BILL ANALYSIS
SENATE LOCAL GOVERNMENT COMMITTEE
Senator Dave Cox, Chair
BILL NO: AB 1791 HEARING: 6/16/10
AUTHOR: Monning FISCAL: No
VERSION: 5/24/10 CONSULTANT: Detwiler
REDEVELOPMENT AT FORT ORD
Background and Existing Law
When the number of redevelopment agencies and project areas
exploded after Proposition 13 (1978), county officials
complained that cities were declaring farmland and open
space as "blighted" and including the properties in
so-called bare land redevelopment projects. Legislators
responded by requiring redevelopment project areas to be
"predominantly urbanized." At least 80% of the land in a
project area must have been or is developed for urban uses
or is integral to developed urban areas (AB 322, Costa,
1983).
A decade later, legislators worried that redevelopment
officials were accelerating the fiscalization of land use
by using their powers to approve development projects on
undeveloped land to generate sales tax revenues.
Legislators responded by prohibiting redevelopment
officials from providing any direct assistance to auto
dealerships and to the development of five acres or more
which had not been developed for urban uses and which
generate sales or use tax revenues. However, that ban
doesn't apply to office, hotel, manufacturing, and
industrial developments (AB 1290, Isenberg, 1993). A later
bill also banned direct redevelopment assistance to casinos
(AB 2063, Isenberg, 1996).
The end of the Cold War forced the Pentagon to adjust to
new geopolitical realities. Federal officials closed or
realigned nearly three dozen military bases in California.
To coordinate the transition of the former Fort Ord
(Monterey County), the Legislature created the Fort Ord
Reuse Authority (FORA) to adopt a Fort Ord Reuse Plan. The
County of Monterey and the cities that cover the former
base must conform their general plans and zoning to FORA's
reuse plan (SB 899, Mello, 1994). FORA adopted its Final
Base Reuse Plan in 1997.
AB 1791 -- 5/24/10 -- Page 2
To accelerate the redevelopment of former military bases,
legislators passed several bills, including special
legislation for the former Fort Ord. FORA can establish
the Redevelopment Agency of Fort Ord with its own
redevelopment project areas. Alternatively, the
redevelopment agencies established by the County of
Monterey and the cities that cover the former Army base can
set up their own redevelopment project areas (SB 1600,
Mello, 1994).
The Final Base Reuse Plan for Fort Ord lays out the future
land uses for the 45-square mile former Army base,
including areas for housing, commerce, recreation, public
uses, and open space. Of particular interest is the
development of about 60 acres near the former base's main
gate as a "life-style regional retail center." However,
FORA and local officials point out that because this
property isn't "predominantly urbanized," redevelopment
officials can't provide direct assistance to potential
private builders.
At the September 2009 joint hearing of the Assembly and
Senate Local Government Committee, FORA and local officials
told legislators that without redevelopment subsidies, it
will be difficult to interest private investors in building
the Seaside Main Gate project. Besides the Main Gate
project, there are about 300 other acres of undeveloped
land that the Final Base Reuse Plan designated for land
uses that generate sales taxes. The officials want an
exemption from the state law that prohibits redevelopment
officials from providing direct assistance to sales tax
generating land uses on previously undeveloped property.
Proposed Law
Assembly Bill 1791 exempts specified territory in a
redevelopment project area within Fort Ord from the state
law that prohibits redevelopment officials from providing
direct assistance to the development of five acres or more
which had not been developed for urban uses and which will
generate sales tax revenues.
For territory to qualify, the Fort Ord Reuse Authority's
Final Base Reuse Plan, as the plan existed on January 1,
2010, must designate the territory as a:
AB 1791 -- 5/24/10 -- Page 3
Planned development mixed-use district.
Business park with light industrial, office, and
research and development mixed uses.
Neighborhood retail space.
Regional retail space.
Space designated for visitor services use.
Before a redevelopment agency can use this exclusion, AB
1791 requires the agency to adopt a resolution which finds
that:
Its community has adopted a general plan housing
element which the State Department of Housing and
Community Development has determined substantially
complies with state law.
For the past three fiscal years, the agency has not
been included by the State Controller's Office on a
list of redevelopment agencies that have not corrected
major audit violations.
The agency has not accumulated an excess surplus in
its Low and Moderate Income Housing Fund.
AB 1791 -- 5/24/10 -- Page 4
Comments
1. Building on success . Unlike many former military
bases, the conversion of Fort Ord to productive civilian
uses has earned broad support. Careful preparation and
thoughtful collaboration produced a base reuse plan that
won the support of the county government and the affected
cities. Moving from the planning phase into
implementation, each of the underlying cities and the
county has its own redevelopment agency to promote private
investment in housing, education, commercial, and
industrial uses. In addition, the base reuse plan reserved
large areas for recreation, habitat conservation, and other
open spaces. To accelerate the development of key parcels,
AB 1791 exempts five categories of commercial development
from the statutory ban on providing redevelopment aid to
previously undeveloped property. Without priming the
economic development pump, it may take years before those
acres attract private real estate investors. Building
those high-profile projects will generate the property tax
increment revenues needed to redevelop the rest of Fort
Ord.
2. Redevelopment, not development . Blight is the gateway
to redevelopment. The Legislature gave redevelopment
officials the extraordinary powers of eminent domain and
property tax increment revenues so they can eradicate the
physical and economic blight that drags down older suburbs
and central cities. Redevelopment was never meant to
subsidize private construction on bare land. The 1983,
1993, and 2006 statutory reforms were reactions to what
legislators perceived as local misuses of state
redevelopment law. State law specifically prevents
redevelopment officials from directly aiding commercial
development on larger parcels of undeveloped property that
produce sales taxes. AB 1791 is the first exemption to
that 1993 reform, but it won't be the last. Why shouldn't
other former military bases ask for the same special
treatment? If local officials can subsidize retail at the
former Fort Ord, why not at the former Mather AFB, Concord
Naval Weapons Station, Mare Island Naval Shipyard, or NAS
Alameda? Why not let the Richmond Community Redevelopment
Agency subsidize the proposed casino at the former Naval
Fuel Depot Point Molate? It's a slippery slope.
3. Sales tax generators . The fiscalization of land use
AB 1791 -- 5/24/10 -- Page 5
occurs when public officials base their land use decisions
on development projects' costs and revenue consequences,
not on the need for jobs, affordable housing, environmental
quality, or resource conservation. When legislators
thought that local officials were luring big box stores,
car dealers, casinos, and other sales tax generating land
uses into redevelopment project areas, they put a stop to
those subsidies. FORA's reuse plan identifies six
categories of commercial land uses that could generate
sales taxes and AB 1791 exempts all of them except
"convenience retail." If legislators accept the argument
that builders need public subsidies to jump-start private
investment at Fort Ord, the Committee may wish to consider
why local officials should subsidize the redevelopment of
vacant land for "neighborhood retail" and "visitor serving"
projects? Why not just focus on mixed-use development,
industrial projects, and regional retail?
4. A Mammoth problem . In its 2000 Friends of Mammoth
decision, the Fourth District Court of Appeals explored the
redevelopment statute's requirement for predominantly
urbanized project areas. That decision rejected the Town
of Mammoth Lakes' attempt to count the undeveloped parts of
a golf course, a community college site, and a local
airport as predominantly urbanized. Relying on earlier
decisions, including the 2000 Murrieta case and the 1984
Honey Springs decision, the Court concluded that not-vacant
isn't the same as urbanized. FORA and local officials
recognize that some of the land planned for future
commercial uses was never "urbanized" when Fort Ord was a
military base. That's why the exemption in AB 1791 helps
to implement the base reuse plan.
5. Who gets what ? According to FORA, AB 1791 allows four
redevelopment agencies to subsidize sales tax generating
land uses on up to 364 acres of Fort Ord's 28,000 acres:
Planned Business &NghbrhoodRegional
Visitor
Agency Mixed-Use Industrial Retail Retail
Serving
Del Rey Oaks 0 0 0 05
Marina 83 0 0 0 0
Monterey (city) 0 0 0 00
Monterey (county) 42 54 0 10 0
Seaside 60 0 49 61 0
Totals 185 54 49 71 5
AB 1791 -- 5/24/10 -- Page 6
6. Screening out the bad actors . None of the four
redevelopment agencies that AB 1791 helps can use the
bill's exemption until it meets the bill's three criteria
for (a) adopting a valid housing element, (b) avoiding
major redevelopment audit violations, and (c) avoiding an
excess surplus of affordable housing money. The City of
Marina and the County of Monterey appear to pass those
tests. However, the cities of Del Rey Oaks and Seaside
haven't adopted valid housing elements. Further, Del Rey
Oaks' redevelopment agency has serious audit findings that
need correcting. Until local officials fix their problems,
they won't be able to take advantage of AB 1791's
exemption.
Assembly Actions
Assembly Local Government Committee: 7-2
Assembly Floor: 50-15
AB 1791 -- 5/24/10 -- Page 7
Support and Opposition (6/10/10)
Support : Fort Ord Reuse Authority, County of Monterey,
Cities of Del Rey Oaks, Marina, Monterey, Pacific Grove,
Sand City, Seaside, Transportation Agency for Monterey
County.
Opposition : LandWatch Monterey County, 3 individuals.