Loading...
HomeMy WebLinkAbout6237 RESOLUTION NO. 6237 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA APPROVING AND ADOPTING RESPONSES TO AND OVERRULING WRITTEN OBJECTIONS REGARDING THE PROPOSED AMENDMENT NO. 5 TO THE CENTRAL REDEVELOPMENT PLAN WHEREAS, the proposed Amendment No, 5 to the Central Redevelopment Plan ("Plan") has been prepared by the Redevelopment Agency of the City of Arcadia ("Agency") pursuant to Community Redevelopment Law (Health and Safety Code section 33000 et seq.) ("CRL"); and WHEREAS, on July 3, 2001, a duly noticed joint public hearing on the proposed Plan was conducted by the City Council of the Arcadia ("City Council") and the Agency; and WHEREAS, any and all persons having any objections to the proposed Plan, including but not limited to the findings of blight and the economic feasibility of adopting and carrying out the Plan, or the regularity of the proceedings, were given an opportunity to submit written comments prior to the commencement or at the joint hearing, or to give oral testimony at the joint public hearing, and show cause why the proposed Plan should not be adopted; and WHEREAS, the City Council received written objections from property owners and affected taxing entities, attached hereto as Exhibit A; and WHEREAS, the City Council directed Agency staff to respond in detail to such written objections in detail, giving reasons for not accepting specified objections and suggestions; and 1 6237 WHEREAS, the City Council has reviewed such written responses; and WHEREAS, the City Council has heard and considered all evidence, both written and oral, presented in support of and in opposition to the adoption of the Plan; and WHEREAS, pursuant to CRl Section 33352, in connection with the proposed adoption of the Plan, the Agency has prepared the Agency's Report to City Council which is on file in the office of the City Clerk and available for public inspection, NOW, THEREFORE THE CITY COUNCil OF THE CITY OF ARCADIA, CALIFORNIA DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOllOWS: SECTION 1. The City Council hereby finds that all persons have had the opportunity to be heard or to file a written objection to the proposed Amendment No, 5 to the Central Redevelopment Plan including but not limited to the findings that the Project Area is blighted and that the adoption and carrying out of the Plan is economically feasible, and to the regularity of the proceedings with respect to the proposed Plan, and having heard and reviewed such oral and written objections, the City Council hereby makes findings in response to each written objection as set forth in Exhibit "A", attached hereto and incorporated herein by this reference, and determines that there are compelling reasons to justify adoption of the Plan, as proposed, notwithstanding such written and oral objections, SECTION 2, The City Council further finds on the basis of substantial evidence contained in the Agency's Report to City Council, and other substantial evidence in the record, that conditions of blight exist within the Plan's project area; and that all other conditions to and requirements for the adoption of the Redevelopment Plan have been 2 6237 satisfied; and that written and oral evidence in opposition received prior to or at the joint public hearing is not persuasive to the contrary. SECTION 3. The City Council and the Agency have duly complied with all provisions, requirements and procedures of the CRL relating to the preparation and adoption of Amendment No.5 to the Central Redevelopment Plan. SECTION 4, The City Council hereby accordingly overrules any and all objections, and more specifically, those written objections of affected property owners and taxing entities, to the adoption of Amendment No, 5 to the Central Arcadia Redevelopment Plan. SECTION 5. The City Clerk shall certify as to the adoption of this resolution and shall cause the same to be processed in the manner required by law. Passed, approved and adopted this 10th day of July, 2001 ATTEST:, , ~Ay~ C Clerk__ APPROVED AS TO FORM: , ~p~ City Attorney 3 6237 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) SS: CITY OF ARCADIA ) I, JUNE D. ALFORD, City Clerk of the City of Arcadia, hereby certifies that the foregoing Resolution No, 6237 was passed and adopted by the City Council of the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular meeting of said Council held on the 10th day of July, 2001 and that said Resolution was adopted by the following vote, to wit: A YES: Councilmember Chandler, Chang, Marshall and Segal NOES: None ABSENT: Councilmember Kovacic 4 6237 EXHIBIT A TO CITY COUNCIL RESOLUTION 6237 WRITTEN OBJECTIONS TO THE PROPOSED SOUTH ARCADIA AMENDMENT NO.5 TO THE CENTAL REDEVELOPMENT PLAN A 1, Document: Letter of June 11, 2001 from F, L. Berberian with petition signed by 25 tenants, 2, Objection 3, Response to Objection 4. Disposition B1. Document: Memo of Seifel Consulting, Inc, dated June 14, 2001 provided by LA County Chief Administrator's Office "Review of Findings include in the Preliminary Report for Amendment No.5 to the Central Redevelopment Project, City of Arcadia." 2. Objection 3. Response to Objection 4. Disposition . , . F.L. BERBERIAN BERBERIAN PROPERTIES 147 North Santa Anita Avenue Arcadia. California 91006-3109 (,JIo (m) 447-6932 Fa., flUll) 445-5507 '-H, f!P Received r JUN 18 2001 Development Services Economic Development Division June 11, 2001 Mr. Pete Kinnahan Economic Development Admin. Arcadia Redevelopment Agency p, 0. Box 60021 Arcadia, Ca, 91066-6021 RE: CENTRAL REDEVELOPMENT PROJECT Dear Mr. Kinnahan: Being a property owner of two areas of this project, I would like to voice my opposition. I have owned the properties at 121-159 N. Santa Anita Ave. and 125 E. Santa Clara Street for more than 25 years, The properties are fully occupied, attractive and have been very well maintained all of these years. I very strongly deny the existence of blight on or around my properties. Many of my present tenants have been with me for more than 15 years with established businesses in the area. It will be extremely difficult for them to pull up roots and relocate elsewhere, As in any city, the co-existence of light industry, retail and commercial in Arcadia is essential for that city's success. All of us feel that the newest and most glamorous surroundings are not the answer, Enclosed are signatures of my tenants who would strongly oppose any further redevelopment of the above listed pruperties. P l;:ase reconsider. Thank you for your time. Sincerely, BERBERIAN PROPERTIES R~ Owner ---- -- DOCUMENT A THE FOLLOWING OPPOSE THE CENTRAL REDEVELOPMENT PROJECT TA ANITA AVE.. ANALIST TURF -157 N. SANTA ANITA AVE. ~ ;;&Arz'/"l BobL~. ~ 'ARALEGAL - 155 N. SANTA ANITA AVE.. AMERICAN KENPO CON 'EPTS - 153 N. SANTA ANITA AVE.. ~ U.S. PAGERS & CELLULAR-151.N. SANTA ANITA AVE. ~>~ ~---- Steve Terzian . STATE FARM -149 N. SANTA ANITA AVE. ~ b" ~<J Tom G. Metzger ' -145 N. SANTA ANITA AVE. ENTERPRISE, INC -123 N. SANTA ANITA AVE. C!/l:!~ Mi eH6 "J FIRST CHINESE SCHOOL -121 N. SANTA ANITA AVE. ~l-r;e~tc9t'~ Florence Wang Lee THE FOLLOWING OPPOSE mE CENTRAL REDEVELOPMENT PROJECT 125 E. SANTA CLARA ST. - UNITS #1 - #20 JEDTRADERS-UNlTS#IAND#5 ~~ Ed teau SQUARE HEAT - UNIT #3 G ~&J~ amartin/"eesar Rhodes ~O~ ISC - UNIT #2 Steve Nahabedian --. RICH ELECTRIC - UNIT #4 ~//~ Rich Protich HEARN KARTING - UNIT #6 ~~/L Richard Hearn /) i I~~'( PROvEN ADY.- UNITS #9/#10 PASADENA TILE - UNITS #7/#8 -c"--0 I Ian Borucki u)df//~e~~ Bill Provence AUDIO IMPORTS - UNIT # 11 r:Jr LJ ( 6 ~ '"'-- . I hn Pornazi MONTECITO ARTS - UNIT #12 eel ~/m!/~ Ed Kuckelkom CONTINUED EMBRACEABLE YOU - #13 ~ L/ Vpn ;Ji J€Jmy Vo ffoL T6/2.-M MAl AXCEL GRAPIDCS - UNIT #14 -~~ Alex CREATIVE MEMORIES - #15 ARCADIA PRECISION # 16 BRITEC CARPET CLEAN, - # 17 2:/ ~1-VOU-j) \.j Bryan 0 d FABRI-QUIPT SYSTEMS - #18/#19 9 / WHITE'S TOOL GRINDING #20 ~~'--CreLv-!2J: J es White .- Seifel CONSULTING INC. 13BB Sutter Street Suits 520 San Francisco, CA 94109-5452 415,931,9600 Fax 931.9602 www~eifel.com Memorandum ReceIved " '....... '\ \ JUN 2 1 2801 June 14, 2001 To: Development SelVices Economic Development Division Martin Zimmerman, Assistant Division Chief Office of Unincorpor;~ Area Services a~{y:ec~al Projects Elizabeth (Libby) Sei~nd MarieJohn~ r. Review of Findings Included in the Preliminary Report for Amendment No.5 to the Central Redevelopment Project, City of Arcadia From: Subject: This memorandum includes a summary of the analysis of the City of Arcadia's Preliminary Report for Amendment No.5 to the Central Redevelopment Project. The proposed amendment would add the South Arcadia Amendment Area to the existing Central Redevelopment Project Area. Seifel Consulting Inc, prepared this memorandum in collaboration with Counry staff, The,analysis presented in this memorandum is based on an evaluation of Preliminary Report No.5, a field survey of the South Arcadia Amendment Area, and a review of supplemental documents on the proposed Amendment and other documents provided by the Agency and the County, We evaluated the Preliminary Report findings in relationship to the requirements set forth in California Redevelopment Law (CRL) and three recent relevant court cases: Beach-Courchesne v, City of Diamond Bar (1998); County of Riverside v, City of Murrieta (2000); and Friends of Mammoth v. Town of Mammoth Lakes (2000). In addition to reviewing the Preliminary Report blight findings, this memorandum discusses two other related requirements of the California Redevelopment Law, the nexus between redevelopment activities and blight alleviation and the necessity for redevelopment, The organization of the memorandum is as follows: Executive Summary A. Existence of Blight B. Nexus between Redevelopment Activities and Blight Alleviation C. Necessiry for Redevelopment Assistance{fax Increment Financing D. Conclusion Please contact us if you have any questions or need further assistance. DOCUMENT B Executive Sllmmary Seifel Consulting Inc., in collaborarion with County staff, prepared this memorandum summarizing the analysis of the City of Arcadia's Preliminary Report for Amendment No, 5 to the Central Redevelopment Project. The proposed amendment would add the South Arcadia Amendment Area to the existfng Central Redevelopment Project Area. The analysis evaluated the Preliminary Report findings in relationship to the requirements set forth in California Redevelopment Law (CRL) and three recent relevant court cases, The documentation presented in the Preliminary Report does not appear to be sufficient to meet the requirements of the CRL concerning the existence of blight, the nexus between redevelopment activities and blight alleviation, and the necessity for redevelopment. Additional information is needed to meet these three requirements. Specifically, the Report needs further documentation to address the following concerns: · The Report does not include a discussion of how substandard design, inadequate parking and lots of irregular shape and inadequate size in multiple ownership have prevented or substantially hindered the economically viable use of the properties or how they present a serious burden to the community. Also, it does not clearly connect the economic blighting condition of stagnant property values to the physical blighting conditions. . The Report discusses infrastructure inadequacies in general terms. It does not present specific documentation as to why the infrastructure is deficient, nor does it demonstrate how the condition of the infrastructure impedes the Amendment Area, . When the maps presented in Preliminary Report are overlaid, it is not apparent that the blighting conditions are substantial and pervasive, Some portions of the Amendment Area exhibit physical deterioration, but others do not. Those portions of the area that do not exhibit blighting conditions should only be included if necessary for effective redevelopment, However, the Report does not discuss why these areas are needed for effective redevelopment, . The Report does not clearly indicate how redevelopment assistance will be used to alleviate blighting conditions. Redevelopment resources are not specifically allocated for the Commercial Fa<;ade Rehabilitation Program, Business Retention/Attraction and Incentive Program, or Property Acquisition. The only programs that the Agency proposes to fund in South Arcadia are public improvements, and the Report does not prese~t a discussion on how these public improvements will alleviate the blighting conditions. . The Report does not present specific information on the limitations of other sources of funding for the redevelopment activities. It does not clearly demonstrate that no other reasonable means of financing the improvements are available to the communiry. Seitel Consulting Inc. 2 A. Existence of Blight The CRL reqUires that an area proposed to be added to a redevelopment plan meet the same legal eligibiliry requirements as a new project area. Pursuant to CRL Section 33030, an added area must be both predominantly urbanized and exhibit a combination of the physical and economic blighting conditions defined in CRL Section 33031. Specifically, the CRL requires that at least one physical blighting condition and at least one economic blighting condition be present in the area proposed for redevelopment. (The CRL allows one exception to this requirement: an area can qualify as blighted if it contains subdivided lots of irregular form and shape and inadequate size for proper usefulness and development-that are in multiple ownership. In this instance, no other factor of blight is required for qualification.) A redevelopment agency must demonstrate that these blighting conditions are substantial andprevalent. Furthermore, the agency must find that the elimination of blight and the redevelopment of the added area could not reasonable be expected to be accomplished by private enterprise and/or government without redevelopment assistance, The Preliminary Report for Amendment No.5 presents documentation for one physical blighting condition and one economic condition in the South Arcadia Amendment Area, along with a general discussion of the condition of buildings and lots in the area. Given the . requirement for a combination of blightingJactors with at least one physical condition and at least one economic condition, if the documentation for either condition is not adequate, the South Arcadia Amendment Area would not qualify for redevelopment. L CRL Requirements for Physical and Economic Blight The characteristics that can be used to support a finding of blight and the statutory definitions are presented below. (Excerpts from,the CRL are italicized,) Section 33030 of the CRL describes the standards for and the characteristics of blighted areas: (a) I t is found and declared that there exist in many communities blighted areas, which constitute physical and economic liabilities. requiring redevelopment in the interest of the health, safety, and general welfare of the people of these communities and of the state. [33030(a)j (bj. A blighted area is one that contains both of the following: (]) An area that is predominately urbanized, as that term is defined in Section 33320,1, and is an area in which the combination of conditions set forth in Section 33031 is so prevalent and so . substantial that it catlSes a reduction of, or lack of, proper utilization of the area to such an extent that it constitutes a seriotlS physical and economic burden on the community which cannot reasonably be expected to be reversed or alleviated by private enterprise or governmental action, or both, without redevelopment, (2) An area that is characterized by either of the foUowing: . (A) One or more conditions set forth in any paragraph of subdivision (a) of Section 33031 and one or more conditions set forth in any paragraph of subdivision (b) of Section 33031, (B) The condition described in paragraph (4) of subdivision (a) of Section 33031, Sellel Consulting Inc. 3 (c) A blighted area also may be one that contains the conditions described in subdivision (b) and is, in addition, characterized by the existence of inadequate public improvements, parking facilities, [Ir utilities, CRL Section 33031 describes both physical and economic conditions that can be used as evidence of blight: Physical Conditions The CRL definition for physical blight is as follows: . Buildings in which it is unsafe or unhealthy for persons to live or work, These conditions can be caused by serious building code violations, dilapidation and deterioration, defective design or physica!.conscruction, faulty or inadequate utilities, or other similar factors, 33031(a)( 1) . Factors that prevent or subsumtially hinder the economically viable use or capacity of buildings or lots, This condition can be caused by a substandard design, inadequate size given present standards and market conditions, lack of parking, or other similar factors, 33031(a)(2) . Adjacent or nearby uses that are incompatible with each other and which prevent the economic development of those parcels [Ir other portions of the project area, 33031 (a)(3) . The existence of subdivided lots of irregular frmn and shape and inadequate size for proper usefulness and development that are in multiple ownership, 33031 (a) (4) Economic Conditions The CRLdefinition for economic blight is as follows: . Depreciated [Ir stagnant property values or impaired invesl71lents, including, but not necessarily limited w, those properties containing hazardous wastes that require the use of agency authority as specified in Article 12.5 (commencing with Section 33459), 33031(b)(1) . Abnormally high business vacancies, abnormally low lease rates, high turnover rates, abandoned buildings, [Ir excessive vacant lots within an area developed for urban use and served by utilities. 33031 (b)( 2) . A lack of necessary commercial facilities that are normally found in neighborhoods, including grocery stores, drug stores, and banks and Other lending institutions. 33031(b)(3) . Residential overcrowding or an excess of bars, liquor swres, or other businesses that cater exclusively to adults, that has led w problems of public safety and welfare, 33031 (b) (4) . A high crime rate that constitutes a serious threat w the public safety and welfare, 33031 (B)(5) Z.. Physical Blight Findings The Preliminary Report for Amendment No.5 presents documentation for one physical blighting condition, described on page 11 as "factors that prevent or substantially hinder the economically viable use or capaciry of buildings or lots." The Preliminary Report provides a general discussion of the condirion of buildings and lots in the area but does not appear to make a finding that the condition described in Section 33031(a)(1) exists, The Preliminary Report also describes lots of irregular shape and inadequate size in multiple ownership as a condition contributing to "factors that prevent or substantially hinder the economically viable use or capacity of buildings or lots," but it does not make a finding that the condition described in Section 33031(a)(4) exists. Seilel Consulting Jne, 4 a. Finding for Factors that Inhibit Proper Use of Buildings or Lots The Preliminary Report presenrs documentation for the physical blignting conditioIi factors that inhibit proper use of buildings or lors. As listed above, the CRL defines this factor of blight as follows: Factors that prevent OT substantially hinder the ecorwmicaUy viable use OT capaary of buildings DT Iors, This condition can be caused by a substandard design, inadequate sil;e given present standards and market conditions, lack of parking, or other similar factDTs, 33031(a)(2) The Preliminary Report documentation for the existence of this condition of blight includes: . Substandard Design The Report cites 51 buildings (55%) with substandard design (poorly laid out, inadequate in size for current use, and/or have shifting uses from one category of land use to another), The report states that these factors indicate that the building design is substandard relative to current market demands. - Buildings of inadequate size: The tepOrt noted that more than half of the buildings in the Amendment Area are of inadequate size based on modem commercial standards (minimum 5,000 square feet), - Poor site configuration: 20 parcels have poor site figuration, including buildings fronting on street with no front yard setback and few side yard setbacks; limited parking at rear of buildings that conflicrs with loading and servicing activities; and lack of parking access for mid-block parcels that makes them undesirable to businesses that need plentiful and visible parking for customers. The Report noted that modem retailing standards require parking in the front of buildings to allow easy access for customers to park. . Inadequate Parking The Report states that 21 parcels have inadequate parking: I parcel has no onsite parking, 9 parcels have poor parking accessibility (access via an alley), and 14 have insufficient parking spaces (parking not visible from the street or with too few spaces for their location), . Lots of irregular shape and inadequate size in multiple ownership The documentation includes 54 parcels (53%) of less than minimum parcel size, The Report's analysis used .46 acres as the minimum parcel size, About 66 of the 90 non-public parcels were less than 200 feet in depth (the minimum depth that Keyser Marston Associates notes is needed to accommodate onsite parking required for neighborhood strip retail development, assuming parcel width of 50 feet, parcel depths of 80-120 feet for shop space and 5,000 square foot building), . The Preliminary Report concludes that these small lot sizes and physical constraints make rehabilitation and reuse of properties in the AmendmentArea difficult. Recent Relevant Court Decisions Concerning Factors that Inhibit Proper Use of Buildings or Lots The following excerpts from recent Court decisions demonstrate the Court's current opinion regarding the necessity of demonstrating how physical factors prevent the economically viable use or capacity of buildit:lgs or lors. (Key language is in boldface text,) Seilel Consulting Inc. 5 Beach-Courchesne \I. On of Diamond Bar Although the City found that 27% of all buildings in the project area exhibited one or more conditions of defective design, including inadequate vehicular access, substandard building materials and inadequate loading areas, the City did not identify a single building as suffering from such conditions. Similarly, although the City found the retail centers were plagued by inadequate vehicular access, it did not indicate which locations suffer from inadequate vehicular access or lack of adequate loading areas. Likewise the City has not specified the basis of its finding that 24% of the buildings in the project area have one or more characteristics of substandard design, including obsolescence and outdoor storage and/or production, Moreover, there is no specification as to how such conditions have hindered the economically viable use of these unidentified properties within the meaning of section 33031, subdivision (a)(2), as claimed by the City. We are given only generic reasons "which might apply to any property anywhere," (Gonzales, supra, 12 Ca. App, 4"' at p. 1346,) Further, there is no specification as to the 20% of buildings which lack adequate parking, or any showing to quantify how inadequate parking has hindered the economically viable use of those properties, In this regard, the only specification in the agency's report to council consists of the following: one residential street near a commercial office structure was lined with cars; and a certain industrial park had only four parking spaces for each tenant space." ". The asserted conditions of physical blight are set forth in conclusionary and summary tenns, The purported physical blight is discussed only in generalities, without any showing of the extent to which the alleged blighting conditions have prevented or substantially hindered the economically viable use of the properties. (Section 33031, subd. (a)(2).) Friends of Mammoch v, Town of Mammorh Lakes Two of the Town's findings do not satisfy the requirements of the statute. Physical conditions causing blight do not result just from factors that limit a parcel's economic viability; they arise from factors that "prevent or substantially hinder" a parcel's economic viability. (Health & Saf, Code S 33031, subd. (a)(2), emphasis added.) Determinations of blight are to be made on the basis of an area's exisring use, not its potential use. Redevelopment "never can be used just because the public agency considers that it can make a better use or planning of an area than its present use or plan," (Sweetwarer Valley Civic Assn. V. City of National City (1976) 18 Ca1.3dd 270,278.) Thus, factors limiting a building or lot. which is currently enjoying an economically viable use or capacity from achieving potentially greater economic returns are outside the scope of subdivision (a)(2) of Health and Safety Code section 33031. Rather, the evidence must show the existence of physical conditions (such as design, size, lack of parking, etc.) which prevent or substantially hinder an existing use or capacity of a lot or building from achieving or maintaining economic viability, Furthermore, the statute's language shows the Legislature was not interested in merely the existence of the suggested physical conditions. Substantial evidence must show the physical factors actually prevent or substantially hinder an existing use or lot's economic viability. For example, many economically viable uses, particularly in urban areas, lack sufficienr auromobile parking, Nevertheless, such uses conrinue to be profitable, demonstrating lack of parking for those uses is nor a factor preventing or hindering their economic viability. They possibly could be more profitable with more parking, but subdivision (a)(2) of Health and Safety Code section 33031 applies only if those uses and lots suffer economic nonviability now. Accordingly, contrary to the Town's argument, the record must demonstrate substantial evidence quantifying the effect the physical condition has on the economic viability for the existing use or capacity of the building or lot... - Seifel Consulting Inc, 6 The rrial Court found that the following passage from the Final Report demonstrated the economic effect of this physical characterisric: 'Lack of parking and the res'!ttip.g Pilrking oyerflow from inadequate .parking to sites which meet parking demand is a strong deterrent to economic development and business expansion, particularly for commercial and industrial uses. Combined with the inadequately sized lots, lack of parking and lack of adequate loading areas causes inaccessibility, traffic congestion and lost business.' However, there is nothing in the record demonstrating that in fact the lack of parking has actually resulted in decreased or lost business. Nowhere does the Town produce facts demonstrating that even one Iiarticular business has lost customers or revenue due to substandard site design... ..The Town claims the Final Report's presentation of the Town's sales tax and transient occupancy tax revenues over the past five years provides substantial evidence for the physical condition's economic impact, We disagtee, Thls evidence shows tax teceipts from the entire Town, not JUSt the Project Area, Furthennore, the Town Council could not detennine from the evidence that the flat rate of tax revenues was caused by defective design or construction, inadequate lot sizes, or substandard site design. The rate of revenues could have been caused by a myriad of different reasons, This evidence is far too disconnected to demonstrate the lack of economic viability due to the physical factors here at issue, Analysis of Finding for Factors that Inhibit Proper Use of Buildings or Lots Recent court cases underscore the importance of documenting not only the factors inhibiting the proper use of buildings or lots, but also how the factors have hindered the economically viable use of the buildings or lots. The Preliminaty Report's documentation describes the location of the factors inhibiting proper use of buildings or lots, including substandard design, inadequate parking, or lots of irregular shape and inadequate size in multiple ownership. However, it does not include a discussion of how these factors have ptevented or substantially hindered the economically viable use of the properties. According to recent court cases, the Agency must futther demonstrate how these factors prevent or substantially hinder the economic viability or capacity of the buildings or lots, The Preliminary Report does not include economic data indicating that lease tates are depressed, vacancy rates are high, resale potential is low or other similar economic indicators are present in the buildings and lots exhibiting factors that inhibit proper use, For example, it does not state how. the lack of parking has resulted in decreased or lost business, revenue and/or customers, Also, as discussed later, the Preliminary Report does not clearly indicate how redevelopment assistance will be used to improve this blighting factor (refer to analysis in Section B). b. Findings Concerning Existence of Deficient and Deteriorated Buildings The Preliminary Report does not state that the existence of deficient or deteriorated buildings is one of the physical factors of blight as defined in CRL Section 33031 present in the South Arcadia Amendment Area, However, it presents the age and condition of buildings as further documentation of adverse conditions in the Amendment Area. The Report states thar many of the buildings have exceeded their normal life expectancy, 43% have some faulty building condition, and 26% of the buildings are in less than sound condition, with the vast majority categorized as deferred maintenance. It also notes that the Amendment Area contains one deteriorated industtial building and one dilapidated commercial building, The Preliminaty Report concludes, "In total, 41 buildings in the Amendment Area (or 45%) were found to suffer from detrimental conditions, The prevalence of these detrimental conditions, in combination Sellel Consulting Inc. 7 with the other blighting conditions described in this Report, creates an overall negative image of the area and discourages reinvestment and upgrading of properties." Recent Relevant Court Decisions Concerning Existence of Deficient and Deteriorated Buildings The following excerpts from recent Court decisions demonstrate the Court's current opinion regarding documenting the physical blighting condition of deficient or deteriorated buildings. (Key language is in boldface text.) CounC"l of Riverside v, Cit'i of Murrieta, Instead, the report identifies fewer than five percent of the project area's structures as belonging in the category of unsafe or unhealthy. ...The rest of the conditions of physical blight are not supported by tangible proof and are not discussed in a meaningful way, An example of the kind of jargon used in the reporr is the following; 'Functional obsolescence is a condition resulting from changes in modem building practices and the manner in which buildings are utilized. As the building srock ages, its structural components and configurations become unable ro meet the expectation and needs of users, This suppresses value and rental income which in turn produces a lower level of physical maintenance at a time when the structures are literally wearing out.' In other words, buildings age and become less valuable. But the foregoing dos not show the existence of blight in the City of Murrieta. The report makes little attempt to describe specific problems caused by older buildings or to estimate the cost of remedying those problems. Beach-Courchesne v, Cit"l of Diamond Bar N at a single structure was identified by the City as being "unsafe or unhealthy for persons to live or work." (Section JJOJI, subd, (a)(I)) In assessing the physical conditions 'of the project area, RSG's criteria included chipped paint, minor non-structural defects, and broken windows. Out of the 250 buildings in the project area, only one structure was identified as being in need of "extensive rehabilitation." Analysis Concerning Existence of Deficient and Deteriorated Buildings Recent case law stresses the importance of distinguishing between buildings needing substantial rehabilitation and those with less significant deficiencies, identifying buildings that are unsafe or unhealthy, and documenting specific problems caused by older buildings, The Preliminary Report for Amendment No, 5 does not distinguish between categories of buildings needing minor repair versus those needing extensive repair or rehabilitation, with the exceprion of noting one dilapidated building and one deteriorated building, It does not mention whether either of these twO buildings is unsafe or unhealthy. Our field survey indicates that one of these buildings -the dilapidated buildirig on the south side of Live Oak A venue and west of Welland Avenue- has been demolished, and another building is being constructed in its place. While the Preliminary Report describes the age of buildings, it does not describe specific problems caused by the age of these buildings that would constitute blight, 3. Economic Blight The Preliminary Report presents documentation for one economic blight condition described on page 16 of the Report as "depreciated or stagnant property values and impaired investments," The CRL definition is as follows: Seitel Consulting Inc, 8 Depreciated or Stagnant property ~alues or impaired in~e5tments, inchuling, but not necessarily limited to, those properries containing hazardous wastes that require the use of agenc::! authority as specified in Arricle 12.5 (commencing with Secrion 33459), 33031(b)( 1) a.. Finding for Stagnant Property Values The Preliminary Report presents documentation on stagnant property values and declining sales revenues in the South Arcadia Amendment Area indicadng: . T oral assessed valuation of the property grew at an average annual growth rate of \.8% over four years, compared to 4.5% for the City of Arcadia, and 4,1 % for Los Angeles County. . Taxable sales revenue declined by 20% in the Amendment Area from FY1997/1998 to FY1999/2000, while sales increased by over 11 % in the City over the same time period. No other supporting economic data is presented regarding the Amendment Area, Recent Relevant Court Decisions Concerning Depreciated or Stagnant Property Values or Impaired Investments The following excerpts from recent Court decisions demonstrate the Court's current opinion regarding the necessity of demonstrating the link between the presence of these blighting factors and the need for redevelopment assistance, (Key language is in boldface text.) Count~ of Riverside v, Cirv or Murrieta Similarly, the report generally discusses economic conditions without quantifying loss of property value, Instead, the report points to low taxable sales without linking those to blighting conditions. . Friends of Mammoth ~ . Town of Mammoth Lakes ..The Town claims the Final Report's presentation of the Town's sales tax and transient occupancy tax revenues over the past five years provides substantial evidence for the physical condition's economic impact. We disagree. This evidence shows tax receipts from the entire Town, not just the Project Atea. Furthermore, the Town Council could not determine from the evidence that the flat rate of tax revenues was caused by defective design or construction, inadequate lot sizes, or substandard site design. The rate of revenues could have been caused by a myriad of different reasons. This evidence is far too disconnected to demonstrate the lack of economic viability due to the physical factors here at issue. Analysis of Findings on Depreciated or Stagnant Property Values or Impaired Investments Recent court opinion indicates a necessity for a connection between economic stagnation and physical blight. The Preliminary Report does not appear to make that connection, The Preliminary Report documents that properry values in the South Arcadia Amendment Area have grown slower than the City and County and likely reflect low property turnover, indicating properry value stagnation, However, the Report does not connect this factor of economic blight to the physical blighting conditions, Also, the Report states that declining taxable sales are indicative of declining sales, business closure, or a combination thereof, and that the data suggest that businesses in the South Arcadia Business Disttict are continuing to . lose business, However, the Report does not present information on business closures or other possible causes for the decline in taxable sales revenues. Seifel Consulting Inc, 9 4.. Inadequate Public Improvements The description of physical and economic conditions contained in CRL Section 33031 no longer lisrs inadequate public improvements as a factor that can be considered in making a finding of blight for a redevelopment project. However, Section 33030 of the law continues to permit consideration of inadequate public improvemenrs when blighting economic conditions are also present. (cJ A blighted area also may be one that contains the conditions described in subdivision (b) and is, in addition, characterized by the existence of inadequate public improvements, parking facilities, or utilities, Finding for Inadequate Public Improvements The Preliminary Report documenrs the following inadequate public improvemenrs and utilities: . Sewer and water main lines along Live Oak Avenue and Las Tunas Drive have exceeded useful service life and need to be replaced, . Overhead utility lines are present along Live Oak Avenue. . Repairs and improvements are needed for traffic signals and traffic medians along Live Oak A venue and Las Tunas Drive, Recent Relevant Court Decisions Concerning Inadequate Public Improvements . The following excerpt from recent Court decisions denotes the Court's opinion regarding inadequate public improvemenrs. (Key language is in boldface text.) Beach-Courchesne v' CiN of Diamond Bar In this regard, the City found, 'The Project Area is characterized by inadequare public infrastructure, improvements and facilities, which contributes ro the stagnation of the area's development and limits the use and reuse of existing commercial and industrial structures. Existing landscaping, srreetscaping,. and public facilities are in need of upgrading or expanding ro provide a pedestrian- friendly environment that encourages business patronage and private secror investment.' Here again, we are presented purely with generalities as to why the infrastructure is deficient. There is nothing, for example, to indicate 'that the lack of such improvements has unduly burdened the existing...use of the area.' (Emmington v, Solano County Redevelopment Agency (1987) 195 Ca\. App, 3d 491,500,237 Cal. Rptr. 636,) Analysis of Finding for Inadequate Public Improvements Recent case law indicates that an Agency must specify the infrastructutedeficiencies and present documentation regarding why they have unduly burdened an area. The Preliminary Report for Amendment No.5 discusses the inadequacies in general terms. It does not present specific documentation as to why the infrastructure and utilities are deficient, nor does it demonstrate how the condition of the infrastructure and utilities impedes the Amendment Area. For example, the Preliminary Report states "although not a primary blighting factor, these conditions impede the private sector's ability to develop and rehabilitate an area thereby alleviate blighting conditions." Seifel Consulting Inc. 10 5. Documentation of Substantial and Pervasive Conditions CRL Section 33030 (b)(l) defines a blighted area as one in which the blighting conditions are so prevalent and so substantial that they impede the proper utilization of the area to such an extent that it creares a serious physical and economic burden on the community. Preliminary Report Documentation of Conditions The Preliminary Report documents a series of blighting conditions in Exhibits 2 through 7, These Exhibits delineate locations of detrimental building conditions, substandard design, poor site configuration, inadequate parking, and lots of irregular shape and inadequate size in multiple ownership, Recent Relevant Court Decision on Documentation of Conditions The Court recently addressed the need for substantial evidence to be presented in the administrative record. (Key language is in boldface text.) Friends of Mammoth v. Town of Mammoth Lakes Unlike CEQA, which required substantial evidence in the administrative record demonstrating only that the EIR provided a reasonable, good.faith discussion of the pptentialimpact, the Community Redevelopment Law requires substantial evidence in the administrative record demonstrating the existence of specific characteristics of urbanization and blight. (Health & Saf, Code Sections 33030.33031,33320.1.) In some instances, the statute requires a finding of a nexus, to borrow the term from takings jurisprudence, between a particular characteristic being reviewed 'and the actual condition being c.aused, If the specific finding required by the Comnl'll1liry Redevelopment Law cannot be made from the evidence in the administrative record, the evidence is not "substantial' proof of the essentials which the law requires' and the finding is not supported by substantial evidence. (Estate of Teed, supra, 1112 Cal.App.2d at p, 644,) Analysis of Preliminary Report Documentation of Conditions Court opinion indicates the necessity for substantial documentation of blighting conditions. When the maps presented in Preliminary Report for Amendment No,S are overlaid, it is not apparent that the blighting conditions are substantial and pervasive. Also, the Preliminary Report does not address how these blighting conditions have prevented or substantially hindered the economically viable use of the properties and how they present a serious burden to the community, The Preliminary Report does not include photographic documentation, which, although not specifically required by the CRL, is a standard exhibit used by redevelopment consultants to provide visual evidence of the concentration of blight for the administrative record. No map or exhibit is presented showing where photographs were taken to indicate the pervasive nature of the blight. The EIR contains photographic documentation, but only a few of the 24 photographs include documentation on the blighting conditions cited in the Preliminary Report. A recent field survey indicates that while some portions of the South Arcadia Amendment Area exhibit physical deterioration, others do not, Those portions of the area that do not exhibit blighting conditions should only be included if necessary fot effective redevelopment. However, no reference is made as to why these areas need to be included pursuant to Section 33321. In Seilel Consulting Ine, 11 addition, the fact that one of only two dilapidated and deteriorating buildings noted in the field survey has been recently demolished by the private sector and a new building is under construction on the patcel, does not corroborate that the presence of adverse conditions that cannot be alleviated by the private sector acting alone without redevelopment. " B. Nexus between Redevelopment Activities and Blight Alleviation CRL Section 33344,5 (e) and (f) require that the Preliminary Report contain a description the proposed redevelopment program and how it will improve or alleviate blight. A description of the spedfic project ryr projects then proposed by the agency, Section 33344.5( e) A description of how the project ryr projects to be pursued by the agency in the project area wiU improve ryr alleviate the conditions described in subdivision (b). Section 33344 .S(f) Preliminary Report Documentation on Nexus between Redevelopment Activities and Blight Alleviation The Preliminary Report includes a description of the proposed redevelopment program and how ir will alleviate blight. The program is presented in five categories: . Capital and Public Improvements Add streetlights, replace/upgrade traffic signals, replace concrete street paving, redeSign/reconstruct street medians, underground electrical transmission lines, replace aging warer and sewer mains, replace aging water well. · Commercial Fa~ade Rehabilitation Pro~am Existing Agency loan program to be made available to property owners and local merchants to improve exterior of their property or business location, . Business Retention/Attraction and Incentive Pro!ITams Existing Agency program that will become applicable to rhe Amendment Area. Attract business through marketing activities, business training and development programs, and offering incentives. . Propertv Acquisition Selective property acquisition/land assembly program for purpose of assembling parcels into sire suirable for development and to transfer property for private development, Objective is centered on eliminating blight, such as parcels suffering from inadequate parking or that are too small for development, .. Housin!! Housing funds ;'iIl be used both inside and outside the Amendment Area. The Report describes how these projects and programs will improve or alleviate existing blighting conditions: · The capital and public improvements will cotrect the shortfall between current demand for public improvements and the level of service provided, · The commercial fa~ade rehabilitation program will reduce the number of buildings suffering from deferred maintenance and detrimental building conditions, Seilel Consulting Inc. 12 . Fa~ade and site improvements will make the area more attractive and desirable as a place to shop or do business, creating a more successful commercial area, which will generate more employment opportunities, support property values and increase sales tax revenue. . The business retention/attraction and incentive program will allow the Agency to support local businesses and attract new businesses to the Amendment Area using the variety of programs and incentives available. . Property acquisition would be centered on the elimination of existing blighting conditions, such as parcels suffering from inadequate parking or that are too small for development, Recent Relevant Court Decision Concerning Nexus between Redevelopment Activities and Blight Alleviation In a recent decision, the Court noted the link between blight alleviation and redevelopment activities (key language is in boldface text): Beach-Courchesne v. CiN of Diamond Bar . . , Even assuming the incompatible uses led to vacancies in the industrial area, redevelopment will not alleviate these conditions unless the Agency intends to acquire the school. However, the Agency did not include such an acquisition in its implementation plan submitted to the City Council pursuant to section 33352, subdivision (c), Analysis of Preliminary Reports Documentation of Nexus between Redevelopment Activities and Blight Alleviation While the Preliminary Report for Amendment No, 5 describes the link between the proposed redevelopment activities and blight in general terms, the proposed funding allocations do not appear to reflect the proposed redevelopment program. The allocations listed in Exhibit 9, Identified Projects, Programs & Activities, do not appear to reflect the five programs summarized in the text of the Report. The Exhibit presents a proposed $5,93 million funding allocation for the South Arcadia Amendment Area with proposed funding amounts: . Replace water mains ($521,000) . Replace water well ($ 1.5 million) . Replace sewer main ($128,000 · Center medians ($250,000) · New/replace traffic signals ($430,000) . Traffic signal synchronization ($960,000) . Median redesign ($150,000) . Replace pavement ($300,000) . Underground electric lines ($1.6 million) · Streetlights ($66,000) The proposed funding allocations in Exhibit 9 do not include funding in South Arcadia for three of the activities that the Preliminary Report describes as central to the efforts to eliminate blight. The Court has emphasized the link between the redevelopment activities and blight alleviation, The Preliminary Report documents two conditions of blight: (1) factors that inhibit proper use of buildings or lots, including substandard design, inadequate parking, and subdivided lots of irregular shape and inadequate size that are in multiple ownership; and (2) depreciated or stagnant property values and impaired investments. The proposed redevelopment program funding allocations for the South Arcadia Amendment Area appear to be allocated solely to capital and public improvements. According to Exhibit 9, redevelopment resources are not specifically allocated for the Commercial Fa~ade Rehabilitation Program, Business Retention/Attraction and Incentive Program, or Property Acquisition. The only programs chat the Agency proposes to fund in South Arcadia are public improvemencs, and the repon does not Seifel Consulting Inc. . 13 present a discussion on how these public improvements will alleviate the two blighting conditions, . C. Necessity for Redevelopment As stated on page 2 of this memorandum, CRL Section 33030 (bH1) requires that the blighting conditions must cause a serious burden on the community that cannot reasonably be expected to be reversed or alleviated by privateenterpris~ or governmental action, or both, without redevelopment. . Preliminary Report Documentation on Necessity for Redevelopment. The Preliminary Report states, "The anticipated costs to implement a program of revitalization in the Amended Project will require significant participation from the Agency as it implements activities which promote and achieve the stated goals and objectives of the Amended Plan.... Although the Agency may consider other funding sources permitted in the Amended Plan, not . all of the funding soutces may be available or be feasible for the Agency to use in financing the anticipated cOSts and revenue shortfalls. In the event that neither the Ciry nor the private market acting alone could fully bear the costs associated with the revitalization of the Amended Project, the implementation of a redevelopment program utilizing tax increment revenues must be considered as a viable financing too\''' The Preliminary Report states that the Amended Plan authorizes the use of financial assistance from the City of Arcadia, State of California, federal government, tax increment funds, Agency bonds, interest income, loans from private financial institutions, lease or sale of Agency-owned property, donations, developer payments, and any other legally available public or private sources," It also notes, "To the extent that it is able to do so, the Ciry may also supply additional assistance through Ciry loans or grants for various public facilities or other project costs." . Recent Relevant Court Decision Concerning Necessity for Redevelopment Recent Court opinion emphasizes the necessity for demonstrating that a proposed redevelopment program cannot be financially feasible bur for the assistance of redevelopment. (Key language is in boldface text.) Beach-Courchesne ~, Citv of Diamond Bar The Supreme Court has cautioned that "'public agencies and courts both should be chary of the use of the [redevelopment] act unless, ... there is a situation where the blight is such that it constitutes a real hindrance to the development of the city and cannot be eliminated or improved without public assistance. It never can be used just because the public agency considers that it can make a better use or planning of an area than its present use or plan,'" (Sweetwater Valley Civic Assn. V, City of National City (1976) 18 Cal3d 270,278, 133 Ca\. Rptr, 859, 555 P.2d 1099.) Thus the concededly desirable goal of improving an area is "insufficient by itself to justify use of the extraordinary powers of community redevelopment. If it were, tax increment financing at public expense would be commonplace as a subsidy to private enterprise." (Regus v. City of Baldwin Park (1977) 70 CA. App, 3d 968, 979, 139 Ca\. Rptr. 196.) , Seilel Consulting Inc. 14 Analysis of Documentation of Necessity for Redevelopment The Preliminary Report for Amendment No,S does not present information on other sources of funding for the redevelopment activities, In demonstrating that redevelopment assistance is necessary for a redevelopment project, it is helpful to present a discussion of potential sources of funding and why they alone cannot make the project financially feasible without the assistance of tax increment funding, As discussed in Section B above, the redevelopment activities are public improvements. To use redevelopment assistance for public improvements, an agency must demonstrare that the public improvements must benefit the project area or immediate neighborhood of the project area, no other reasonable means of financing the improvements are available to the communiry, and the agency's contribution to the cost of the public improvement or faciliry must assist in the elimination of blight. Thus, the Preliminary Report should include a discussion as to why the Ciry's $59 million Capital Program and Equipment Replacement Program for 2000- 2005 cannot fund the public improvements that are proposed as the redevelopment program, D. Conclusion The documentation presented in the Preliminary Report does not appear to be sufficient to meet the requirements of the CRL concerning the existence of blight, the nexus between redevelopment activities and blight alleviation, and the necessity for redevelopment. In order to meet the requirements of redevelopment law, the City would need to augment its documentarion, Blight The report does not fully document the existence of physical and economic blighting conditions to meet the definitions of blight contained in the CRL. It does not discuss how physical conditions have prevented or substantially hindered the economically viable use of the properties or how they present a serious burden to the community, The Report does not demonstrate how the condition of infrastructure impedes the Amendment Area. When the maps presented in Preliminary Report are overlaid, it is not apparent that the blighting conditions are substantial and pervasive, Some portions of the Amendment Area exhibit physical deterioration, but others do not. Those portions of the area that do not exhibit blighting conditions should only be included if necessary for effective redevelopment, However, no reference is made as ro why these areas are needed for effective redevelopment, Nexus between redevelopment activities and blight alleviation The Report does not clearly indicate how redevelopment assistance will be used to alleviate blighting conditions, Redevelopment resources are not specifically allocated for the Commercial Fa~ade Rehabilitation Program, Business Retention/Attraction and Incentive Program, or Property Acquisition, The only programs that the Agency proposes to fund in South Arcadia are public improvements, and the report does not present a discussion on how these public improvements will alleviate the blighting conditions. Seitel Consulting Ino, 15 Necessity for redevelopment The Repon does not present specific information on the limitations of other sources of funding for the redevelopment activities. It does nor clearly demonstrate that no other reasonable means of financing the improvements are available to the communii}'. Seilel Consulting Inc, 16