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HomeMy WebLinkAboutSEPTEMBER 30,1997 I I I 39:0223 0/(0 - !>o 09 3f} II / cc CITY COUNCIL PROCEEDINGS ARE TAPE RECORDED AND ON FILE IN THE OFFICE OF THE CITY CLERK 1. ROLL CALL 2. 3. M I NUT E S CITY COUNCIL OF,THE__CITY OF ARCADIA and the ARCADIA REDEVELOPMENT AGENCY ADJOURNED REGULAR MEETING SEPTEMBER 30, 1997 The City Council and the Arcadia Redevelopment Agency met on Tuesday, September 30, 1997 at 6:00 p,m. in the Conference Room of the City Council Chambers for an Adjourned Regular Meeting. PRESENT: Council/Agency Members Chang, Kovacic, Kuhn, Young and Harbicht ABSENT: None AUDIENCE PARTICIPATION None CLOSED SESSIONS 3a. Pursuant to Government Code Section 54956.8 to confer with Agency 0//0. '10 negotiators William R. Kelly and Peter Kinnahan pertaining to the purchase price, terms and conditions for the potential sale of part 068'O-Zr6or all of the 4-acre Northwest Corner site located at the northwest corner of Huntington Drive and Second Avenue in Arcadia to one of three proposers: a) Stonebridge Companies (Gary Rohr) - Hilton Garden Inn; b) Andrus Enterprises (Brent Andrus) - Courtyard by Marriott and Town Place Hotel; c) Promus (David Smith) - Homewood Suites. Pursuant to Government Code Section 54956.8 to confer with Agency negotiators William R. Kelly and Peter Kinnahan pertaining to potential Agency acquisition of the following propertiesi 7 North Fifth AVenue (Ralph Alfieri and Ken Kentner/Aiken Construction, property owners)i 11-111 North Fifth Avenue (Arnold F. Richter/AFR Construction, property owner)i and 131 North Fifth Avenue (D.B. Milliken, property owner - vacant parcel formally occupied by Tele- dyne/Technari broker John Thys, The Seeley Co,) for purposes of possible retail development by Gateway Associates (Larry Mielke/ James Barthe/Dennis Alfieri). 3b. O/fO, <(0 O(,'iO .~'/ 3c. ()IIO _ '/0 t%~O _ OJ Pursuant to Government Code Section 54956,8 to confer with Agency negotiators William R. Kelly and Peter Kinnahan pertaining to potential Agency acquisition of the following properties: 201-257 East Santa Clara (Western Security Bank - Steve Nazaroff/Grubb & Ellis, Agency); 324 North Second Avenue (Don and"Robert Johnson, Property owners) for purposes of possible Water Reservoir reloca- tion and development of an Inline Roller/Ice Hockey facility. 1 9/30/97 3d. OIfOD'fO 3e. () II(J . off} 4. ROLL CALL 5. 6. 7. 39:0224 Pursuant to Government Code Section 54956.8 to confer with Agency negotiators William R. Kelly and Peter Kinnahan pertaining to potential Agency acquisition of the former Foulger Ford property located at 55 I West Huntington Drive (William Adkins, property owner, Art Garcia, agent) for purposes of possib Ie commercial development by' Lewis Homes Retail (John Koenig). Pursuant to Government Code Section 54956.8 to confer with Agency negotiators William R. Kelly and Peter Kinnahan pertaining to possible Agency acquisition of the Arcadia Lumber property located at 214 North Santa Anita (Lawrence Beckstrom, property owner, Carole Walker/John AIle Realty, agent), At 6:04 p.m. the City Council/Redevelopment Agency RECESSED to the Closed Session. The Adjourned Regular Meeting RECONVENED at 7:00 p.m. in the Council Chambers. PRESENT: Council/Agency Members Chang, Kovacic, Kuhn, Young and Harbicht ABSENT: None SUPPLEMENTAL INFORMATION FROM STAFF REGARDING AGENDA ITEMS City Manager Kelly announced that State Assemblyman Margett has re- quested a study session with the City Council at a regular Council meeting sometime before the end of December, 1997, The City Manager announced the Holiday Tree Lighting ceremony is scheduled for Wednesday, December 3, 1997 from 4:30 to 6:00 p.m.. In the event of rain the ceremony will be rescheduled to December 9th. I QUESTION FROM CITY COUNCIL/AGENCY REGARDING AGENDA ITEMS None AUDIENCE PARTICIPATION Gino Roncelli, 1250 Ramona Road, stated in part, that in his opinion the Redevelopment Agency is playing aginst the City's budget problems. Tax monies related to redevelopment are paid to the Agency rather than the City.., then the Agency spends these tax funds on more rede~ velopment. He feels if development were left to the normal process de- velopers could come into the City, develop land, then the incremental tax revenue could go to the City and pay for police and fire services. Mr. Roncelli questioned the redevelopment process that buys land at one price and resells it at a lower price to developers when the City can't pay the fire department or sweep City streets, or do other things that need to be done. City loans to the Agency are borrowed back by the Agency... with this process the City will never get these funds back. He would like to know how long will this go on? Mr. Roncelli mentioned a book which he recently read, "Redevelopment, The Unknown Government". The author talks a lot about some of these issues and how some cities have gotten into deep trouble and will never get re- I development loans back. He offered to provide copies of this book to the Council. 2 9/30/97 39:0225 I Mayor Harbicht noted it is true that the Agency receives 100% of the tax increment when there is redevelopment, where the City would only receive approximately 10% of that tax increment... the rest of it goes to other agencies. However, there are other taxes that do not go the the Redevelopment Agency, for example, the Transcient Occupancy Tax, which is projected at $200,00 a year from the Extended Stay Hotel, this will go to the City. And sales tax comes to the City... it is only the property tax increment that goes to the Agency from Redevelop- ment projects. There are benefits to the City from certain redevelop- ments over and above those that go to the Agency. Further, the Agency currently receives approximately $2 million in tax increment from Agency projects per year which is going toward paying the loan debts as well as continuing operations of the Agency. The Agency and City have a very carefully worked out plan as to when the money is going to come in from the projects and when it is going to be paid back to the City, The Agency has been managed very conservatively. In response to Mr. Roncelli, Mr. Kinnahan, Director of Economic Devel- opment, advised that the last year the Agency can incur debt is 2004. The Redevelopment Agency will go out of business, essentially, in the year 2014 unless the Agency is involved in low/moderate income housing, in which case the Agency can exceed that date. And, the Agency must payoff all debt by the year 2024. 8. MATTERS FROM ELECTED OFFICIALS None I 9. DISCUSSION AND DIRECTION REGARDING COMMUNITY AND ECONOMIC DEVELOPMENT PROJECT PRIORITIES I (1) EXTENSION Consideration of the report and presentation by Steve Deitsch, Agency EMINENT DOMAIN Special Counsel, Best Best & Krieger LLP (BBK). Agency staff recently AUTHORITY requested that the BBK law firm prepare a memorandum to the Redevelop- ., ment Agency Board relating to an Amendment of the Central Redevelopment OG!/()' oJO Project Area Redevelopment Plan (Plan) for purposes of extending the time in which the Agency may exercise its eminent domain authority which will soon expire. The Agency's power to condemn property as set forth in the Redevelop- ment Plan expires June 30, 1998. The Plan date can be extended for up to twelve (12) more years after a noticed public hearing. Notice must be sent by certified mail, return receipt requested, to all property owners of record in the Redevelopment Project Area. If the Agency intends to condemn property in which anyone resides, the Agency must form a Project Area Committee (PAC) composed of residential and commercial owners and tenants. All projects requiring displacement must first be considered by the PAC before going to the Agency Board. If the Agency considers condemnation of only non-residentially occupied properties (commercial and industrial), no PAC is required. However, properties for which condemnation may be considered must be so informed by the Agency by separate notice prior to the public hearing. If the Agency desires to extend the power of eminent domain for another 3 9/30/97 0(; '-10 - "Ie (2) PROPOSED UPDATE OF THE AGENCY'S 5 YR. IMPLEMENTATION (HOUSING) PLAN STRATEGY (3) "BLUE RIBBON" ECON. DEVELOPMENT TASK FORCE 39:0225a twelve (12) years, through 2010, on all properties in the Project Area, then notice of this must be included in the notice of public hearing to all project owners. If the Agency wishes to consider condemnation of just the commercial and industrial properties within the Project Area, then the notice must so state to the commercial and industrial property owners. In any event, notice of the proposed plan amendment to extend the power of eminent domain must be sent to all property owners. Mr. Steve Deitsch, Special Agency Counsel, was in attencance to present a report detailing the process with which to extend the Redevelopment Agency's eminent domain au thori ty, (A TRANSCRIPT OF THIS REPORT HAS BEEN PREPARED) I At the conclusion of Mr. Deitsch' report, and the Agency's determin- ation to proceed with the process to amend the Central Redevelopment Project Area Redevelopment Plan for the purpose of extending time in which the Agency may exercise its eminent domain authority, staff noted they will proceed on instructions to put a schedule together and get the steps in place for the Agency's consideration. Mr. Kinnahan, Economic Development Administrator, advised that this item on the agenda was just for information that staff is preparing a required update of the Five-Year Implementation Plan. It is due to be approved by the Agency before December of this year. A draft has been submitted by the Agency's consultant which will be submitted to the Agency within the next month. Consideration and discussion of the formation of a "Blue Ribbon" Eco- nomic Development Task Force was CONTINUED to the next regular City Council/Redevelopment Agency meeting by consensus of the Council/ Agency. I CLOSED SESSION At 7:50 p.m. the City Council/Redevelopment Agency RECESSED the 01/0. ";0 Adjourned Regular Meeting and REENTERED the Closed Session to discuss Closed Session Item 3b. ADJOURNMENT (Oct. 7,1997) ATTEST: J At 9:15 p.m. the Adjourned Regular Meeting RECONVENED and ADJOURNED to Tuesday, October 7, 1997 at 6:00 p.m. in the Conference Room of the Council Chambers to conduct the business of the City Council and Arcadia Redevelopment Agency and any Closed 'Session necessary to discuss personnel, litigation matters or evaluation of properties. //~ Robert C. Harbicht, Mayor of the City of Arcadia I 4 9/30/97 I I I TRANSCRIPT (Insofar as decipherable) RELATING TO A REGULAR CITY COUNCIL AND REDEVELOPMENT AGENCY MEETING SEPTEMBER 3D, 1997 AGENDA ITEM NO, 9, I. REPORT AND DIRECTION REGARDING THE POSSIBLE EXTENSION OF ARCADIA REDEVELOPMENT AGENCY EMINENT DOMAIN AUIHORITY CITY COUNCIL AND REDEVELOPMENT AGENCY MEETING - SEPTEMBER 30, 1997 I ITEM NO, 9, 1. - POSSIBLE EXTENSION OF ARCADIA REDEVELOPMENT AGENCY EMINENT DOMAIN AUTIlORITY, Discussion: Redevelopment Agency and Economic Development Project Priorities, The nex1 part of the presentation deals with three specific items that you can act on tonight, just take presentations and think about and act on in the future, The fim item deals with the agency's eminent domain authority, You will receive a report from staff as well as a report from professional council, Steve Deitsch, that we e>.-pire on June 3D, 1998, That is when the agency loses the right to acquire property using the eminent domain proceedings, As some of you know it is a difficult process to do projects without that as a tool because you are not able to willingness acquire property, projects don't happen, And the success of redevelopment agencies at least on some projects is if you have four property owners and one holds out you can use that as a tool to make the project work if you don't have it there's no project. The report from Steve is pretty ex-plicit. I'll let Steve add to the presentation at this point. Steve, BEST. BEST & KRlEGER.lLP Thank you, Chainnan and Board Members of the agency, the use of eminent STEPHEN DEITSCH domain is something that is found in many; maybe most redevelopment plans adopted throughout the State of California, The community redevelopment law allows an agency in the redevelopment plan to use eminent domain for the initial window of twelve years following adoption of the plan, It also allows an agency to ex1end the time for the use of eminent domain. Although the law is not clear regarding how long the ex1ension can be, most practitioners believe that its up to an additional twelve years every time you amend the plan to ex1end eminent domain, The City of Arcadia and its redevelopment agency have used eminent domain judiciously, I believe, over the last ten or fifteen years, The City, the agency have used eminent domain to assemble real property that by most objective as well as subjective standards would be deemed to be blighted property, The agency has used eminent domain in the past to assemble property which was either haphazard configuration or inadequate size so as to deter reasonable, logical development of that property, and to allow the assembly of property for larger scale development projects such as you see on the south side of Huntington with the Gribble project and the north side of Huntington with the Emkay project all of which includes retail, restaurant pads, hotel and office building uses, If you were to consider eX1ending the use of eminent domain in your redevelopment plan you have several options which I will get into with you, First of all, you don't have to do anything. you don't have to ex1end it. You also have the option of e>.1ending it now or sometime before its due to expire on June 30, 1998, Or you don't have to e>.1end it promptly then, but could come back and reconsider it after June 3D, 1998 at anytime and before the plan ex-pires, MAYOR ROBERT HARBICHf CITY MANAGER WILLIAM KELLEY I I In order to amend the redevelopment plan to allow for an extension on the use of eminent domain you would have to follow some fairly simple amendment processes spelled out in the community redevelopment law. You'd have to have a public hearing, You'd have to mail notice of that public hearing thirty days in advance of conducting that public hearing to all assessees of real property within the project area, and to all persons or businesses within the redevelopment project area, The law also says that if it is possible any property owner's property could be acquired by the agency you have to specially note that in the notice you dispatch regarding your public hearing to amend the redevelopment plan, The law also says that if there are a substantial number of low and moderate income persons in the redevelopment project area who might have to relocate because of the possible acquisition of their property by eminent domain then you would have to form a project area committee to advise you whether to amend the redevelopment plan to add the extension of eminent domain, The law is silent as to what is meant by a substantial number of low and moderate income persons, This is where I guess lawyers earn their fees trying to figure oul, maybe through litigation or otherwise what that means, Let me tell you a little bit about what eminent domain entails and what the responsibility is of any public entity, or where the public entity uses eminent domain, and that includes redevelopment agencies or for that matter cities or other public bodies like school districts and water districts and the like, First of all, in order to use eminent domain if the redevelopment plan allows for its use, on a case by case basis where its use is proposed, a resolution of necessity would have to be adopted in order to allow the filing of an eminent domain action, A resolution of necessity has to be adopted by a two-thirds vote of the legislative body that uses eminent domain. In other words, if you have a five member board such as the redevelopment agency board in Arcadia, you would need the affirmative vote of four members of the redevelopment board to adopt a resolution of necessity, The resolution of necessity can be adopted only after the hearing is conducted for the benefit of the property owner whose property is the subject of consideration of eminent domain, In order to adopt a resolution of necessity four findings have to be made by the legislative body, Under redevelopment law before you even consider using eminent domain, before you get to the point of adopting a resolution of necessity, you have to by law afford to the property owner and any tenants on the property what are called owner participation rights, You have to give the property owner and tenants an opportunity to eXl'ress a willingness to redevelop their property in accordance with the redevelopment plan and an opportunity if they don't wishpto develop their precise property to relocate elsewhere within the redevelopment project area, An agency before it uses or considers using eminent domain has to adopt relocation guidelines, And the State of California is currently amending its guidelines, revamping its guidelines and we expect that by the end of this calendar year the state will have adopted its new relocation guidelines which will be applicable to all redevelopment agencies and other public entities who acquire property, Before the redevelopment agency considers use of eminent domain it must prepare and adopt a relocation plan for persons who might live on property from which they would be relocated as a result of the taking, I I I 2 I After eminent domain is used, if a complaint is filed to take property by eminent domain, a property owner, of course, is allowed to present evidence before a court including a judge and a jury regarding the value of the property owner's property. If a business is on tbat property, the law requires tbat there be compensation paid by the public entity to the business owner for any loss of good will caused by the relocation of the business from property. In the event residents are required to move from property which is taken by eminent domain the law requires tbat actual relocation e"penses, moving ex-penses be paid. The same applies to businesses who have to move. The law also requires tbat in the case of residential relocation the public entity pay for certain differential in the cost of renting a replacement site and it must be comparable housing. That includes rental payment differentials, it also includes mortgage payment differentials if property is taken from an owner resident and the owner resident has to move to other property and pay a mortgage on the new property. The point of what I am describing is tbat there are a significant safeguards imposed by law on any public entity including every redevelopment agency where the public entity employs eminent domain to acquire property. I might add, and this is extremely important, an agency cannot consider using eminent domain until it first conducts an appraisal of real property and makes an offer of just compensation to acquire tbat property. In order to acquire property for a project there are additional safeguards tbat apply to any project which an agency may involve itself with and tbat includes an environmental assessment of the project for which an agency acquires property by eminent domain and the like. I might conclude by saying that there's one additional option you have with regard to possible ex1ension of eminent domain in your redevelopment plan and tbat is this. Although you have the option of employing eminent domain in your redevelopment plan throughout the redevelopment project area you also have other options such as by employing eminent domain only in certain areas of the redevelopment project, or only for certain purposes. For example, if you desire to limit the use of eminent domain to niajor thoroughfares which you might list in your plan you may do so. If you, instead, choose to limit the use of eminent domain to the acquisition of commercial, or industrial, or commercial and industrial properties only but not residential properties, you may also limit in your plan the use of eminent domain in tbat way. You could also limit the use of eminent 'domain to the acquisition of non- conforming residential properties - properties tbat are no longer zoned residential or used residential. You could limit Q1e use of eminent domain only for purposes of doing projects tbat will be commercial or industrial in nature, or just commercial in nature. So you do have a world of opportunities available to you if you wish to use eminent domain and ex1end it in your redevelopment plan but not make it universally usable everywhere within the project area. With tbat I think I have covered just about all the points I wish to; and I'd be pleased to answer any questions which you have. I I 3 HARBICHf DEITSCH HARBICHf DEITSCH HARBICHf COUNCILMEMBER SHENG CHANG DEITSCH CHANG DEITSCH CHANG DEITSCH I have a couple of questions, Steve. First, if we didn't extend our eminent domain authority, that would also have an influence on our ability to do friendly condemnations? That would. You couldn't use friendly condemnation without having the authority, without having the power, and your power derives only from with your redevelopment plan allows. The reason I ask that question is even if the agency was not contemplating using eminent domain in the normal way we think about it, if we were negotiating with a property owner to buy his property we can sweeten the deal through frienclly condemnation and save the agency money in making tbat acquisition. But we don't have the eminent domain power, we can't do tbat The second question I had is, what's the down side ofex1ending it? If we don't use it, we don't use it. But if we need it and we don't ex1end it we don't have it. So, is there any reason not to ex1end it? Not that I can think of. Okay. Any other questions? Something about this inverse condemnation. Did you mention that? I No I didn't, and I'd like to spend a moment with you about tbat. We deal with tbat, I forget what page. Six. All right, tbank you. The bottom of page six; The Owners Rights to Demand Condemnation. There is an interesting provision in the California community redevelopment law tbat is not widely used but its available and it works like this. If there is authority in the redevelopment plan to use eminent domain, then within three years after the adoption of the redevelopment plan, a property owner whose property could be taken by eminent domain, if an agency chose, has the right to demand of the agency tbat the agency condemn his property. At eighteen months after receiving tbat demand from the property owner the agency has a choice. It could either proceed to file a complaint in eminent domain, or it could renounce the use of eminent domain for tbat particular piece of property. In other words, it will not be able to use eminent domain from tbat point forward if it officially, formally says it will not take tbat property by eminent domain. Now if an agency has been silent after the property owner makes this demand on the agency to condemn it, then the property owner, after the eighteen month window within which the agency can act, the property owner has a right to proceed with an inverse condemnation claim against the agency at tbat point to compel the agency to pay just compensation for tbat property and acquire it. It has not happened in our city? No? No, I haven't In fact, I have not seen it operate in Arcadia or ninety-five percent of the other redevelopment agencies with which I have had contact. I've seen one or two incidences where reference was made by legal counsel representing a property owner in an isolated case to the ability to use this statutory provision. But even with tbat, I've never seen a formal demand filed with an agency to compel condemnation. I I 4 I I I MAYOR PRO TEM GARY KOVACIC HARBICHf DEITSCH HARBICHf KOVACIC HARBICHf KOVACIC HARBICHf COUNCILMEMBER MARY YOUNG When I was first here, I don't know if Pete remembers, but when Murray Cane represented this agency before Steve did, I remember correspondence from an attorncy to that effect, but it never came to anything, but we did get some letters back and forth. Nothing was effectuated on it, but it did happen at one point, and it led to nothing but it did come up once. All of the things that you talked about are things tbat are currently at work here since' we have this authority. In other words, eX1ending our authority doesn't change anything. All of these things are things we currently have as liabilities or responsibilities. . That's correct and you've had them for the last twelve years and even beyond. Gary, you had a question? Yes. as many of you know my practice is exclusively in the area of eminent domain and land use. We've used tbat provision quite a bit on behalf of our private property owner client's 333. It can be an effective weapon to (inaudible) agencies. Bob, you asked what the down side is of not having the power of condemnation? No, the down side of continuing. Okay, one of the benefits of having the power of condemnation is what you talked about, the frienclly condemnation aspect. There are certain tax benefits and I am not a tax attorney, but I do know they exist. That if properties acquired by eminent domain or under threat of eminent domain, the property owner gets certain tax benefits and if the agency didn't have the power of condemnation tbat property owner wouldn't get those tax benefits if they decided to sell the property presumably to the city or someone else. The city would count, but, if the agency didn't have tbat power they couldn't take advantage of those tax benefits. The one down side I can see and its in the area of inverse condemnation. There are instances when an agency puts a cloud of condemnation over a piece of property. .They make public announcements about an intent to condemn a piece of property and then don't take steps to do it, and as a result the property owner either loses rents or the property value goes down. If the agency never had the power of condemnation tbat property owner couldn't make tbat allegation, they couldn't claim its under a cloud of condemnation because the agency didn't have the power of condemnation. That seems to me to be the only down side. Ninety percent of our clients are private property owners so I am very sympathetic with their position. But it seems to me tbat with all the safeguards built in, especially the 4/5's vote, 4 out of 5 council members have to vote to adopt a resolution assessing. If you're even contemplating having a redevelopment agency, unless tbat redevelopment agency has the power of eminent domain to use in a judicious manner, its basically an emasculated public entity. Well, tbat was the point tbat I was going to make even though we may not be currently contemplating any future development. If there's any chance tbai we might do it then we should extend our authority because without it you don't have a redevelopment agency. Even if you don't use it, the threat of being able to use it brings people to the table. And so, clearly I think tbat we should extend this for another twelve years and take whatever steps are necessary. Anothcr twelve years, I was just trying to think of the dates. 5 ECONOMIC DEV. ADMIN. 2010. PETER KINNAHAN YOUNG KINNAHAN YOUNG KINNAHAN CHANG KOVACIC KELLY COUNCILMEMBER BARBARA KUHN KOVACIC DEITSCH KOVACIC KUHN KOVACIC YOUNG KINNAHAN YOUNG HARBICHf KINNAHAN DEITSCH I That would be 20 I O. That would get us past that 2004 date. Yes, incurring debt, the incurring debt limit. Yes. We would still be operational as an agency through 2014. This would take us through ~O 10, we would have roughly four years. We could extend it again for four more at tbat time. Or we could (inaudible). Is there some saying that an agency without the power of eminent domain is just like a soldier without a sword? That's a good analogy. I worked for an agency tbat waived that right in a plan formation. They had a lot of money so they could buy their way into deals until they got to the very end when the owner realized they could almost ex10rt any amount of money to make the deal work. The agency stopped and said, now we'll change our plan and put eminent domain in to get the deal done. Because you can't do it You can't do it? I don't know if, Steve, what your ex-perience has been, but I think there are very few agencies that have waived tbat power of eminent domain. I think so, and I've seen it mixed. Sometimes agencies adopt a plan with eminent domain in it but do limit the use of it to certain areas. I've seen plans where they don't have it apply, let's say, to residential areas, if there are a lot of residences in a redevelopment project area, sometimes they opt out residences. But, I think it would be very rare for a full-blown redevelopment agency to totally waive their power of eminent domain. Well it docsn't make sense to take away a tool that you have. As I say, sometimes if the property owner benefits a great deal by the fact tbat the property is being sold under the threat of condemnation as opposed to some other method. We did some oftbat on Third Avenue, didn't we? We've done it in the northwest corner of the Southside project, the Northside project too. So, yes we've done it I remember the relocation problems. What do you need? Do you a motion? Do you need just direction? If I can just ask Steve to respond to one more issue the Council may need to be aware of and tbat is the project area committee issue. Would you discuss tbat a little more, Steve, as far as residential PAC, and the role of the PAC and what tbat means as far as its relationship to the redevelopment agency, and when its created? Yes, at one time Arcadia had a project area committee. And, in accordance with law found that thcre was no further need to keep in place the project area committee, approximately in 1986. I I 6 HARBICHf That's because the law literally says tbat three years after a redevelopment plan is adopted you don't have to keep a project area committee in place unless you annually determine tbat it should be extended. However, if you amend the redevelopment plan, and as I mentioned, if the redevelopment project area has a substantial number of low and moderate income families within it who might have to be relocated because of the use of eminent domain then an agency is required by law to call upon residents, businesses, and community organizations who function within the redevelopment project area to form a project area committee. And the law specifies how the redevelopment agency and the city council will have to call upon those groups to have an election and to elect members to comprise a project area committee. The project area committee has to be representative to each of those classes, each of those groups (residents, businesses, and community organizations). Then the PAC is called upon to give advice to the city council regarding the amendment. And if , for example, the project area committee recommends agaiust adoption of the amendment, then the city council is obliged to approve the amendment by a super majority if it still wishes to proceed. The super majority is two-thirds, or four votes of the five. And tbat' s what tbat means. Is there, I mean I know tbat the law is not specific, but I can't imagine tbat we would have a substantial number, meaning a high percentage. We have attached a map, tbat kind of gives you a little ballpark of what's in the project area. There's quite a few living in the project area and significant as Steve says its undefined its difficult to determine. For relocation purposes, I've been advised tbat its (inaudible) seven. So its going to be significant for relocation purposes. I don't know if it applies to eminent domain, because its a just a number tbat they generally use. Let me ask you another question on, if a PAC is created and they have a legal responsibility to advise the redevelopment agency, city council on the amendment, say tbat the amendment is approved. Is there a responsibility after tbat in the years to come on other projects tbat come before the agency tbat the PAC must be consulted upon and must be heard upon? Well, the law simply says the redevelopment agency and the city council must consult with the project area committee on matters tbat relate to possible relocation and possible low and moderate income housing issues. That's all the law says. (Inaudible) every issue? Not on every issue. For example, if you were doing a hotel project on property the redevelopment agency already owns then there would be no relocation. There would be no legal rcquirement to consult with a project area committee about tbat specific project. Always an example. Furthermore, the law simply says consult. It doesn't indicate tbat if a project area committee recommends agaiust doing a specific project tbat the super majority then be needed to the development board to proceed. That super majority would only be required if there's a negative recommendation on redevelopment plan amendment adoption. The question is, is tbat given tbat there is 343 housing units in here and maybe some of them are low income is it your opinion tbat we're required to have a project area committee? If the ex1ension of eminent domain would be project-wide I would have to conclude. yes. I KINNAHAN I DEITSCH CHANG DEITSCH HARBICHf I DEITSCH 7 KOVACIC Do we know whcre most of those, I assume we do, where most of the residential units are located? Probably what, above Colorado or just below the college streets? The blocks are short. Most of them are clustered, tbat's roughly where they're clustered. Where they're clustered, okay. Where you see the 110, tbat's roughly where they live and the 62 is where they live. And so, tbat's where they, basically... And tbat's all residential. That's not just low and moderate. Yes. I KINNAHAN KUHN KINNAHAN KELLY KINNAHAN KUHN CHANG KELLY That's all, okay. So, we need to form a PAC, right? If you're going to include residential relocation, is a permissible ex1ension of eminent domain. If you exclude residential relocation you don't need a PAC. Is tbat right, Steve? That's true, if a substantial number of low/mod persons would not have to be relocated because eminent domain couldn't be used to acquire their property, then it's true you wouldn't have to. If you get down to numbers like ten units I would think tbat no PAC would be required. If you get over tbat number I'm not sure what the number is, the magic number tbat suddenly calls into play the requirement for a PAC, but tbat's what we're talking about, the process we're talking about here. I'd have to think about tbat and give you advice. Okay, I mean if we have to. Its just a nuisance tbat we have to do, but I just don't think tbat should preclude us from going ahead and eX1ending our eminent domain. But we don't have to appoint that committee until we take an area and decide to redevelop it, do we? Once you make the determination of the proposed amendment, for example, if you desire to bring fonvard an amendment to use eminent domain for another twelve years throughout the entire redevelopment project area, then obviously you're talking about a substantial number of low and moderate income people who might have to be relocated, then you have to call upon the groups I mentioned to form a project area committee. Was this formed before? Yes, we had one before. Then we decided not to continue it? Well, the area it covered was developed. But was this still in the project area? That's what I was asking. Say we wanted to take the area tbat has 51 residents in it and make tbat an active redevelopment project, then I can see getting a committee for tbat area. But we aren't going to, certainly, do all these areas at once, so tbat I wondered if we could as we assign an area to redevelopment I DEITSCH HARBICHf YOUNG DEITSCH CHANG YOUNG CHANG YOUNG CHANG YOUNG I 8 I I I HARBICHf What he's saying is tbat if we include them in the areas covered by the ex1ended eminent domain authority, then we have to have the PAC. Clearly, the twenty-three over there on Fifth and Santa Clara tbat's an area I would not want to exclude. YOUNG HARBICHf No. The ones on the south of Huntington, there, I would not want to exclude. I don't have any specific plans for tbat but we've talked at times about acquiring property for parking and things like tbat. I think it would be tying the agency's hands to exclude that. And so, just based on those two areas, it's clear tbat we need a project area committee. So we'll just form one,just like we did before. Can I assume tbat these residential units include multiple units as well? The 110 you see up there is a lot of multiple units in tbat area, yes. The 44 and 3 I just below Huntington are too. Plus the 23 over there by Santa Clara, its all a court there. it would have to be. So what do you need from us? I think for clarification tbat would mean tbat, if you would like to proceed, we will proceed to schedule the nex1 process to essentially get a PAC formed, that's the nex'l step and follow the law. I just want to mention that I don't want to do Steve'sjob. He's a great attorney, but I think its important to keep this in the contex1 tbat we're just planning. We're not making any announcements of intent to condemn, we're not putting any clouds of condemnation over property. Its just part of the planning process. It's simply eX1ending what's already in place. Well, and the amendment itself is subject to a public hearing before you even adopt the amendment. Then, there'll be plenty of notice before tbat public meeting is held. I think its important too tbat the, other than the fact tbat you might not want to sell your property, other tban tbat having your property condemned is the best way to sell it. Because you get relocation ex-penses, (inaudible) expenses with your business, and they bend over hackwards. You've got a sure buyer, that's for sure. Well not only tbat, but, generally the redevelopment agencies are fairly generous to avoid ex1ended and protracted court battles and everything. And the law is weighted in favor of the person, the property owner, and tbat's just the way it works. and probably as it should be because they are being displaced That's right. As long as its used with care and I know the city will do tbat. Its fair to both sides. We'll proceed on instructions to put the schedule together and get the steps in place for your consideration. And, you don't need a motion then? Okay, so now is it the council's desire to... Okay, item 2, Pete tbat's just an announcement? KUHN KINNAHAN HARBICHf KUHN HARBICHf KINNAHAN KOVACIC HARBICHf DEITSCH HARBICHf KUHN HARBICHT KUHN CHANG KELLY KUHN HARBICHT 9 KINNAHAN Yes, it's just an information item that we are preparing, a required update of our five year implementation plan. It's due to be approved by the agency before December of this year. A draft has been submitted by our consultant and we will be bringing it to you within the nex1 month I'd say. Just to let you know that it is coming. Okay. Is it the council's desire to continue item 3 to next week's meeting? That's fine. I HARBICHf YOUNG KUHN KOVACIC CHANG HARBICHf KELLY HARBICHf Is tbat what we need to do? That's fine, no problem. Okay. It will be brought up at the regnlar council meeting for discussion. Done. Okay, so tbat finishes the scheduled agenda items. We will now go back into closed session to take up item B. Thank you all for coming. I I 10