HomeMy WebLinkAbout1999-216
RESOLUTION NO. ---1999-216
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO DESIGNATING A REDEVELOPMENT
3 SURVEY AREA FOR PROJECT STUDY PURPOSES (40TH STREET)
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THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO
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HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS:
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SECTION 1. The Mayor and Common Council hereby acknowledge receipt of a report
entitled "Feasibility Study Proposed 40th Street Redevelopment Project" dated July 1999. The
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Mayor and Common Council of the City of San Bernardino desire to designate a certain area to
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be studied as a redevelopment survey area (the "Survey Area") and authorize the San Bernardino
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Community Development Commission (the "Commission") to proceed with further studies to
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determine the feasibility of potential redevelopment activities within the Survey Area.
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SECTION 2. The California Community Redevelopment Law ("CRL") provides that if
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directed by the Mayor and Common Council, the Planning Commission shall select a project
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comprised of all or part of a redevelopment Survey Area. It is hereby determined that
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consideration of a redevelopment project within said redevelopment Survey Area is in the best
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interests of the City.
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SECTION 3. The Mayor and Common Council hereby finds and determines that the
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area requires study to investigate the feasibility of the formation of a redevelopment project to
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abate and eliminate the condition of blight as described in the July, 1999 survey area study
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report, and the Mayor and Common Council hereby designate the Survey Area (as depicted on
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Exhibit "A") as a redevelopment survey area within the meaning of Section 33310 of the CRL.
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SECTION 4. The Mayor and Common Council hereby direct the Planning Commission
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of the City of San Bernardino to select the boundaries for one or more redevelopment project
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areas within the Survey Area and to submit a preliminary plan for the redevelopment of such
proposed project areas, pursuant to CRL Sections 33322 and 33325.
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1999-216
SECTION 5. The designation of any territory as part of a redevelopment survey area
2 accomplished by action of the Mayor and Common Council prior to approval of this Resolution
3 shall remain in full force and effect.
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1999-216
2
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO DESIGNATING A REDEVELOPMENT
SURVEY AREA FOR PROJECT STUDY PURPOSES (40TH STREET)
3
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
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Common Council of the City of San Bernardino at a
joint adjourned
meeting
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16th
thereof, held on the
day of
August
,1999, by the following vote to wit:
6 Commission/Council Members:
7 ESTRADA
8 LIEN
9 MCGINNIS
10 SCHNETZ
VACANT - 5th Ward
11
ANDERSON
12
MILLER
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14
15
Aves
Navs
Abstain
Absent
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17 The foregoing resolution is hereby approved this
11hv
day of
Anqn~t-
,1999.
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,~~~~,
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Betty Dean Anderson
Mayor Pro Tem
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Approved as to form and Legal Content:
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James F. Penman
City Attorney
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City of San Bernardino
ECONOMIC DEVELOPMENT AGENCY
Proposed 40th Street Redevelopment Area
EX
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1999-216
PROPOSED 40TH STREET
REDEVELOPMENT PROJECf
Prepared For:
The Economic Development Agency and The City of San Bernardino
201 North E Street, Suite 301
San Bernardino, California 92401-1507
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Prepared By:
A ~. ~.#"-.o..
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Rosenow Spevacek Group, Inc.
540 N. Golden Circle, Suite 305
Santa Ana, California 92705
Phone 714.541.4585
Fax 714.836.1748
E-Mail Address:RSGINCCA@ao1.com
July, 1999
1999-216
TABLE OF CONTENTS
SECTION
PAGE #
EXECUTIVE SUMMARY .............................................................................................................1
I. INTRODUCTION .................................................................................................................4
II. LEGISLATIVE REQUIREMENTS........................................................ .............................6
III. DESCRIPTION OF PHYSICAL AND ECONOMIC CONDITIONS EXISTING
IN THE STUDY AREA........................................................................................................9
IV. PRELIMINARY FINANCIAL FEASIBILITY ANALYSIS .............................................24
TABLES AND MAPS
TABLES
Table I ......... ........................... ........... ............... ............... .......... ............... ... ... ....... ..........................9
Table 2 .......................................................................................................................................... .19
Table 3 .. .... ... ............... .......... ......................... ... ......................... ... ......... ... ... ...... .... ... .............. ... ... .20
Table 4 .................................................. ........................................ .............................................. ...21
Table 5 .. ... ....... ... ... ... ............... ........... ............... ......................... ........ .... ... ... ... ....... ......... ......... ..... .22
Table 6 . .... ...... ........................... ... .................... .......... ..... ... .......... ... ...... ... .......... ........................... .28
Table 7 .. ... .................. .......... ........ ........... ......... ... .... ... ........ ....... ...... ...... ... ... .......... ...... ... ... ... ... ...... .29
Table 8 .. ... .... ... ... ... .................. ..... ...... ... ...... ...... ... ...... ........ ................ ... ............. ............. ... ... ....... ..30
Table 9 ....................... ........................ .......................................................................................... ..31
MAPS
Map I ....................................................................................................................Following Page 5
APPENDICES
Appendix 1 - Photographs of the Study Area
1999-216
EXECUTIVE SUMMARY
The Rosenow Spevacek Group, Inc. ("RSG") was retained by the Economic Development
Agency and the City Council of the City of San Bernardino to conduct a Feasibility Study to
determine whether conditions pursuant to the California Community Redevelopment Law are
substantial enough to proceed with the adoption of a redevelopment project area for the 40th
Street Study Area ("Study Area"). The information and recommendations of this study are based
upon a parcel-by-parcel field study conducted by RSG, information gathered from secondary
data sources, and a review of historical documents.
The 40th Street Study Area consists of approximately 73.28 acres (excluding public rights of
way) of commercial and residential uses in the northeastern portion of the City of San
Bernardino. The area is made up of 2 non-contiguous portions. The larger area is generally
bordered by 44th Street to the north, Waterman Avenue to the east, Ralston Avenue and Sonora
Drive to the south, and Electric and Mountain View Avenues to the west. The other area is
multi-unit residential, just to the east of Sierra Way on 49th Street. The existing commercial
areas in the Study Area are located on 40th Street, as well as along certain portions of Sierra
Way. These uses consist of a mix of marginal retail and other commercial uses serving the local
neighborhood. The residential areas are primarily north of 40th Street, east of Sierra Way, and
south of 40th Street, west of Sierra Way.
The results of the field survey indicate that 74% of all parcels in the Study Area suffer
from one or more physical blighting conditions, one or more economic conditions, or both.
The Study Area is comprised of deteriorated and dilapidated structures, with areas that do not
meet current codes, have poor access and other design problems. The majority of the
commercial properties in the Study Area contain deteriorated and underutilized structures with
inconsistent architectural or design theme. Inadequate access and inadequate parking exacerbate
the poor condition and obsolete appearance of these properties, and have contributed to the lack
of business patronage and the overall decline in the economic viability of the commercial uses in
the Study Area. Economic conditions in the Study Area are also strained. Property values in the
Study Area have declined by over 9% over a five-year period, while values in both the City and
County have increased. Despite substantial population growth and increasing retail sales in the
City and County of San Bernardino, the Study Area has experienced a decline of 10.1 % in its
taxable sales in the last 4 years. As the economic viability of the commercial areas in the Study
Area has diminished, necessary maintenance of buildings has been deferred. Property owners
with little or no cash flow appear unable to fund improvements due to the relatively prohibitive
cost of routine maintenance.
A central focus in the Study Area is the 40th Street Shopping Center ("Shopping Center") and its
environs. The physical and economic blighting conditions present in the Shopping Center
include deterioration and dilapidation, defective design, substandard design, and a vacancy rate
of nearly 40%. The Shopping Center also suffers from varying grade levels, as the portion
directly adjacent to 40th Street is of a higher grade than the southerly portion of the Center. The
Shopping Center has suffered a loss of 2 anchor tenants in the last decade, which has made
leasing vacant space problematic. The substandard condition of the Center, as well as the
Rosenow Spevacek Group, Inc.
July, 1999
Feasibility Study for the
City of San Bernardino
1999-216
development of a larger, newer, and more attractive adjacent shopping center fronting Sierra
Way have further exacerbated this problem. The use of Waterman Avenue as the primary
thoroughfare to the mountain areas, rather than Sierra Way, has also diverted a significant
amount of traffic away from the commercial properties in the Study Area.
Residential properties with the highest incidence of physical and economic blighting conditions
in the Study Area are primarily located in the following areas: in the northern portion along 49th
Street, near the comer of 44th Street and Mountain View Avenue, the area bounded by Electric
Avenue, Mountain View Avenue and 49th Street, and adjacent to the 40th Street Shopping
Center along Sonora A venue. The properties along 49th Street exhibit the most severe
conditions of deterioration and dilapidation in the Study Area. High proportions of residential
units are boarded up and appear abandoned. Two large apartment complexes located near 44th
Street and Mountain View Avenue are land-locked with inadequate access points, some of which
require traveling through narrow alleys. The complexes also have bars on windows and doors,
which indicates crime issues in the neighborhood. Additionally, these structures suffer from
deferred maintenance and lack adequate tenant and visitor parking. Conditions documented in
the southerly portion of the Study Area, along Mountain View and Electric Avenue include
deterioration and dilapidation, inadequate parking access, outdoor storage, and incompatible
uses. Finally, the residential area located to the south of the Shopping Center exhibited signs of
varying grade levels, deferred maintenance, incompatible uses, and graffiti. Further, there are a
number of multifamily properties that are vacant and/or have been taken back by HUD or the
mortgage lenders. The 1990 Census reports that over 46% of the housing units in the City were
constructed prior to 1960. The poor condition of the housing stock in portions of the Study Area
is reflective ofthe older age structures and the lack of routine maintenance.
The conditions noted above, and detailed in the following report, have resulted in the overall
physical and economic decline of the commercial and residential areas of the Study Area. It is
our opinion that without governmental assistance utilizing the tools of redevelopment, the Study
Area properties will continue to decline, increasing the existing physical burden on the
community and further diminishing the economic viability of the area. Multiple ownerships and
small commercial lot sizes have acted as an impediment to rehabilitation and development. The
powers of redevelopment are needed to assemble properties and provide financial assistance for
improvements. In residential areas, many of which have been negatively impacted by the poor
condition of the commercial properties, public intervention and assistance is needed for
rehabilitation, reuse of abandoned buildings, and improved access and parking.
The City of San Bernardino has a long history of initiating proposed projects to alleviate the
blighting conditions at the 40th Street Shopping Center with little success, including, previous
attempts to include the area in a redevelopment project area. To provide necessary financial
tools to initiate projects in the area, the City has obtained an Economic Development Initiative
(EDI) grant in the amount of $344,000 and has qualified for a $2,295,000 Section 108 Loan from
HUD for the 40th Street Shopping Center. In addition, the City annually receives Community
Development Block Grant (CDBG) funding in the amount of $3,884,000, HOME funding in the
amount of $1,773,000, and ESG funding in the amount of $138,000. It is anticipated that these
funding sources can be used in combination with the financial tools available through
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July, 1999
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Feasibility Study for the
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1999-216
redevelopment to alleviate blighting conditions in the Study Area. The principal financing
mechanism of redevelopment is the tax increment financing. Preliminary projections indicated,
that over the proposed 45-year period to collect tax increment allowed under Community
Redevelopment Law, the Study Area may generated approximately $50 million dollars of gross
revenue. Of this amount, $34.2 million dollars of net tax increment revenue (after mandatory
payments to the Area's taxing agencies) allocate to the Agency for redevelopment and housing
purposes. These funds in conjunction with the other funding sources described above will
provide the necessary dollars need to address and remedy the blighting conditions now prevalent
within the Study Area.
STUDY AREA BOUNDARIES
The Study Area is generally bounded by 44th Street to the north, Ralston Avenue, and Sonora
Drive to the south, Electric Avenue and Mountain View Avenue to the west, and Sepulveda
Avenue and Waterman Avenue to the east. In addition, a section of high-density apartments
north of this area is included in the Study Area. This additional section is generally bounded by
Waterman Avenue to the east, Sierra Way to the west and northwest and parcels fronting 49th
Street on the south. Major land uses in the Study Area consist of retail, commercial and
residential uses located directly adjacent to or near commercial and office properties. A map of
the Study Area is attached as Map I of this Study.
RECOMMENDA nONS
Based on the conditions of physical and economic blight documented in this Study, it is RSG's
preliminary determination that there is sufficient evidence to move forward with the adoption of
a redevelopment project. Additionally, because of the number of residential units within the
Study Area, it is also recommended that a Project Area Committee be formed pursuant to
California Community Redevelopment Law.
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July, 1999
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Feasibility Study for the
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1999-216
I. INTRODUCTION
The Rosenow Spevacek Group, Inc. ("RSG") has been retained by the Economic Development
Agency of the City of San Bernardino ("Agency") and the San Bernardino City Council
("Council") to analyze the feasibility of establishing a redevelopment project area. More
specifically, the City requested that RSG review previously prepared studies and materials to
assess historical trends in the Study Area and assist in preliminary analysis to identify
appropriate redevelopment project area boundaries. To this end, RSG has prepared a Feasibility
Study ("Study") to identify areas in the City which meet the requirements of a redevelopment
project area, as specified in the California Redevelopment Law, Health and Safety Code Section
33000, et. seq., ("CRL"). With the assistance of studies to provide historical perspective on
portions of the Study Area, and other data provided by the City and other sources, the analysis
presented in this report focuses primarily on those areas which have been identified by RSG for
inclusion in a potential redevelopment project area, as shown in on Map I ("Study Area").
RSG's preliminary findings of the physical and economic blighting conditions present within the
Study Area to date indicate that a large portion of the residential and commercial areas in the
Study Area qualify for inclusion in a potential redevelopment project. The properties contained
within the Study Area appear to exhibit conditions of physical and economic blight, which
cannot be alleviated by private enterprise and/or government action, without redevelopment.
However, certain issues such as some parcel level analyses, lease rates, building code violations,
and crime statistics require further review and analysis by RSG staff
It is important to note that this Study is limited in nature and therefore in scope. For example,
this Study does not recommend a specific redevelopment program of activities, or examine the
potential costs associated with such a redevelopment program, and therefore does not make any
formal determination ofthe economic feasibility of redevelopment. Section 33352(e) of the CRL
requires that when a project is adopted, the Agency must provide a detailed explanation of the
proposed method of financing so that the City Council may make a finding, in the ordinance
adopting the redevelopment plan, that the plan is economically sound and feasible. While we are
confident that feasibility can be adequately demonstrated to fulfill the CRL requirements, sources
of revenues other than tax increment revenue will need to be identified and incorporated into a
full financial analysis if a redevelopment plan adoption is undertaken. The Agency is not bound
by the assumptions used to demonstrate financial feasibility during the adoption process, but will
be required to adopt an implementation plan, covering the first five years of redevelopment
activity, concurrent with the plan adoption.
In addition to the above limitation, this Study is limited in its assessment of blight. While blight
assessment performed for this Study was based primarily on a parcel-by-parcel survey, it
contains a review of secondary data sources and does not contain the full scope of the
comprehensive review and research of secondary data sources that would be required for an
actual redevelopment plan adoption.
Rosenow Spevacek Group, Inc.
July, 1999
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Feasibility Study for the
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1999-216
Another factor to consider in connection with the use of redevelopment is the formation of a
Project Area Committee. Section 33385 of the California Community Redevelopment Law
requires that a Project Area Committee ("PAC") must be formed in either of the following
situations:
(I) A substantial number of low and/or moderate income people reside within a project area,
and the redevelopment plan contains the authority for the agency to acquire, by eminent
domain, property on which any persons reside; or
(2) The redevelopment plan contains one or more public projects that will displace a
substantial number of low and/or moderate income persons.
Based upon the number of residential units within the Study Area that are likely to be occupied
by low and/or moderate income people, RSG recommends that a PAC is formed. A PAC is an
elected body comprised of residential owner occupants, residential tenants, business owners
(including non-resident property owners), and existing community organization within a
redevelopment project area. Each group must be adequately represented. A PAC reviews the
proposed redevelopment plan and may choose to prepare a report and/or recommendation about
the redevelopment to the City Council. If a PAC opposes the adoption of a redevelopment plan,
the City Council must adopt the plan by a two-thirds vote, rather than a simple majority.
Rosenow Spevacek Group, Inc.
July, 1999
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Feasibility Study for the
City of San Bernardino
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City of San Bernardino
ECONOMIC DEVELOPMENT AGENCY
Proposed 40th Street Redevelopment Area
1999-216
II. LEGISLATIVE REQUIREMENTS
Section 33030 of the CRL states that "there exists 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." This Report
describes the existing physical and economic conditions present within the Study Area that create
blight, the factors which cause a reduction of or a lack of proper utilization of the Study Area,
why these blighting conditions create a burden on the community, and why private enterprise
acting alone is unable to reverse or alleviate the blighting conditions found within the Study
Area.
Section 33030 of the CRL states a blighted area is one that contains both of the following:
I. "An area that is predominantly 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 are so
prevalent and so substantial that it causes a reduction of, or lack of, proper utilization of
the area to such an extent that it constitutes a serious physical or 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 following:
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."
Section 33031 of the CRL describes both physical and economic conditions that cause blight.
The "physical" conditions that cause blight, as detailed in subdivision (a) of Section 33031, are
as follows:
1. "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 physical construction, faulty or inadequate utilities, or
other similar factors.
2. Factors that prevent or substantially 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.
3. Adjacent or nearby uses that are incompatible with each other and which prevent the
economic development of those parcels or other portions of the area.
4. The existence of subdivided lots of irregular form and shape and inadequate size for
proper usefulness and development that are in multiple ownership."
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Feasibility Study for the
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The "economic" conditions that cause blight, as stated in subdivision (b) of Section 33031, are as
follows:
1. "Depreciated or stagnant property values or impaired investments, including, but not
necessarily limited to, those properties containing hazardous wastes that require the use
of an agency's authority as specified in Article 12.5 (commencing with Section 33459).
2. Abnormally high business vacancies, abnormally low lease rates, high turnover rates,
abandoned buildings, or excessive vacant lots within an area developed for urban use and
served by utilities.
3. A lack of necessary commercial facilities that are normally found in neighborhoods,
including grocery stores, drug stores, and banks and other lending institutions.
4. Residential overcrowding or an excess of bars, liquor stores, or other businesses that cater
exclusively to adults, that has led to problems of public safety and welfare.
5. A high crime rate that constitutes a serious threat to the public safety and welfare."
This analysis, and the assessment of the blighting conditions found within the Study Area, is
based upon the following:
1. A windshield survey of the properties within the Study Area conducted during May of
1999 by RSG, redevelopment consultants to the City.
2. Information and data contained in the report from National Decision Systems, a division
of the VNU Precision Marketing Group, Inc.
3. Information and data contained in the Inland Empire Consultants, Inc., land lease analysis
ofa site in the 40th Street Shopping Center, December 1997.
4. Information contained in the 108 Loan Application to the U.S. Department of Housing
and Urban Development for the 40th Street Shopping Center in November, 1994.
5. Information contained in the appraisal report of a portion of the 40th Street Shopping
Center by Gottfried, Gamble & Associates, Inc., April 1996.
6. Retail sales data obtained from the State Board of Equalization, 1994 through 1997.
7. Retail sales data from MBIA MuniServices Company, 1993 through 1998.
8. Parcel ownership, sales, and secured assessed valuation data from MetroScan Information
Service, derived from the most recent assessment roll of the County of San Bernardino
Assessor's Office.
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Feasibility Study for the
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9. Crime statistics from State of California Department of Justice - Bureau of Criminal
Information and Analysis, Criminal Justice Statistics Center.
10. Information provided by the City of San Bernardino.
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III. DESCRIPTION OF PHYSICAL AND
ECONOMIC CONDITIONS EXISTING IN
THE STUDY AREA
The following discussion presents a general analysis of physical and economic blighting
conditions within the Study Area. As mentioned in the Executive Summary, for the purposes of
the description of physical conditions presented in this analysis, the Study Area is the area shown
on Map I. However, the analysis of the economic conditions presented may in some instances
(e.g., crime statistics) include additional areas beyond the Study Area because the City provided
data for a district that encompasses additional land. Table I presents blight findings pursuant to
the field study.
TABLE 1
Adoption ofthe 40th Street Redevelopment Project Area
Summary of Blighting Conditions
Physical Blighting
Conditions
Buildings Unsafe/Unhealthy to Live or Work
Serious Building Code Violations
Dilapidation and Deterioration
Deferred Maintenance
Moderate Rehabilitation
Extensive Rehabilitation
Subtotal
No. of
Parcels/Properties with
Blighting Conditions
No. of
Parcels/Properties
in Project Area
% of Parcels with
Blighting Conditions
in Project Area
Defective Design/Physical Construction
Faulty or Inadequate Utilities
18 234 7.69%
109 234 46.58%
24 234 10.26%
II 234 4.70%
144 234 61.54%
57 234 24.36%
46 234 19.66%
Factors that Prevent or Hinder the Economically
Viable Use or Capacity of B1dgs. or Lots
Substandard Design (I)
Lack of Parking
75
29
234
234
32.05%
12.39%
Incompatible Adjacent Uses
10
234
4.27%
Lots of Irregular Shape and Inadequate Size
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234
10.68%
Total Physical Blighting Conditions (2) 171
Economic Blighting Conditions
Declining Property ValueslImpaired Investments 19
Business Vacancies (3) 16
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Total Economic Blighting Conditions (2)
39
234 73.08%
234 8.12%
69 23.19%
234 3.85%
234 16.67%
(1) Includes Outdoor Storage or Production.
(2) This number represents the number of parcels with at least one condition of physical or <<onomic blight
(3) Totals include Parcels Designated for Use by Business Establishments with at least one vacant unit
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Feasibility Study for the
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1999-216
A. Physical Conditions That Cause Blight
The CRL describes physical conditions that cause blight in Section 33031(a), as
shown above. These physical conditions are assessed in terms of the health and safety of
persons and the economic viability and development of the area. Seventy-two percent of all
parcels within the Study Area suffer from one or more conditions of physical blight. The
physical blighting conditions found in the Study Area include deterioration and dilapidation of
all types of buildings, buildings defective in design, buildings which do not meet code
requirements, buildings with faulty or inadequate utilities, buildings of substandard design,
properties with parking and access problems, and parcels of irregular form and shape, and
inadequate size which are under multiple ownership. Conditions of deterioration and
dilapidation, inadequate parcel size and shape for development, as well as the conditions listed
above, discourage private sector investment and further contribute to the blighting conditions of
the Study Area.
The area analyzed primarily comprises the commercial centers along 40th Street
and Sierra Way, which are important resources for neighborhood serving commercial uses in the
Study Area, and the surrounding residential uses. Poor physical conditions place a burden on
the immediate community by causing a lack of necessary commercial uses needed or desired by
area residents. The poor physical and economic conditions of the commercial property also
impact surrounding neighborhoods, as residents have no incentives in some cases to upgrade
and/or maintain their properties. The magnitude of these building and site problems has
seriously impacted the ability of the City to remediate poor conditions and facilitate private
reinvestment in the area. In many cases, the high costs involved in upgrading and rehabilitating
existing structures and infrastructure have caused buildings to deteriorate to a state of disrepair
that causes health and safety issues for occupants, and have caused buildings to remain vacant
for two years or more. Removing blighting conditions will require a concerted effort by both
the community and the private sector. Neither entity acting alone possesses the ability or the
resources to remediate the deficiencies of the Study Area.
The following discussion provides a preliminary summary of physical blighting
conditions found to be pervasive within the Study Area. The photographs contained in Appendix
1 provide examples of conditions within the Study Area described below.
1. Buildings in which it is Unsafe or Unhealthy for Persons to Live or Work
(a) Deterioration and Dilapidation
Deterioration and dilapidation is one indicator of buildings which are unsafe or
unhealthy for persons to live or work in, as identified under Section 33031(a)(1) of the CRL.
Buildings, which are in poor or substandard condition, jeopardize the health and safety of the
occupants and the community as a whole. The presence and persistence of deteriorated and
dilapidated building conditions reflects a lack of investment necessary to assure the safety of
persons who live or work in the area.
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In order to assess the level of building deterioration occurring in the Study Area, a
parcel-by-parcel survey of blighting conditions was conducted in part to assess the overall
conditions of buildings in the Study Area. Buildings in the Study Area were viewed and
generally categorized based on the condition of the structures in one of the following categories:
=> Sound: There are no noticeable deficiencies in the structural condition of the
roof, walls, or foundation. The structure appears to have adequate plwnbing and
electrical service and is subject to a regular program of maintenance. The exterior
walls and other surfaces are well painted and clean, and the windows and doors
are intact.
=> Deferred Maintenance: The structure has been maintained adequately enough to
eliminate any major structural defects. The exterior of the building shows signs
of deferred maintenance such as peeling paint, dirty exterior walls and other
surfaces, weathered and worn wood facades, and/or cracked plaster or
foundations.
=> Moderate to Extensive Rehabilitation: There are obvious indications that proper
maintenance to the structure is very infrequent. The building shows signs of
structural deterioration, such as rotten or cracked building materials, a sagging
roof or walls, or a crumbling foundation. Patchwork repairs may be apparent, and
paint may be largely peeled or faded. The exterior walls and other surfaces are
very dirty and show signs of neglect.
=> Dilapidated: The building appears structurally unsound, and maintenance is
nonexistent. Its fitness for human habitation is highly questionable, and its state
of deterioration and neglect is such that it is a candidate for demolition.
Deteriorated and dilapidated structures were observed throughout the Study Area.
The windshield survey identified a total of 144 parcels (62% of properties surveyed) with signs
of deterioration or dilapidation. Approximately 109 parcels had one or more signs of deferred
maintenance, 24 parcels were in need of moderate rehabilitation, and II parcels require extensive
rehabilitation.
Building conditions observed during the field survey include broken windows,
boarded up abandoned buildings, rotting wood eaves or trim, sagging roofs, damaged and
deteriorated roofing material, damaged exterior building material, cracked or crumbling
foundations, and substandard exterior electrical wiring and plumbing. The deterioration in the
commercial area includes damaged exterior building and roofing materials, exposed wiring and
plumbing, peeling paint, occasional broken windows, and obsolete signage. These conditions are
most prevalent in what appears to be the older commercial area along the northern portion of
Sierra Way. Physical blighting conditions are also concentrated along the businesses west of
Sierra Way on the south side of 40th Street, with many of the buildings exhibiting conditions
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similar to those cited above. One of the most dramatic examples of the deterioration conditions
in some commercial areas is the Shopping Center, where the western side is not in use and has
been partially covered with exposed building materials, or has boarded up windows. Further, the
rear of these buildings show exposed plumbing and electrical wiring, cracked foundations,
peeling paint, and deteriorated building materials.
The majority of all structures within the Study Area are residential. The overall
condition of the building stock in the Study Area is reflective of the older age of the housing.
Residential units in the area are generally bounded by 40th Street to the north, Electric A venue to
the west, and Mountain View Avenue to the east, exhibit one of the highest incidences of
deterioration in the Study Area. These "bungalow" type houses are quite deteriorated, primarily
due to age and lack of maintenance. Further, these residential properties contain trash and other
debris accumulating around properties. In addition, the residential area along 49th Street
contains at least six abandoned, boarded up buildings, as well as a large number of units in need
of moderate to extensive rehabilitation. According to the 1990 Census, approximately 46% of
the total housing units in the City were constructed prior to 1960. Given the age of many of the
residential units, routine minor and major maintenance and repair are required to insure the
structural integrity and safety of residential buildings.
In the absence of such repair, deterioration and dilapidation like that observed in
the Study Area can have an injurious effect on the physical and economic viability of the specific
property, as well as the surrounding area.
(b) Code Violations
Violations of local or state building codes is a condition identified under Section
33031(a) of the CRL, which characterize buildings that are unsafe or unhealthy for persons to
live or work. Buildings and structures that do not meet current uniform building requirements, or
other local codes mandated to ensure human health and safety, pose a threat to the workers,
patrons, visitors, and residents of an area.
According to a City of San Bernardino Senior Code Compliance Officer familiar
with the Study Area, the most significant problem, although not the most prevalent, is illegal
construction. During the windshield survey, RSG also identified several instances where
additions appeared to be faulty or illegal. The most frequent complaint in the residential areas is
landscape maintenance. Another recent concern for the Code Compliance Division has been the
neglect, and eventual abandonment, of several of the apartment buildings on 49th Street, east of
Sierra Way. Also, large apartment complexes on both Ralston and Sepulveda Avenues have
been notified by code enforcement staff regarding serious code violations such as plumbing,
heating, and electrical deficiencies.
The City of San Bernardino covers 59.83 square miles and has a population of
185,000 (January 1999, State Department of Finance). Because of the size of the City, code
enforcement efforts are, for the most part, limited to complaint generated enforcement. The
majority of the complaints come from property owners or tenants who observe potential
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violations in their neighborhoods. However, due to the fact that code violations are investigated
if a complaint is filed or as observed by staff, many properties go unnoticed and the true number
of total building and other code violations are likely to be much greater than those reported.
Code enforcement complaints are currently maintained in a computerized log, which provides
updated information on the monitoring of residential and other structures with code enforcement
problems. This information included years 1997, 1998 and the first six months of 1999. Code
enforcement log data for the Study Area indicates that code violations have increased by
8% between 1997 and 1998. A total of 32 properties (or 13.6% of all Study Area
properties) was cited with code violations in 1998. Serious Code Violations have also
increased by 8% between 1997 and 1998. A total of 18 properties (or 7.6% of all Study Area
properties) was cited with serious code violations in 1998. Serious code violations are
violations, which are potential threats to public safety such as illegal construction, outdoor
storage/trash & debris, illegal home occupancy, building maintenance violations, and violations,
which are health code violations and fire code violations.
Violations, which are referred to outside agencies such as health, air quality, and
fire code violations, require further research to accurately determine the full range of code
violations with the Study Area.
(c) Faulty or Inadequate Utilities
Faulty or inadequate utilities, is a condition identified under Section 33031(a)(I)
of the CRL, which characterizes buildings that are unsafe or unhealthy for persons to live or
work. Buildings served by electrical or other utilities that are old, constructed inadequately,
modified without proper permits, or otherwise substandard, are considered faulty or inadequate.
These conditions, which include exposed electrical wiring or excessive concentration of utilities,
were documented during the windshield survey of blighting conditions within the Study Area.
Faulty or inadequate utilities systems often serve as an indicator of health and safety issues
facing building occupants and the area in general.
The results of the windshield survey indicate that 46 properties, (20% of parcels in
the Study Area), or one out of every five properties, exhibit faulty or inadequate utilities, or have
current violations concerning utility systems. This condition was present on residential
properties located along Mountain View Avenue, south of 40th Street, and on some of the high-
density apartment buildings between 44th Street, Sepulveda Avenue, and 42nd Street. The
majority of the properties suffer from exposed or damaged wiring. Exposed wiring often occurs
when structures as originally designed did not provide adequate electrical capacity or outlets. In
an effort to upgrade these utility systems, electrical wiring and plumbing are sometimes strung
along the exterior of a building where they are subject to damage due to adverse weather
conditions, accidental dislocation, and vandalism. Exterior wiring is also a potential safety
hazard because of the age of the work, location, and possible lack of compliance with modem
code standards. Substandard wiring is also an indicator of obsolescence (i.e., that the building is
approaching the end of its useful economic life).
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(d) Lots/Buildings Suffering from Defective Design or Defective Physical
Construction
Buildings, structures, or their additions that are constructed with materials that do
not meet current design or construction standards may be considered defective in design. Such
buildings can present safety hazards, be functionally inefficient, or facilitate their own
deterioration. Defects may exist from the moment a given building is completed; or, they may
evolve as uses within the building or within the surrounding buildings change over time.
Conditions of defective design or physical construction can be manifested in a number of ways.
One example is where existing conditions do not meet modem construction standards established
to ensure the health and safety of building occupants. Such defects may not technically be code
violations (although, most older buildings suffer from many of these too) but rather deficiencies
resulting from evolutionary improvements in building code standards that have occurred since
the building's construction.
The results of the windshield survey indicate that 24% of the parcels in the Study
Area were observed to have one or more conditions of defective design or defective physical
construction. These include inadequate vehicular access and loading areas, outdoor storage, and
substandard building materials.
Examples of defective design can be seen in some of the auto repair shops in the
Study Area. These businesses seem to have inadequate storage area for the number of vehicles
currently in the repair facility. In addition, it appears that parts, storage, and repair often take
place in the open parking areas. Thus, these businesses do not appear to have adequate building
or parking lot space for their current business volume. Inadequate loading capabilities plague
many of the commercial retail uses along 40th Street. This lack of or inadequate loading areas
results in trucks loading and unloading in parking lots, impeding access to businesses and
restricting traffic flow.
Towards the north end of the Study Area on the eastside of Sierra Way, there is a
group of businesses that can only be accessed by the alley east of the street. This provides very
poor access and visibility for these commercial properties. Furthermore, there are few designated
parking spaces for these establishments.
The high-density apartments located on Sonora Drive and Ralston Avenue, south
of 40th Street, suffer from excessive lot coverage, which has caused inadequate parking, poor
vehicle access to parking, and little or no open space. These conditions make these
developments less attractive to tenants and would appear to affect the rental income potential for
the units. The units on Ralston Avenue have parking access only from a rear alley that may
increase the potential for crime in the parking areas. These units, as well as other high density
developments, seem to have only one off-street parking space per unit, which may be inadequate
for most families and does not meet current City standards.
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2. Factors that Prevent or Substantially Hinder the Economically Viable
Use or Compatibility of Buildings or Lots
Buildings in the Study Area were noted as having physical factors inhibiting the
economic viability of properties. Indicators of this condition that were frequently noted are
substandard design, lack of parking, and lots and buildings of inadequate size. Seventy-five
(32.05%) of the parcels surveyed had substandard design.
(a) Substandard Design
Substandard design is identified as a factor that prevents or substantially hinders
the economically viable use or capacity of buildings or lots under Section 33031(a)(2) of the
CRL. Substandard design includes architecture, site layout problems, and other deficiencies
involving the building or parcel that do not meet the contemporary requirements of users or
residents. The results of the field survey indicate that 32% (nearly one-third of all properties)
exhibit conditions of substandard design.
The most obvious characteristic of substandard design in commercial properties
within the Study Area is obsolescence. Although not technically defined as a blighting
characteristic, it is most often a result of a combination of factors, including the age of a
structure, lack of maintenance and lack of desirable amenities such as parking and tenant
improvements and occurs as contemporary market standards evolve over time. This condition
often occurs as competing newer, more efficiently designed buildings or developments emerge.
The appeal of obsolete buildings diminishes, as market conditions and consumer preferences
change, or as factors important to the function for which the buildings were designed change,
making the buildings no longer useful in terms of their original function or purpose.
As stated above, important factors in determining obsolescence are the size and
design of commercial properties. Along the north side of 40th Street, several small stand-alone
retail stores show signs of deferred maintenance to extensive rehabilitation. Current market
standards make these small stores less desirable. Further, many of the stores have block walls or
other barriers that inhibit customers from going from store to store without pulling out on 40th
Street to do so.
The 40th Street Shopping Center is one of the two major retail centers in the
Study Area. The Shopping Center, located on 40th Street between Waterman Avenue and Sierra
Way, is 14 acres in size, which comprises 19% of the Study Area. Construction began in 1959
and the Center was completed in 1969 with the addition of the Stater Bros. grocery store. The
original anchor grocery store was destroyed in a fire in the early 1990's. The building was
subsequently demolished and never replaced. Shortly thereafter, the Center's other anchor
tenant, Thrifty Drug, left the Center. Currently, the Center is 35% vacant. The occupied tenant
spaces house marginal, incidental, small tenants and a low-end discount store (i.e., Cheapo
Depot). Given its generally poor condition, the Center will likely continue to suffer from tenant
attrition. The lack of maintenance and investment in the Center, as well as other factors, have
caused its deterioration: poor access from 40th Street, lack of presence on Waterman, poor
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internal traffic circulation, the presence of trash and other debris. In addition, the many differing
facades result in a lack of Center identification, and signage is poor. Multiple ownership of this
property (the Center is owned by eight different owners) has caused rehabilitation efforts to be
nearly impossible. A recently completed appraisal of one of the properties in the Center states
that the multiple ownership have prevented anyone owner to obtain financing for rehabilitation.
Another indicator of obsolescence was the prevalence of outdoor storage, which
was noted on many commercial properties particularly along Sierra Avenue. The storage of
construction materials and equipment, or the presence of other debris around buildings, not only
poses health and safety hazards, but also has the effect of reducing the economic value of
properties and diminishing the potential for a favorable economic return on the properties. The
presence of outdoor storage is also an indicator that the existing building stock provides
inadequate building space for modem business activity. When outdoor storage areas are
unscreened, as in the Study Area, it contributes to the declining appearance of an area.
It appears that the economic value of commercial land in the general area
encompassing the Study Area has gradually declined over the years as the needs of modem
commercial users have intensified, thereby requiring larger lot sizes and diverse building
amenities. Many of the commercial properties on the west side of Sierra Way, north of 42nd
Street, and intermittent parcels on the north side of 40th Street, exhibit signs of obsolescence.
These properties lack suitable access and convenient parking. Many are constructed in a manner
that prevents adequate provision for truck delivery, storage, manufacturing, and production
space. As a consequence, this section within the Study Area has a high proportion of vacant
tenant spaces. Sixteen of the 69 commercial parcels, or 23%, have at least one vacant unit.
(b) Lack of Parking
Other factors, similar to substandard design, can also provide or substantially
hinder the economic viability of uses or capacity of buildings or lots as identified in Section
3303 I (a)(2) of the CRL. Another factor specific to the Study Area is inadequate parking, which
inhibits the economic viability of properties in the Study Area. Properties that do not have
adequate available parking for patrons, employees, or residents, and/or do not provide
satisfactory access for vehicles and pedestrians, experience diminishing economic value. The
field survey results indicate that 29 parcels, or 12% of the properties in the Study Area, do not
have the parking needed to effectively conduct business. It should be noted, however, that this
figure is based upon a field survey in which only gross deficiencies in parking, such as
inadequate on-site and off-site parking adjacent to a business, were identified. For example,
there are two developments along the western side of Sierra Way, south of 40th Street that do not
appear to have adequate parking. The lots are narrow and cover several businesses, providing
insufficient space for turning around should all of the spaces be full. Further, these
developments do not have alley access, so all loading must be done in the small parking lots.
Additionally, the strip commercial center to the north of this property provides no off-street
parking for patrons.
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3. Incompatible Adjacent Uses
Section 33031(a)(3) of the CRL states that adjacent or nearby uses that are
incompatible with each other and which prevent the economic development of those parcels or
other portions of the project area are conditions of blight. These incompatible uses hinder the
economic development of the area by causing a reduction in the proper utilization of the parcel.
This condition was noted on ten of the properties, or four percent of parcels within the Study
Area, where residential properties are directly adjacent to commercial properties.
One example is the area south of 40th Street, between Sierra Way and Genevieve
Street. The alley stretching north and south is the only buffer between the commercial uses on
the east and the housing on the west. Residents are likely impacted by truck deliveries being
made through this alley. In addition, the residential neighborhood along Ralston Avenue and
Sonora Drive is directly adjacent to the 40th Street Shopping Center. Since the majority of the
loading for the Center occurs on these streets, the residents are impacted by noise and
congestion. Graffiti and loitering were also observed in this area during the field survey.
4. Subdivided Lots of Irregular Form and Shape and Inadequate Size for
Proper Usefulness and Development That Are In Multiple Ownership
Economic dislocation, deterioration, or disuse can result from the prevalence of
lots of irregular form or shape and of inadequate size for proper usefulness and development.
Parcels must be large enough to accommodate the primary structure, setback areas, and parking
and circulation space. Irregularly shaped parcels frequently occur as a result of a change in the
street system or subdivision pattern. As with the Study Area, such a change can be a result of the
construction of roads that cut across existing subdivisions, causing irregularly shaped remnant
parcels. This is what has occurred between Electric and Mountain View Avenues, south of 40th
Street. A number of residential properties are of inadequate size in this area. Of the 113
residential parcels in the Study Area 9 parcels (8%) are inadequate in size and under multiple
ownership.
In order to determine appropriate minimum lot sizes for properties within the
Study Area, the adopted ordinance for commercially zoned properties was reviewed and
analyzed. The results of this review indicate that of approximately 69 commercial parcels in the
Study Area, 16 (23%), or nearly one out of every 5 parcels, are inadequate in size and under
multiple ownership. These parcels are a barrier to development because they are frequently
difficult or impossible to use without combining with other parcels. Multiple ownership
exacerbates this problem by complicating land purchases and shared use agreements that would
make these parcels more useful. One of the most severe examples of multiple ownership is in the
40th Street Shopping Center, which has 8 different property owners. This has made upgrading
and rehabilitating the Shopping Center nearly impossible. It is extremely difficult to coordinate
between property owners to make necessary improvements to the Center such as improvements
to vehicle access and pedestrian access. In addition, it is impractical for a single individual
owner to finance such a project that would benefit all tenants in the Center.
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Due to small lot sizes, coupled with the diversity of ownership, it is unlikely that
the reuse or private redevelopment of deteriorated and obsolete properties would ever be possible
without a land assembly effort. The prevalence of economic blighting conditions in the Study
Area further discourages any prospect of attracting private sector investment. Even in the
unlikely event that two or three parcels were owned by the same property owner and were
successfully assembled, these combined parcels would only result in a site of little more than one
acre. Such properties are a barrier to development because, as stated previously, they are
frequently difficult or impossible to use without combining with other parcels.
A major tool of redevelopment is the power to assemble properties and remedy
ownership problems. Properties can be assembled for recycling to newly developed properties.
Viable uses that need to expand can also be assisted with an agency's power of assembly.
B. Economic Conditions That Cause Blil!:ht
The CRL requires that for an area to qualify for inclusion in a redevelopment
project area it must not only exhibit conditions of physical blight, but also must contain and
suffer from economic blight.
To accurately represent existing economic conditions, the Study Area has been
analyzed and information and data have been gathered from City, County, and private sources to
document the deteriorating economic conditions of the Study Area. The following describes the
economic blighting conditions that are present and contribute to the lack of proper utilization of
the properties within the Study Area.
1. Depreciated or Stagnant Property Values or Impaired Investments
(a) Depreciated or Stagnant Property Values
When assessed values are increasing at a comparable rate to surrounding areas,
such as the City, it is often an indicator of a healthy local economy. Conversely, if assessed
values are declining, especially at a rate greater than the remainder of the City, or the City as
whole; the area's economy is likely to be in a state of decline.
In order to examine the health of the real estate market in the Study Area, trends
in secured assessed property values, which include land values and building improvements for
fiscal years 1993-94 through 1998-99, were analyzed for the Study Area and compared to those
for the City and the County as a whole.
Data obtained from the San Bernardino County Auditor-Controller's office
indicates that the total secured assessed valuation in the Study Area has declined by over 9%
over a five year period, from $41,118,009 in fiscal year 1993-94 to $37,371 ,172 in 1998-99,
compared to a 3% increase City-wide and a 4% increase County-wide over the same time period.
This significant decrease in assessed property values in the Study Area compared to the increases
in both the City and the County is an indicator that the area's economic condition is weak and
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investment in the area is impaired. Table 2 below presents the secured valuation for the Study
Area, the City, and the County for fiscal years 1993-94 through 1998-99.
TABLE 2
ECONOMIC DEVELOPMEI'iT AGENCY OF THE
CITY OF SAN BERNARDINO
Comparative Secured Assessed Values, 1993494 through 1998-99
CHANGES IS ASSESSEDVALUATION
Chl/nge/rom
lliH< ~ 199~96 .Lm::21 .ill.1:.28 .l22H2 ~
Propo!ledProjectArea $41,118,009 S41,l9S,872 $37,560,746 $38,035,643 $37,468,172 537.371,781 -9.11%
City of San Btrnardino S3}82,524,71I $3,353,924,718 $3,374,643,679 53,396,989,862 $3,424,621,285 $3,467,788,731 2.52%
CounlyofSanBernardin $53,270,888,724 $52,616,134,087 $52,964,717,925 $53,531,875,400 $54,410,823,045 $55,263,360,728 3.74%
Source: TRW Redi-Data MelroSean, HdL Companies and San Bernardino County Auditor Controller's Office, 1999
Note TRW Redi-Data MetroScan data, not San Bernardino County Auditor Controller's Office data, was lIlilized in the analysis of
Proposed Projecl Area secured assessed values
The significant drop in property values in the Study Area between fiscal years
1993-94 and 1998-99, compared to increases in the City and County, indicates that property
values in the Study Area are weak. When property values decline or remain constant over an
extended period of time, such as during the period reported above, property owners have little
incentive to reinvest in their property due to an uncertain return on their investment. Over an
extended period of time, lack of investment, including maintenance, contributes to the decline of
an area and eventual revenue loss to the City, particularly in commercial areas.
(b) 1mpaired Investments
(i) Retail Sales Tax Revenues
Stagnation or decline in sales tax revenues is an important indicator of impaired
investments. The majority of the commercial businesses north of the 30 Freeway are located
within the boundaries of the Study Area. Although Waterman Avenue is used as the primary
thoroughfare to the mountain areas rather than Sierra Way, the primary commercial corridors of
the Study Area (Sierra Way and 40th Street) continue to sustain sufficient traffic levels, and
businesses along these corridors should be successful. Many of the businesses located on these
streets have been unsuccessful in capturing business from a constant traffic flow as evidenced by
the taxable retail sales information reported by the California State Board of Equalization and
data provided by MBIA MuniServices Company.
RSG compared the taxable retail sales information provided by MBIA for the
Study Area and the same information for the City and County of San Bernardino between 1993
and 1997. For this period, the taxable retail sales in the City and County increased by 9 and 26%
respectively. Other surrounding cities, including Rialto, Colton, and Redlands have experienced
increases up to 44%. However, the Study Area has suffered a significant decrease of 10% for the
five-year period.
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Study Area
City of San Bernadino
County of San Bernadino
City of Colton
City of Redlands
City of Rialto
Study Area
City of San Bernadino
County of San Bernadino
City of Colton
City of Redlands
City of Rialto
TABLE 3
ECONOMIC DEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
Taxable Sales Trends, 1993 through 1997
1993 1994 1995
Taxable Sales % change Taxable Sales % change Taxable Sales % change
357,981 N/A 337,980 -5.59% 329,678 -2.46%
1,677,978 N/A 1,727,800 2.97% 1,747,319 1.13%
11,131,798 N/A 11,843,466 6.39% 12,482.309 5.39%
391.231 N/A 397,593 1.63% 415,493 4.50%
434,990 N/A 452,449 4.01% 459,561 1.57%
325,543 N/A 331,805 1.92% 35 !,715 6.00%
1993-1997 CHANGE IN
1996 1997 TAXABLE SALES
Taxable Sales % change Taxable Sales % change
336.824 2.17% 321,685 -4.49% -10.14%
1,792,467 2.58% 1,827,233 1.94% 8.89%
13,126,523 5.16% 14,005,016 6.69% 25.81%
410,918 -1.10% 394,069 -4.10% 0.73%
477,436 3.89% 521,703 9.27% 19.93%
391,953 11.44% 468,630 19.56% 43.95%
Source: California State Board of Equalization and MBIA MuniServicesCompany
The results of the analysis of State Board of Equalization and MBIA data
presented above indicates that many of the existing retail businesses in the Study Area are
performing below standard with regard to sales, Additionally, the analysis indicates that
significant retail sales tax leakage is occurring as residents and other business patrons are
traveling outside of the Study Area to purchase goods and services.
2. Abnormally Low Lease Rates
Preliminary research of lease rates within the Study Area and the City suggests
that lease rates are substantially lower in the Study Area as compared to those in surrounding
cities. However, further research, including a survey of local real estate brokers and firms, will
be necessary to determine actual lease rates throughout the area and the Inland Empire.
3. High Business Vacancies
High vacancy rates or high turnover rates in businesses provide an indication of
the presence of economic blight. A vacancy survey was conducted in June 1999 as part of the
field survey to determine the vacant parcels, buildings, and tenant spaces within the Study Area.
In addition to identifying vacancies during the field survey, the names and phone numbers of real
estate brokers representing the vacant buildings and/or tenant spaces were noted. These brokers
were interviewed regarding the size of the vacant buildings or tenant spaces, as well as how long
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the property had been vacant. The results of the field survey, interviews with local real estate
agents, indicates that of the 69 commercial parcels in the Project Area, a total of 16 properties, or
23%, are partially or completely vacant. Real estate brokers and recently completed appraisals of
commercial properties cited the poor condition of the structures, small tenant spaces, and the
perception of criminal activity as primary factors affecting vacancy in the Study Area.
In order to illustrate the magnitude of the commercial/retail vacancy problem, the
field survey data was aggregated to show the vacancy rate of each shopping center and strip mall
in the Study Area (Table 4). As shown in Table 4, all but one shopping center has vacancies. Of
this amount, the centers located at 4276 North Sierra Way and 4236 North Sierra Way have
critical vacancy rates of 89% and 40%, respectively.
TABLE 4
ECONOMIC DEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
Shopping Centers and Slip Malls in Survey Area
Shopping Center
Tenant
Spaces
Vacant Tenant
Spaces
%
Vacant
4276 N. Sierra - Commercial Strip
Q
8
88.89%
4236 N. Sierra - Commercial Strip
5
2
40.00%
40th Street Shopping Center
65
23
35.38%
Lucky's Shopping Center
17
6
35.29%
171 W. 40th Street - Commercial Strip
8
2
25.00%
3990 N. Sierra - Commercial Strip
5
20.00%
3970 N. Sierra - Commercial Strip
4
o
0.00%
Due to the fact that there are a number of well developed retail centers within a
fifteen-minute drive of the area, the Study Area has encountered great difficulty in attracting
larger retail businesses. The composition and quality of the existing retail stock further
exacerbates this problem as very few of the retail centers in the Study Area contain large enough
structures to house a "large" retailer or a value oriented discount retailer. Because of this,
developments in other parts of the City not only draw residents out of the Study Area to purchase
goods and services, but also inhibit other national retailers from adding locations in the area.
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1999-216
4. A High Crime Rate That Constitutes A Serious Threat To The Public Safety
and Welfare
According to the Community Redevelopment Law, "a high crime rate that
constitutes a serious threat to the public safety and welfare" constitutes a condition of economic
blight. In order to assess the impact of crime within the Project Area, information regarding the
incidence of violent and other serious crime reported by the San Bernardino Police Department
for the Study Area was analyzed. As shown on Table 5, information obtained from the Police
Department indicates that the total number of the most serious reported crimes in the police
districts that encompass the Study Area have increased between 1996 and 1997. Complete data
for 1998 was not available.
TABLE 5
ECONOMIC DEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
Crime Statistics for 40th Street Redevelopment Project Area *
1996
1997
1998
4
4
1
ROBBeRY A.ASSAULT BURGLARY LARCENY
45 43 143 220
28 43 108 240
13 22 53 102
93
134
48
548
558
239
'* - Reporting Districts roughly encompass the following geographic boundaries:
North - 48th Street, South - Parkdale Street, East - Watennan Avenue, West - H Street
>[1 * _ Crime Statistics by specific geographic regions for 1998 was only available for the time span of
January 1, 1998 to July 31, 1998 due to computer conversions for compliance with Year 2000 issues.
These types of crimes can be potential safety threats, negatively impacting
existing businesses in the Project Area, and may discourage business investment and patronage
in the area. This has been confirmed by information gathered from local real estate brokers.
Additionally, appraisals conducted for commercial properties in the area indicate that crime,
and/or the perception of criminal activity, has negatively impacted the Study Area. Crime
represents an additional cost in conducting businesses, as well as attracting new businesses to the
Study Area. Crimes such as rape, burglary, and assault not only affect business owners and
tenants, but also discourage patronage. Businesses located in areas perceived to have a crime
problem suffer from increased insurance and other costs as a result of stolen merchandise.
Increases in crime rates may also negatively influence property values in an area by diminishing
the area's desirability. Give the location options within the competitive market area and the
potential threat to personal safety and property, crime presents a threat to the economic viability
of the Study Area. Also detrimental to property values is the presence of graffiti. Graffiti affects
the condition of a property and adds an extra cost and concern to doing business in communities
where it is prevalent. Aside from the cost and effort of removal, graffiti can also be a detriment
to investment and reinvestment, since it is often a sign of gang activity - a hazard businesses and
residents avoid whenever possible.
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1999-216
Further analysis of crime in the Study Area will be presented in the documents
prepared during the redevelopment plan adoption process.
CONDITIONS THAT CAN BE ALLEVIATED BY REDEVELOPMENT
This Report provides a description of the physical and economic blighting conditions prevalent
within the Study Area. The combination of these conditions has caused a physical and financial
burden on the City which cannot reasonably be expected to be reversed or alleviated by private
enterprise, or governmental action, or both, without redevelopment. This is primarily due to the
lack of incentive for the private sector to invest in this area. Redevelopment offers planning and
financial tools to the City to remediate the negative conditions in the Study Area through
implemented projects and programs. For example, a commercial rehabilitation program would
be established to provide assistance, in the forms of low interest loans and grants, to businesses
in the Study Area to encourage and assist in restoring, modernizing, and improving commercial
structures. Property acquisition could be used in some cases of multiple ownership as a means
for restoring and/or recycling buildings suffering from a variety of physical and economic
blighting conditions. A program of this type could enhance the appearance, visibility and
economic viability of the existing shopping areas. More specifically, projects for first-generation
retail centers in the Study Area could include commercial rehabilitation, architectural fayade
enhancement and the acquisition and redevelopment of vacant properties and structures, parking
facilities, and street improvements. This type of program could substantially improve the
physical appearance, structural integrity and economic viability of buildings, which will have the
effect of alleviating or eliminating physical blighting conditions such as deterioration, code
violations, defective design and substandard design. In addition, the rehabilitation and
modernization of the building stock will also have the effect of reversing economic blighting
conditions including impaired investments, declining property values and business vacancies.
Overall, the primary focus of this program could be to transform the obsolete commercial
corridors into economically viable shopping districts.
With regard to the residential portions of the Study Area, redevelopment would provide financial
assistance through the requirement to set aside not less than 20% of the tax increment revenue
generated by a redevelopment project into a low and moderate income housing fund. These
funds would be used to increase, improve, and preserve the supply of low and moderate income
housing in the Study Area. Specifically, the Agency could implement one or more of the
following programs: I) residential rehabilitation loan program; 2) residential rehabilitation grant
program; 3) residential acquisition and rehabilitation program; 4) property acquisition assistance
for qualified home buyers, such as a first-time home buyers program; 5) residential loan
assistance; and 6) assistance in the construction of new dwelling units. This program could assist
very low, low and moderate income persons to not only rehabilitate and maintain existing
properties in order to alleviate physical conditions such as deterioration and dilapidation, but
may also provide relocation assistance for residential properties in the Study Area affected by
incompatible uses.
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July, 1999
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Feasibility Study for the
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1999-216
IV. PRELIMINARY FINANCIAL
FEASIBILITY ANALYSIS
The successful implementation of a redevelopment program in the Study Area will require both
capital and the tools and powers available to the Agency with the adoption of a redevelopment
plan. Redevelopment is traditionally funded through tax increment financing and is often
supplemented with State and/or Federal funds. Redevelopment agencies do not have the
authority to raise taxes or impose new assessments. Instead, tax increment financing allows for a
redistribution of future property tax revenue to a redevelopment agency.
Tax increment revenue is property tax revenue generated by increases in assessed values over an
established base year value. When a redevelopment project area is established, the county
auditor-controller sums up the existing value of all properties within the project area; this value is
called the base year value. As subsequent year assessed values within the project area increase
due to the reassessments provided for by Proposition 13 (property improvements and/or sales,
and an up to 2% inflation adjustment), the resulting property tax revenue generated from this
incremental increase in assessed value over the base year value is allocated to a redevelopment
agency to fund redevelopment activities. The chart below graphically depicts how tax increment
is generated.
TAX INCREMENT FINANCING
W
:J
..J
~
Q
w
en
en
w
en
en
..
Redevelopm ent
Project Area Created
Tax Base Value Set
Redevelopm ent
Project Period
Com pleted
New Private
Investm ent
. Increase In Assessed
. Valuation Accrues to
Other Agencies
Increase Assessed
Valu ation For
Redevelo pm ent
.'
StarlProject
10
20
30
40
50
YEARS
The underlying philosophy of tax increment financing is that without redevelopment, property
tax revenues within a redevelopment project area would remain generally flat or even decline.
However, when redevelopment powers are utilized in a proactive mode, such actions should
result in an increase in property values.
Rosenow Spevacek Group, Inc.
July, /999
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Feasibility Study for the
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1999-216
When a redevelopment program and project area are established, all of the property tax revenues
generated from any future increase in the assessed value of properties is allocated to the agency.
Upon receipt, an agency is statutorily required to: I) deposit 20% of the tax increment revenue
into a low and moderate income housing fund in order to improve and expand the community's
supply of affordable housing, and 2) remit statutory payments to each of the taxing agencies who
collect property taxes from the project area. With respect to the latter, a legally prescribed
formula is established that calls for payments equal to 25% of the remaining 80% nonhousing tax
increment revenue during the first ten years of a redevelopment project. Beginning in the 11th
year and again in the 31 st year of a redevelopment project, these amounts increase pursuant to a
statutory formula. In general, over the 45-year time period that a redevelopment agency may
collect tax increment revenue, $0.31 of every $1.00 of tax increment revenue is allocated to the
area's taxing agencies; the redevelopment agency retains $0.20 for affordable housing programs
and $0.49 for nonhousing programs.
The chart below depicts the disposition of the three primary ways tax increment revenue is
distributed.
Disposition of Tax Increment Revenues
Agency
Nonhousing
Fund Revenue
49%
Statutory
Payments (to
Affected Taxing
Agencies)
31%
l_
gency Housing
Fund Revenue
20%
I
~
AB 1290, adopted in 1993, changed the CRL by imposing upon redevelopment project areas new
limits and financing provisions, as well as requiring mandatory pass throughs of tax increment to
affected taxing agencies. In general, these new provisions have had a somewhat negative impact
on the financial feasibility of new redevelopment project areas. Two provisions that have the
greatest financial impact on new project area formations are: (1) the 20 year time limit on
incurring (nonhousing fund) debt, and (2) the provision for mandatory tax increment pass
throughs. The mandatory pass through provision allocates approximately 31 % of all tax
increment generated from a project area over the 45-year term for collecting tax increment to its
taxing agencies. These funds are passed through to the affected taxing agencies (excluding the
City) on a formula basis specified in the CRL that increases the percentage allocated to the taxing
agencies over time. The second provision limiting the amount of time an agency has to incur
debt severely limits the dollars available to invest in the redevelopment of a project area,
particularly as it relates to bonding capacity. These limits can be extended through the
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Feasibility Study for the
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1999-216
amendment of a redevelopment plan. However, an amendment of this type would require the
resubstantiation of blight.
POTENTIAL 40TH STREET PROJECT AREA TAX INCREMENT REVENUE
Tax increment revenue projections were constructed to examine the preliminary financial
feasibility of the Study Area. All projections assumed that the established base year would be
1999-2000 (see Table 6). The estimated base year value utilized in the projections was obtained
by totaling the fiscal year 1998-99 secured assessed valuation of all properties within the
complete Study Area, as shown on Map I, and inflating this amount by 1.8%.
The projections in Table 6 show the total estimated fiscal year 1999-2000 base year value of
$47,485,520; $38,044,473 in secured value and $9,366,303 in unsecured and utility value. In
total, the redevelopment project may generate $34.2 million in net tax increment for both
housing and non-housing projects. Table 6 utilizes an annual growth rate for secured assessed
valuation of between 2% and 5%. Unsecured assessed values were estimated to increase at a rate
of 0.25% annually over the term of the projections shown in Table 6.
For the purposes of reviewing the proposed project's financial potential a New Development
scenario has been created. Table 7 summarizes 7 separate new development projects that could
be developed. New development values are net of current assessed values for land and
improvements. While some of these potential projects could occur without redevelopment, the
majority of the 7 would require at least the Agency's power to assemble properties, if not some
financial support.
. Project I assume the expansion of the Lucky's located on Sierra Way. This project
would require the removal of a number of retail structures that front the center and the
acquisition and inclusion into the market of the two adjoining structures to the north
of the market.
. Project II envisions construction of a Big Box retail use on the 40th Street and Lugo
Avenue shopping center. This project of approximately 10 acres would require the
assembly of 11 parcels including the apartment properties located on the north side of
Sonora Drive.
. Project III assumes the rehabilitation of the Stater Brothers store located at 40th Street
and Waterman Avenue.
. Project IV envisions the development of 60 units of Senior Housing on vacant
residential property within the proposed Study Area.
. Project V assumes the rehabilitation of a number of the multifamily properties located
on 49th Street.
. Project VI assumes the development of 6 single-family houses on the vacant
properties on the north side of 49th Street.
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Feasibility Study for the
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1999-216
. Project VII envisions the development of a second Senior Housing project of 100
units within the vacant and underutilized residential area of the Study Area.
OTHER FUNDING SOURCES
Redevelopment will provide additional tools in assisting this declining area. The Study Area
already benefits from several other funding sources that would be available to assist
redevelopment efforts. The City has qualified for a $2,295,000 Section 108 Loan for the 40th
Street Shopping Center, as well as a $344,000 Economic Development Initiative Grant. The City
annually receives $3,884,000 from Community Development Block Grant (COB G) funding,
$1,773,000 from HOME Funds, and $138,000 from ESG funding. These funds can be used for a
wide array of eligible activities including land acquisition, demolition, infrastructure
improvements, construction or rehabilitation, and related development costs within targeted acres
of the City. These funds, combined with tax increment revenues expected to be generated by one
proposed Project Area will significantly increase the financial feasibility of revitalizing the Study
Area.
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Feasibility Study for the
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e Assumed Unsecured Increased Gross Housing G",,, Total Not Cumulative Total
, Ftscal G",," Secured &'Utility value Incremental T" Set Nonhousing Statutory Nonhousing Not Housing &
. Years Rail! Value Valul!@25%inc "". Value Increment ""'. Revenue PassThru Revenue Nonhousing Nonhousing
0 (estimaled@25%of
see)" conslruclion " '" Payments Re.MUI!
,
F '99'.99 37,371}81 9,342,945
1999.2000 1.8'10 38,044,473 9,366,303
, 2DO()..{)1 " 38,805,363 9.389.718 1,480,355 14,804 Agency will not receive lax illcrement until following fiscal year
, 2002..{J3 " 39,969,523 9,413,193 7,788,232 10.456,222 104,562 20,912 83,650 20.912 62.737 62.737 83.650
3 2002-03 " 49,190,488 9,436.726 6,422,880 18,335,367 183,354 36.671 146,683 36,671 110,012 172,750 146,683
. 2003-04 " 57,281,769 9,460,317 8.759,383 28.786,743 287,867 57,573 230,294 57,573 172,720 345,470 230.294
5 2004-05 .- 58.58V98 9.483.968 831,600 32,283.640 322.836 64.567 258.269 64,567 193,702 539,172 258,269
6 2005-06 .- 72.294,974 9,507,678 35.087.926 350.879 70,176 280,703 70.176 210,528 749,699 280,703
, 2006-07 .- 75.186.773 9,531.447 38,003.494 380.035 76,007 304.028 76,007 228.021 977,720 304,028
. 2007-08 .- 78,194.244 9,555.276 41,034,794 410,348 82,070 328,278 82,070 246,209 1,223.929 328,278
9 2008-09 .- 81,322,014 9,579,164 44,186.452 441,865 88,373 353.492 88,373 265,119 1,489,048 353,492
>0 2009-10 5% 85,388.114 9.603.112 48,276,500 48V65 96,553 386,212 96,553 289,659 1,778.707 386,212
" 2010-11 5% 89,657,520 9,627,120 52,569,914 525,699 105,140 420,559 112,353 ....,lUr 2,086,913 413,346
" 2011-12 5% 94,140.396 9.651.188 57,076,858 570,769 114,154 456,615 128,938 327,677 2,414.590 441,830
>3 2012.13 5. 98,847.416 9.675,316 51,808,005 518,080 123,615 494,454 146.349 348,115 V5V05 471.731
" 2013-14 .- 102,801.313 9,699,504 55,785,090 557,861 131,572 525,289 160.988 365,300 3.128,005 496,873
>5 2014-15 .- 106,913.365 9.723.753 69,922,392 699.224 139,845 559,379 176,210 383,169 3,511,175 523.014
" 2015-16 .- 111,189,900 9,748,062 74.223,236 742,232 148,446 593,786 192,037 401,749 3.912,924 550.195
'7 2016-17 .- 115,637.496 9,772,432 78,695,202 786,952 157,390 629,562 208.494 421,068 4.333,991 578.458
,. 2017.18 .- 120,262,996 9.796,863 83,345,133 833.451 166,690 666.751 225.506 441,155 4.775.147 607,846
>9 2018-19 3,5% 124.472.200 9,821,355 87,578,830 875,788 175,158 700,631 241,185 459,445 5.234,592 534,603
20 2019-20 3,5% 128.828,727 9,845,909 bond issue 91,959,910 919,599 183,920 735.679 257,308 478.371 5,712,963 662,291
" 2020-21 3.5% 133.337.733 9,870,524 limrt 96,493,530 964,935 192,987 771,948 273.992 497,957 6,210,920 590.944
" 2021-22 35% 138.004,554 9,895,200 101,185,027 1,011,850 202,370 809.480 291,256 518.224 6.729,144 720,594
23 2022-23 35% 142,834.713 9.919.938 106,039,925 1,060,399 212.080 848,319 309.122 539,197 7.268,341 751.277
" 2023.24 3% 147,119.754 9.944,738 110,349,755 1,103,498 220,700 88V98 324,983 557,816 7,826,156 778,515
25 2024-25 3% 151,533.347 9.969.600 114.788.220 1.147,882 229,576 918,306 341,316 576,990 8,403.146 806.566
" 2025-25 3% 156,079.347 9,994.524 119.359.145 1,193.591 238,718 954,873 358,137 596,736 8.999.882 835,454
27 2025.27 3% 160.761.728 to.019.510 124,066.511 1.240,665 248,133 992.532 375,460 617,072 9.616.954 865,205
20 2027-28 3% 165,584,580 10,044,559 128.914.412 1,289,144 257,829 1.031,315 393.301 638,015 10.254.968 895,844
" 2028-29 3% 170,552,117 10,069,670 133.907,061 1.339.071 267,814 1,071,256 411,673 659,583 10,914.552 927,397
30 2029-30 3% 175,668,680 10,094,844 139,048,798 1,390.488 278.098 1,112,390 430.595 681,795 11,596,347 959,893
" 2030-31 3% 180,938.741 10,120,081 144,344,096 1.443.441 288.888 1,154,753 456.012 698.140 12,295,087 987,428
" 2031.32 3% 186,366.903 10.145,382 149,797,558 1,497,976 299,595 1,198,380 482,189 716,191 13.011,278 1,015.786
33 2032-33 3% 191.957.910 10,170,745 155,413,929 1.554,139 310,828 1,243,311 509,148 734,164 13,745.442 1,044,992
3l 2033-34 3% 197,716.648 10,196.172 161,198,093 1,611.981 322,396 1.289,585 536,912 752,673 14.498,115 1,075,069
35 2034-35 3% 203.648,147 10.221,662 167.155.083 1.671,551 334,310 1.337,241 565,505 771.735 15,269,851 1,106,046
" 2035.36 3% 209,757.591 10,247,216 173,290,082 1.732.901 346,580 1,386,321 594,953 791,367 16,061.218 1.137,948
" 3036.37 3. 216,050,319 10,272,835 179,608,427 1,796.084 359,217 1.436,867 625,281 811,586 16,872.804 1.170.803
'" 2037-38 3% 222,531,829 10,298,517 186,115,619 1,861.156 372,231 1,488.925 656,516 832,409 17.705,213 1,204.640
3S 2038-39 3% 229,207,784 10,324,263 192,817.320 1,928,173 385,635 1,542.539 688,684 853,855 18,559,068 1,239,489
" 2039-40 3% 236,084,017 10,350,074 199.719,364 1,997,194 399.439 1.597,755 721,814 875,941 19,435,009 1.275.380
" 2040-41 3% 243.166,538 10,375,949 206,827.760 2,068,278 413,656 1,654,622 755,934 898,688 20,333,697 1,312,344
" 2041-42 3% 250,461,534 10,401,889 214.148,696 2,141,487 428,297 1,713,190 791,075 922,115 21,255,812 1,350,412
" 2042-43 3% 257.975,380 10,427,893 221.688,547 2.216,885 443,377 1.773.508 827,266 946,243 22,202,055 1,389,620
.. 2043.44 3% 265.714.641 10,453.963 229,453,878 2.294.539 458,908 1,835.631 864,539 971,092 23,173,148 1.429.999
<5 2044-<15 3% 273,686.080 10,480,098 237,451,452 2,374.515 474,903 1,899,612 902,928 996,684 24,169,830 1,471.587
Totals 23.802,095 50,140.794 10,025,198 40,100.792 15,930.962 24,169,830 34,195.028
-- -
Net Present Value (based on a6%relurnj 10,606,151 2,245,543 8,982,173 3.162,687 5,819,486 8,065,029
Notes
1999-216
TABLE 6
STUDY AREA.HYPOTHETICAL ESTIMATED TAX INCREMENT REVENUE
BY' Base Year
GrowIn Rales over 2% reftecl tne stalulory 2% assessed value increase limn per Proposilion 13, plus assessed valuation increases dL>eto new oonslruction and reassessment from properly sales
HousingselasideperSeclion333342.Community Redevelopmenl Law (Haalth & Safety Code)
StaluforypaymentsperSeclion 33607.5(b),(c),and(d),CommunityRedevelopmenILaw(f-klalth&SafetyCode)
Ta>:lncremenfoolrollecled in Year 1 doo to assumed adopliondale aflerJanuary 1, 1999
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Feasibility Study for the
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1999-216
TABLE 7
ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
PROPOSED PROJECT AREA
NEW DEVELOPMENT SCENARIO
I ncreased Assessed
~ ~ Roll Year
I.
II.
III.
IV.
V.
VI.
VII
Expansion of existing Grocery Store
Big box user 120K sq. ft.
Rehab of existing retail
Senior Housing Project 60 units
Rehab of triplexes
Development of vacant land
Senior Housing Project 100 units
$1,954,102
$6,422,880
$1,034,130
$4.800,000
$759,383
$831,600
$8,000,000
2000.()11roll2001.()2
2001.()21ro1l2002.()3
2000.()11roll2001.()2
2000.()lIroll2001.()2
2002.()31roll2003.()4
2003.()4/roll2004.()5
2002.()3/ro1l2003.()4
In an attempt to identify the funds available for redevelopment implementation purposes, Tables
8 and 9 identifies the maximum bonding capacity. Maximum potential bonding capacity is based
upon the net redevelopment funds available to the subject area in year 20, which is consistent
with the CRL's 20-year limit to incur debt. The potential bonding capacity for the net
redevelopment and combined with Low and Moderate Income Housing Fund's ("Housing
Fund") has also been identified. The CRL allows an agency to incur debt beyond the 20-year
time limit to meet housing obligations. As shown in Table 8, the estimated bonding capacity for
the Redevelopment Fund is projected at $6.0 million by fiscal year 2019-20. The
Redevelopment Fund and the Housing Fund have a projected bonding capacity of $8.6 million
by fiscal year 2019-20.
The 20-year limit on incurring debt is critically important in determining the financial feasibility
of a potential project area. For a new project to generate sufficient revenue to address blight,
new development value must be added before the 20-year deadline to enable an agency to
finance (bond) needed area improvement.
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Feasibility Study for the
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1999-216
BONDING CAPACITY ANAL YSIS OF PROJECTED NET TAX INCREMENT REVENUE (NET OF HOUSING)
San Bernardino Economic Development Agency
40th Street Study Area
TABLE 8
Plan
Year
Fiscal
Year
Net
To<
Increment
(net of housing)
Debl
Issued
Issuance
Costs
Reserve
Funds
Net
Proceeds
Bond
OeblService
TolalBond
Debt
Service
Covocage Interest
Ratio on Reserves
Surplus
Resources
" 1999-2000
, 2000-01 0
, 2002-03 62,737 0 62.737
, 2002-03 110,012 0 110,012
, 2003-04 172,720 0 172.720
, 2004-05 193,702 0 193,702
. 2005-06 210,528 0 210,528
, 2006-07 228,021 2,729,278 54,586 272.928 2,401.765 198,279 198,279 1.15 13,646 43,388
" 2007-08 246,209 198,279 1.24 13,646 61,576
, 2008-09 265.119 198.279 134 13,646 80,486
" 2009-10 289,659 198.279 1.46 13.646 105,026
" 2010-11 308.207 198.279 1.55 13,646 123,574
" 2011-12 327,677 198,279 1.65 13,646 143,044
" 2012-13 348,115 198,279 1.76 13,646 163,482
" 2013-14 365,300 198,279 184 13,646 180,668
" 2014-15 383,169 198,279 1.93 13,646 198,537
" 2015-16 401,749 2,079,422 41,588 207,942 1,829,892 151,068 349,347 1.15 24,044 76,446
" 2016-17 421,068 349,347 1.21 24,044 95,764
'" 2017-18 441,155 349,347 1.26 24,044 115.852
" 2018-19 459,445 349,347 1.32 24,044 134,142
,", i ,
1..-m120 2019-20 478,3711 1,250,000 25,000 125,000 1,100,000 97.783 447,130 1071 30,294 61,535
" 2020-21 497,957 447,130 1.11 30.294 81,120
" 2021-22 518,224 447.130 1.16 30,294 101,387
" 2022-23 539,197 447,130 121 30,294 122,360
" 2023-24 557,816 447,130 1.25 30,294 140,979
" 2024-25 576,990 447,130 1.29 30,294 160,153
. 2025-26 596,736 447,130 133 30,294 179,899
" 2026-27 617,072 447,130 1.38 30,294 200,235
" 2027-28 638,015 447,130 1,43 30,294 221,178
" 2028-29 659,583 447,130 1,48 30,294 242,746
. 2029-30 681.795 447,130 152 30.294 264,959
" 2030-31 698.740 447,130 1.56 30,294 281,904
" 2031-32 716,191 447,130 1.60 30,294 299,355
" 2032-33 734,164 447,130 1.64 30,294 317,327
" 2033-34 752,673 447,130 1.68 30,294 335,836
" 2034-35 771,735 TOTAL BONDING 447,130 1.73 30,294 354,899
. 2035-36 791,367 CAPACITY 447,130 1.77 30,294 374,531
" 3036-37 811,586 $6,058,701 248,851 326 30,294 593,028
'" 2037-38 832.409 FUNDS REMAINING 248,851 3.35 30,294 613,851
" 2038-39 853,855 $13,160,301 248,851 3,43 30.294 635,297
" 2039-40 875,941 (includes funds available after debt 248,851 3.52 30,294 657,383
" 2040-41 898,688 service and interest on reserve 248,851 361 30,294 680,130
" 2041-42 922,115 funds) 248,851 3.71 30,294 703,557
" 2042-43 946,243 248,851 3.80 30,294 727,685
<< 2043-44 971.092 248,851 390 30,294 752,534
" 2044-45 996,684 248,851 4.01 30,294 778,126
Totals 24,169,830 6,058,701 121,174 605,870 5,331,657 447,130 13,022,774 1,006,623 12,153,678
6%
2%
10%
115 5%
Rosenow Spevacek Group, Inc.
July, 1999
30
Feasibility Study for the
City of San Bernardino
1999-216
BONDING CAPACITY ANAL YSfS INCLUDING HOUSING FUNDS
San Bernardino Economic Development Agency
40th Street Study Area
TABLE 9
Plan
Year
Fiscal
Year
Not
r"
Increment
Debt
Issued
Issuance
Costs
Reserve
Funds
Not
Proceeds
Bond
DeblService
Total Bond
Debt
Service
Coverage Interest
Ratio on Reserves
Surplus
Resources
" 1999.2000
, 2000-01 0
, 2002-03 83,650 0 83,650
, 2002-03 146,683 0 146,683
. 2003-04 230,294 0 230,294
, 2004-05 258,269 0 258,269
. 2005-06 280,703 0 280,703
, 2006-07 304,028 3,639,038 72,781 363,904 3,202,353 264,372 264,372 1.15 18,195 57,851
. 2007-08 328,278 264,372 1.24 18,195 82,101
. 2008-09 353,492 264,372 1.34 18,195 107,315
" 2009-10 386,212 264,372 1.46 18,195 140,035
u 2010-11 413,346 264,372 156 18,195 167.169
" 2011-12 441,830 264,372 167 18.195 195.653
" 2012-13 471,731 264,372 178 18.195 225,554
" 2013-14 496.873 264,372 1.88 18,195 250,696
" 2014-15 523,014 264,372 198 18,195 276,837
" 2015-16 550,195 2,946,481 58,930 294,648 2,592.903 214.059 478,431 115 32,928 104,692
" 2016-17 578,458 478,431 1.21 32,928 132,955
" 2017-18 607,846 478,431 1.27 32,928 162,343
" 2018-19 634.603 478.431 133 32,928 189,100
00,
'-00 2019-20 662,291 2,000,000 40.000 200,000 1,760.000 145,298 623.729 106 42,928 81.490
" 2020.21 690.944 623,729 1.11 42,928 110.143
" 2021-22 720,594 623,729 116 42,928 139.793
" 2022-23 751,277 623,729 1.20 42,928 170,476
" 2023-24 778,515 623,729 1.25 42,928 197,714
" 2024-25 806,566 623,729 129 42,928 225,765
" 2025-26 835,454 623,729 134 42,928 254,653
" 2026-27 865,205 623.729 139 42,928 284.404
" 2027-28 895,844 623.729 1.44 42,928 315.043
" 2028-29 927,397 623.729 1.49 42,928 346,596
" 2029-30 959,893 623,729 154 42,928 379,092
" 2030-31 987,428 623.729 1.58 42,928 406,627
" 2031-32 1,015,786 623.729 163 42,928 434,985
" 2032-33 1,044,992 TOTAL BONDING 623,729 168 42,928 464,191
" 2033-34 1,075,069 CAPACITY 623,729 1.72 42,928 494.268
$8,585,519
" 2034-35 1,106,046 FUNDS REMAINING 623,729 1.77 42,928 525.245
" 2035-36 1,137,948 $16,508,182 623,729 182 42.928 557,147
" 3036-37 U70,803 (includes funds available after debt 623,729 188 42,928 590,002
" 2037-38 1,204,640 service and interest on reserve 623.729 193 42,928 623,839
" 2038-39 1,239.489 funds) 623,729 199 42,928 658,688
. 2039-40 1,275,380 623.729 204 42,928 694,579
" 2040-41 1,312,344 623,729 2.10 42,928 731.543
" 2041-42 1,350,412 623,729 2.17 42,928 769,611
" 2042-43 1,389,620 623,729 2.23 42,928 808,819
.. 2043-44 1,429,999 623.729 229 42,928 849,198
" 2044-45 1,471,587 623.729 2.36 42,928 890,786
Totals 34,195,028 8,585,519 171,710 858,552 7,555,256 623,729 20,510,015 1,411,584 15,096,597
6%
2%
10%
115
5%
Rosenow Spevacek Group, Inc.
July, 1999
31
Feasibility Study for the
City of San Bernardino
1999-216
APPENDIX 1
Summary of Attached Photos
I, 2 exposed wiring
3 deteriorated eaves and overhangs, dry rot
4 buckled foundation
5, 6 chipped and peeling paint
7 deteriorated roofing materials
8 deteriorated exterior building materials
9 outdoor storage
10 vacant building
II trash and debris
12 vacant building
13 exposed wiring/missing, deteriorated exterior building materials
14 broken window/vacant building
15 vacant building
16 inadequate drainage, vacant building
17 inadequate loading
18 deteriorated exterior building materials/substandard exterior plumbing
19 trash and debris
20 inadequate loading
21 substandard exterior plumbing
22 deteriorated exterior building materials
23 deteriorated foundation
24 exposed wiring
25 broken window, peeling paint, vacant
26 faulty addition
27 deteriorated exterior building materials
28 faulty electrical
29 faulty addition
30 broken and deteriorated roofing materials
31 vacant building
Rosenow Spevacek Group, Inc.
July, 1999
32
Feasibility Study for the
City of San Bernardino
1999-216
, ~._"t'" '7 '
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Photograph 1: APN: 0154-222-01
4253 North Sierra Way
Photograph 2: APN: 0154-222-25
175 East 44th Street
1999-216
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Photograph 3: APN: 0154-222-23
4202 Sepulveda Avenue
1999-216
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Photograph 4: APN: 0154-222-23
4202 Sepulveda Avenue
Photograph 5: APN: 0271-062-12
3952 North Mountain View Avenue
1999-216
Photograph 6: APN: 0271-062-16
3932 North Mountain View Avenue
ll-
Photograph 7: APN: 0271-062-17
3924 North Mountain View Avenue
1999-216
Photograph 8: APN: 0271-062-17
3924 North Mountain View Avenue
Photograph 9: APN: 0271-062-24
3894 North Mountain View Avenue
1999-216
Photograph 10: APN: 0271-062-16
3932 North Mountain View Avenue
Photograph 11: APN: 0271-062-28
3934 North Mountain View Avenue
1999-216
Photograph 12: APN: 0154-462-02
161 East 40th Street
~.
Photograph 13: APN: 0154-462-02Z
191 East 40th Street
1999-216
Photograph 14: APN: 0154-462-02
161 East 40th Street
1999-216
Photograph 15: APN: 0154-462-02Z
191 East 40th Street
1999-216
Photograph 16: APN: 0154-462-13
Commercial Retail Center at 201 East 40th Street
1999-216
Photograph 17: APN: 0154-462-13
Commercial Retail Center at 201 East 40th Street
Photograph 18: APN: 0154-462-13
Commercial Center at 201 East 40th Street
1999-216
Photograph 19: APN: 0154-452-49
277 East 40th Street
Photograph 20: APN: 0154-452-46
265 East 40th Street
1999-216
Photograph 21: APN: 0154-452-44
255 East 40th Street
1999-216
Photograph 22: APN: 0154-452-44
255 East 40th Street
1999-216
Photograph 23: APN: 0154-452-43
233 East 40th Street
1999-216
Photograph 24: APN: 0154-462-13
201 East 40th Street
L-___ _____
1999-216
Photograph 25: APN: 0154-462-13
201 East 40th Street
1999-216
Photograph 26: APN: 0154-461-08
133 East 40th Street
Photograph 27: APN: 0154-263-12
3981 North Sierra Way
1999-216
Photograph 28: APN: 0154-262-20
3948 North Sierra Way
Photograph 29: APN: 0154-262-03
3955 Genevieve
1999-216
Photograph 34: APN: 0154-221-33
4352 North Sierra Way
Photograph 35: APN: 0154-221-31
4276 North Sierra Way
1999-216
Photograph 30: APN: 0154-261-20
3951 North Mountain View Avenue
Photograph 31: APN: 0154-261-20
3951 North Mountain View Avenue
1999-216
Photograph 32: APN: 0154-242-02
194 East 40th Street
Photograph 33: APN: 0154-242-28
4151 North Sierra Way