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RDA RES 1994-017 RESOLUTION NO. RDA 94-17 A RESOLUTION OF THE RANCHO PALOS VERDES REDEVELOPMENT AGENCY ADOPTING AN IMPLEMENTATION PLAN FOR PROJECT AREA NO. 1 THE RANCHO PALOS VERDES REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. The Redevelopment Plan for Project Area No. 1 of the Rancho Palos Verdes Redevelopment Agency (the "Project Area") was approved and adopted by Ordinance No. 190 of the City Council of the City of Rancho Palos Verdes on November 27, 1984. Section 2. Health and Safety Code Section 33490 requires that each redevelopment agency that has adopted a redevelopment plan prior to December 31, 1993, adopt, after a public hearing, an implementation plan on or before December 31, 1994 containing the specific goals and objectives of the agency for the project area, the specific programs (including potential projects) , and estimated expenditures proposed to be made during the next five years, and an explanation of how the goals and objectives, programs and expenditures will eliminate blight within the project area and implement the low and moderate income housing requirements of the Community Redevelopment Law (Health and Safety Code Section 33000, et sea. ) . Section 3 . The Agency has prepared an implementation plan for the Project Area, attached hereto as Exhibit A and incorporated herein by reference (the "Implementation Plan") , in accordance with the requirements of Health and Safety Code Section 33490. Section 4. On December 6, 1994, the Agency held a duly noticed public hearing on the proposed adoption of the Implementation Plan at which time all persons desiring to comment on or ask questions concerning the Implementation Plan were given the opportunity to do so. Prior to the public hearing on the Implementation Plan, copies of the draft Implementation Plan were available for public inspection in the office of the City Clerk. 11/ Section 5. The Agency has reviewed and considered all written and oral comments, questions and concerns regarding the Implementation Plan received prior to and at the public hearing on the Implementation Plan. Section 6. The Agency hereby adopts the Implementation Plan as the implementation plan for the Project Area pursuant to the requirements of Health and Safety Code Section 33490. 1 Section 7. The Implementation Plan may be amended from time to time after a public hearing on the proposed amendment. Section 8. Adoption of the Implementation Plan does not constitute an approval of any specific program, project or expenditure and does not constitute a project within the meaning of Section 21000 of the Public Resources Code. Section 9. The Agency hereby directs that the Implementation Plan remain on file in the office of the City Clerk and be open to public inspection. PASSED, APPROVED and ADOPTED this 6th day of December 1994. L)-, ts CHA ATTEST: e,tka__&—C-------- AGENCY SECRETARY STATE OF CALIFORNIA } COUNTY OF LOS ANGELES }ss CITY OF RANCH PALOS VERDES } I, Jo Purcell, Agency Secretary of the City of Rancho Palos Verdes Redevelopment Agency, hereby certify that the above Resolution No. 94-17 was duly and regularly passed and adopted by the said Redevelopment Agency Board at a regular meeting thereof Feld on December 6, 1994. 4/0 pL12/ IENCY� SECRETARY DJ34:5YRPLAN.RES Resolution No. RDA 94- 17 Page 2 of 2 RESOLUTION NO. RDA 94-17 EXHIBIT "A" FIVE YEAR IMPLEMENTATION PROGRAM RANCHO PALOS VERDES REDEVELOPMENT AGENCY November 18, 1994 Prepared for: Rancho Palos Verdes Redevelopment Agency 30940 Hawthorne Boulevard Rancho Palos Verdes, Ca. 90274-5391 Prepared by: Sandra Genis, Planning Resources 1586 Myrtlewood St. Costa Mesa, Ca. 92626 (714) 754-0814 BACKGROUND On November 20, 1984, the Rancho Palos Verdes Redevelopment Agency established Project Area No. 1 and adopted a Redevelopment Plan for the area. The 1,240 acre Project Area is predominantly in single family residential use with small amounts of institutional, recreational and agricultural uses. The vast bulk of development occurred prior to 1962. The Project Area includes the Abalone Cove, Portuguese Bend, and Klondike Canyon landslides and adjoining areas and roughly corresponds to the City's Landslide Moratorium Area. The continuous earth movement has resulted in blighted conditions in the area. Palos Verdes Drive South, the major circulation element in the area, is in perpetual need of repair, as are other infrastructure. The landform is fractured with steep scarps and rifts, and homes are set at odd angles. In response to these continuing conditions, the Redevelopment Project Area was established. In 1993, the California Legislature passed Assembly Bill 1290 (Isenberg) which was a comprehensive revision of State redevelopment law. In accordance with AB 1290, by December 31, 1994, each redevelopment agency must adopt an Implementation Plan which contains the specific goals and objectives for the project area, the projects and expenditures anticipated for the next five years, an explanation as to how the projects and expenditures will eliminate blight and respond to overall redevelopment goals and a five year housing plan (Health and Safety Code Section 33490). The required housing plan must include the number of housing units to be developed, destroyed, price-restricted, rehabilitated, or otherwise assisted (Health and Safety Code Section 33490). In addition to addressing replacement and inclusionary requirements, the plan must describe how the agency intends to utilize the twenty percent housing set aside funds. The requirements of AB 1290 were further refined by Senate Bill 732 (Bergeson). This plan is intended to respond to the Implementation Plan requirements of AB 1290 and SB 732. I RESOL. NO. RDA 94-17 1 of 11 REDEVELOPMENT GOALS AND OBJECTIVES The goals and objectives of the adopted Redevelopment Plan are to: eliminate physical and economic blight in the Project Area through the stabilization of hazardous landslides. eliminate the conditions of physical and economic blight existing in the Project Area and to prevent the recurrence of blighting conditions in the Project Area. The Redevelopment Plan proposes to accomplish this by: planning, development, replanning, redesign and rehabilitation of the Project Area; providing such structures and spaces as may be appropriate or necessary in the interest of the general welfare; providing for the alteration, improvement, modernization, reconstruction and rehabilitation of existing structures in the Project Area; providing for open space types of uses, public and private buildings, structures, facilities and improvements; In particular, the Plan proposes that the Agency take such actions as may be necessary, desirable or appropriate to abate the blighting geologic hazards which exist in the Project Area. FIVE YEAR PLAN Over the next five years the agency proposes to undertake actions to eliminate blight by ameliorating the effects of unstable geologic conditions on infrastructure and to abate the geologic hazards existing in the Project Area. Projects will be funded by tax increment financing supplemented by other funds that may be appropriate and available, such as proceeds from a special assessments and a loan from the City to the Agency. The loan must be repaid from Agency funds, however. For purposes of administration, the funds have been separated into the Abalone Cove Landslide Fund and the Portuguese Bend Landslide Fund. Due to the critical nature of problems in the landslide area, the City has also utilized Community Development Block Grant Funds and Federal Emergency Management Agency Funds for remedial work in the area. The Army Corps of Engineers has also participated in funding. These additional sources of funding are not administered through the Agency, however, and this Implementation Plan addresses only Agency funded programs and projects. RESOL. NO. RDA 94-17 2 of 11 The Redevelopment Plan provides for the Agency to undertake such actions as may be necessary, desirable, or appropriate to abate geologic hazards existing in the Project Area. The Redevelopment Plan provides for a number of improvements which would either stabilize earth movement or repair damage due to the continued slide activity. Many of these actions are geared toward control of excessive moisture in the slide area which has served to lubricate the slide and to destabilize the earth. As set forth in the Redevelopment Plan, the Agency proposes to pay for all or part of the value of land for and the cost of installation or construction of the following buildings, structures, and improvements which will be publicly owned: Dewatering wells Pipelines Storm Drains Breakwaters Jetties Culverts, pipes, and channels Revetments Relocation or reconstruction of Palos Verdes Drive South and other public streets serving the Project Area. Installation or relocation of utilities Potential projects are geared to be undertaken by the Agency in the next five years and estimated expenditures include: Moisture Control As noted above, excessive moisture in the Project Area aggravates existing unstable geologic conditions. This includes natural moisture and moisture from human activities, such as landscape watering and use of septic tanks. Further, as infrastructure is damaged by slide movement, leaks in water pipes and sanitary sewers release additional moisture. Thus, projects which will control moisture in the Project Area will help eliminate blighting conditions through the stabilization of hazardous landslides. These include: Altamira Canyon Drainage Improvements This project will eliminate excess moisture from the Altamira Canyon area, thus reducing the destabilizing effect of such moisture. The project includes construction of a new debris basin, channel lining, and storm drain improvements. Estimated Expenditure: $1,243,000 Time Frame: 1994-1995 Kelvin Canyon Drainage Improvements This project will develop a system to capture spring water to eliminate excess moisture from the Kelvin Canyon area, thus reducing the destabilizing effect of such moisture. RESOL. NO. RDA 94-17 3 of 11 Estimated Expenditure: $371,000 Time Frame: 1995-1996 Abalone Cove Drainage Improvements This project consists of installation of storm drains and culverts in the existing developed areas, thus reducing the destabilizing effect of excessive moisture area. Estimated Expenditure: $337,000 Time Frame: 1994-1995 Abalone Cove Sanitary Sewer System, Most of the homes in the Project Area are not connected to a sanitary sewer, but are on private septic systems. This has contributed to excessive moisture and slide lubrication. The project will provide sanitary sewers for the entire Abalone Cove area above Palos Verdes Drive South. Estimated Expenditure: $2,188,000 Time Frame: 1994-1995 Dewatering and Observation Wells, This project will provide for monitoring of water tables in the project area to more adequately assess the need for additional drainage improvements and will remove excess moisture from the various slide areas, thus reducing the destabilizing effect of such moisture. The information obtained through monitoring will be utilized to identify and design further improvements which can help stabilize the landslide. Project costs include well construction, power for well operation, and heavy equipment support for erosion control. Estimated Expenditure: $1,000,000 Time Frame: 1994-1999 Other Stabilization Efforts Other landslide stabilization efforts focus on structural means of stopping of slowing earth movement. These activities will help to eliminate the blight created by continued earth movement and include: Shoreline Protection Feasibility Study This project is to be undertaken under the auspices of the Army Corps of Engineers, and is one of the priorities established for stabilization of the landslide. The study is anticipated to take three years. This study will assist in the development of strategies for stabilization of the landslide area. RESOL. NO. RDA 94-17 4 of 11 Estimated Expenditure: $308,000 Time Frame: 1995-1998 Shoreline Protection Environmental Processing This activity will provide for processing of environmental documents for construction of the shoreline protection projects identified in the Shoreline Protection Study. As such, it is a necessary step in the process of establishing shoreline protection measures. Estimated Expenditure: $300,000 Time Frame: 1998-2000 Stabilization Toe Berm This project will consist of the construction of an earthen berm at the toe of the landslide and is designed to reduce or halt landslide movement. This is a major project which will be commenced in 1998 but is not anticipated for completion until within the time frame of this Implementation Plan. Estimated Expenditure: $2,000,000 (within Implementation Plan time frame) Time Frame: 1998-2000 Rehabilitation of Blighting Conditions Ongoing earth movement has resulted in damage to infrastructure. This damage not only constitutes a blighting condition in and of itself, but, in the case of water or sewer lines, can exacerbate unstable geologic conditions through the release of additional moisture. Thus, the Abalone Cove Sanitary Sewer System and erosion control costs discussed above will eliminate blighting conditions both through stabilization of landslide activity and repair of blighting conditions created by the landslide. Administration Administrative activities include legal review of agency contracts and other activities, project administration activities undertaken by engineering staff, and ongoing studies. These are support functions for the projects outlined above, and as such will assist in elimination of the blighting conditions due to earth movement. Estimated Expenditure: $60,000 per year Time Frame: Ongoing RESOL. NO. RDA 94-17 5 of 11 Housing In accordance with Sections 33334.2, 33334.3 and 33334.6 of the Health and Safety Code, twenty percent of tax increment revenues have been and will continue to be set aside for low and moderate income housing purposes. Approximately $64,000 is added to this fund annually. This is discussed in more detail in the following section. HOUSING PLAN The Rancho Palos Verdes Redevelopment Plan does not contain specific goals or objective related to housing. However, the California State Legislature has declared that: the provision of housing is itself a fundamental purpose of the Community Redevelopment Law and...a generally inadequate statewide supply of decent, safe, and sanitary housing affordable to persons and families of low or moderate income...threatens the accomplishment of the primary purposes of the Community Redevelopment Law (California State Health and Safety Code Section 33334.6(a)) Thus, redevelopment agencies have an implicit responsibility to become active in the housing arena. Under State law, redevelopment agencies have three specific responsibilities with regard to housing: 1) A housing set-aside requirement, whereby twenty percent of the redevelopment tax increment must be set aside for the purpose of increasing, improving, and preserving housing affordable to very low, low, and moderate households (Section 33334.2, and 33334.6 of the Health and Safety Code). The City currently contains significant numbers of households which could be aided by the required housing programs. The 1990 Federal Census identified 1,176 very low income households, 683 low income households, and 1,493 moderate income households residing in the City of Rancho Palos Verdes. It is anticipated that the Agency will have a balance of$457,000, in its LMI Fund by the end of the 1994-95 Fiscal Year. LMI funds are accruing to the Agency at the rate of about $64,000 per year. Unspent or unencumbered LMI Funds in excess of the greater of $1,000,000 or the aggregate amount deposited into the LMI Fund over the previous four years are considered to be "excess surplus funds" (Health and Safety Code Section 33334.12). Based on current accrual rates, total LMI funds deposited in a four year period would be well below $1,000,000, and therefore the Agency's limit for accrual of excess surplus funds would be $1,000,000. Thus, the Agency would not accumulate an excess surplus until at least 2001, even if no funds were expended. However, as identified in this plan, the Agency does plan to expend funds for housing purposes. 2) An inclusionary requirement, whereby at least thirty percent of all new and substantially rehabilitated dwelling units developed by the agency must be available at housing costs affordable to low and moderate income persons or families (Health and Safety Code Section 33413(b)(1)),and fifteen percent of new or substantially rehabilitated RESOL. NO. RDA 94-17 6 of 11 housing units developed by other parties within the Project Area must be available at housing costs affordable to low and moderate income persons and families (Section 33413(b)(2)). For purposes of inclusionary requirements, "substantially rehabilitated" means rehabilitation worth at least twenty five percent of the value of the property following rehabilitation, including land value (Section 33413(b)(2)(A)(iv)). 3) A replacement requirement, whereby low and moderate income housing eliminated as a result of a redevelopment project must be replaced (Health and Safety Code Sections 33413(a) and 33413.5). An agency's required housing plan must address how a redevelopment agency will fulfill its housing responsibilities under State Law. The Rancho Palos Verdes Redevelopment Agency does not contemplate the destruction of or elimination of existing low and moderate income housing in order to implement the redevelopment project. No new or price-restricted single family or multi-family housing projects have been developed in the project area since its formation or are anticipated at this time or within the next ten years or over the duration of the Redevelopment Plan. Further, substantial rehabilitation of a property as defined in the Code, i.e. improvement worth twenty five percent or more of total property value after rehabilitation, has not occurred in the Project Area since its formation and would be highly unlikely over the next ten years or the life of the Redevelopment Plan, due to the high cost of land in the City as compared to the cost of improvements. Therefore, no units have been developed in the Project Area which meet the requirements of Section 33415 (b)(2) of the Health and Safety Code or are required to be developed within the Project Area to meet the requirements of Section 33413 (b)(2) of the Code. The existing building moratorium due to the unsafe conditions caused by the landslide severely limits potential new development or redevelopment, although the moratorium may be lifted in a limited portion of the moratorium area. Any easing of the moratorium would apply only to single family homes held by separate owners. Thus, no new housing or even substantial rehabilitation would be anticipated, and only the first of the housing responsibilities listed above, the set aside requirement, is currently applicable to the Agency on a practical basis. The twenty percent low and moderate income (LMI) housing fund must be utilized in a manner consistent with the goals of the local redevelopment plan and State housing goals. Goals of the Agency Plan include the elimination of blight and the abatement of geologic hazards in the project area, and, as noted above do not specifically address housing. Housing must be provided for very low and low income households in at least the proportion of total very low, low, and moderate income housing need allocated to lower income groups, unless the very low and low income housing need is being met by other agencies. In its latest 1988 Regional Housing Needs Assessment (RHNA), the Southern California Association of Governments (SCAG) indicated that unmet housing need existed in the City of Rancho Palos Verdes, which corresponds to the Redevelopment Area. At that time the following need was determined: RESOL. NO. RDA 94-17 7 of 11 Income Level Dwelling Units Percent of Percent of Very Needed Total Low to Moderate Very Low 38 7.6 27.9 Low 46 9.1 33.8 Moderate 52 10.3 38.2 High 366 73.0 --- Total 502 100.0 100 Activity in the years since 1989 has not exceeded this need. A new regional housing needs assessment had been originally scheduled for completion by SCAG in 1993. However, the preparation of the 1993 needs assessment has been temporarily suspended due to lack of State funding for this State mandate. The LMI Funds are to be expended for housing in the project area or elsewhere in the community if the Agency and the City Council adopt a resolution finding that the LMI Fund expenditure will be of benefit to the Project Area (Health and Safety Code Section 33334.2(g)). Due to unstable earth conditions and lack of suitable sites in the Project Area, the Agency anticipates use of LMI Funds elsewhere in the Redevelopment Area. New development in the Project Area will consist primarily of stabilization efforts and infrastructure repair and improvements. It is anticipated that these activities may generate some new employment in the area. This would include engineers and other professional in the moderate income range as well as construction employees in moderate and lower income groups. This may create an associated increase in the demand for housing affordable to lower and moderate income households. Further, existing residents require the provision of domestic and commercial services in the area which generate employees and an associated need for lower and moderate income housing. Therefore, efforts to increase affordability of housing elsewhere in the Redevelopment Area will be of benefit to the Project Area. Activities an agency may pursue in order to provide housing include (Health and Safety Code Section 33334.2(e)): Land acquisition Building acquisition On-site or off-site improvements associated with the development of affordable housing On-site or off-site improvements found necessary for the elimination of a specific condition which jeopardizes the health and safety of existing low or moderate income residents Donation of real property Financing certain insurance premiums Building rehabilitation Subsidies to, or for the benefit of, very low, low and moderate income tenants Preserve the availability of previously assisted housing Loans Bond payments Development of plans RESOL. NO. RDA 94-17 8 of 11 Increases in the supply of lower and moderate income housing may be provided through new construction or through use of funds to reduce the cost of existing, more expensive housing to residents. Due to the modest balance available in the LMI Fund, the construction of a new housing project would not be economically feasible without substantial financial assistance from other sources. Housing ma y also be preserved or provided through expenditure of funds to maintain housing costs at an affordable level when costs would otherwise be expected to rise above a level affordable to a low or moderate income household. Recognizing the limited funding and costs of staff time, the Agency will focus its housing program efforts on affordability write-downs and the Mortgage Credit Certificate program. These programs will allow lower and moderate income households to afford housing which would otherwise be beyond their economic reach as described in the following sections. Affordability Write-Downs, LMI funds will be used to reduce rents of apartments otherwise not affordable to low or moderate income households. Under this program, the property owner or his agent will be responsible for monitoring tenant income and reporting to the City on a regular basis. The units provided would be considered new units added to the affordable housing stock, though not new units in the overall housing stock. This will constitute a subsidy for the benefit of very low, low, or moderate income households, as provided by Section 33334.2(e)(8) of the Health and Safety Code. The Agency will work with owners of existing rental housing and new developers to write down rents. As a condition of approval of a number of residential developments, the City has required that the applicant make provision for development of some level of affordable housing. In some cases, the specific housing program has not yet been clearly defined. Use of LMI funds may increase the feasibility of inclusionary programs or enhance a minimal inclusionary program. Greater numbers of units at a more affordable range may result from pooling of resources in a public/private partnership. Any such programs will involve close examination of project financing in order to ensure maximum benefit for any funds expended. Based on an estimated write-down of $450 to $500 per month, which is the approximate difference between a current affordable low income rent and mean rental rate, this program would cost $5,000 to $6,000 per unit per year for low income households and approximately $700 per month, or $8,400 per unit per year for very low income households. An appropriate discount rate would be applied to payments for future years in the case of long term covenants. Based on these factors, long term write downs would be anticipated to cost $50,000 to $60,000 per low income unit and $85,000 to $95,000 per very low income unit. Initial administrative costs will include legal fees and costs for review of project economic statements, and would be conservatively estimated at $15,000 per agreement. Thus, units will be consolidated under one contract, rather than provided through individual affordability contracts for each unit. Further, the program would be more efficiently initiated after accrual of substantial additional monies in the LMI Fund. Administrative costs should be minimal after program initiation inasmuch as the bulk of the burden of tenant screening and fund administration would fall on the property owner, not on City staff. RESOL. NO. RDA 94-17 9 of 11 Initial Administrative Cost: $15,000 initial Ongoing Administrative Cost: $1,000 per year thereafter Time Frame: Initiate first contract 1998 Units Provided: 5 very low income units, 7 low income units Mortgage Credit Certificate Under the Mortgage Credit Certificate (MCC) program, a first time home buyer may receive a direct federal income tax credit for up to twenty percent of mortgage interest, rather than the traditional write-off against income. The mortgage lender must consider this reduced tax liability in calculating allowable mortgage limits. Thus, the home buyer may be able to afford and qualify for a larger loan. MCC's may be used with conventional fixed rate and adjustable mortgages. Gross income for the home buyer must not exceed 115 percent of county median, adjusted for household size. The home must become the buyer's principal residence within sixty days of execution of financing. Eligible properties include detached homes, condominiums, and duplexes where the buyer will occupy one of the units. The purchase price of the home must not exceed ninety percent of the average home price in the county, which currently equates to approximately $191,000. Local real estate listings do include a few condominiums which could be eligible for this program. This program would be expected to serve primarily moderate income households. The program will be administered through the county and private lenders. In order for home buyers in a city to participate, the city must enter into a cooperative agreement with the County and pay a one time $2,000 enrollment fee for the city. In addition, the City might sustain additional minor costs in providing public information and making referrals. Costs would not be expected to exceed a few thousand dollars per year. Initial Costs: $2,000 enrollment, $2,000 administrative Ongoing Costs: $1,000 per year administrative Initiate Program: 1995 Units assisted: 5 moderate income households RESOL. NO. RDA 94-17 10 of 11 Housing Plan Summary Units Provided 1995 1996 1997 1998 1999 TOTAL New Units Developed 0 0 0 0 0 0 Units Destroyed 0 0 0 0 0 0 Units Substantially 0 0 0 0 0 0 Rehabilitated Units Price Restricted 0 0 0 0 0 0 Through Acquisition Units Otherwise 1 1 1 7 7 17 Assisted Funds Expended 1995 1996 1997 1998 1999 Beginning $457,000 $544,420 $640,085 $741,490 $503,979 Balance Increment Added $64,000 $64,000 $64,000 $64,000 $64,000 Interest $27,420 $32,665 $38,405 $44,489 $30,239 Funds Expended $2,000 0 0 $330,000 $450,000 for Housing Program Administration of $2,000 $1,000 $1,000 $16,000 $16,000 Housing Fund Transfers to 0 0 0 0 0 Other Agencies Balance $544,420 $640,085 $741,490 $503,979 $132,218 RESOL. NO. RDA 94-17 11 of 11