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Home My WebLink AboutR36-Economic Development Agency CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY FROM: Emil A. Marzullo Interim Executive Director SUBJECT: Elimination or Debt Limits ror three (3) Redevelopment Agency of the City of San Bernardino Project Areas (Meadowbrook/Central City, Central City Soutb and Central City East Redevelopment Project Areas) DATE: April 12, 2010 Svnopsis of Previous Commission/CounciVCommitlee Action(s): On March 4, 2010 Redevelopment Committee Members Johnson, Brinker and Alternate Redevelopment Committee Member Shorett unanimously voted to recommend that the Mayor and Common Council consider this action for approvaL Recommended Motion(s): First Reading of Ordinances (Mavor and Common Council) MEADOWBROOK/CENTRAL CITY ORDINANCE A: Ordinance of the City of San Bernardino eliminating the debt incurrence deadline for the Redevelopment Plan for the Meadowbrook/Central City Redevelopment Project Area, RESOLUTION B: Resolution of the Mayor and Common Council ofthe City of San Bernardino electing the statutory pass- through pursuant to Health and Safety Code Section 33607,5(a)(2) for the Meadowbrook/Central City Redevelopment Project Area CENTRAL CITY EAST ORDINANCE C: Ordinance ofthe City of San Bernardino eliminating the debt incurrence deadline for the Redevelopment Plan for the Central City East Redevelopment Project Area, RESOLUTION D: Resolution of the Mayor and Common Council of the City of San Bernardino electing the statutory pass- through pursuant to Health and Safety Code Section 33607,5(a)(2) for the Central City East Redevelopment Project Area, CENTRAL CITY SOUTH ORDINANCE E: Ordinance ofthe City of San Bernardino eliminating the debt incurrence deadline for the Redevelopment Plan for the Central City South Redevelopment Project Area. RESOLUTION F: Resolution of the Mayor and Common Council of the City of San Bernardino electing the statutory pass- through pursuant to Health and Safety Code Section 33607.5(a)(2) for the Central City South Redevelopment Project Area, Contact Person(s): Mike Trout Meadowbrook/Central City, Central City East and Central City South Phone: (909) 663-1044 Project Area(s): Ward(s): }st and 3rd Supporting Data Attached: o Staff Report 0 Resolution(s)/Ordinances 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letter(s) FUNDING REQUIREMENTS: Amount: $ -0- Source: N/A Signature: 7 Q ~ Fiscal Review: / Emil A, Marzu1!O, Interi ecutive Director Lo Director -------- Administrative Services Commission/Council Notes: P:\Agendas\Comm Dev Commission\CDC 2010\04-19-10 Elimination of Debt Limits SR.doc COMMISSION MEETING AGENDA Meeting Date: 04/19/2010 Agenda Item Number: JL&.P ECONOMIC DEVELOPMENT AGENCY STAFF REPORT ELIMINATION OF DEBT LIMTS FOR THREE (3) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO REDEVELOPMENT PROJECT AREAS (MEADOWBROOK/CENTRAL CITY, CENTRAL CITY SOUTH AND CENTRAL CITY EAST) BACKGROUND: In December 2003, the Agency had twelve (12) Redevelopment Project Areas that had certain limitations in accordance with Redevelopment Law; specifically AB 1290 and SB211 set forth those limitations. These limitations include, but are not limited to, time limit on length ofthe project plan (the "Plan") (effectiveness date on the redevelopment plan), time period to collect tax increment to repay debt, the power of eminent domain (12 years from plan adoption), limit on the amount of tax increment it can receive over the life of the project area and the time period on the amount of bonded indebtedness that can be outstanding at any one time, and last but not least, the time limit to incur debt. Of the twelve (12) Redevelopment Project Areas, Agency Staff had determined that nine (9) of those Redevelopment Project Areas should be amended at that time to eliminate the debt incurrence limit. Those nine (9) Redevelopment Project Areas were: State College, Central City North, Central City West, Southeast Industrial Park, Northwest, Tri-City, South Valle, Uptown and Mt. Vernon. The time limit to incur debt is important because tax increment financing is based upon the project area being in debt. Furthermore, the project area must have outstanding debt in order to collect tax increment revenue (both total debt and annual debt payments). The manner in which the Agency discloses all of its debt is by filing annually with the County of San Bernardino a Statement of Indebtedness (the "SOl") for each of the Agency's Redevelopment Project Areas. Therefore, on December 1,2003, the Mayor and Common Council adopted an ordinance for each of the nine (9) Redevelopment Project Area, mentioned above, eliminating the debt incurrence deadline for the individual Redevelopment Plans. By doing so, this would allow the Agency to establish loans, advances and indebtedness to be paid with the proceeds of property tax increment revenues attributable to the individual Redevelopment Project Areas at any time prior to the termination of the individual Redevelopment Project Area Plans. Those Redevelopment Project Areas whose Redevelopment Plans were not amended to eliminate the debt incurrence deadline, though their deadline expired on January 9, 2002, are the following: Meadowbrook/Central City, Central City South and Central City East (the "Project Areas"). The subject of this Staff Report is the elimination of the debt incurrence deadline for the Project Areas. CURRENT ISSUE: In order for the Agency to be able to claim new debt, which would be paid with the proceeds of property tax increment revenue generated by the Project Areas after January 9, 2002, it is necessary for the Agency to extend the time frame in which to incur debt. Accordingly, SB211 was adopted in January 2001, by the State Legislature in order to allow agencies time in which to extend the time frame in which to incur debt to P:\AgendasIComm Dev Commission\CDC 2010\04-19-10 Elimination of Debt Limits SR.doc COMMISSION MEETING AGENDA Meeting Date: 04/1912010 Agenda Item Number: .P-3iP Economic Development Agency Staff Report Elimination of Debt Limits for Project Areas Page 2 correspond with the project area duration (effectiveness date of the Plan). The following chart illustrates the Project Areas that would be extended to conform to the limits established under SB2 I I : Summary of Project Area Limitations Proposed S8211 Debt Time Limit Amendment A B C D E F G Project Area Time Limit Limit on Proposed Duration on Receiving Time Limit Limit on Total Amounl of SB211 Change- (Effectiveness Tax Increment to Incur Debt Total Dollars of Bonded Debt Time Limit Project Areas Date of Plan) (to Repay Debt) (Existing) Tax Increment (at Any One Time) to Jncur Debt Meadowbrook! May 3, 2019 May 3, 2029 January 9, 2002 1.75 x Total Debt $50,000,000 May 3, 2019 Central City Central City South May 3, 2019 May 3. 2029 January 9, 2002 1.75 x Total Debt $25.000,000 May 3. 2019 Central City East May 3, 2019 May 3. 2029 January 9, 2002 1.75 x Total Debt $30,000,000 May 3, 2019 The proposed SB2 I I Plan Amendment will change the time limit to incur debt for each of the Project Areas as noted in column G. SB21 I Plan Amendment will not impact those taxing agencies that have pass thru agreements in place to share tax increment revenue with the Agency; but for those agencies (which includes the City of San Bernardino) that do not presently have a pass thru agreement, the Agency, under SB2 I I is mandated to share in the new tax increment revenue. ENVIRONMENTAL IMPACT: No impact per the California Environmental Quality Act (the "CEQA"); does not meet the definition of a Project. FISCAL IMPACT: Account Budgeted Amount: $0.00 Balance as of: April 12.2010 Balance after approval of this item: $0.00 Without a Plan Amendment for each of the Project Areas the Agency is unable to claim any new debt on the SOl. Therefore, this impacts the Agency's ability to consummate new business deals, redevelop blighted properties and to claim Agency administrative costs, thereby impacting the amount of tax increment the Agency receives for each of the Project Areas noted above. RECOMMENDATION: That the Mayor and Common Council adopt the attached Ordinances and Resolutions. ~ .. ..~ Emil A. Marzullo, Interim Executive Director COMMISSION MEETING AGENDA Meeting Date: 04/1912010 Agenda Item Number: f2.3(p P:\Agendas\Comm Dev Commission\CDC 2010\04-19.10 Elimination ofDcbt Limits SR-doc (I rrlI\rrlI fJ,\[ ('lfrllY [lfJfJJrr'('T(' .I1Ll_lld.u .1__ III Ib.l_~) CENTRAL CITY EA . MEADOWBROOKICEtil'RAL CITY /~ CENJJ/AtAVF_ Plan Adoptions: Meadowbrook/Central Ci~-No'ember 7, 1lJ77 590 Acres Central Ci~ East-May 3, 1976 225 Acres Ceotral Ci~ Soulh-May 3, 1lJ76 193 Acres , Projetts Merged in 1983 Total groi acres: 1,1)08 ~ NlNTHSTREU > . ~ I fMEI'T {.}