HomeMy WebLinkAbout04- Redevelopment 0
SPOTLIGHT ON
..............
SAN ERNARDINO
REDEVELOPMENT
by the
LEAGUE OF WOMEN VOTERS
OF SAN BERNARDINO
APRIL 1995
o-
yt3
The League of Women Voters is a nonpartisan political organization that encourages the informed and
active participation of citizens in government and influences public policy through education and
advocacy.
This publication is an outgrowth of the League of Women Voters of San Bernardino's study of State
and local government finance and was made possible by a League of Women Voters of California pass
through grant from the Irvine Foundation.
"Spotlight on San Bernardino Redevelopment" was written by Jim Mulvihill and Marion White-
Vassilakos. Members of the SLGF committee also included Shirley Marshall, Erna Schuiling, and
Susan Townsend.The committee thanks the EDA and the IVDA for their sharing of data,especially Tim
Steinhaus, Bob Botts, Barbara Lindseth,Terry Shea, Penny and Deanna.
"Spotlight on San Bernardino Redevelopment" is dedicated to the memories of Margareta Chandler
(1921-1994) and Meredyth Jordan (1910-1995), past League presidents, active Board members, and
community leaders.
Layout art and computer graphics by Linda Amick Puetz.
TABLE OF CONTENTS
Tableof Contents............................................................................................. 1
PART I: CALIFORNIA COMMUNITY DEVELOPMENT LEGISLATION
Redevelopment agency powers: reasons for legislation.................................. 2
Redevelopment agency boards....................................................................... 2
Blightdefined................................................................................................2 3
Designation of project areas............................................................................ 3
Tax increment financing................................................................................... 3
AB 1290 makes changes in Community Development Law ........................... 4
Blight defined under AB 1290.......................................................................... 4
Tax increment allocation schedules under AB 1290........................................ 4
Time limits on redevelopment plans................................................................ 5
Restrictions on redevelopment activities formerly legal................................... 5
Concerns.......................................................................................................... 6
PART II: REDEVELOPMENT IN SAN BERNARDINO
History of San Bernardino redevelopment....................................................... 6
Redevelopment agencies and acreage............................................................ 7
Frozentax base................................................................................................ 7
Salestax revenues................................................................................. 7, 8, 14
Incentives for private business......................................................................... 8
City frozen assessed valuation and tax increments......................................... g
Fundtransfers............................................................................................ 9, 15
Comparison to State averages......................................................................... 9
TotalEDA debt................................................................................................. 9
Public and private taxation............................................................................... 9
Inland Valley Development Agency................................................................ 10
Map of redevelopment sites in the City.......................................................... 11
LWV of San Bernardino recommendations.................................................... 12
Mission statement of EDA - Appendix A.........................................................13
SC, TC, SEIP, CC: current status - Appendix A............................................. 13
Sales tax tables -Appendix B..........................................................................14
Transfers of funds among projects - tables, Appendix C................................15
OrganizationalChart.......................................................................................16
Bibliography.................................................................................................... 17
LWV membership application,address,telephone............................backcover
1
REDEVELOPMENT IN CALIFORNIA
Redevelopment agencies in California have been redefined blight as the presence of both physical and
given special powers to eliminate urban blight.The economic blighting conditions within the project
most important are: 1)to acquire property by"emi- area. These conditions must be so prevalent and
nent domain," even when a private development extensive that neither private enterprise,nor private
project is planned; 2) to create "tax increment fi- enterprise with governmental action would alleviate
nancing districts."The key objectives to be attained the blight without redevelopment powers(Health&
with these powers are: 1)the rearrangement of land Safety Code Sec 33031).
ownership and use;2)the fiscal resources to encour-
age private development that is in the public inter-
est. The first section of "Spotlight" will examine
these powers,as well as the activities of redevelop-
ment agencies in California. .;
Need for Redevelopment
Suburbanization increased significantly after WWII '
because of unprecedented affluence, FHANA in F:
sured mortgages,and innovations in transportation,
among others. The population of central cities k§
suburbanized first, followed by retail, then indus-
trial and office activities. Given the political frag-
mentation of metropolitan areas, this departure of Health & Safety Code Section
population and businesses was closely followed by 33031(a) defines physical blight:
the economic decline and deterioration of central
cities. Because local government relies heavily on
property and sales taxes to support its functions,the ' Buildings in which it is unsafe or unhealthy for
departure of businesses and population reduced the persons to live or work. These conditions can be
caused by serious building code violations, dilapi-
city s ability to stem the deterioration that followed.
Extraordinary measures were needed. Thus, the dation and deterioration,defective design or physi-
redevelopment powers came into being. cal construction, faulty or inadequate utilities, or
other similar factors.
Redevelopment in Operation • Factors that prevent or substantially hinder the
The Board of Directors for redevelopment agencies economically viable use or capacity of buildings or
(RDA)in California are typically the respective city lots.This condition can be caused by a substandard
councils.Initially,separate boards were appointed; design,inadequate size given present standards and
however this ended when city councils sought more market conditions,lack of parking,or other similar
direct control over redevelopment activities.While factors.
such council arrangements can expedite redevelop- .Adjacent or nearby uses that are incompatible with
ment activities, there are increased concerns over each other and which prevent the economic devel-
conflicts of interest, and lessened public review of opment of those parcels or other portions of the
RDA activities.
project area.
In operation,the RDA,first,determines that an area •The existence of subdivided lots of irregular form
is"blighted;"the existence of blight is the basis for and shape and inadequate size for proper usefulness
the extraordinary redevelopment powers. AB 1290 and development that are in multiple ownership.
2
H&S Code Section 33031(b)
defines economic blight' area committee" is appointed if the area includes
residential land uses, and public hearings are held.
• Depreciated or stagnant property values or im- Lastly, the city council must adopt the redevelop-
paired investments, including, but not limited to, ment area plan. Once approved, the area plan pro-
those properties containing hazardous wastes that vides an outline for redevelopment,but need not be
require the use of agency authority as specified in precisely followed.
Section 33459.
• Abnormally high business vacancies,abnormally Use of Redevelopment Powers
low lease rates, high turnover rates, abandoned In the past,the use of"eminent domain"generated
buildings, or excessive vacant lots within an area great controversy. Although people receive fair
developed for urban use and served by utilities. market value for their property, often such pay-
ments take months, even years, of negotiating. In
• A lack of necessary commercial facilities that are addition,property owners may have no desire to sell
normally found in neighborhoods, including gro- their land at any price. Because of such frictions,
cery stores,drugstores and banks,and other lending eminent domain has been applied very little since
institutions. the 1980s.
• Residential overcrowding or an excess of bars, Of great importance today, is the RDA's ability to
liquor stores, or other businesses that cater exclu- use tax increment financing (TIF). Under TIF, it is
sively to adults that has led to problems of public assumed that all increases in property value result
safety and welfare. from RDA activities, thus all additional property
taxes within project areas go to the RDA,rather than
• A high crime rate that constitutes a serious threat their regular distribution: school districts,the city's
to the public safety and welfare. general fund, the county, special districts, etc. For
example, if a firm owns a piece of property in a
•Most importantly,AB 1290 has eliminated the lack redevelopment project area worth $2 million, then
of public improvements per se as evidence of blight. builds a development on that property, which in-
creases the property's total value to $15 million,
then RDA will take all the property taxes from the
increment of $13 million (at 1% this would be
' $130,000),while the$2 million will be allocated by
►« -' f the usual means. Although agreements with these
other agencies to"pass through" some incremental
. ;: .< tax benefits are common, they are not mandatory.
Regardless,the RDA is in a strong position in such
negotiations.
Given Prop 13 limits on tax increases, it is in the
Once identified as being blighted,the district can be interests of RDAs to encourage that properties are
designated a"project area."Obviously,an argument sold frequently,and/or that development occur rap-
could be made for a substantial part of California to idly on project area properties. In 1975,there were
be judged as blighted.Second,a redevelopment plan 156 redevelopment agencies,with 195 project areas
must be written defining the project area, develop- receiving $50 million in tax increment funds. By
ment standards to be followed in its redevelopment, 1984, redevelopment agencies increased to 293,
and the finance plan. An environmental impact with 470 project areas receiving$378 million(Beatty
report is then prepared, a "project et al., p. 7).
3
m! at `
Changes Brought by AB 1290 ,� 4
Due to the rapid growth of redevelopment activities
in California, i.e. 359 cities and 24 counties had £' }
such agencies by 1993,tax increments were cutting s
deeply into the property tax resources of many ;
public services,especially the State's schools.With `
> y
the State also facing shortfalls in its own resources
that restricted its ability to assist education, the %: r }•.
legislature enacted AB 1290.Taking effect on Janu-
ary 1, 1994,AB 1290's changes were aimed at both ,,. x�
X.
existing and new project areas: '
•Modified the definition of blight
Tax Increment
• Terminated the fiscal review process, which had Allocation Schedules
been negotiating "pass through" agreements In place of negotiated"pass through"agreements by
fiscal review committees,a fixed schedule of alloca-
•Imposed new time limits on the life of project areas tion to affected(i.e.,established on or after January
and the establishment of debt 1, 1994) taxing entities was established:
•Repealed the authority of agencies to receive sales 1. From the first year tax increments are received,
tax revenues until the last year that tax increments are received,
25% of tax increments, less the low and moderate
•Imposed new finding requirements for the dispo- income housing set-asides, will be paid to affected
sition of land and the financing of public improve- taxing entities,
ments PLUS
2. From the eleventh year tax increments are re-
Included new penalties for agencies failing to use ceived to the last year that tax increments are re-
their housing funds (Beatty, 1994, p. 9) ceived,an additional 21%of tax increments,less the
low and moderate income housing set-asides, will
be paid to affected taxing entities.
PLUS
3. From the thirtieth year that tax increments are
:. received to the last year that tax increments are
received, an additional 14% of tax increments, less
the low and moderate income housing set-asides,
;3 will be paid to affected entities.
i ,�:
Y
The above payments will be apportioned among the
affected taxing entities in proportion to the percent-
X11: * � •{.. Nf A '� ta` .rA �_. �I1W�� .
r age share of property taxes each entity receives
;:..:. :.
, > k
Y during the fiscal year the funds are allocated(Beatty,
r
1994, pp. 38-41).
4
Time Limits on Redevelopment Plans
For plans adopted prior to 1994: date of the ordinance adoption the plan.
Establishing Debt:
The time limit for establishing debt will be the later Time Limit on Plan Activities:
of either 20 years after the plan's adoption, or The time limit on the activities of the plan may not
January 1,2004. This limitation may be extended by exceed 30 years from its adoption.
amending the redevelopment plan after findings,
based on substantial evidence that significant blight Time Limit on the Repayment of Debt:
remains within the project area. Regardless, the All debt incurred must be paid from the proceeds of
extension cannot go beyond the earlier of either ten property taxes within 45 years from the plan's adop-
years from the time limit set above, or the time limit tion. (Health& Safety Code Sec. 33333.2)
for overall plan activities set below.
Restrictions on Redevelopment Activities:
Time Limit on Plan Activities: With certain exceptions, AB 1290 modified Health
The time limit for the plan cannot extend past 40 &Safety Code Sec 33445 to prohibit an agency from
years from its adoption, or January 1, 2009, which- using tax increments for construction or rehabilita-
ever is later. Most existing plans will have to be tion whose use will be as a city hall or county
amended to incorporate this requirement. administration building. There are exceptions made
for indebtedness established before January 1, 1994,
Time Limit on Repayment of Debt: and for serious damages sustained during an earth-
The agency may not repay debt or receive tax quake (Beatty, 1994, p. 180). Also prohibited was
increments after ten years from the termination of direct assistance to auto dealerships or retail projects
the redevelopment plan, i.e. 50 years from the date on land greater than five acres, either of which on
of adoption, or January 1, 2019, whichever is later. land not previously developed for urban uses(Beatty,
A plan cannot be amended to exceed this time limit. 1994,p. 199-200).Finally,the authority of redevel-
opment agencies to receive sales taxes was elimi-
For plans adopted after January 1, 1994: nated.
Establishing Debt:
Time limit may not exceed 20 years from the adop- Redevelopment Concerns:
tion of the plan, except by amendment based on The functioning of RDAs raise numerous concerns
substantial evidence that significant blight remains, because they have the potential of"sheltering" great
and that this blight cannot be eliminated without amounts of taxes from being allocated to important
incurring additional debt. However, this amend- public agencies. Little wonder that some cities have
ment many not exceed 30 year from the effective declared their entire city as redevelopment areas.
5
Concerns:
1.RDA goals may be contradictory,e.g.the agency tinized for their social worth,especially when com-
is responsible for"fighting"blight,but also it should pared to alternative programs.
undertake operations that will maximize tax incre-
ments. In most cities, the downtowns are the most 3. Related to "2," there is a great diversity of com-
plex maneuvers to negotiate "deals" and hide them
blighted,and should be the focus of redevelopment
from a complacent public:lease-back arrangements,
efforts; yet tax increments may be maximized in
undeveloped areas on the city's periphery.The latter single developer negotiations, etc. None of this
was encouraged as, until recently,project areas did needs a public referendum. The possibility of con-
was of interest is clear.
not have to be previously developed. Now, 80 per-
cent of the project area must be developed. As a 4.Because of the lack of accountability,the redevel-
result of this change, we are seeing project areas opment process often results in physical projects
heavily gerrymandered to included no more than 20 that can be quickly completed — within the city
percent undeveloped within a large project area council's term of office. They can then be easily
composed of non-contiguous parcels,spread broadly pointed to as resulting from those individual's"de-
across the city. The undeveloped 20 percent is still cisive"actions.Whereas less visible,or longer term
likely to be the focus of RDA interests. projects, that are potentially more valuable, e.g.
2. There is a lack of public review, and possible affordable housing,neighborhood improvement pro-
concern,over redevelopment subsidies being shifted grams, are given low priority.
from relatively poor taxpayers to wealthy develop- 5. Increasingly, public subsidies become indispen-
ers. Property taxes should be used for what the sable for attracting office, retail, stadia, etc. to the
community needs most.RDA decisions typically do jurisdiction. The public-private "partnership" be-
not receive the same "cost-benefit" analysis that comes public subsidy of private development. Free
truly private projects must face.Public subsidies can enterprise not only becomes lost within each juris-
allow otherwise poor projects to be undertaken. diction, but, increasingly, in the heated economic
Public subsidies of private projects should be scru- competition between jurisdictions.
Part II: Redevelopment in San Bernardino
RDA HISTORY
Redevelopment emerged as a tool to combat blight
in San Bernardino in 1952.Fifteen years later in the
original 98.5-acre redevelopment project area, s x
Meadowbrook,20 percent of the land had been sold
to developers/investors. The 94-acre Central City
* k w
Project established in 1965, called for the acquisi- k�
„- _
tion and clearance of a 120,000 sq.ft. site for a
pedestrian mall with 3 anchor stores, 100 shops,and By 1980 San Bernardino's downtown appeared very
parking. Additional development included office different from 25 years earlier.In addition to the new
buildings, 2 parking structures and street improve- mall, a new City Hall and convention center had
ments. In December 1977 the two original project been built.San Bernardino's City Council had voted
areas were merged in order to share in tax increment itself the RDA Board, thus replacing the appointed
revenues. public commissioners.
6
The focus of downtown redeve.-pment in the 80's frozen year's b«,c.As the project area is reassessed
was to include the construction of a downtown because of improvements and development, the
hotel,the renovation of the Andreson Building and increase in property taxes, called tax increment,
the California Theatre,a fourth mall anchor,a link goes to the redevelopment agency to pay off bonded
connecting the two San Bernardino malls, the ex- indebtedness and to continue redevelopment. Until
pansion of the civic center complex, relocation of 1994,forty years was the maximum time for project
the public library, relocation of the fire station, area life,after which all property taxes would revert
revitalization of E St., establishment of a central to the City. However, beginning in 1994, all new
transportation center, development of downtown projects must adhere to an abridged calendar. (See
open space (Pioneer and Seccombe Lake Parks), page 5.)
acceleration of other major redevelopment project
areas,and the provision in downtown for corporate
or institutional headquarters facilities. City of San Bernardino
Acreage Under Redevelopment Ya. " 1976/77
in San Bernardino °"°'"p"y`
PI•pNly
Many of these objectives have been realized through
redevelopment.San Bernardino's City Council,the
legislative body responsible to the public for City
.7
redevelopment activities,has presided over growth F,^ A
FOIIIINIII '3', '�i�'i
or merger of 10 EDA project areas which total 8598
acres out of the City's 35,654 acres. Until April
1978, an appointed body of private citizens sat as
the Community Development Commission, which s
is the formal title of what was commonly referred to °°'"'T•'
as the "Redevelopment Agency Board" and after
1993 the "Economic Development Board." The Tor I••T..
former RDA reorganized as the Economic Devel-
opment Agency in 1993. The predicament of local jurisdictions is reflected in
Another redevelopment agency,Inland Valley Re- pie charts of San Bernardino's revenue sources with
development Agency,was formed upon the demise property taxes reduced not only by Proposition 13,
of Norton Air Force Base.The project area permit- but also by frozen tax base.
ted under special State legislation extends to a 1994/95
perimeter 3 miles from NAFB boundaries, which
Y/•e Plsp•rty T..
encompasses 8540 acres of the City. Add to the V»of NOW
8540 acres, 2003 acres of NAFB and the 8598 of PI°P"" •n•M•• T•.
EDA projects.The frozen tax base in the City of San 11.3
1.31
Bernardino, including both active redevelopment I °`°°�"^"°°I•I _-'' 6
agencies,amounts to 54 percent of the City with tax
base frozen, the first area since 1958. yFo,10 •
What is frozen tax base, and how does it enter into
ue•n°•• a•a.r.,
the picture of City well-being? When a redevelop-
ment project area is declared,the tax base(assessed
valuation)is frozen.From then on,until the expira-
4.6
tion of the redevelopment project, the City will umily r.,
receive property tax revenues equal only to the
Tor
7
The Pursuit of Sa,-s Tax
However,redevelopment is a tool for revitalizing a Analysis of City sales tax revenues over the years
city and has proved valuable as summarized in 4 demonstrates spotty surges and declines.In 1976-78
instances on page13. Discernible, however, is a increases in sales tax revenue reached more than 20
tendency for aggressive courtship of commercial percent,but in recent years, 1990-95,City sales tax
development in hopes of landing retail businesses, receipts reflect negative percentages over each pre-
thus providing sales tax revenues which fund City vious year and less than one percent increase in 1994
services no longer supported by property tax rev- and 1995 (see Appendix B). Cities in California
enues. Despite new malls and other retail outlets, receive 1.25% of the State's 7.25% rate, not the
sales tax revenues have failed to bail out the City; entire 7.25%. Another .5% each is earmarked for
whereas development has left vacant buildings as local public safety and health/welfare programs.
customers abandon older neighborhoods for newer Voters approved in 1994 an added County sales tax
stores. Additionally, the tendency is for legislative of .5% for law enforcement. Dependence on sales
bodies to entice development by offering incentives tax revenues for City income places a strain on urban
which may prove unwise in the future and which planning and neighborhood environmental concerns
impede an ordered planning process. (see below) as jurisdictions vie for commercial development.
EXAMPLES OF INCENTIVES DIRECTED TO PRIVATE BUSINESS:
1991 —$3,500,000 for purchase of Pacific 1 st Bank bldgs.to be site of new police station
1992—$400,000 for Maruko Hotel operation
1993—Roger's Bindery defaulted on a$500,000 loan,filed Chapter 11,and in 1995 decided to leave City for larger facility
to Riverside
May 1993 —$140,000 loan to Allan Steward for refurbishment of former Gas Co.Bldg. on 4th St. Due date extended
until late April 1995. 100%of bldg. leased,but no rent paid on City's 25%interest in bldg.It is reported that leases do
not meet costs.
Sept. 1993—$1,000,000 loan guarantee for improvements to Heritage Bldg
March 1994—$180,000 for Gil Lara as compensation for cancelled SRO
April 1994—$4,000,000 invested in Duke's Arrow Vista Tract,possible$3.2 million recoup thru sales effort.
April 1994—$120,000 buy out agreement with John Dukes
April 1994—$300,000 to Civic Light Opera for title to Calif.Theatre. $103,000 loan balance deferred 2 yrs.with reduced
interest rate. $100,000 max for 2 yrs. free rent
Oct. 1994—$351,000 for Holiday Oldsmobile land purchase
Feb. 1995—$51,218 for design work on Calif.Theatre
Mar. 1994—$325,000 for parking lot at Court&E
Dec. 1994—$45,000 loan to keep Jersey's rent current;Jersey's failed by November 1994.
April 1994—$30,000 for consultants re-feasibility of building baseball stadium
Sept. 1994—$300,000 EDA direct loan to Allan Steward for renovation of Freeway Home Center
Sept. 1994—$2,200,000 loan guarantee to Steward for renovation of Freeway Home Center
Sept. 1994—$12,800,000 for baseball stadium construction,to be derived from:(1)private donations,(2)tax allocation
bonds,tax allocation funds from the new police station,and refund from State on funds from Superblock project
Nov. 1994—$160,000 for environmental study of baseball stadium site
1994—$500,000 loan to reduce mortgage payments on Westside Plaza
1995—$2,200,000 loan to renovate 40th St. Shopping Center.
Jan. 1995—$7,300,000 loan from HUD Sec. 108 for Harris Co.to purchase the bldg.they sold 15 yrs.ago.Harris Co.
needs capital now and has agreed to remain at Carousel Mall for 3 more years,possibly more.$2,100,000 CDBG loan
for Harris Co.
Feb. 1995—$50,000 each to Court&E Sts. and to Fed. Office of Hearings &Appeals for security guards.
Feb. 1995—$320,000 loan guarantee for Highland AM/PM Mini-Mart so Mr.Farah can consolidate loans,incl.existing
$65,000 City loan.
April 1995–Consolidation of existing$350,000 and$140,000 loans to Al Steward with reduced interest and 20 year
amortization.
8
Assessed Value Incr,...ses 383%
The City's Community Development Commission bonded indebtedness of the EDA in Oct. 1995 is
(City Council) has established project areas within projected at$106,425,000. The first of the City's
the City with a total frozen assessed valuation of projects matures in 2010,with other projects expir-
$384,824,922. The first project area was frozen as ing principally between 2013 and 2029.Mt.Vernon,
long ago as 1958.The assessed valuation of develop- adopted in 1990,is scheduled for expiration in 2038.
ment above the "frozen" base is $1,475,076,228, a When a project expires or matures,the tax increment
figure which is down 2.5% from anticipated valua- which was apportioned to the EDA is redirected to
tion because of reassessments in an economy which its original jurisdiction, in this case the City.
has experienced falling real estate values. The tax
increment based on assessed valuation above the Public Buildings and Properties
frozen base varies from year to year depending upon In cases where commercial property is redeveloped
development in the project areas and upon the as public property (public buildings or parks), the
economy. For example,the net tax increment in 8 frozen tax base is removed from the tax rolls,and the
out of the 12 EDA project areas(3 project areas have EDA receives no tax increment on the developed
been combined but can still be tracked separately)is public building. In cases where public property is
projected to decline from 1993/94 to 1994/95. The converted to commercial property through redevel-
four project areas which show a total of$242,699 opment, the EDA receives tax increment above
increase in net increment are Central City West, frozen tax base (of zero).
Northwest, Tri-City, and South Valle. It should be > '�"`
a t .
noted here that the largest proportion of tax incre- tx ,
ments occur when a project is young because that is � 1
P J Y g
when dramatic increases in development take place.
Transfers of increment or bond proceeds from one r _
redevelopment project area to another are used as
start-up funds and to further development in targeted
projects. (See table Appendix C, p. 15.) s
The State average for leveraging borrowed money .`
with tax increments shows proceeds from long-term
debt and transfers from cities and counties is 43%of Z. sl
total revenues. In San Bdno it is 41%. Average tax
increment allocated to RDA's statewide is 39% of
total revenues.In San Bdno it is 44%.Use of money
and property average statewide is close to San Bdno's Examples of public buildings/parks in project areas
14%. ("Common Cents" and "Component Unit are the Superblock downtown with its County build-
Fin.Rpt") ings and State buildings,the City civic center with
° _r .....,.,..:,. City Hall, the convention center, parking garages
and lots,Seccombe Lake and Meadowbrook Parks,
x :.. 'mow ` :::.:>• Feldhe m Library and Pioneer Park, the Police
� � :::: . Station,and the proposed ballpark(if City owned).
.........::>:.:.
:> y.::.t..:.:.:... ::... :: .. .: ::
�� ,F 'w•>$Zr AB 1290, which became effective Jan. 1, 1994,
�a prohibits some of the practices of redevelopment
' ...... �!. ¢��j agencies, such as construction or rehabilitation of
city halls or county administration buildings,direct
assistance to auto dealerships or retail projects plan-
Project Debt and Maturities ning to establish on more than 5 acres not previously
Total EDA annual debt service projected for the developed for urban use,80%of project areas must
1994/95 fiscal year is $21,105,316. [Tax incr. pro- be urban and blighted,agencies may not receive any
jections 1994/95, revised March 14, 1995] Total sales tax revenues. (See page 5.)
9
IVDA
The Inland Valley Development Agency, which Loma Linda Mayor Robert Christman and Council-
was established in Jan. 1990,is currently comprised man Glenn E.Elssmann.Highland will be naming 2
of representatives from the cities of San Bernardino, Board members.
Loma Linda, Colton, and the County. The agency SBIAA
adopted a redevelopment project area extending 3
miles from the base boundaries, thus freezing the San Bernardino International Airport Authority
property tax base of 15,000 acres. Highland and Commissioners,also a joint powers authority,are 2
Redlands refused to join IVDA because they ob- elected officials from the City of San Bernardino,
jected to freezing their tax base within a 3-mile and one each from the County,Colton,Loma Linda,
radius of the AFB.In March 1995 Highland agreed Redlands, and Highland.
to join offering 450 acres(5%)of its geographic area Progress
as IVDA frozen tax base. The IVDA Board must IVDA Board members agreed to concentrate devel-
vote approval of Highland's membership, which opment efforts at NAFB,perceiving it as the key to
may take place in May 1995. local economic recovery. Awarded a $7 million
Total assessed valuation of IVDA's frozen tax base federal grant, the IVDA is completing road and
''%:::'2i::Sti'" ""S'.>. 'C+:::>: Sck%'::::.'.+e'.,:aiiC `::::::..:; :::::'' :::i::::e `•:.;?:.
in June 1994 was $1,561,697,511. The total as-
r.
sessed valuation of the tax increment was4J
$402,059,381. Eighty-two percent of the IVDA's
current frozen base is in the City of San Bernardino.
The tax increment derived from the San Bernardino �? `f. r
City portion of the total valuation in 1994 is esti-
y P .�
mated at $1,416,894 out of the total IVDA incre-
ment of$1,741,626.
„ . :.
....:.....................
Joint Powers Agreement
The founding document of IVDA, a joint powers `' t
agreement,stipulates that the IVDA Board votes are
divided among the jurisdictions as follows: 2 votes infrastructure improvement at NAFB. The City Po-
each to the County, Colton, Loma Linda, prospec- lice Dept.has relocated temporarily to NAFB.IVDA
tive member Highland; the City of San Bernardino has successfully won a 750 employee Defense Fi-
may cast 3 votes.Highland would like to change the nance Accounting Service for the base, and is suc-
vote structure to one vote each, except for San cessfully marketing commercial and industrial sites.
Bernardino which would cast 2 votes. San Bernar- Oh Bok Foods, Inc., Los Padrinos of Southern
dino receives a weighted vote because it is geo- California, Electro Bake, Inc., an envelope manu-
graphically the home of the former AFB and be- facturer, Goodwill Industries, and at the airport
cause over 80 % of the acreage is within the City. Kelly Space and Technology and BSA International
Aerospace, have recently leased space at NAFB;
Current IVDA Board members are Co-chairs Super- and Pemco is negotiating to locate an aircraft main-
visor Jerry Eaves and San Bdno Mayor Tom Minor, tenance facility there.
Board members County Coroner Brian McCormick,
San Bdno Councilman Ralph Hernandez, Colton The City of San Bernardino has gained the base
Mayor George Fulp and Councilman Abe Beltran, swimming pool and other recreational facilities.
10
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RECOMMENDATIONS OF THE LEAGUE
OF WOMEN VOTERS SAN BERNARDINO
I. INFORM THE PUBLIC ABOUT ACTIVITIES OF SAN BERNARDINO'S ECONOMIC DEVELOPMENT
AGENCY:
A. Publish an annual report in lay language to be mailed to city residents. This could replace the calendar
which is currently mailed to residents annually @ $120,000.
B. Broadcast via television,KCSB and/or KVCR,a regular live call-in TV show with Economic Development
as the subject.
C. Media play a role in accurate reporting of information.
1. News reporters/broadcasters should clarify,when reporting news re-EDA,which legislative body is in
session: the Common Council or the Community Development Commission.
2. Media reporters should clarify for readers/viewers whose money is being committed: EDA, City, or
private.
3. Media should identify how each Council/Commission member voted.
4. Background information on issues should be a part of news stories.
II. GENERAL OBSERVATIONS FOR PUBLIC CONSIDERATION:
A. As the City's General Plan is updated, the Plan Committee should provide a comprehensive document
which includes a projected image of the City to the year 2015.
1. The Plan Committee should consist of a broad based representation of City residents.
2.The Plan should include zoning and code regulations,and it should provide for enforcement procedures.
3.The Plan should be publicized by means of traditional and emerging technologies:newspapers,television
broadcasts,call-in shows(either by telephone or computer),computer conferencing,videotapes which can
be borrowed, speakers available to organizations, information packets for individuals.
B. Though redevelopment as a remedy for blight has invigorated the City,expedient Community Development
Commission votes can result in short term financial problems,or worse,long term financial problems for
the jurisdiction and possible long term urban planning problems.
C.Statistics demonstrate that sales tax revenues do not remedy revenue shortfalls from other revenue sources.
D.Retail and commercial developments have not demonstrated that they bail out floundering City revenues.
12
APPENDIX A
EDA MISSION
The EDA defines its mission as follows:to enhance Cobb Co., Webtrend Direct, Zieman Mfg., Home
the quality of life for the citizens of San Bernardino Depot, COMPUSA, Petmart, BEST BUY,
by creating and retaining jobs,eliminating physical TGIFridays, SAMS Club, Sportmart, Chili's, and
and social blight, supporting culture and the arts, Rancon. Assessed value in SEIP since 1976 has
developing a balanced mix of quality housing and increased $334,663,146; and the net tax increment
attracting and assisting businesses both indepen- accruing to the EDA in 1994/95 is projected at
dently and through public-private partnerships. $2,670,710.In 2016 the increment will be paid to the
City.TC's assessed value since its adoption in 1983
A LOOKAT 4 PROJECT AREAS has increased $128,911,207; and the net tax incre-
ment for the EDA projected for 1994/95 is
STATE COLLEGE PROJECT $1,031,273. The increment will be paid to the City
Located near railroad and freeway access, the 305 beginning in 2023. [EDA "1994/95 Projections"]
acres of State College Project (SC) are suited to
manufacturing and distribution.This area is also the CENTRAL CITY PROJECT AREA
home of California State Univ. SB, as well as com- Meadowbrook Project,the City's firstproject adopted
mercial and residential buildings.Major companies in 1958, was merged with Central City East(CCE)
locating in the SC include The SUN,McLane Truck- and South (CCS) in 1983, forming Central City
ing, Primeline, Calmat Co., C & M Fine Pack, (CCP).The area contains Carousel Mall,downtown
Cargill, Cumberland-Swan,Fred G. Walter&Son, office and retail businesses, as well as the court
General Foam Plastics, Herrick Corp.,J&V Foam house and other government units.Maj or businesses
Products, Kimko Industries, and Mannesmann include Avalon Shutters,Bird Inc., Sorrento Coats,
Demag Corp.Hundreds of employees work here and W A Lane,Journal Inc.,Quiel Bros.,Zwerner Indus-
spend dollars in the City. The net tax increment to tries,plus a number of long term resident businesses.
the EDA is $3,875,980 based on an increase of The total increase in assessed value of CCP over its
$473,529,358 in assessed value since SC's estab- long history is projected to be$246,199,703,and the
lishment in 1987, an increment which will flow to net increment accruing to EDA in 1994/95 is esti-
the city after the project's scheduled expiration in mated to be $1,950,123. The increment per project
2010. [EDA"1994/95 Projections"] is $151,442 for CCE, $838,987 for CCS, and
$959,694 for MICC.The project life expires in 2017,
TRI-CITY AND SOUTHEAST when increment should become available to the
INDUSTRIAL PARK PROJECT AREAS City.
Two distinct areas constitute Tri-City (TC), one
zoned residentially and the other 283 acres zoned for PAST AND FUTURE
office,light industry,and restaurants.Easy access to Positive results of EDA's efforts,according to agency
Interstate 10 enhances business uses. Southeast In- spokesmen,are the support of 2 shopping malls,the
dustrial Park(SEIP)with easy access to freeway and creation of industrial parks, and revitalized neigh-
rail prompts office complexes, restaurants, hotels, borhoods. The entire downtown was developed in
movie complexes, commercial and light industrial the late `60's and early `70's.The EDA's objectives
uses and in the eastern section manufacturing and are to eliminate blight and revitalize specific project
distribution centers. Major businesses in TC and areas, which include the Superblock, downtown
SEIP include Acacia Inc., Aurora Pacific Enter- plan, construction of the new police facility, a pro-
prises, Baldwin Technology, Canam Metal Prod- fessional baseball stadium, the Mt. Vernon storm
ucts,Foamex,GTE Directories Corp.,Kelly-Moore drain,and revitalization of business sections of Base
Paint Co., Mc Intire Tool Die & Machine, Monier Line, Highland Avenue, and 40th St. Programs to
Roof Tile, Rogers Bindery, Snow Plastics, T M upgrade and increase housing stock are to continue.
13
APPENDIX B
SALES TAX REVENUE CITY OF SAN BERNARDINO
DIFF. PREVIOUS % DIFF.
FISCAL YEAR SALES/USE TAX $ YEAR $ PREV. YR. CPI %
1973-74 5,210,288
1974-75 5,320,263 109,975 2.1 %
1975-76 6,023,314 703,051 13 %
1976-77 7,273,177 1,249,863 20.7 %
1977-78 8,911,168 1,637,991 22.5 % 13.3 %
1978-79 9,832,436 921,270 10.3 % 12.4 %
1979-80 10,679,581 847,143 8.6 % 8.9 %
1980-81 10,969,728 288,333 2.7 % 3.9 %
1981-82 11,969,728 1,001,814 9.1 % 3.8 %
1982-83 11,056,486 (913,242) (7.6 %) 4 %
1983-84 13,117,099 2,060,613 18.6 % 4
1984-85 14,515,821 1,398,722 10.7 % 3.8 %
1985-86 16,603,127 2,087,306 14.4 % 1 %
1986-87 17,739,952 1,136,825 6.8 % 4.4 %
1987-88 18,492,549 752,597 4.2 % 4.4 %
1988-89 20,598,636 2,106,087 11.4 % 4.6 %
1989-90 21,951,477 1,352,841 6.6 % 6.2 %
1990-91 21,635,519 (315,958) (1.4 %) 3 %
1991-92 20,021,349 (1,614,170) (7.5 %) 3 %
1992-93 18,991,940 (1,029,409) (5.1 %) 2.7 %
1993-94 19,178,000 est. 186,060 0.9 % 2.7 %
1994-95 19,400,000 est. 222,000 1.2 % n/a
Bray, Anna J. "Consumer Prices Increase 0.3 %,"INVESTORS BUSINESS DAILY, Mar. 17, 95, B-1.
Derks, Scott. THE VALUE OF A DOLLAR: PRICES AND INCOMES IN THE U.S. 1860 - 1989. Detroit:
Gale, 1994
Famighetti, Robert (ed.) WORLD ALMANAC AND BOOK OF FACTS. Mahwah, NJ: Funk & Wagnalls,
1978+
San Bernardino. SAN BERNARDINO CITY BUDGET. San Bernardino, CA: City Printer, 1978+
U.S.Dept. of Labor. Bureau of Labor Statistics. CONSUMER PRICE INDEX, 1980+. Washington,DC: Govt.
Printing office.
Though several sources were checked, figures re-the consumer price index,though close, were not consistent.
14
APPENDIX C — .,igures are taken from the EL,♦ 1994/95 Budget
KEY: SC = State College Project; CCN = Central City North; CCW = Central City West; SEIP = Southeast
Industrial Park;NW=Northwest;TC= Tri-City;UPT=Uptown;SV=South Valle;CCP=Central City Projects
(MCC, CCE, CCS); MTV =Mount Vernon; Nend=Northend
by=bond proceeds;CLO=Civic Light Opera;ctstsq=Court Street Square;ERAF=Educational Augmentation
Fund;mxc=Mexican Consulate; opr=operations;pa=performing arts;pf=police facility; sb=Superblock;
SFe= Santa Fe; ti =tax increment; tr=transfer
Not included in transfers are funds used for the 20%low and moderate income housing set aside,nor all ERAF
funds.
PROJECT TRANSFERS IN TRANSFERS OUT FROM RESERVES
SC 203,005 from TC (ERAF) 1,597,003 ti to NW opr. 6,062,883
10,600,000 by to CCN for pf,sb
200,000 ti to Nend for prof costs
310,352 ti to CCP proj.opr.
CCN 96,308 from TC (ERAF)
10,600,000 from SC by for pf
834,242 from SV by for pf,pa
1,952,600 from TC by for CLO, sb, pf,mxc
6,076,151 from SEIP for sb
CCW 4,807 from CCP
976 from TLC (ERAF)
SEIP 234,859 by for ERAF 6,076,151 to CCN for sb 7,225,812
840,091 to MainSt. opr.
164,692 to MTV opr.
234,859 by for ERAF
NW 1,597,003 from SC by for opr.1,860,000 by to MTV, SFe 1,945,000
23,532 from TC for ERAF
TC 1,952,600 by to CCN for 2,915,288
CLO,sb,pa, Mxc
300,000 by to MTV for SanMarcos
755,257 by to other prcjs for ERAF
UPT 14,349 from TC for ERAF 200,000 to MTV for SanMarcos 260,994
SV 25,885 from TC for ERAF 834,242 to CCN for pf, pa 1,310,086
444,641 to CCP for ctstsq
CCP 444,641 from SV for ctstsq 4,807 to CCW opr.tr. 2,470,780
310,352 from SC opr.tr.
156,343 from TC for ERAF
MTV 164,692 from SEIP for opr.
196,0000 from SBco incre.
1,860,0000 from NW by for MTV, SFe
300,000 from TC by for SanMarcos
200,000 by from UPT for SanMarcos
Nend 200,000 from SC opr. 15
EDA Organizational Chart
Electorate
Common Council • • • • • when sitting as • • • • Mayor
Community Development
Commission
Economic Development Agency
Office of Business Development Convention &
Development Main Street Department Visitors' Bureau
-------------L-- -,",j . — I
Administrative Div. Development Div. Housing Services Div.
16
BIBLIOGRAPHY
Beatty, David F. et. al. REDEVELOPMENT IN CALIFORNIA. 2nd ed. Point Arena, CA: Solano Press,
1994.
Bray, Anna J. "Consumer Prices Increase 0.3%," INVESTOR'S BUSINESS DAILY, Mar. 17, 95, B-1.
California. Legislative Analyst's Office. COMMON CENTS. Sacramento: State Printing Office, Oct. 1993.
Derks. Scott. THE VALUE OF A DOLLAR: PRICES AND INCOMES IN THE U.S.1860- 1989. Detroit:
Gale, 1994.
Economic Development Agency of San Bernardino. BUDGET 1994-95. San Bernardino: City Printer,
1994.
"Component Unit Financial Report," June 30, 1994.
"Tax Increment Projections for the Fiscal Year 1993/94, and 1994/95.
Famighetti, Robert (ed.) WORLD ALMANAC AND BOOK OF FACTS. Mahwah, NJ: Funk& Wagnalls,
1978+.
Fulton, William. GUIDE TO CALIFORNIA PLANNING. Point Arena, CA: Solano Press, 1991.
Inland Valley Development Agency. Financial Reports. from the Agency, 1995.
League of Women Voters. Study kits "State and Local Government Finance," (I through IV). LWVC, 1994.
Redevelopment Agency, City of San Bernardino. ANNUAL REPORT 1981. San Bernardino: City Printer,
1981.
PLAN OF DEVELOPMENT INTERIM REPORT.
1975.
SAN BERNARDINO 1951 - 1980: A SUPPLE-
MENT TO THE CENTRAL CITY PLAN OF DEVELOPMENT. RDA of San Bdno, n.d. [1975?]
San Bernardino. CITY BUDGET, 1973 - 1995 preliminary. San Bernardino: City Printer, 1973+.
San Bernardino Central City Development Concept, Area South of Central City Redevelopment Project No.
1, " Gruen Assoc., Mar. 13, 1969.
San Bernardino County SUN. Articles are indexed and available on microfilm at the Feldheym Library.
U.S. Dept. of Labor. Bureau of Labor Statistics. CONSUMER PRICE INDEX, 1980+. Washington, DC:
Govt. Printing Office.
17
MEMBERSHIP APPLICATION LWV SAN BERNARDINO
NAME
ADDRESS
PHONE
PARTICULAR INTERESTS
INDIVIDUAL MEMBER $40/yr. HOUSEHOLD MBRSHP$60/yr.
MAIL CHECK AND APPLICATION TO:
LEAGUE OF WOMEN VOTERS SAN BERNARDINO
568 NO. MOUNTAIN VIEW AVE. #150
SAN BERNARDINO, CA 92401-1218
OUR PHONE IS (909) 889-8600