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HomeMy WebLinkAbout1994-01 CRA . . . REC, 6/9194 RESOLUTION NO. 94-1 A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA DETERMINING THAT THE CON- STRUCTION OF A RECREATION CENTER IN ROSITA PARK IS OF BENEFIT TO THE SANTA ANA NORTH HARBOR BOULEVARD REDEVELOPMENT PROJECT AREA, THAT NO OTHER REASONABLE MEANS OF FINANCING CONSTRUCTION OF SAID RECREATION CENTER IS AVAILABLE TO THE CITY AND THAT THE USE OF FUNDS OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA FOR CONSTRUCTION OF SAID RECRE- ATION CENTER WILL ASSIST IN THE ELIMINATION OF ONE OR MORE BLIGHTING CONDITIONS; AND AUTHORIZING THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA TO PAY A PORTION OF THE COST OF CONSTRUCTION OF SAID RECREATION CENTER WHEREAS, Rosita Park, which is located at the southwest corner of Newhope and Hazard (the "Park"), is located less than one-half mile from the boundary of the Santa Ana North Harbor Boulevard Redevelopment Project Area (the "Project Area"); and WHEREAS, the Park serves residents of the Project Area; and WHEREAS, the construction of a Recreation Center in the Park is anticipated to increase utilization of the Park and, thereby decrease crime in the area around the Park and in a portion of the Project Area; and WHEREAS, the cost of design and construction of the Recreation Center is estimated to be $3.1 million; and WHEREAS, the city of Santa Ana (" ci ty") has assembled $1. 1 million in funds from various sources in order to finance the construction of the Recreation Center, leaving a shortfall of approximately $2 million; and WHEREAS, the Community Redevelopment Agency of the city of Santa Ana (the "Agency") has indicated its willingness to contrib- ute up to $2 million in funds from the Project Area to make up the shortfall and enable the city to construct the Recreation Center; and WHEREAS, the community has no other reasonable means of financing the construction of the Recreation Center; and, WHEREAS, the Redevelopment Plan for the Project Area authoriz- es the construction of Park improvements; and 1 . . . WHEREAS, California Health and Safety Code section 33445 requires the Agency to determine, prior to paying any portion of the cost of construction of the Recreation Center, that the Recreation Center is of benefit to the Project Area, that no other reasonable means of financing the construction of the publicly owned building is available to the City and that the use of Agency funds to pay a portion of the cost of construction of the Recre- ation Center will assist in the elimination of one or more blighting conditions in the Project Area; and WHEREAS, the factual basis supporting such determinations has been discussed in the Report entitled, "Recreation Center for Rosita Park" attached hereto as Exhibit A; and WHEREAS, the Agency has considered such Report and has held a public hearing as required by California Health and Safety Code § 33679 for the purpose of receiving public input and comment on the proposed agreement; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES HEREBY RESOLVE AS FOLLOWS: 1. It is hereby determined that: (a) The Recreation Center will be of benefit to the Project Area; (b) No other reasonable means of financing the con- struction of the Recreation Center are available to the community; and (c) The use of Agency funds for the cost of construc- tion of the Recreation Center will assist in the elimination of one or more blighting conditions inside the project Area. 2. The Agency is hereby authorized to contribute up to $2 million in Agency funds from the project Area to finance a portion of the cost of construction of the Recreation Center. Subject to the $2 million maximum, the use of Agency funds shall be in accordance with that certain Cooperation Agreement, dated June 16, between the Agency and the City. 2 . . . ADOPTED this following vote: 20th day of June , 1994, by the AYES: Members Lutz, McGuigan, Mills, Moreno, Pulido, Young NOES: Members Members Richardson ABSENT: ABSTENTIONS: Members ATTEST: Cy~&.~~ Executive Director APPROVED AS TO FORM: ~~ Chairman 3 . EXHIBIT A SANTA ANA NORTH HARBOR BOULEVARD REDEVELOPMENT PROJECT REPORT ON RECREATION CENTER FOR ROSITA PARK . COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA JUNE 20, 1994 C¡tf-( . 15 3 . I. INTRODUCTION The Community Redevelopment Agency of the city of Santa Ana- (the "Agency") has prepared this report pursuant to sections 33445 and 33679 of the California Community Redevelopment Law (Health and Safety Code sections 33000 et seq.). This report sets forth the factual basis for the making of certain findings that must be made in order for the Agency to fund a portion of the cost of the construction of a Recreation Center to be located in Rosita Park (the "Park"). A map showing the location of the Park is attached hereto as Exhibit A. It is proposed that the Agency would contribute up to $2,000,000.00 to the cost of construction of the Recreation Center. Agency funds from the Santa Ana North Harbor Boulevard Redevelop- ment Project Area (the "Project Area") would be used for this purpose. . This report includes information on the following topics: (1) an estimate of the amount of tax increment funds or other Agency funds to be used to pay for the construction of the Recreation center; (2) the facts supporting the determinations required by section 33445 of the California Redevelopment Law to be made by the Agency and the city Council; and (3) the redevelopment purpose for which tax increment or other Agency funds are being used to pay for the construction of the Recreation Center. II. ESTIMATED TAX INCREMENT OR OTHER AGENCY FUNDS TO BE USED TO PAY FOR CONSTRUCTION OF THE RECREATION CENTER The estimated cost of construction of the Recreation Center is $3.1 million. The city has assembled $1.1 million in funds from the following sources: Community Development Block Grant and State Recreation Grant funds. There is a shortfall of approximately $2,000,000.00. The Agency proposes to contribute up to $2,000,000.00 in funds from the Project Area to make up this shortfall. The Agency may use any funds then legally available for the purpose, including but not limited to, tax increment payments and proceeds from the sale of bonds. III. DETERMINATIONS REOUIRED BY SECTION 33445 . section 33445 of the California Redevelopment Law requires that certain determinations or findings be made by the city Council and the Agency before the Agency agrees to pay all or part of the value of the land for and the cost of the installation and construction of any building, facility, structure, or other improvement which will be publicly owned. Those determinations are: 2 3 16 . (1) That the buildings, facilities, structures, or other improvements are of benefit to the project area or the immediate neighborhood in which the project is located, regardless of whether the improvement is within another project area. (2) That no other reasonable means of financing the buildings, facilities, structures, or other im- provements, are available to the community. (3 ) That the payment of funds for the acquisition of land or the cost of buildings, facilities, struc- tures, or other improvements will assist in the elimination of one or more blighting conditions inside the project area. A. THE RECREATION CENTER IS OF BENEFIT TO THE PROJECT As shown on the map attached as Exhibit A, the Park is less than one-half mile outside of the Santa Ana North Harbor Project Area (the "Project Area"). Due to its proximity to the Project Area, the Park serves residents of the Project Area. . Over the last 15 years, the Park has been underutilized. During the period of time that the Park has been underutilized, the crime rate in-and around the Park and in a portion of t~e Project Area has increased according to Santa' Ana police Department statistics. It is anticipated that the crime rate in and around the Park and in the affected portion of the project Area would decrease if the Park were fully utilized. A Recreation Center in the Park would contribute to greater utilization of the Park by making it possible to use the Park for various activities in the evenings and without regard to the weather. Park amenities will include a recreation center, gymnasium, swimming pool, play equipment area, picnic area, and security lighting. construction of the Recreation Center will be of benefit to the Project Area because it will (1) improve park facilities available to and used by residents of the Project Area, and (2) by increasing utilization of the Park, decrease the opportunities for criminal activity in a portion of the Project Area. B. NO OTHER REASONABLE MEANS OF FINANCING THE PUBLIC FACILITIES AND IMPROVEMENTS IS AVAILABLE TO THE COMMUNITY . In California, municipal or tax-exempt financing has traditionally taken one of two basic forms: general obligation bonds or revenue bonds. General obligation bonds pledge ad valorem 3 17 3 . c~.- . property taxes without limit as to rate or amount; hence they were highly regarded by investors and commanded the lowest borrowing rate because of their minimal credit risk. However, the affirma- tive vote of two-thirds of the people is required to issue such bonds. Due to the costs involved in such a bond issue, this type of financing is not feasible for the purpose of financing the construction of the Recreation Center or meeting the shortfall in funding for the Recreation Center. Revenue bonds are payable from a specific revenue source other than property taxes. These bonds have been used extensively for financing water, sewer, or other utility systems, toll bridges and airports, where revenues of the enterprises are reasonably well assured. Issuance of conventional revenue bonds generally requires a simple maj ori ty vote. However, the Recreation Center will generate little, if any, revenue, making revenue bond financing infeasible. The city's general revenues are another possible source of revenue for construction of the Recreation Center. However, since the passage of Proposition 13, severe strains have been placed on the city's revenues. Most devastating of the causes for revenue curtailment has been the withholding from cities by the state of California of revenues traditionally subvented to local government. Some of these sources simply have been commandeered by the-~tate. Other sources of subvented revenues have been withheld on an allegedly temporary basis, but there is no certainty that the reduction of the subvention stream might not be permanent. The fact of diminished revenue, and the need to provide a suitable level of services, dictate that the City explore alternative means of financing public facilities while maintaining an adequate level of vital services with its General Fund revenues. Tax increment revenues or tax allocation bond proceeds are the only viable method of making up the shortfall in funding for the construction of the Recreation Center. Tax increment revenues are allocated annually to the Agency to the extent of Agency indebtedness, and are paid from the portion of taxes in excess of the assessed valuation of the property within the Project Area in the base year of the project. Tax allocation bonds are payable from and secured solely by tax revenues to be derived from the Project Area and the use of such revenues is appropriate since the project Area will be benefitted. C. THE BLIGHTING CONDITION WITHIN THE PROJECT AREA THAT THE EXPENDITURE OF AGENCY FUNDS WILL HELP TO ELIMINATE A high crime rate that constitutes a serious threat to the public safety and welfare has been recognized by the Legisla- ture as an economic condition that causes blight. Health and Safety Code § 33031(b) (5). The construction of the Recreation Center and the greater utilization of the Park that is expected to 4 3 18 . ..8 . result from the availability of the Recreation Center will help to eliminate the blighting influence of criminal activity. IV. THE REDEVELOPMENT PURPOSE FOR WHICH TAX INCREMENT FUNDS ARE BEING USED TO PAY FOR THE RECREATION CENTER. As discussed above in section III. C. of this report, the funding of the Recreation Center will assist in the elimination of blight. In addition, section 100, subdivision 10 of the Redevelop- ment Plan for the Project Area states that one of the major goals of the Redevelopment Plan is the provision or replacement of various public facilities and improvements, including, but not limited to, parks. Further, sections 405,406 and 407 contemplate the use of property within the project Area for park and recre- ational purposes and section 412 of the Redevelopment Plan authorizes the Agency to permit thè maintenance, establishment or enlargement of public parks and recreational facilities. centcit2.rpt 5 19 3 ~l . ",-,': . ,; ~_-~.-L£:;' /{. ....~ \ " '0 " ~ \. ' ROStTA \ Ii \ -,::'~~:: ;' ',,: '.., '::~~J .. ~,.-,',:; .:.,..x:\,3 ,",J;'Pß;'!~'o-' PARK' ~ ~ '\ ~ '. \ ¡ ~ t / / / / ",'0" ~I ì~ STREET ~ ~ EXHIBIT A 20