No. 2 tax increment revenue to generate facilitate affordable housing construction. ROSENOW SPEVACEK GROUP, INC. PAGE D-1 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT The Redevelopment Plan includes $69.8 million of projects to address these deficiencies; $63.4 million in flood control and street system improvement projects and $6.5 million of community development programs (to address irregularly shaped properties). Since 1989, the Agency has funded major infrastructure improvement projects either in conjunction with private developers and landowners, or with the City of La Quinta. To date, approximately 70 percent of these improvements have been implemented, which has improved the economic vitality of Project Area No. 2. This leaves approximately $20.9 million of non -housing improvements that should be addressed to eliminate the remaining infrastructure deficiencies and property configuration impediments,. The existing tax increment limit impacts the Agencys ability to fund these improvements. The Law provides that the Agency must insure that 15 percent of all privately developed or substantially rehabilitated units in Project Area No. 2 must be affordable to very low, low and moderate -income households. This mandate must be achieved during the life of the Redevelopment Plan or by 2029. Based upon the projections contained in the Agency's Second Amended Housing Affordability Compliance Plan, the Agency must secure,636 affordable units of which 254 must be affordable to very low-income households. To date, the Agency has secured 420 affordable units in Project Area No. 2, of which 75 are affordable to very low-income households. This leaves the need to secure an additional 37 units affordable to low and moderate -income households, and 179 units affordable to very low-income households. The average Agency per unit investment to secure low and moderate -income units is $106,000, and the average per unit investment to secure very low-income units is $175,000. Using the remaining number of units the Agency must secure and the average per unit cost to obtain each unit by income category, the Agency must invest a total of $35.2 million in today's dollars to secure the required number of affordable units to achieve its affordable housing mandates. The existing tax increment limit impacts the ability to timely achieve these units because it prohibits the Agency from issuing additional housing bonds in order to underwrite affordable housing development. Project No. 2 has $42.0 million of pending funding obligations it must address (not including interest expense on outstanding bonds and loans) to complete its non -housing redevelopment obligations. These are comprised of: $20.9 million of non -housing redevelopment projects to achieve to Redevelopment Plan's objectives; $10.6 million of outstanding bond debt; and approximately $10.5 million in outstanding loans due to the General Fund of the City of La Quinta. These loans represent advances the City made to fund operations and non -housing redevelopment projects for Project No. 2. ROSENOW SPEVACEK GROUP, INC. PAGE D-2 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT With the current $400,000,000 tax increment limit, the Agency will have the capacity to repay the bond debt, but it YAll not have the capacity to complete the $20.9 million of non -housing redevelopment projects nor retire the City general Fund loans. This is because if the current tax increment limit remains in place, the Agency is forecasted to retain $28.9 million in non -housing tax increment revenue (after payments are made to taxing agencies) by the time the $400,000,000 tax increment limit is achieved in fiscal 2020-21. Remaining non -housing bond debt service payments are projected to total $12.9 million leaving only $16.0 to fund the, remaining $20.9 million of redevelopment'projects, and retire the $10.5 million of outstanding General Fund debt. ROSENaW SPEVACEK GROUP, INC. PAGE D-3 Section E M MeOwd of Financing and Mic Feasibility of the Plan Redevelopment of the Project Area No. 2 has been and will continue to be financed as follows: • Property tax increment; • Agency bonds; • Financial assistance from the City, State of California and/or 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 loans. 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 $11.2 million in tax allocation bonds ($6.7 million of non -housing bonds and $4.5 million of housing bonds) and approximately $9.57 million of City General Fund loans. The Amendment only modifies the $400,000,000 tax increment limit by increasing this limit to $1,500,000,000. No other provisions of the Redevelopment Plan are being modified. The proposed $1,500,000,000 tax increment limit was derived by preparing revenue projections for the remaining 36 years of the Redevelopment Plan that use a 3 percent per annum growth rate. If the Amendment is adopted, the Agency will fund the remaining housing and non -housing projects through a combination of tax allocation bonds and tax increment revenue. ROSENOW SPEVACEK GROUP, INC. PAGE E-1 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT 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 (20% of gross tax increment revenue) from other retained tax increment revenue. The pertinent provisions of these agreements are summarized below: County of Rkwside The Agencs Cooperation Agreement with the County of Riverside provides for full payment of the tax increment revenue generated by the County General Fund (25.530/o), Ubrary District (2.80%), and Fire District (6.02%) property tax levies. Additionally, the Agency is paying the County $2,050,000 over the next 11 years to reimburse the County for tax increment revenue generated by the Countys General Fund property tax levy the Agency retained during the initial years of the Redevelopment Plan. Coacheft Valley Communky Collie" Dilstrict This agreement provides that the College District shall receive 50% of the tax increment revenue generated by the College District's 7.72% property tax levy. Rkwskle County Sulpeillntwen .1d of Schools This agreement provides that the Superintendent of Schools shall receive 50% of the tax increment revenue generated by the Superintendent of Schools' 4.18% property tax levy. Coachella Vailley Wateir Dbbftt The agreement provides that the Water District shall receive 100% of the tax increment revenue generated by the Water District' s 7.67% property tax levy. CoachelliaVaIlley -accurse-a-11-i nand Park Dhdrict The agreement provides that the Agency shall retain 100% of the tax increment revenue generated by the Park Districfs 2.13% property tax levy. This revenue, however, must be expended on identified park -related capital improvements. Due to the Agencys expenditure to acquire land ROSENOW SPEVACEK GROUP, INC. PAGE E-2 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT acquisition and make park improvements in Project Area No. 2, the Agency is entitled to retain the Park District's tax increment revenue until fiscal year 2003-04. After 2003-04, the Agency anticipates that it will continue to fund park -related projects with the Park District's share of annual tax increment revenue. Desert Sancls Unlifiled School Diistrilct The agreement provides that the Agency shall retain 50% of the tax increment revenue generated by the School District's 37.16% property tax levy. The remaining 50% is paid to the School District. Coachella Valley Mosquito and Vectxw Control Dlistdct The agreement provides that the Mosquito and Vector Control District shall receive 100% the tax increment revenue generated by its 1.41 % property tax levy. ROSENOW SPEVACEK GROUP, INC. PAGE E-3 Section F 70-171 M-1 A Z 47M L The Agency adopted a Method of Relocation in March 1989 as part of approving the Redevelopment Plan. This document, which has been updated from time to time to conform to changes in State Law, will continue to guide Agency relocation activities in Project Area No. 2. Pursuant to the Law, if the Agency implements a project that results in relocation, no persons will be displaced prior to the provision of decent, safe and sanitary housing. ROSENOW SPEVACEK GROUP, INC. PAGE F-1 Section G An Analysis of the Preliminary Plan The Preliminary Plan for the Amendment Was approved by the City of La Quinta Planning Commission ("Planning Commission") on September 9, 2003 and accepted by the Agency on September 16, 2003. The Preliminary Plan described the boundaries of Project Area No. 2 and included general statements of the proposed land uses, layout of principal streets, population densities, building intensities, and building standards. It also addressed how the Amendment would attain the purposes of the Law. It discussed the conformance with the General Plan and generally reviewed potential impacts the Amendment would have on residents and the surrounding neighborhood. The Amendment conforms to the standards and provisions of the Preliminary Plan, as detailed below: Prowect Area No. 2 Location and Description: This section of the Preliminary Plan describes the boundaries of Project Area No. 2. The Amendment does not propose any changes to these boundaries. General Statement of Proposed Planning Elements: This section of the Preliminary Plan states that land uses, proposed layouts of principal streets, proposed population densities, proposed building intensities, and proposed building standards shall be subject to and controlled by the General Plan, Zoning Ordinance, and other local codes, as amended from time to time. The Amendment does not propose any changes to population or development densities or land use designations. Attainment of the Purposes of the Law: This section of the Preliminary Plan descdbes how the current limit on cumulative tax increment revenue impairs the Agencys ability to address the remaining blighting condkions within Project Area No. 2 and significantly limit the Agencys ability to fund new affordable housing initiatives. Addressing remaining blight and the provision of affordable housing attain the purposes of the Redevelopment Law. ROSENOW SPEVACEK GROUP, INC. PAGE G-1 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT Conformance to the General Plan: Both the Preliminary Plan and gedevelopment Plan conform to the standards, policies and provisions of the General Plan, as they exist or are hereafter amended. General Impact of the Proposed Projecl: Upon the Residents of the Added Area and Surrounding Neighborhoods: This section of the Preliminary Plan states that by amending the Redevelopment Plan, the Agency will gain additional financial capacity to facilitate additional infrastructure improvements, enhance economic development activities, improve community facilities, and improve existing and provide new affordable housing opportunities. Other impacts associated with the implementation of the Plan have been assessed and analyzed in the Mitigated Negative Declaration on the Redevelopment Plan, included in Section K of this Report, and the Neighborhood Impact Report, incorporated in Section M of this Report. ROSENOW SPEVACEK GROUP, INC. PAGE G-2 Section -W TIM and lecornmenclations of the Planning Commission On September 9, 2003, the Planning Commission adopted Resolution No. 2003-108 as its report and recommendation on the draft Plan. A copy of the Planning Commission's Report and the Resolution follows this page. ROSENOW SPEVACEK GROUP, INC. PAGE H-1 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT {Replace this page with a copy of the September 9 Planning Commission Resolution approving the Preliminary Plan.) ROSENOW SPEVACEK GROUP, INC. PAGE H-2 Section I W%_ 4 - .9 The MWF%R L md Remmmendations of the Project Area Commiftee Because the Redevelopment Plan does not grant the Agency authority to acquire prop erty by eminent domain, the Amendment does not modify the Redevelopment Plan to establish eminent domain authority, and because the Amendment does not take any other action that would require the formation of a Project Area Committee, the Agency was not required to form a -Project Area Committee. ROSENOW SPEVACEK GROUP, INC. PAGE 1-1 Section i On September 9, 2003, the Planning Commission adopted Resolution No. 2003-108, determining that the Amendment and implementation activities described therein are in conformity with the General Plan of the City, pursuant to Government Code Section 65402. A copy of the Planning Commission resolution is included in Section H of this Report. . ROSENOW SPEVACEK GROUP, INC. PAGE J-1 Section -K- The Mitigated Negative Dedaration As part of the amendment process, the Agency processed a Mitigated Negative Declaration regarding the environmental impact of the Amendment. A copy follows. ROSENOW SPEVACEK GROUP, INC. PAGE K-1 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT Replace this page with a copy of the Mitigated Negative Declaration.) ROSENOW SPEVACEK GROUP, INC. PAGE K-2 Section --L- Report of dw County Fiscal Officer Because the Amendment does not change the base year assessment roll, this report was not required for the Amendment. ROSENOW SPEVACEK GROUP, INC. PAGE L-1 Sect'ion M 1 1 F-01�- -I , - T Ilk L 7� -0 --a ,I -- I I I -I I -. ',�: " 0i .1 'A I I Lo� A* The Law requires that the following topics be addressed in the Neighborhood Impact Report: relocation, traffic circulation, environmental quality, availability of community facilities and services, effect on school population and quality of education, property assessments and taxes, and other matters affecting the physical and social quality of the neighborhood. The. report must also discuss the impact the Redevelopment Plan will have on low- and moderate -income persons or families in the following areas: the number of dwelling units to be removed or destroyed; the number of persons expected to be displaced; the general location of housing to be rehabilitated or constructed; the number of dwelling units planned for construction or rehabilitation; the projected means of financing the aforementioned dwelling units; and the projected timetable for meeting the Redevelopment Plan's relocation, rehabilitation and replacement housing objectives. Project Area No. 2 is primarily developed with residential uses; commercial is the secondary use but represents a small percentage of total land use. The Redevelopment Plan does incorporate the California Relocation Assistance and Real Property Acouisition Guidelines as the Method of Relocation for Project Area No. 2. Prior to the commencing of property acquisition activity that would cause displacement of either businesses or residents, the Agency will adopt a relocation plan in conformance with State Guidelines. ROSENOW SPEVACEK GROUP, INC. PAGE M-1 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT When the original Redevelopment Plan was adopted many traffic and circulation problems impacted traffic circulation in Project Area No. 2. The Redevelopment Plan includes numerous improvements to the traffic and circulation system to alleviate the existing deficiencies and provide for improvements that will mitigate future traffic increases resulting from new development. The basic goal of the Redevelopment Plan is to improve the overall environmental quality of Project Area No. 2 by addressing the existence of certain environmental deficien - cies. The Redevelopment Plan seeks to remedy the substandard vehicular circulation, and storm drainage systems, utility infrastructure, park and recreation facilities and other similar public improvements including provisions to fu�d needed community facilities. The -Redevelopment Plan's objectives also direct the Agencys efforts toward providing and expanding housing opportunities for low- and moderate -income households citywide. A Mitigated Negative Declaration was prepared for the Amendment that indicates that the Amendment will not have an adverse effect on the overall environmental quality of Project Area No. 2. Future development will be reviewed by both the City and the Agency to ensure that architectural, landscaping and urban design principals are adhered to and that compatibility in uses is maintained. Additionally, where required, more specific environmental. analysis will take place as required by CEQA. The County of Riverside provides police and fire protection services under contract to the City of La Quinta. The County also provides library services. Implementation of the Redevelopment Plan is not expected to adversely impact community facilities or services within the area. The Amendment will not alter the -delivery of these services because it does not alter the allocation of property tax payments made to these agencies. ROSENOW SPEVACEK GROUP, INC. PAGE M-2 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT The Desert Sands School District provides public education services for elementary and high school -aged children. The Coachella Valley Community College District provides post high school education services. The Amendment will not after the delivery of these services because it does not after the allocation of property tax payments made to these agencies. The Amendment'will not after the allocation* pf property tax increment revenue. It will increase the amount of tax increment revenue the Agency may receive from Project Area No. 2, but this will not increase property taxes or impose new or additional assessments. A. Number of Dwelling Units Housing Low- and Moderate -income Households Expected to be Removed by the Redevelopment Project Redevelopment Plan implementation activities may result in the displacement of low- and moderate -income households will be displaced by Redevelopment Plan implementation activities. The Amendment would provide the Agency with the additional financial capacity to implement projects that lead to the acquisition and redevelopment of mobile home parks in Project Area No. 2. These are older properties that have unsafe and unsanitary conditions. With additional tax increment revenue capacity, the Agency would have the financial capability to acquire these parks and redevelopment them with new residential uses. Since the Agency has the need to secure additional dwellings that are affordable to very low, low and moderate -income households, the Agency intends to replace any displaced dwellings with new dwelling that are affordable to households in the income categories of those displaced. If future specific implementation activities impact housing in Project Area No. 2, the number of units will be identified. This responsibility is set forth in Section 512 of the Redevelopment Plan. As such and in accordance with the Law, whenever dwelling units housing persons and families of low- or moderate -income, are destroyed or removed from the low- and moderate -income housing market as part of a redevelopment project, the Agency shall, within four years of such destruction or removal, rehabilitate, develop or construct, or cause to be rehabilitated, developed or ROSENOW SPEVACEK GROUP, INC. PAGE M-3 REPORT TO THE CITY COUNCIL LA QUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT constructed, for rental or sale to persons and families of low- or moderate - income an equal number of replacement dwelling units at affordable rents within the City. Pursuant to Section 33413 of the Law, at least 30 percent of all new or rehabilitated dwelling units developed within Project Area No. 2 by the Agency shall be available at affordable costs for persons and families of low- and moderate -income; and of such 30 percent, no less than 50 percent thereof shall be available for and occupied by very low-income households. At least 15 percent of all new or rehabilitated units developed within Project Area No. 2 by public or private entities or persons other than the Agency shall be available at affordable cost for persons and families of low- and moderate -income; and of such 15 percent, not less than 40 percent thereof shall be available for and occupied by low-income households. The percentage requirements set forth in Section 532 of the Redevelopment Plan shall apply independently of the requirements of Section 531 of the Redevelopment Plan and in the aggregate to the supply of housing to be made available pursuant to this Section and not to each individual case of rehabilitation, development or construction of dwelling units. Pursuant to the Law, not less than 20 percent of all taxes which are allocated to the Agency pursuant to subdivision (b) of Section 33670 of the Law and Section 702(2) of the Redevelopment Plan shall be used by the Agency for the purposes of increasing and improving the Citys supply of low-, very low- and moderate -income housing available at affordable housing cost, as defined by the Law. All non-residential persons or businesses displaced by the Agency will be assisted in finding other suitable locations and facilities. The Agency shall assist these persons or businesses in the methods set forth in the Agency's Method of Relocation as outlined in the Redevelopment Plan. Additionally, the Agency shall extend reasonable preferences to persons who are engaged in business in Project Area No. 2 to re-enter into business within Project Area No. 2 if they otherwise meet the requirements prescribed by the Redevelopment Plan. B. Number of Persons and Families of Low- and Moderate -Income Expected to be Displaced by the Redevelopment Project None at this time C. General Location of Replacement Low- and Moderate -income Housing to be Rehabilitated, Developed and Constructed The Agency is bound by the Law to replace within four years, by a variety of means, any low- and moderate -income dwelling units removed by a ROSENOW SPEVACEK GROUP, INC. PAGE M-4 REPORT TO THE CITY COUNCIL LA OUINTA REDEVELOPMENT PROJECT NO. 2 AMENDMENT project. A commitment to do so is contained in Section 531 of the Redevelopment Plan. Construction of replacement low- and moderate -income housing will be dependent upon land availability, market conditions and availability of funds. The Agency's present intention is to develop a series of mixed income developments throughout Project Area No. 2. D. Number of Dwelling Units Housing Persons of Low- and Moderate -income Planned for Construction or Rehabilitation Other than Replacement Housing Based upon the projections contained in the Agencys Second Amended Housing Affordability Compliance Plan, the Agency must secure 636 affordable units of which 254 must be affordable to very low-income households. To date, the Agency has secured 420 affordable units in Project Area No. 2, of which 75 are affordable to very low-income households. This leaves the need to secure an additional 37 units affordable to low- and moderate -income households, and 179 units affordable to very low-income households. E. Projected Means of Financing Rehabilitation and New Construction of Housing for Low- and Moderate -Income Households The Agency intends to utilize tax increment revenues of not less than 20 percent as provided by Section 33670 of the Law. Agency will also cooperate with the City to pool funds and resources beyond the tax increment set aside funds if it is determined to be necessary by both bodies. F. Projected Timetable for Meeting the Redevelopment Plan's Relocation, Rehabilitation and Replacement Housing Objectives All relocation activities will comply wfth timeframes established by Title 25, Chapter 6 of the California Administrative Code and Section 33413 of the Health and Safety Code. Further, all replacement housing requirements will be met within the four year time frame established by the Law. ROSENOW SPEVACEK GROUP, INC. PAGE M-5 Section A Summary of the Agency% Consulb-, ons with Affect6d Twdng im"MIU111.12u The Agency currently has agreements with all of the taxing agencies that levy property taxes in Project Area No. 2: • County of Riverside • City of La Quinta • Coachella Valley Community College District • Riverside County Superintendent of Schools • Coachella Valley Water District • Coachella Valley Recreation and Park District • Desert Sands Unified School District 0 Coachella Valley Mosquito and Vector Control District 0 Coachella Valley Public Cemetery District Coachella Valley Resource Conservation District On eptember 17, 2003, these entities were mailed, via certified mail, the Statement of Preparation of the Redevelopment Plan Amendment. On November 19, 2003, the Preliminary Report and Draft Redevelopment Plan were transmitted via certffied mail to the taxing entities. Finally, on December 23, 2003, all taxing Agencies were mailed via certified mail the notice of joint public hearing scheduled for January 20, 2004. As a part of each of these transmfttals, the Agency offered to consult with the affected taxing entities pursuant to Section 33328 of the Law. To date Agency staff has received inquiries from the Coachella Valley Mosquito and Vector Control District, the Coachella Valley Water District, and the Coachella Valley Park and Recreation District. The Mosquito and Vector Control District representative requested that the District's name be modified to reflect its new charge, to control both vectors and mosquitoes. The Water District requested additional copies of the Preliminary Plan and ROSENOW SPEVACEK GROUP, INC. PAGE N-1 Preliminary Report. Finally, Agency staff is holding discussions with the Park and Recreation District regarding the park and recreation facilities that Agency has, and intends, to fund pursuant to the fiscal mitigation agreement. Since these meetings will occur after this Report has been published, Agency staff will provide additional information regarding these discussions at the January 20, 2004 Joint Public Hearing. ROSENOW SPEVACEK GROUP, INC. PAGE N-2