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REDEVELOPMENT AGENCY AGENDA ITEM NO. 4

Meeting Date: March 8, 2005

Subject/Title: Public Hearing and adoption, by resolution, of the Five-Year Implementation Plan for the Merged Brentwood and North Brentwood Redevelopment Projects

Prepared by: Gina Rozenski, Redevelopment Manager

Submitted by: Howard Sword, Director of Community Development

RECOMMENDATION
Hold a public hearing, hear testimony, and adopt by resolution, the Five Year Implementation Plan for FY 2004/05 to 2008/09 for the Merged Brentwood and North Brentwood Redevelopment Projects.

PREVIOUS ACTION
The Brentwood Redevelopment Agency adopted its First Five-Year Implementation Plan in 1994, and its Second Five-Year Implementation Plan in 2000.

BACKGROUND
AB 1290, sometimes referred to as the “Redevelopment Reform Act” of 1993, became effective in January 1994. AB 1290 requires every redevelopment agency in the state to adopt a Five-Year Implementation Plan. The plan must set forth the agency’s goals and objectives for its project areas for the five-year period; identify programs, potential projects and financing methods to achieve those goals and objectives; and address the agency’s efforts to provide affordable housing in the project areas. The housing component of the Implementation Plan shall focus on the Agency’s Housing Fund (20% of annual tax increments) and how it will be used during the five-year period, as well as identify inclusionary, replacement housing and targeting obligations and compliance.

This public hearing and the attached Five Year Implementation Plan for FY 2004/05 to 2008/09 comply with the AB1290 requirement. This public hearing and the opportunity to review and comment on the Five-Year Implementation Plan was noticed in the Brentwood Press and was posted at public locations within the Project Areas.

While the Five-Year Implementation Plan meets all the reporting obligations mandated by AB 1290, for summary purposes, this staff report will address only the highlights of the Implementation Plan.

CONSIDERATION
Goals, Objectives, Programs and Projects
The goals and objectives of the Agency during the five-year period of the Implementation Plan represent a comprehensive economic development and infrastructure improvement approach to redevelopment based on a mix of public actions and private activities. The major focus for the Agency shall be to create a Downtown that is a community center for its residents and showcases the City’s strongest assets to visitors; to redevelop and revitalize the Brentwood Boulevard Corridor as the gateway to the City that provides multiple housing products and opportunities, employment centers, neighborhood retail shopping and improved infrastructure; and to financially support a public improvement program throughout the Merged Project Areas. To achieve this, the Agency plans to focus on the following goals and objectives over the next five- year period:

1. Continue alleviation of blighting conditions remaining in the Project Areas (such as incompatible adjacent land uses, Davis Camp and Hiway Rooms).
2. Improve urban structure by facilitating, financially participating and encouraging creation, expansion and retention of local commercial, retail, industrial and residential opportunities to maximize the leveraging of tax increment, create local jobs, enhance sales tax generation, and increase property values (such as Sunset Industrial Complex, Sand Creek Business Center and Coppergate townhomes).
3. Facilitate and assist the preparation and implementation of goals, objectives and recommendations of approved specific plans, economic strategic plans, development policies and design documents (such as Downtown and Brentwood Boulevard Corridor Specific Plans and the Downtown Economic Strategic Plan).
4. Facilitate private investment and revitalization through improvement and installation of public infrastructure to reduce congestion, improve public safety, and accommodate long-term growth and development patterns (such as extension of O’Hara Avenue to Second Street, and Walnut Boulevard widening).
5. Facilitate the provision of community facilities that will encourage and strengthen economic, civic and social viability (such as police station and community playhouse).
6. Contribute to economic development and marketing activities that benefit, preserve and support economic revitalization (such as marketing program partnership with Chamber of Commerce and other Downtown special activities and functions).
7. Continue to increase, improve and preserve the supply of affordable housing (such as Villa Amador, Brentwood Senior Commons and Sycamore Place II).

The principal programs that address the achievement of the goals and objectives are identified in the Implementation Plan as follows:
Public Improvement Program
Community Facilities Program
Commercial Development Assistance Program
Residential Development Assistance Program
Economic Development and Marketing Program
Affordable Housing Program (20% Housing Fund)

Projected Funds for the 80% Programs
The primary source of revenue available to the Agency to fund its programs and projects has been and will continue to be property tax increment and bond proceeds. After subtracting the Agency’s debt, state-mandated housing set-aside funds and other obligations, the Agency expects that approximately $12.2 million will be available during the Five-Year Implementation Plan period for its programs and projects (refer to Table II-3 on Page II-11 and Table II-4 on Page II-13). Based on current capital improvement projects, and the Agency’s annual discussions of project priorities and reservation of bond proceeds for specific projects, staff recommends the following funding levels (refer to Table II-1 on Page II-9):


Public Improvement Program $5,503,810
Community Facilities Program 3,440,000
Commercial Development Assistance Program 2,040,000
Residential Development Assistance Program 900,000
Economic Development & Marketing Program 250,000
Contingency for unanticipated expenditures 108,190
$12,242,000

The assessed property values in the Merged Project Areas are increasing at a level that is likely to support the issuance of another bond in the next few years to assist in financing the five-year goals and objectives and to implement the programs and projects described in the Implementation Plan. The total assessed value of the Merged Project Areas increased 15% in FY 2002/03, 9% in FY 2003/04, and 16% in FY 2004/05. Preliminary financial analysis estimates that a bond of approximately $16 million could be issued by the Agency within the next five years.

Housing Component
The Housing Component of the Implementation Plan summarizes the Agency’s housing obligations pursuant to Community Redevelopment Law. It sets forth housing goals and objectives for the five-year period, presents estimates of revenues and planned expenditures, and explains how the stated goals, objectives, programs and projects will produce affordable housing units to meet State obligations. In addition, redevelopment agencies must forecast housing production within project areas during the next five-year period, and also for a ten-year period and for the life of the redevelopment plans.

Inclusionary Housing Obligation
Redevelopment agencies are required to cause at least 15% of all housing constructed within a redevelopment project area to be affordable, with at least 40% of 15% to be affordable to very low income households. This is known as “inclusionary housing.” The Agency reports that 1,202 units have been constructed in the Merged Project Areas since the adoption of the Project Areas through FY 2003/04 (refer to Table III-1, Page III-4). This created the obligation of 181 affordable units (15%), of which 73 units (40%) must be affordable to very low income households. To date, 69 units have been produced of which 60 are affordable to very low income households (refer to Table III-2, Page III-5). The Agency has a deficit of 112 affordable units, of which there is a deficit of 13 very low income units. However, over the past 24 months the Agency has entered into agreements with for-profit and non-profit housing developers for the production of additional affordable units that are not yet occupied. Through these actions, the Agency anticipates 143 very low and 55 low and moderate income units will be completed by 2006, which will fulfill and exceed the Agency’s inclusionary housing obligation.

The Agency plans to meet its “historical” housing obligations as described above. Furthermore, as described in the Housing Component section of the Implementation Plan, the Agency expects to meet and exceed its inclusionary housing obligations over the ten-year period and over the life of the plans.


Programs and Projects for the Agency’s Housing Program
To carry out the Agency’s Housing Program and to comply with California Redevelopment Law to create, improve and preserve affordable housing, the Agency has four principal housing programs identified in the Implementation Plan as follows:
New Construction of Owner Occupied Units
New Construction of Rental Housing
Substantial Rehabilitation
Health & Safety Grant Program

The Agency has actively participated in creating affordable housing opportunities through its New Construction Program for both owner occupied units and rental housing. Two new programs are recommended for Agency’s consideration and approval: Substantial Rehabilitation and Health and Safety Grant Program.

A home rehab loan program is currently administered by the Contra Costa County Community Development Department for all homeowners in Brentwood. Even though the program is advertised, there have been only three rehab projects in Brentwood over the last four years, totaling $79,705. Staff believes the reason for the lack of participation in this program is due to the low loan maximum of $40,000 per household (County recently increased the loan maximum from $25,000 to $40,000). As many of us know from renovating our own homes, $40,000 is not representative of today’s market and costs for rehabilitation needs. Many of the older neighborhoods in Brentwood are located within the Merged Project Areas. Rehabilitation of these older homes routinely consists of new roof, window replacement, bathroom and kitchen update, handicap accessibility, interior and exterior paint, repaired driveways and walkways, and code-compliance plumbing and electrical. Staff recommends the Agency consider supplementing the County’s home rehabilitation loan program in an effort to fund more comprehensive rehabilitations and to preserve the existing housing stock in our community. The Agency could also supplement the outreach and marketing efforts of the County’s program to better serve our older neighborhoods.

The second new housing program staff recommends is the Health and Safety Grant Program. In many cases, simple emergency repairs are needed that are unaffordable, especially to our senior citizens. Routine repairs such as replacement hot water heaters, grab bars, wheelchair ramps, seismic safety, weatherization and smoke detectors can be overlooked or postponed by homeowners when monthly income is used primarily for medical costs and basic needs. An annual funding of $25,000 during the last three years of the Implementation Plan period is proposed for this program.

Both new housing programs will be brought to the Agency at later dates for formal approval of the programs’ policies and appropriation of funds.

Projected Funds for the Agency’s Housing Program
The primary funding source for the Agency’s affordable housing activities will be the 20% portion of annual tax increment revenue deposited in the Agency’s Housing Fund. The Housing Fund balance at the end of FY 2003/04 was $1.6 million. After adding in the estimated 20% tax increment revenues over the next five-year period and subtracting administrative expenses to administer the housing programs and activities, the Agency will have approximately $5.4 million available for its Housing Program during the Implementation Plan period (refer to Table III-4 on Page III-8).

To carry out the Agency’s Affordable Housing Programs, staff estimates expenditures for housing activities of approximately $5.1 million (refer to Table III-5 on Page III-9). These expenditures include the already-approved appropriation of funds for specific housing projects.

Targeting Requirements
Effective January 1, 2002, by AB 637, the Agency’s Housing Fund must be spent to assist households in at least the same proportion to Brentwood’s housing need by income and age level. Compliance with targeting requirements is measured based on dollars spent over the ten-year compliance period ending 2014.

As reported in the Implementation Plan, the Agency has met and exceeded its income targets, but has not satisfied its age targets. Since the current compliance period ends 2014, the Agency will continue to monitor its Housing Fund expenditures in order to comply with the requirement for minimum expenditures on age restricted housing.

Summary
The Implementation Plan can be viewed by the Agency as its five-year business plan. The Agency has successfully achieved many of its goals and objectives by the implementation of programs and activities over the last ten years. Through the adoption of the Five-Year Implementation Plan for 2005-2009, the Agency shall be setting a course to continue its mission. The Agency will have sufficient financial resources and opportunities to implement the identified programs to further achieve its goals and objectives, and to meet its housing obligations. If necessary, the Implementation Plan can be amended at any time to include a likely project, and the Agency’s annual budget can be modified to meet future budgetary needs and new program goals.

FISCAL IMPACT
There is no fiscal impact to hold a public hearing and hear testimony on the Five-Year Implementation Plan for 2005-2009.

Attachment: Five-Year Implementation Plan for FY 2004/05 to 2008/09
Resolution No. _____

AGENCY RESOLUTION NO.

A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD APPROVING AND ADOPTING THE IMPLEMENTATION PLAN FOR THE MERGED BRENTWOOD AND NORTH BRENTWOOD REDEVELOPMENT PROJECTS
WHEREAS, Section 33490 of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.), requires that each five years the Redevelopment Agency of the City of Brentwood (the "Agency") must adopt a Five-Year Implementation Plan for its redevelopment projects, and that at least once within the five-year term of the implementation plan, shall conduct a public hearing and hear testimony of all interested parties for the purpose of reviewing the redevelopment plans and the corresponding implementation plan for the redevelopment projects and evaluating the progress of the redevelopment projects; and
WHEREAS, as required by Health and Safety Code Section 33490, the Agency previously prepared and adopted an AB 1290 Five-Year Implementation Plan for 2004/05 to 2008/09 (the "Implementation Plan") pertaining to the Merged Brentwood and North Brentwood Redevelopment Projects (the "Projects") containing the specific goals and objectives of the Agency for the Projects, the specific programs, including potential projects and estimated expenditures proposed to be made during the five-year term of the Implementation Plan for the Projects, and an explanation of how the goals and objectives, programs and expenditures will eliminate blight within the Project Areas and implement the requirements of Sections 33334.2, 33334.4, 33334.6 and 33413; and
WHEREAS, the Agency has reviewed and updated the Implementation Plan and, as required by Section 33490 of the Community Redevelopment Law, a public hearing was held by the Agency on March 8, 2005, for the purpose of reviewing the Redevelopment Plans and the corresponding Implementation Plan for the Merged Brentwood and North Brentwood Redevelopment Projects and evaluating the progress of the Redevelopment Projects, and the testimony of all persons interested in the matter was heard; and
WHEREAS, notice of the public hearing was published in the Brentwood Press, a newspaper of general circulation in the City of Brentwood, and was posted in at least four (4) permanent places within the Project Areas, as required by Section 33490 of the Community Redevelopment Law; and
WHEREAS, the proposed Implementation Plan, together with all information pertaining thereto, was made available for public inspection prior to the public hearing; and
WHEREAS, the Agency has reviewed and considered the proposed Implementation Plan;
NOW, THEREFORE, BE IT RESOLVED that the Brentwood Redevelopment Agency of the City of Brentwood hereby approves and adopts the updated Five-Year Implementation Plan for the Merged Downtown and North Brentwood Redevelopment Projects, in substantially the form currently on file with the Agency Secretary and presented to the Agency at the public hearing held on March 8, 2005, subject to any further minor, technical or clarifying changes that may be approved by Agency Counsel.
PASSED, APPROVED AND ADOPTED by the Brentwood Redevelopment Agency of the City of Brentwood at a regular meeting held on the 8th day of March, 2005 by the following vote:

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