kane ballmer berkman legal opinion ccdc cap 05 162011
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51 5 S. F IGUEROA STREET
S U IT E 1 85 0
LOS
ANGELES,
CAL I FORN IA 90071
TELEPHONE 213 617 -0480
FAX 213 625 -0931
i E Mailjgraham@ccdc com
K A N E
LLMER
ERKM N
A LAW CORPORATION
WWW.KBBLAW.COM
BRUCE D.
BALLMER
RETIRED
ROBERT P
BERKMAN
1919-2001
September 23 2 1
402 WEST BROADWAY
4TH FLOOR
SAN
DIEGO,
CAL IFORNIA
92101
TELEPHONE 619 567 -3450
F AX 6 19 567 - 3 448
Writers:
Murray Kane
Direct 213 452-0121
Gustavo Lamanna
Direct 213 452-0131
File
No. 029 191
Mr
JeffGraham
Vice President, Redevelopment
Centre City DevelopmentCorporation
4 1
B Street, Fourth Floor
San Diego, California 92101
Dear
Mr
Graham:
We have been asked to provide this opinion concerning an agency s ability to expend tax
increment outside its own redevelopment project area. The Centre City Development
Corporation is considering a recommendation to the Redevelopment Agency of the City
of
San
Diego to utilize tax increment from the Centre City Redevelopment Project Area to pay for the
value
of
land and cost
of
installation
of
improvements that are to be publicly-owned and outside
the Centre City Redevelopment Project Area.
Two specific projects were identified. The first involves the development of a 15.64 acre
park improved with a community swimming pool, recreation centre building, multi-purpose
fields, ball field lighting and spectator seating, site furniture, public restrooms, children s play
area, landscaping public art, storm water channel improvements and public parking lot
improvements ( Park Project ). The land proposed for by the Park Project is presently owned by
the City
of
San Diego and due east from the Centre City Redevelopment Project divided only by
Interstate
5
The Park Project is to be publicly-owned. The Park Project does not appear to
contain any affordable housing.
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B LLMER
BERKM N
Mr JeffGraham
Vice President, Redevelopment
Centre
City
Development Corporation
September 23 2010
Page 2
The second involves unspecified public improvements in neighborhoods to the east o the
project area in Golden Hill and Sherman Heights, and southeast
o
the project area in Barrio
Logan. These areas are part o Council District 8
We
note that the eastern boundary
o
the
Centre City Redevelopment Project Area ends at Interstate 5 and the western boundaries o the
Golden Hill and Sherman Heights areas commence east o Interstate 5 The southeastern
boundary o the Centre City Redevelopment Project Area abuts the northwestern boundary
o
the
Barrio Logan Redevelopment Project Area along South 16
th
Street, Newton Avenue, Sigsbee
Street, Harbor Drive and Beardsley Street. The public improvements proposed are unspecified
but appear to include street improvements, pedestrian improvements, and other public
infrastructure improvements that are to be publicly-owned ( Neighborhood Public
Improvements ). At this point the Neighborhood Public Improvements do not appear to include
a payment for the value o land and involve only the payment for the cost o installation and
construction o improvements that are to be publicly-owned.
is unknown whether there are
any affordable housing developments that are to be considered at, near, or around the
Neighborhood Public Improvements.
further appears that no part o the property under the Park Project or Neighborhood
Public Improvements project is partially located in the project area.
Based on the foregoing information, we provide the legal requirements the Centre City
Development Corporation ( CCDC ) must consider when preparing a proposal to the
Redevelopment Agency o the City
o
San Diego (the Agency ) concerning the Park Project
and Neighborhood Public Improvements. Additional, different, or new information may yield
additional, different, or new legal requirements.
Health Safety Code section 33445(g) reads, in relevant part: an agency may pay for all or
part o the value o the land for and the cost o the installation and construction o any building,
facility, structure, or other improvement that is publicly owned and is partially located in the
project area, but extends beyond the project area's boundaries, the legislative body makes the
determinations required by subdivision (a). We point this out because CCDC appears
to
be
considering a development proposal separate from the Park Project and Neighborhood Public
Improvements project along Newton Avenue involving publicly-owned property within the
CCDC project area but abutting the Barrio Logan project area. To the extent that CCDC
development proposal (Monarch School) on Newton Avenue involves Neighborhood Public
Improvements that extend beyond the CCDC boundaries into Barrio Logan the unique aspects o
Section 33445(g) may be implicated and may be considered separately
requested.
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K NE B LLMER BERKM N
Mr JeffGraham
Vice President, Redevelopment
Centre CityDevelopment Corporation
September23,2010
Page 3
With these facts and qualifications to date, we separate the legal opinion into the
following two questions, the subsequent short answers, discussions
the applicable law, CCDC
implementation and redevelopment plans, and analysis each answer.
QUESTIONS PRESENTED
May the Agency use 80 CCDC tax increment funds to pay for both the
value land and cost installation and construction improvements for
the Park Project?
2 May the Agency use 80 CCDC tax increment funds to pay for the cost
installation and construction improvements incident to the
Neighborhood Public Improvements?
SHORTANSWER
The Agency may, after conforming with all legal requirements imposed
by
the recent enactment Senate Bill No. 93 (2009-2010
Reg
Sess.)( SB 93 ), expend only 80 CCDC tax increment funds on the Park
Project. As set forth below in more detail below, the legal requirements
include, but are not limited to, making a finding
benefit, that
no
reasonable means financing the Park Project exist in the community,
and the Park Project is consistent with the Fourth Implementation Plan for
the Horton Plaza and Centre City Redevelopment Project for the period
July 2009 to June 2014 ( Implementation Plan ) and provided for in the
Centre City Redevelopment Project, which was initially approved
and
adopted on December 29, 1976 ( Redevelopment Plan ).
2 The Agency may, after conforming with all legal requirements imposed by
SB 93, expend 80 CCDC tax increment funds on the Neighborhood
Public Improvements project on only those identifiable public
improvements in the Implementation Plan in only those areas contiguous
to the CCDC project area and provided for in the Redevelopment Plan; the
areas include the western boundaries Golden Hill and Sherman Heights
directly adjacent to Interstate 5 and that area on the northwestern boundary
Barrio Logan (South
6
th
Street, Newton Avenue, Sigsbee Street,
Harbor Drive and Beardsley Street), that are adjacent to the CCDC project
area and divided only by a public street or highway. Other non
contiguous areas and unspecified public improvements under the
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BERKM N
Mr
JeffGraham
Vice President, Redevelopment
Centre CityDevelopmentCorporation
September 23, 2010
Page 4
Neighborhood Public Improvements project are not likely to conform with
the requirements for non-contiguous expenditures under of
SB 9
DISCUSSION OF APPLICABLE LAW
SB 9
from the last Legislative session set forth certain requirements before tax
increment may be spent outside a project area to pay for the value of land and cost of installation
of
improvements that are to be publicly-owned. The bill amended the California Health
Safety Code Sections 33000
s q
[Community Redevelopment Law] and amended Sections
33445 and 33679 and added 33445.1 and 33505
3
to the Community Redevelopment Law.
SB 9 requires additional o f primary benefit findings based on substantial evidence and
essentially make more difficult than before for agencies to spend tax increment outside the
project area on parcels that are non-contiguous. For instance, contiguous, pursuant
to Section
33445 f), means that the parcel on which the building, facility, structure, or other improvement
that is publicly owned is located, shares a boundary with the project area or is separated from the
project area only by a public street or highway, flood control channel, waterway, railroad right
of-way, or similar feature. So as to parcels that are contiguous, Section 33445 applies. For those
parcels that are not contiguous, Section 33445.1 applies.
Section 33445 Applies
ifthe
Parcel is Contiguous
The following legal requirements of Section 33445 apply
if
the parcel is contiguous to
the project area:
a) ... .
an
agency may, with the consent
of
the legislative body, pay all or a part of the
value
of
the land for and the cost of the installation and construction of any building,
facility, structure, or other improvement that
is
publicly owned and
is
located inside or
contiguous
to
the project area,
if
the legislative body determines all
of
the following:
1)
That the acquisition of land or the installation or construction of the
buildings, facilities, structures, or other improvements that are publicly owned
2 All section references shall be to the Community Redevelopment Law unless otherwise noted.
3
Section 33505 involves the settlement of legal actions and the facts concerning the Park Project
and Neighborhood Public Improvement Project do not implicate this section of the Community
Redevelopment Law.
f
there are additional facts, please advise and we will review and amend
this opinion accordingly.
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K NE B LLMER
BERKM N
Mr
Jeff
Graham
Vice President, Redevelopment
Centre City Development Corporation
September23,2010
Page 6
committed, notice and publish that notice in a newspaper o general circulation under Section
33679.
4
Section 33445.1 Applies Parcel is Not Contiguous
The following legal requirements o Section 33445.1 apply the parcel is not contiguous
to the project area:
a ... an agency may, with the consent
o
the legislative body, pay all or a part
o
the
value
o
the land for and the cost
o
the installation and construction
o
any building,
facility, structure, or other improvement that
is
publicly owned and
is
located outside and
not contiguous to the project area, but
is
located within the community,
the legislative
body fmds, based on substantial evidence in
the record, all o the following:
1
The acquisition
o
the land or the installation or construction
o
the
buildings, facilities, structures, or other improvements that are publicly owned
are
o
primary benefit to the project area.
2 The acquisition
o
the land or the installation or construction
o
the
buildings, facilities, structures, or other improvements that are publicly owned
benefits the project area by helping to eliminate blight within the project area, or
will directly assist in the provision
o
housing for low- or moderate-income
persons.
3 No other reasonable means
o
fmancing the acquisition o the land or the
installation or construction
o
the buildings, facilities, structures, or other
4 Section 33679 reads: Before an agency commits to use the portion
o
taxes to be allocated and paid to an
agency pursuant to subdivision b
o
Section 33670 for the purpose
o
paying all or part
o
the value
o
the land
for
and the cost o the installation and construction of, any publicly owned building, other than parking facilities, the
legislative body shall hold a public hearing.
Notice
o
the time and place
o
the public hearing shall be published in a newspaper o general circulation in the
community for at least two successive weeks prior to the public hearing. There shall be available for public
inspection and copying, at a cost not to exceed the cost
o
duplication, a summary that includes all
o
the following:
a Estimates o the amount
o
the taxes proposed to be used to pay for the land and construction
o
any publicly
owned building, including interest payments.
b Sets forth the facts supporting the determinations required to be made by the legislative body pursuant to Section
334450r the fmdings required to be made by the legislative body pursuant to Section 33445.1.
c Sets forth the redevelopment purpose for which the taxes are being used to pay for the land and construction o
the publicly owned building.
The summary shall be made available to the public for inspection and copying no later than the time o the first
publication
o
the notice
o
the public hearing.
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B LLMER
BERKM N
Mr
Jeff
Graham
Vice
President Redevelopment
Centre City
DevelopmentCorporation
September 23,2010
Page?
improvements that are publicly owned, are available to the community,
including, but not limited to, general obligation bonds, revenue bonds, special
assessment bonds, or bonds issued pursuant to the Mello-Roos Community
Facilities Act
o 1982 Chapter 2.5 commencing with Section 53311 o Part 1
o
Division 2
o
Title 5
o th
Government Code . In determining whether other
means o fmancing are feasible, the legislative body may take into account any
relevant factors, including, but not limited to:
A Legal factors, such
as
the eligibility
o
the improvements for
funding under the governing statutes.
B Economic factors, such as prevailing interest rates and market
conditions.
C
Political factors, such as the priority
o
commitments
o
other
public funding sources, the ability or willingness
o
property owners or
taxpayers to bear the cost
o
any special assessments, taxes, or other
charges, and the likelihood
o
obtaining voter approval,
i
required.
4 The payment
o
funds for the acquisition
o
land or the cost
o
buildings,
facilities, structures, or other improvements that are publicly owned is consistent
with the implementation plan adopted pursuant to Section 33490.
5 The acquisition
o
land and the installation
o
each building, facility,
structure, or improvement that is publicly owned is provided for
in
the
redevelopment plan.
b An agency shall not pay for the normal maintenance or operations
o
buildings,
facilities, structures, or other improvements that are publicly owned. Normal maintenance
or operations do not include the construction, expansion, addition to, or reconstruction of,
buildings, facilities, structures, or other improvements that are publicly owned otherwise
undertaken pursuant to this section.
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BERKM N
Mr
JeffGraham
Vice President, Redevelopment
Centre City Development Corporation
September 23,2010
Page 8
DISCUSSION OF IMPLEMENTAn PLAN
We reviewed, identified and set forth below certain provisions of the Implementation
Plan that support the subject projects. Note that the Park Project and Neighborhood Public
Improvements project must be consistent with the Implementation Plan and to the extent
possible, each project proposal should be crafted around the Implementation Plan to assure
conformity with under Sections 33445 a 3 :
III. Project Area Goals and Objectives
Creative implementation of catalyst projects which spur reinvestment on
surrounding blocks [Page 3]
Land acquisition for the creation
of
public facilities which serve both the
immediate neighborhood and the community at large [Page 3]
Improvements to existing water and sewer lines, streets, sidewalks, parkways, and
lighting in the public right-of-way; continued participation in the enhancement
of
the public transit system [Page 4]
Acquisition and disposition
of
property to abate blighting influence uses and
provide for future development [Page
4]
IV. Goals and Objectives, Proposed Projects, and Contribution to Blight Alleviation for
the Five-Year Period
Construct Off-Site Improvements; [Page 8]
Other Public Infrastructure/Facility Projects Area Wide
Downtown Street Lighting [Page 2]
Street Enhancement [Page
2]
Miscellaneous Public Improvements Facilities [Page
2]
Increase Availability
of
Parking [Page 2]
Linear Park Improvements [Page 2]
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B LLMER
BERKM N
Mr Jeff Graham
Vice President, Redevelopment
Centre City Development Corporation
September 23,2010
Page 9
Government Offices [Page 2]
Park to Bay Link [Page
2]
Parks, Open Space RecreationS [Page 2]
Interstate 5 Enhancement [Page
2]
Water, Sewer
Storm Drain Upgrades [Page
2]
Transit Corridor Enhancements [Page 2]
Elimination o Toxic Substances [Page 3]
Under/above ground Utility Lines/Facilities [Page
3]
DISCUSSION OF REDEVELOPMENT PLAN
addition to the Implementation Plan, the Redevelopment Plan contains numerous the
provisions which would apply to the projects. Section 33445 b) 2) requires that the projects be
provided in the Redevelopment Plan. A review
o
the Redevelopment Plan may also provide
specific ideas to assist in developing characteristics for the projects. Here is a sampling o the
objectives we believe apply. As noted in the discussiono the Implementation Plan, the projects
should be crafted around provisions o the Redevelopment Plan to assure conformity with
Section 33445 b) 2).
S The Implementation Plan also suggests there is a desire by the community to develop and
support a Ballpark Project. may be worth determining
there may exist any linkage between
that community desire and the Park Project. For instance, page 4 o the Implementation Plan
lists certain objectives concerning the support to a Ballpark Project within a unique
SportsiEntertainment District so as to: ... Provide parks and open space for existing and future
downtown residents; provide additional parking for downtown businesses and residences during
non-even periods; Provide another regional facility for civil events amateur athletics, concerts,
multiple day trade shows, private parties and other gatherings. seems that
the will in the
community were to find a method
o
connecting and integrating the Park Project to the Ballpark
Project, the Implementation Plan would support such a nexus. Further investigation would be
necessary.
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BERKM N
Mr
JeffGraham
Vice President Redevelopment
Centre City Development Corporation
September23 2010
Page 1
Here are selected objectives o the Redevelopment Plan that appear to apply:
Provide for development in which a full range o activities and uses may occur and where
a living and working environment exists for the use and enjoyment o all San Diegans
[Section 110.1A]
Eliminate blighting influences including incompatible and obnoxious land uses obsolete
and deficient structures and inadequate or surplus streets and rights of way [Section
110.1C]
Eliminate environmental deficiencies including among others small and irregular lot and
block subdivision economic and social deficiencies and inadequate utilization
o
land
and public facilities [Section
11
O.ID]
Coordinate the location o neighborhood/community based facilities such as parks
plazas commercial recreational uses open spaces recreational centers and other
community facilities which serve the needs o the entire downtown area [Section 110.II]
Coordinate the upgrading
o
sewer water and storm drains and other community
facilities that serve the needs
o
the entire downtown area [Section 110.1
J]
Accommodate parking needs in a manner which will reduce the negative impact
o
parking needs o the environmental quality o the area [Section 110.1K]
Provide strong physical linkages in order to create attractive vehicular and pedestrian
connections between major downtown activities and the San Diego waterfront [Section
110.IL]
Strengthen and encourage retail entertainment business cultural social and other
commercial functions including but not limited to the establishment o a safe healthy
and attractive environment in which business commercial cultural and social services
activities can thrive and residents live [Section 110.1M]
Provide for maximum participation in the redevelopment and restoration process by
property owners and tenants [Section 11O.IP]
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BERKM N
Mr
Jeff Graham
Vice President, Redevelopment
Centre City Development COIporation
September 23,2010
Page
Provide for development in which a full range activities and uses may occur where an
attractive urban living and working environment exists for the use and enjoyment all
San Diegans [Section 110.1U]
Encourage the rehabilitation and upgrading historical and architecturally significant
6
structures and sites [Section 110.1
X]
Strengthen the economic base
downtown through the installation
needed public
improvements, including transit and parking facilities, to stimulate new commercial,
residential, employment and economic growth, and to improve the circulation
people
and vehicles [Section 110.1Z]
Create an urban open space system that is designed to take advantage
San Diego s
climate and setting that offers both formal and informal gather places, active recreational
and quiet areas for downtown workers, residents and visitors [Section 110.IAA]
Emphasize development and use
efficient mass transit [Section 110.1CC]
The Redevelopment Plan provides the following provisions which may also satisfy
Section 33445 b) 2) under General Redevelopment Actions:
Demolition, clearance, site preparation and construction buildings, and public
improvements [Section 400B]
Disposition
property for uses in accordance with this Plan [Section 400F]
Development transportation concepts and related facilities [Section 400B]
Participation opportunities in connection with construction, realignment, widening or
abandonment some streets and public rights-of-way [Section 430.7B] and
construction or expansion
public facilities [Section 430.7E]
6
We were uncertain whether the existing City use the Park Project site may involve historical
or architecturally significant structures and sites and therefore include this Redevelopment Plan
objective.
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K NE B LLMER
BERKM N
Mr JeffGraham
Vice President, Redevelopment
Centre CityDevelopment Corporation
September23,2010
Page 2
The Agency is authorized under Section 440.2 to install and construct, public
improvements and public utilities within or outside the Project Area necessary to
carry out this Plan. Such public improvements include, but are not limited to, over-
or underpasses, bridges, streets, curbs, gutters, sidewalks, streetlights, water
distribution systems, sewers, storm drains, traffic signals, electrical distribution
systems, parks, plazas, playgrounds, motor vehicle parking facilities, landscaped
areas, street furnishings and transportation facilities
The Agency is authorized under Section 440.3 to construct foundations, platforms
and other structural forms necessary for the provision or utilization o air rights sites
for buildings to be used for residential commercial, industrial, public or other sues
provided in this Plan
The Agency is authorized to pay all or part o the value for the land for and the value
o the land for and the cost o the installation and construction o any building,
facility, structure, or other improvement which is publicly owned either within or
without the Project Area, the City Council determines that the buildings, facilities,
structures, or other improvements are o benefit to the Project Area or the immediate
neighborhood in which the Project is located, and that no other reasonable means o
financing such buildings, facilities, structures, or other improvements are available to
the community. The Agency may enter into contracts, leases and agreements with the
City or other public body or entity pursuant to Section 460.10 and the obligation
o
the Agency under such contract, lease or agreement shall constitute an indebtedness
o the Agency which may be payable out o the taxes levied in the Project Area and
allocated to the Agency under subdivision b
o
Section 33670
o
Community
Redevelopment Law and under Section 710 o this Plan, or out o any other available
funds.[Section 460.10]
Satellite parking sites may be established on property near freeway egress/ingress and
other peripheral locations near the Project Area for parking purposes [Section 480.2]
Certain public bodies are authorized by state law to aid and cooperate, with or
without consideration, in the planning, undertaking, construction or operation
o
this
Project. The Agency shall seek the aid and cooperation o such public bodies and
shall attempt to coordinate this Plan with the activities o such public bodies in order
to accomplish the purposes
o
redevelopment and the highest public good [Section
490.1]
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BERKM N
Mr Jeff Graham
Vice President Redevelopment
Centre City Development Corporation
September 23 2010
Page
3
The Agency is authorized to assist in the development
o
publicly owned buildings
facilities structures or other improvements as provided in Section 460 10
o
this Plan
[Section 490 2]
Open space within the Project Area includes: King Promenade Embarcadero
Marking Parks Pantoja Park Park at the Park in addition to a number o small parks
Together these parks total approximately 42 acres Additional new parks plazas and
open space will be provided by extension o the King Promenade the North
Embarcadero Bayfront Esplanade the County Administration Center Waterfront
Parks and through the creation
o
a variety
o
smaller parks throughout the Project
Area These new parks total approximately
75
acres [Section 510 9]
The Agency shall require that all utilities be placed underground when physically and
economically feasible as determined by the Agency [Section 510 10]
After adoption
o
this Plan and from time to time during the period
o
the Plan the
Agency shall proceed with reasonable diligence to identify specific strategies
obtained through public input for implementation which may include more specific
plans and programs and which shall include geographical and topical focus areas
The Agency shall emphasize the use o
implementing actions including those set
forth in Section 400 o this Plan in the identified topical and geographical areas as
necessary and appropriate to make the most efficient use o its resources and so that
the impact
o
its activities stimulate private redevelopment [Section 550]
According to the Redevelopment Plan the City shall aid and cooperate with the
Agency
in
carrying out this Plan and shall take all actions necessary to ensure the
continued fulfillment o the purposes
o
this Plan and to prevent the recurrence or
spread in the area
o
conditions causing blight Action by the City shall include but
not be limited to:
institution and completion
o
proceedings for widenting or
changing the grades o streets alleys and for other necessary modifications o
streets all other functions and services relating to public health safety and physical
development which will permit the redevelopment
o
the Project to be commenced
and carried to completion without unnecessary delays and the undertaking and
completing o any other proceedings necessary to carry out the Project [Section 800 1
A G and
H]
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BERKM N
Mr Jeff Graham
Vice President, Redevelopment
Centre City Development Corporation
September 23,2010
Page 4
ANALYSIS
Park Project
According to the facts presented to us, the Park Project appears contiguous as defined by
Section 33445 f) to the Centre City Redevelopment Project Area. As a result, Section 33445
applies. Here are the steps necessary to accomplish the Park Project:
To the extent necessary, the details
o
the Park Project should be consistent with the
Implementation Plan. Many examples are set forth above, but this list is not exhaustive and the
facts concerning the Park Project should be developed around particularized sections o the
Implementation Plan to assure the payment
o tax increment is consistent with Section
33445 a) 3).
2 The Agency initiate and finalize a summary report under Section 33679 in compliance
with Section 33445, which requires seeking the consent o the City, and the City s determination
that: 1) that acquisition
o
land or installation or construction o buildings incident to the Park
Project are
o
benefit to help eliminate blight within the Centre City Redevelopment Project
Area[as set out in detail in Section 33445 a) I)]; 2) that there are no other reasonable means o
financing the acquisition
o
the land or installation or construction o the improvements related to
the Park Project[as set out in detail in Section 33445 a) 2)], and 3) the payment proposed
concerning the Park Project is consistent with the implementation plan [as set out in detail in
Section 33445 a) 3)].
3 The details o the Park Project, once fully discerned, must be provided for in the
Redevelopment Plan. Many examples are set forth above, but this list is not exhaustive and the
facts concerning the Park Project should be developed around particularized sections o the
Redevelopment Plan. [Section 33445 b) 2)]
4 The Agency expenditure may not include any payment for maintenance or like
operations incident to the Park Project.[Section 33445 b) 3)]
5 the details o the Park Project include the City s initial contribution o the land and
improvements to the Park Project, under Section 33445 c), the Agency may contract with the
City for payments over a period o time. This option essentially permits contractual financing
with the City, which, i exercised, should be included in the summary report, presentation to the
City and joint public hearing.
6 The Agency would also have to comply with Section 33679, hold a joint public
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Mr
JeffGraham
Vice President, Redevelopment
Centre City Development Corporation
September 23,2010
Page 5
hearing, set out the exact details of the transaction in the summary report, and publish the notice
of
hearing in a newspaper
of
general circulation such as the Daily Transcript.
7 In addition, and if facts suggest and apply hereunder, under Section 33421, gives the
Agency additional powers. The section reads: An agency may develop
as
a building site any
real property owned or acquired by it. In connection with such development it may cause,
provide or undertake or make provision with other agencies for the installation, or construction
of streets, utilities, parks, playgrounds and other public improvements necessary for carrying out
in the project area the redevelopment plan. Additional facts are likely necessary to determine
the applicability
of
this section to the Park Project.
8 To the extent billboards or like air rights are part of the Park Project, under Section
33440, an agency may construct foundations, platforms, and other like structural forms
necessary for the provision or utilization of air rights sites for buildings to be used for residential,
commercial industrial, or other uses contemplated by the redevelopment plan.
Please advise if you wish additional assistance in moving forward with the Park Project
or the preparation
of
a recommendation for the Agency.
Neighborhood Public Improvements Project
According to the facts presented to us, the Neighborhood Public Improvements project
fails to identify exactly what public improvements
r e
sought to be installed and exactly where
the installation is proposed. Such facts would be vital to determine (i) whether Sections 33445
concerning continuous parcels or 33445.1 regarding non-contiguous parcels apply, (ii) if the
payment
is
consistent with the Implementation Plan under Sections 33445(a)(3) or
33445.1(a)(4), and (iii) whether the public improvments are provided in the Redevelopment Plan
under Sections 33445(b)(2) or 33445.1(a)(5).
Furthermore, the facts would also avail the e
of
the ability to access set asides. For
instance, if there were any affordable housing projects within the Golden Hill, Sherman Heights,
or Barrio Logan areas, there may be avenues to explore the possibility
of
Agency-assistance
under the affordable housing sections of Community Redevelopment Law and such expenditures
would have the benefit of the statutory authorization to encourage affordable housing under
Section 33445(a)(1) or 33445.1(a)(2). With such facts and affordable housing redevelopment
public purpose, such expenditures would able to
be
froin 20 tax-increment set asides. At the
present time, we
do
not have such public purpose and as a result, this opinion rests on 80 tax
increment from the CCDC project areas.
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B LLMER
BERKM N
Mr
JeffGraham
Vice President, Redevelopment
Centre CityDevelopment Corporation
September23,2010
Page 6
For the foregoing reasons, we believe the Agency is limited in its ability to expend only
80 CCDC tax increment only on those contiguous areas,
as
defined in 33445(f). We also
believe there must be some showing o how these public improvements on the other side o
Interstate 5 in these neighborhoods actually eliminate blight in the Centre City Redevelopment
Project Area.
We
believe the Neighborhood Public Improvements project details must be further
developed to show the payment
o
such funds are consistent with the Implementation Plan and
provided for in the Redevelopment Plan. Assuming such barriers are overcome,
as to
those
sections o Golden Hill, Sherman Heights, and Barrio Logan, that are actually contiguous the
Agency must only comply with Section 33445(a). Further development o facts may also reveal
the Agency may also possess the powers under Section 33445(c), 33421, and 33440,
necessary.
For instance along those western parcels o Golden Hill and Sherman Heights directly
adjacent to Interstate 5 and those northwesterly parcels o Barrio Logan, CCDC may recommend
that the Agency undertake only those improvements that are publicly-owned that eliminate blight
in the Centre City Redevelopment Project Area. Further inquiry would be necessary as to what
is the state o the parcels adjacent to the Centre City Redevelopment Project Area to determine
exactly what blight exists and what improvements should be installed or constructed in and
around those parcels. For instance, the Redevelopment Plan does encourage all utilities be
placed underground when physically and economically feasible, as determined by the Agency
[Section 510.10]. In addition, the Agency is authorized under Section 440.2 o the
Redevelopment Plan to install and construct, public improvements and public utilities (within or
outside the Project Area) necessary to carry out this Plan. Such public improvements include,
but are not limited to, over- or underpasses, bridges, streets, curbs, gutters, sidewalks,
streetlights, water distribution systems, sewers, storm drains, traffic signals, electrical
distribution systems, parks, plazas, playgrounds, motor vehicle parking facilities, landscaped
areas, street furnishings and transportation facilities. Further review o the discussion sections
concerning the Implementation and Redevelopment Plans may also assist in further development
o the Neighborhood Public Improvements project. Please advise you wish for
us
to meet with
you further to determine how such aspects o the Implementation and Redevelopment Plans may
yield a revised Neighborhood Public Improvements project to accomplish CCDC and Agency
goals.
With respect to those specific contiguous areas
o
Golden Hill, Sherman Heights, and
Barrio Logan that are to be part o the Neighborhood Public Improvements project, these areas
are the only parcels that appear contiguous to the Centre City Redevelopment Project Area as
defined by Section 33445(f). The Agency may follow Section 33445 for only those contiguous
parcels in the Neighborhood Public Improvements project. Here are the steps necessary to
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Mr Jeff Graham
Vice President, Redevelopment
Centre City Development Corporation
September23,2010
Page 7
accomplish this revised scope for this project:
To the extent necessary, the details o the Neighborhood Public Improvements project
should be consistent with the Implementation Plan. Many examples are set forth above, but this
list is not exhaustive and the facts concerning the Neighborhood Public Improvements project
should be developed around particularized sections o the Implementation Plan to assure the
payment o tax increment is consistent with Section 33445 a) 3).
2 The Agency initiate and finalize a summary report under Section 33679 in compliance
with Section 33445, which requires seeking the consent o the City, and the City s determination
that: 1) that installation or construction o any facility, structure or other improvement incident
to the Neighborhood Public Improvements project are o benefit to help eliminate blight within
the Centre City Redevelopment Project Area[as set out in detail in Section 33445 a) 1)]; 2) that
there are no other reasonable means o financing the installation or construction o any facility,
structure or other improvement incident to the Neighborhood Public Improvements project [as
set out in detail in Section 33445 a) 2)], and 3) the payment proposed concerning the
Neighborhood Public Improvements project
is
consistent with the implementation plan [as set
out in detail in Section 33445 a) 3)].
3 The details o the Neighborhood Public Improvements project, once fully discerned,
must be provided for in the Redevelopment Plan. Many examples are set forth above, but this
list is not exhaustive and the facts concerning the Neighborhood Public Improvements project
should be developed around particularized sections
o
the Redevelopment Plan. [Section
33445 b) 2)]
4
The Agency expenditure may not include any payment for maintenance or like
operations incident to the Neighborhood Public Improvements project.[Section 33445 b) 3)]
5 the details
o
the Neighborhood Public Improvements project include the City s
initial contribution o improvements to the Neighborhood Public Improvements project, under
Section 33445 c), the Agency may contract with the City for payments over a period o time.
This option essentially permits contractual financing with the City, which,
i
exercised, should be
included in the summary report, presentation to the City and joint public hearing.
6 The Agency would also have to comply with Section 33679, hold a joint public
hearing, set out the exact details o the transaction in the summary report, and publish the notice
o hearing in a newspaper o general circulation such as the Daily Transcript.
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K NE LLMER ERKM N
Mr
JeffGraham
Vice President, Redevelopment
Centre City Development Corporation
September 23,2010
Page 18
7 In addition, and i facts suggest and apply hereunder, under Section 33421, gives the
Agency additional powers. The section reads: An agency may develop as a building site any
real property owned or acquired by it. In connection with such development it may cause,
provide or undertake or make provision with other agencies for the installation, or construction
o streets, utilities, parks, playgrounds and other public improvements necessary for carrying out
in the project area the redevelopment plan. Additional facts are likely necessary to determine
the applicability o this section to the Neighborhood Public Improvements project.
8
To the extent billboards or like air rights are part
o
the Neighborhood Public
Improvements project, under Section 33440, an agency may construct foundations, platforms,
and other like structural forms necessary for the provision or utilization o air rights sites
for
buildings to be used for residential, commercial industrial, or other uses contemplated by the
redevelopment plan. A review o consistency with the Redevelopment Plan would also be
necessary
i
this becomes part
o th
Neighborhood Public Improvements project. Because these
areas are adjacent to Interstate 5 this may show promise as a revenue generator but should
be
vetted through a public process.
As to those areas o Golden Hill, Sherman Heights, and Barrio Logan that are not
contiguous to the Centre City Redevelopment Project Area, Section 33445.1 applies. Unlike
33445,
SB
93
was made to limit the Agency s role in purchasing or improving non-contiguous
parcels outside the project area. As noted above in the discussion o applicable law, Section
33445.1 would require that the City and Agency evaluate other financing facilities, like
assessment bonds, Mello-Roos, and the like under Section 33445.1(a)(3) before using tax
increment for the Neighborhood Public Improvements project. As a result, i the public
improvements are not specified and the land to be improved is not contiguous, it
is
vital to
demonstrate how the unspecified public improvements under the Neighborhood Public
Improvements project are o primary benefit to the project area without any other reasonable
means
o
financing.
While we believe there may exist some recognizable nexus to show that contiguous
parcels under the Neighborhood Public Improvements project are
o
benefit to the Centre City
Redevelopment Project Area, we have not yet seen such facts. However, at this time, we do not
see how the Neighborhood Public Improvements project on non-contiguous parcels may
be
o
benefit to the Centre City Redevelopment Project Area.
We
would be happy to assist in the
investigatory process
i
and as necessary.
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K NE
B L l
ME H
BERKM N
Mr
Jeff
Graham
Vice President, Redevelopment
Centre City DevelopmentCorporation
September
23 2010
Page 19
We are pleased
to
have
provided
this opinion on the Park Project
and Neighborhood
Public Improvements project. As and when
p p r o p r i t ~ kindly
advise if
you
wish any further
assistance
in
connection with this assignment.
you have any further questions, please do not hesitate to call us.
Very truly yours,
KANE BALLMER BERKMAN
cc: Elisa Cusato, Esq., Office
o
General Counsel Via E-Mail [email protected])