BILL ANALYSIS
SB 93
Page 1
Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Anna Marie Caballero, Chair
SB 93 (Kehoe) - As Amended: July 1, 2009
SENATE VOTE : 34-0
SUBJECT : Redevelopment: payment for land or buildings.
SUMMARY : Distinguishes between the public works projects that a
redevelopment agency (agency) can finance inside and contiguous
to redevelopment project areas and the public works projects
that an agency can finance outside project areas.
Specifically, this bill :
1)Provides that an agency may, with the consent of the
legislative body, pay all or a part of the value of the land
for and the cost of the installation and construction of any
building, facility, structure, or other improvement that is
publicly owned and is located inside or contiguous to the
project area, if the legislative body determines all of the
following:
a) The acquisition of land or the installation or
construction of the buildings, facilities, structures, or
other improvements that are publicly owned are of benefit
to the project area by helping to eliminate blight within
the project area or providing housing for low- or
moderate-income persons;
b) No other reasonable means of financing the acquisition
of the land or installation or construction of the
buildings, facilities, structures, or other improvements
that are publicly owned, are available to the community;
and,
c) The payment of funds for the acquisition of land or the
cost of buildings, facilities, structures, or other
improvements that are publicly owned is consistent with the
agency's adopted implementation plan.
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2)Defines "contiguous" as the parcel on which the building,
facility, structure, or other improvement that is publicly
owned is located shares a boundary with the project area or is
separated from the project area only by a public street or
highway, flood control channel, waterway, railroad
right-of-way, or similar feature.
3)Authorizes an agency, with the consent of the legislative
body, to pay all or a part of the value of the land for and
the cost of the installation and construction of any building,
facility, structure, or other improvement that is publicly
owned and is located outside and not contiguous to the project
area, but is located within the community, if the legislative
body finds, based on substantial evidence in the record, all
of the following:
a) The acquisition of the land or the installation or
construction of the buildings, facilities, structures, or
other improvements that are publicly owned are of primary
benefit to the project area;
b) The acquisition of the land or the installation or
construction of the buildings, facilities, structures, or
other improvements that are publicly owned benefits the
project area by helping to eliminate blight within the
project area, or will directly assist in the provision of
housing for low- or moderate-income persons;
c) No other reasonable means of financing the acquisition
of the land or the installation or construction of the
buildings, facilities, structures, or other improvements
that are publicly owned, are available to the community,
including, but not limited to, general obligation bonds,
revenue bonds, special assessment bonds, or bonds issued
pursuant to the Mello-Roos Community Facilities Act of
1982.
i) In determining whether other means of financing are
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feasible, the legislative body may take into account any
relevant factors, including, but not limited to:
(1) Legal factors, such as the eligibility of the
improvements for funding under the governing statutes;
(2) Economic factors, such as prevailing interest
rates and market conditions; and,
(3) Political factors, such as the priority of
commitments of other public funding sources, the
ability or willingness of property owners or taxpayers
to bear the cost of any special assessments, taxes, or
other charges, and the likelihood of obtaining voter
approval, if required.
d) The payment of funds for the acquisition of land or the
cost of buildings, facilities, structures, or other
improvements that are publicly owned is consistent with the
agency's adopted implementation plan; and,
e) The acquisition of land and the installation of each
building, facility, structure, or improvement that is
publicly owned is provided for in the redevelopment plan.
4)Specifies that an action to challenge the above findings
section shall be filed and served within 60 days after the
date of the resolution containing the findings.
5)Prohibits the agency and legislative body from authorizing or
approving the settlement of any judicial action that contests
the validity of the adoption or amendment of a redevelopment
plan if the settlement requires the expenditure of funds
outside the project area unless the agency and the legislative
body have first held a public hearing on the proposed
settlement.
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6)Establishes noticing requirements for the settlement hearing.
7)Prohibits an agency from paying for the normal maintenance or
operations of buildings, facilities, structures, or other
improvements that are publicly owned.
8)Repeals the requirement that an agency, with respect to the
financing, acquisition, or construction of a transportation,
collection, and distribution system and related peripheral
parking facilities, in a county with a population of four
million persons or more, enter into an agreement with the
rapid transit district that includes the county, or a portion
thereof, under which the rapid transit district is required to
be given specified responsibilities.
EXISTING LAW :
1)Authorizes an agency, with the consent of the legislative
body, to pay all or a part of the value of the land for, and
the cost of the installation and construction of, any
building, facility, structure, or other improvement that is
publicly owned either within or without the project area if
the legislative body determines that:
a) The public works benefit the project area or the
immediate neighborhood;
b) No other reasonable means of financing are available;
and,
c) Paying for the public works helps eliminate blight
inside the project area or provides affordable housing and
is consistent with the agency's implementation plan.
2)States that the determinations made by the agency and the
local legislative body are final and conclusive.
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3)Requires the agency, with respect to the financing,
acquisition, or construction of a transportation, collection,
and distribution system and related peripheral parking
facilities, in a county with a population of four million
persons or more, to enter into an agreement with the rapid
transit district that includes the county, or a portion
thereof, under which the rapid transit district is required to
be given specified responsibilities.
FISCAL EFFECT : None
COMMENTS :
1)In May 2005, the San Diego City (City) Council adopted a
redevelopment plan for the 990-acre Grantville Redevelopment
Project Area. In July 2005, San Diego County (County) sued,
alleging that the area did not meet the statutory tests for
physical blight and economic blight; that the area was not
predominantly urbanized; and, that officials failed to show
that redevelopment was essential to eliminate any blight.
2)In June 2008, the County and City agreed to settle the lawsuit
challenging the Grantville Project Area. The San Diego
Redevelopment Agency will pay nearly $31.4 million from the
Grantville Project Area to the City for downtown transit line
improvements. The Centre City Development Corporation (the
quasi-government entity that manages redevelopment in downtown
San Diego) will pay the County nearly $31.4 million for the
North Embarcadero Project Improvements on County-owned
property. The Centre City Development Corporation reported
that the payments to the County will be 80% of the property
tax revenues that the County would have received from the
Grantville Project Area. The July 2008 formal settlement
agreement noted that state law allows redevelopment officials
to pay for public works outside the project area if local
officials make determinations.
3)At Senator Kehoe's request, the Attorney General reviewed the
settlement agreement and raised two issues. First, the
Attorney General questioned whether Grantville funds should
pay for the downtown trolley projects. Second, the Attorney
General noted that the settlement agreement "might also be
construed as an effort to bypass legal restrictions on the use
of redevelopment funds to settle litigation." In September
2008, a local citizens group sued the City over the settlement
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agreement. The case is pending and there is no trial date.
4)According to the author's office, SB 93 tightens up the
state's redevelopment law to make sure that projects paid for
by redevelopment agencies directly benefit the residents whose
property tax dollars are being used to support the agency's
work. The author believes that
SB 93 will make redevelopment agencies more accountable to
California's taxpayers and adhere to legislative intent.
5)Many redevelopment agencies have strategically planned for the
construction of necessary public improvements. These public
works projects are an essential component of a long-term
redevelopment strategy. In many cases, they support private
and public investments that have already addressed the
original conditions of blight in the project area. Opponents
to
SB 93 argue that there are cases across the state where
scheduled public improvements that may occur outside of the
project area could be in dispute based on the new
determination requirements established under this measure.
The Committee may wish to add a "grandfathering" clause to the
bill in order to protect those public works projects that may
be under construction or otherwise contractually obligated
outside of the project area.
6)PROPOSED AMENDMENT :
Add: The provisions of this Section shall not apply if the
financing, construction or installation of the land,
buildings, facilities, structures or other improvements are an
obligation of the agency under a contract existing on December
31, 2009, are specifically described in the implementation
plan prepared by the agency pursuant to section 33490 as of
July 1, 2009, or are specifically provided for in the
redevelopment plan, as of December 31, 2009. If the
provisions of this section do not apply as set forth in this
subsection (d), the provisions of Section 33445 shall apply.
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REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees
CA Redevelopment Association (if amended)
CA Rural Legal Assistance Foundation
Cities of Poway, Vista, and West Hollywood
Councilmember Marti Emerald, 7th District, City of San Diego
Councilmember Sherri S. Lightner, 1st District, City of San
Diego
Councilmember Donna Frye, 6th District, City of San Diego
Grantville Action Group
League of CA Cities
Opposition
CA Association for Local Economic Development
Cities of Brea, Burbank, Cathedral City, La Quinta, Los Angeles,
Sacramento, San Marcos
Cities of Fountain Valley, Glendale, Salinas, and Seaside
(unless amended)
City of Westminster Redevelopment Agency (unless amended)
County of Monterey (unless amended)
County of Santa Cruz
La Quinta Redevelopment Agency
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958