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HomeMy WebLinkAboutRDA Min 1971-11-01 "1- ~ll-11"~J':' 71 ;- " .. ......c ~ Seal Beach, California November 1, T971 The Redevelopment Agency met in regular session at ~:45 p.m. ~Iith Chairman Covington presiding. The meeting Vias called to order with the Salute to the F1 ag. ROLL CALL Present: Chairman Covington ',lernbers Lindstrom, Jackson Scheib1 auer One Absent: Vacancy: A 1 so present: Eugene Jacobs, Special Counsel' Robert Myers, Executive Director-Secretary, and Hrs. Hei r , , APPROVAL OF MINUTES The Agency did not accept the minutes of October 18, 1971, preferring that they be verbatim minutes. The fol1o~ling is'verba'tim accounting of the I/ovember 1, 1971 , Agency meeting:, . EXECUTIVE DIREcToRS REPORT_, The Executive Director read~he Status Report which is included with these minutes as a matter of record. Lindstrom: Mr. Ch~irman, just to keep the record straight, I would like to have it entered that the so~called Irado Agreement is the first ref.er.enc~__that_tb,is-Agency-haS-bad~_, that being another part,icipation agreel!1ent. '~~ers: That came as a new one.to me because I had looked at that as being the Sibarco Agreement which was also signed but there v/ere apparantly subseque:nt changes. I \ Lindstrom: Well, Arco, Sibarco, whatever, the name is, this' is the first time reference in your report that this Agency , has had of any other participation agreements other than the \, Suburbia and the R & B. The initialed agreement between i I Mr. Risner and the Pacific Electric... ' , ~~ers: Well, there was, we have discussed the proposed.. ,or what was apparently an agreement that,was supposed be~een the Pacific Company and the O'Sullivan's and there \'/ere ' , questions asked quite some time ago about that. The fact is that there is a resolution of the Redevelopment Agency that authorized the execution of that agreement. and Exhibit "A", the agreement is attached... the fact is that there is no "Exhibit A" and there is 110 signed agreement.. .so I'm in the position of saying that we have no executed agreement ' whatsoever \~ith ar'''1:1e, other than ~/hat I have listed hereu and the Irada agreement..so called. .has never probably been mentioned because it was a very simple straight fon~ard service station project,a11 it amounted to was the approval of the plans. Lindstrom: Well, even though it only amounted to approval of p1ans...by a previous Agency V/hich \'/aS the City COllocl1. W~en this Agency specifically asks...to be inforw2d of all " .~ - . I ,I . I j h_ ,..._ .___ I I I '-' , , 11-1-71 "~1'''1[ , Page Two - Redevelopment Agency Minutes '- ~vember 1,1971 I \ \ I \ I i I participation agreements...\ihy l~ere ~Ie not inforned? That's my questi on and I I d 1 i ke that to be a matter of thi s record that this Agency has r.ever been infonned of that one participation agreement. ' Covington: Of course, to be fair, I,lr. Lindstrom, we should point out that our request....for that information was made, I guess, last November...before Mr. Myers took over. Lindstrom: That's true...even though, even though...even after Mr. Myers took over, I believe we made that request.. if there was anything else in the former City ~~nager's records that we were not aware of that he may have become ' aware of. He may have-just discovered it but I'd still like to have it a matter of'record that this is the first time this Agency's been informed of that participation agreement. It's that simple. ' Covington: I think that r1r. Myers has already indicated that some of the background because apparently there's no documentation indicating the time and circumstances under which the Arco became the Sibarco and the Sibarco became the Irado Agreement. - Is that correct, Bob? , , Myers: There was the first agreement, as I recall at least, with Arco...and that became Sibarco and then it became Irado and I thfnk that..... --..- . , Covington: You imply, then, that you were unable to find then, any'documentation as to the transition in:name from one to the other? At least you found out about it. MYers: I think thatTweiif-iiifci'-rCi-ntt1e more-rndeptli -than I had previously on my own, rather than othen~ise, but as nearly as I can tell, at this point, whether it has been my omission or not, and I admit that I had omitted it because it isn't an active agreement, we were discussing active agreements. Bu~ the fact is that the only agreement that I could find that we've entered into...regard1ess of whether I'm,1n error or not...are those three. ~ Covington: Do any of the Ag~ncy members have a~ comments on the projects as they have been described? Lindstrom: The only comment I have is... has there been any discussion with the City Manager as to the timetable on , First Street extensions~ Myers: In terms of months,'no, we have it budgeted for this year. A lot of this of course, is dependent upon our ability to acquire 'the property without a lengthy condemnation proceeding. That would be the only question. We're dealing with one, tl'/O, three, perhaps four property o~/ners. That would be, I believe, the East Naoles Land Company that owns what used to be the P. E. Right of Way... that's just South of the R & B Development...we'd be dealing with the Department of Water and Power....w~ would be deaJing with the Standard Oil Company and perhaps Humble Oil Company. So very much depends upon whether we have successful negotiations or have to go to condemnation and ,how lengthy that would be...but its budgeted for the 1971-72 fiacal year. , , . " ... , , -~ :H~2 ,11-1-71... , ~'I .- . . , Page Three - Redevelopment Agency Minutes - Nov~mber 1, 1971 And lie have approval from the County's High~/ay !lid Program for this project so they I-lill be contributing fifty percent to~/ard the acquisition as i.t develops. L iridstrom: The approval from the County I'/ould only take place if its a four land through h'ighl'/aY, right? r~ers: Yes, that's true...it can be constructed in stage cons tructi on. . . ' Lindstrom:' True, but their funding liould only be contributed on a four lane highway.. Hyers: Yes, that's what the General P1 an calls for.... I tlli nk I stipulated that in the report. Lindstrom: And the proposed alignment directly into a two ' lane First Street? According to the General Plan as it now exi sts? Myers: Yes, although I would anticipate that First Street would eventually be widened....for the mere accomodation of beach traffi c. ' Covington: To the best of my recollection, I fee~ that the Status Report has responded to most of the changes that were... or additions that were aske~-for. ' Jackson: We have not' heard anything from the owner of the P. E. Right of Way? r~ers: No sir. As you know, the letter went out over the signature of r'lr. Covington... the request was to contact us , ' immediately...and still no indication other than that tlley would, have completed their appraisal, October 22nd...and I have received nothing. Lindstrom: By that you mean the Agency, or the Secretary of the Agency, or do you mean the Ci ty r'lanagers offi ce or the I City Counci 1. I~yers: I mean me personally. If-any of you have beem Jnformed, then you haven't, informed me. Covington: It was the City Hall address with my name~ so i haven't received any response at my home or City Hall. , ' Lindstrom: I was just trying to get at the semanitics of, words here...The Agency, the legislative body, and uS...we and w~o and what...nail things down really. Be a little- gore specific rather than ambiguous. , .. Covington: Well, if no member of the Agency has any additions or modifications to the Status Report as they have been presented by Mr. Hyers, I think that we should just accept it by order of the Chair and ask that ccpies of it be ma~ , available to members of the City Council who will be s:itting as the Agency at the next time they meet...that perhaps some , adtlitiona1 copies 110u1d be available for distributiol) to the public at the next meeting. It presents a summarized form of what has been accomp1 i shed by the Agency and I'/hat has been initiated by the Agen~y while we have been sitting as Agency -. I ." ." , I 'I ,J I I I '~ I , j 11-1-71 :1~3 Page Four - Redevelopment ^g~ncy Minutes - rrovember 1, 1971 \ \ \ \ I I I I I I , , members...and permits the opportunity for whatever momentum presently exists in the Agency and under&tanding that it was derived by Agency members, in continuous form, to be transmitted to the next group of individuals who will sit as the ^gency,....namely the Council, the City Council. They are at a greater advantage that we inherited in turn last October...I remember, when we first sat on the Agency we had to in a sense, ressurect the body from a series of bones, ~ little flesh, not.very much blood and after about a year, we have a certain amount of background understanding and a certain momentum ... in terms of change in direction of the plan whilE! still using the alternative provisions of the original plan so that the Agency plan as nOl.' directed is in more keeping with the consensus of what the public wants. ' That ~s the maximum and optimum acquisition and development of the land within the scope of the Agency plan for public use. ' Lindstrom: Before you make that a minute order of the Chair here...to ac~ept the Secretary-Treasurer's report vcrbatim... I think that you ought to clear the air as far as this Agency is concerned that we had no part in the original Suburbia ' \ Agreement or R & B Agreement ~,hich started the apartmcnts or First Street extension... this was a carry-over \1hich we inherited.. and ~,hich I believe former City Councilmen took into consideration in appoi,nting citizen Agency members. , , --..-- Covington: Yes, that's a good point, r~r. .Lindstrom, I ~/ou1d certainly agree with you. ,/' Lindstrom: By your own wording a few minutes ago, you intimated that the whole Agency, including yourself as Chairman, condone this sort of action.'-----'. Covington: I apologize if I indicated condonment. I tried to , indicate that we had constructed the background information of - what had been accomplished and what has, been dene has been done... we also try to indicate the changes in direction that were initiated during our term of office and the mon~ntum, the direction toward which those changes are presently moving towards. This is then ~oth a map and a vehicle that the next group of ' individua1s,.name1y the City Council inherit. They have then the opportunity to continue to use the momentum that has already becn generated to establish the goals that have been modified.. or to go in some other direction...but at least they will have an opportunity to begin moving...or continue moving when they take over...which is perhaps quite a bit different than when we., the challenge that we had over a year ago...when everything had . to come to kind of a dead stop...be researched and then a new direction launched. If we have agreement, so ordered. Covington:, The next item on the Agenda, old business. ,Do we have any items under old business? ' ... - ~ " , Lindstrom: The only items under old business...wou1d quite probably be a reaffirmation of some of the points of the. Redevelopment Law which were under contpntion the last time... I believe our Mr. Smith,' one of our City Councilman, was in the audience and made some comments that was his interpretation of the 1a\~. I believe we all had our ovm -int\lrpretation of the' 1aw...that is the difference between the legislative body acting as the Redev~l opment Agency... the po\~~rs that they had versus the . " , -.- .~. j , 1 : 11-1-71 ,-.. :1 ~4 ,-- , , . -~ - . j : ! "," Page Five - Redevelopment JI,g~ncy 11inutes - ~>,,,rnb(!I' 1, 1971 powers of a citizen group ap~ointed by a legislative body as admin'lstrators of an Agency...I think thclt these are the points that should be defined and confirmed as far as ald business is concerned. i I I \ \ \ I I J I Covington: For the benefit of the audience, for those of you or most of you who were not present at our last meeting...the last meeting ~/e asked that Mr. Jacobs, the Agency attol'ney, who Ylas also instrumental in helping form the Agency originally for this City and l~ho is one of the foremost authorities on Redevelopment' Agency Law in the State...and who is on a retainer to this Agency among many others, I believe twenty-odd...is present at the meeting tonight so that tie could obtain from him, hopefully straightforward anStlerS" to any questions that might be asked of him, by either members 'of the Agency or by any members of the, audience.....P1ease do so. Perhaps you would like to ask one of the first questions, 11r. ,Lindstrom. , Lindstrom: Mr: Jacobs, the City Council sitting as'a legislative body....isn't it true that they not only have the full p0l1er of the Agency because they constitute the legislative body in the City? Jacobs: You mean, while there is a separate Board? Lindstrom: Right. I ------., Jacobs: No. ,--- Lindstrom:' Well, I mean they sit as the City Council, but they also sit as the Redevelopment Agency. Jacobs: You mean there-fs no'hdepcndent Agency~ Lindstrom: Right. I Jacobs: Yes, but they are two separate distinct legal e~tities. Lindstrom: Tl'/O separate distinct entities, but, in real ity they can act as a body....isn't that right? , Jacobs: No 11ay... Lindstrom: When they are the legislative body as well as the Agency. .' ' Jacobs: They have to conform to the laws of the Agency, just like a separate body would. Its just a different board of directors. There is many examples of this where parking authorities, housing authorities. City Councils can sit as a Board of Directors for those. They cannot willy-nilly in one meeting, act as a Redevelopment Agency one moment, park authority the next, City Council the next,...they have to call appropriate meetings for each.:..either by laws setting up regular meetings or establish special meetings with special notices of those special meetings. They cannot just at one moment exercise all of those powers as a unit~ I , . Lindstrom: Okay, now, the City Council as the legislative body cannot delegate their legislative authority over the City to a " , '. I I I , " 11-1-71 19s Page Si,x - Redevelopment J"g'~ncy l'linutes - iwvG..ber 1, 1971 . \ \ \ I \ bunch of citizen directors I)f the Agency they simply delegate the administrative authority of the Ager,cy, isn't this true? Jacobs: Under the 1aw'they can give it back to a separate board if they desire. Lindstrom: They do this though when they don't define what the ground rules are, is that correct? Jacobs: ,Hel1...:they don't define the ground ro1es...the ground rules are established by the State Law....l,/hfle they are the Board of Directors they operate under the State Law, the Redevelopment Plan, ,if it's adopted, and so forth. If they have a separate board, then they have to operate themselves under the State law. It should be remembered that the Redevelopment Agency and the City Council operating under the redevelopment 1aw.,..are state agencies... for those purposes at that time, and different laws apply situations where they are not operating only under their ordinances and charters. '. Covington: If I could rephrase the question...is it true that an independent citizen agency board is established in a city...that has set up a redevelopment agency then the independent 'citizen members of the agency cannot pursue autonomous goals or cannot, pursue autonomously goals that are different from or commit money for reasons othe~ trr~n the original goals for that agency. - '--. Jacobs: The Redevlopment Agency board in. the first p1ace,~cannot do anything unless the Planning Commission...the City Council creates it...creates the project area, creates the boundaries, creates the preliminary plan and then have the Agency go fon~ard and prepare a plan...,.: tll,J,~at c~~g,,_the Redevel.ppJ!!.eItt_Agency, is merely an administrative body to prepare the plan...and bring it back to the Council, even though they are a board themselves at that time, the plan has to come back to the City Council for adoption pursuant to ordinance. After that then the Redevelopment Plan becomes the constitution in effect of the Agency, for th~t area and you can't do anything inconsistant with that plan or beyond the po\~ers delegated to you in that plan, ~/hether you're a Redevelopment Agency or the City Council as a separate board or the City Council operating as the board so. ' Covington: Constituted either way, as independent citizens or as City Council, you cannot make any significant changes to the agency plan nor can you expend money or place bond issues for any projects or goals that were not consistant with the ' original goals or plan once it's approved. Jacobs: Except if the plan is approved through an amendment procedure, that, of course, would be easier to change when both powers' are assigned to the same people...they can't do it automatically, they have to go through a series of public hearings and series of notices. In either event, however, it ~ti11 has to go to' the Planning Commission and the series of procedural steps so that the goals cou1d'be changed. Lindstrom: I have one question. As a legal eagle for redevelopment agencies and being an authority on redevelopment law...Do you, believe that the Redevelopment Agency is best . ~ I' ,. . - ,~.J. -, ,.,12-1-71, 1~6 . , Page Seven - Redevelopment Agency ~Iinut!'!:; - November 1, 1971 constituted of electorate citizens \~ithollt an ax to grind to devote full time to an Agency or do you 'bel ieve that ',it should be constituted by a legislative body? i ! I \ \ I I \ \ I I ~ Jacobs: I think in the larger cities...San Francisco, Los Angeles, San Diego. .so forth, separate agencies generally \~ork very \'/ell. However, in recent times in the last three or four years, ' independent citizen boards are becoming a thing of the past, the City Council's themselves have generally been the Board of' Directors. If they have a separate board, the have done so only with a very tightly knit contract or some other types of ordinances... or sometimes even language in the redevelopment p1an...that tightly co~tro1s the redevelopment agency. It hit a low point in a city five or six years ago when the Agency was so independent they refused to tell the Mayor of the City what the salary of the executive director was. from that moment on Redevelopment Agencies as separate entities have somewhat been on the way out, because that kind of relationship with the City was not being accepted by the City Councils ... and then last year, I think some six or eight months ago, ~he law was changed to where there is no ques~ion about the fact that the City Council can take the board back to itself, so therefore, the ultimate power is in the Board of Directors. The \ only emphasis nO\~ in- se'parate board being created.. .most agencies being created now are not separate boards...the on1y reason where separate boards are created are in most insta~ces where a legal vehicle is set up so that the City Council can assure itself that it has a separate entity very much like the Planning Commission, with controls. I personally think that the political, problems that have happened in cities with separate boards with no sllch controls have led to a very bad situation... forgetting for the moment that you may have been right or wrong...so my , recommendations normally is that it not be a separate board, except Itith some set standards ilnaer-~Ih'ich-thn-b-oal"a-iS-to. ' operate. Your circumstances and Cerritos were created almost instantaneously without taRing into' account all the various problems. Covington: Were you consulted, for example, last fall prior to... at the time that the Council membership of the Agency was changed then turned, over to a citizen members. I ,I Jacobs: No, I was not. , Covington: Are you saying then that most instances then in recent past and future, where independent agencies have been established, regardless of the size of the city, that the definite trend is then to so establish an agency then with greater control and supervisjon by the Council on the output of those then individual agencies. Jacobs: Yes, where a'separate agency makes sense and comes about generally is when it has a greater case 10ad...either two or three projects and maybe fifty, sixty, seventy pieces of land... is under deve10pment...where the whole role becomes almost heavier in some cities than normal processes...and it becomes too big a load. That's where the,separate agency does come about..and. I certainly the City Coundl's do not want to be that much involved with detail on a day to day basis. They prefer to send it out like they would the Planning Commission or the Recreation Commission...some other form of commission under those circumstances. . ,:. "':q -. ..... 11:'1-=71- -1',n1Ai '.yt\ h~ . " Page Eight - Redevelopment Agency f-linutes - 11ovem!ler I. 1971 I ,I I Other circumstances have to do with the fact that politically sometimes its very unpopular and they prefer to have a separate ~oard as a buffer. Of course, that's with a very close relationship with that board. Covington: They don't want to spend the time in detail but just that they can't afford... ;(' , . Jacobs: Some absolutely 11il1tput ft out to separate board.,..they. don't want a separate board, some instances they do automatically in those cases, hO\~ever. they \'/ant to make sure the kind of thing that did happen in the City I referred to, where the board felt that they were so independent from the City Council they did not even have to respond to the, City Council's request on salary... They don't \1ant that kind of thing to ever happen again. ' Covington: So then.to relate back to Seal Beach, the original Agency \1aS constituted 11ith the expectation that Councilmen would always be sitting as members and therefore the contracts and controls and the checks and balances that might have otherwise been placed in the original ordinance creating the agency were not present. Jacobs: One doesn't usually place it in the ordinance. its either in the redevelopment plan or...you have a contract we drafted, typical kind of contract that we have used but because it was the same board, that ~ontract deals only with the financial end of it. Of keeping the City separate and distinct from the agency for financial and accounting purposes. That was, . worked out in detail, usually that's done on the outside where a separate board is created and other relationships between the board and the City...For instance, what developed out of the City of San Francisco, they used the City Attorney's office...they decided they wanted to drop the City Attorney...the Court held that under those circumstances under that part1cu1ar contract they had no choice because they had a contract with the attorney of the City of San Francisco and they had to use the City Attorney's office. So here the legal power...the code,section here.. .and the agency could delegate its pov/ers to the City'in those circumstances. They could use that particular legal power " to create the binding relationship between the Agency and City Council. We've done that in Alhambra and we've done that in Bakersfie1d...Th~ City of Crescent City, when it was all finished except with minor amounts of land sale, in that case all power was delegated to the City and the City operated in the name of the Agency. Actually, all power was delegated and they operate as the ,City. In the sense of your original question...the proper kind of delegation between the City and the Agency...they can ~ operate as a Ci ty... ., Covington: Then in your opinion, many problems are almost built into any situation in which an Agency plan is brought into being that assumes at its creation that Councilmen will be sitting as Agency members but then subsequently a~e replaced by appointed citizens without proper modification of the Agency Plan take . this into account...and that was not done here. Jacobs: Yes, if it's fully discussed out and everyone knew that that was exactly the power of the board, there's no doubt ,about " it at all, that the power of the board:.. . some example of this' where 11e might have had intertie \'/hich requires City Council approval ...for instance the City of Los Ange1es...no land can be sold in the I -I . I I. , ,...~.., , 11-1-7~ .... "_'. , .....:-.I... 1~ I ;t .._',. . ,I 1 t ..... .- , ' .... , " Page Nine - R-edevelor-!l1ent Ag'~,ncy Ninutes -, rowJ.cmber 1, 1971 City of L.A. except in spec1.!l agreement.. .without City Council of Los Angeles approving. ilo contract cc-n be approved by the Agency in Alhambra over five thousand dollars wlthout the approval of the City Council. So there's a numfter of these b~ilt-in situations that exist. Covington: So. in your opinion, there are a namber of independent I agencies now operating under appropriate adequate controls by " the City Council but only because the Agency plan as it was originally drafted that way or modified so as to... \ , \ i I \ \ I I i , Jacobs: Or even beyond the plan, the entire organization can be structured that ~/ay.. .in Alhambra was the f,'irst case we aid in our office when the 'City Council said they would not... Their neighbors which is South Pasadena, which had this fundamental problem, the~ did not want that k~nd of struggle beb/een the Agency and the City Co'uncil. NO~/',. I spent a considerable period of time working with the COuncil before they ever even created the Agency...estab1ishing a framework which they ~lOu1d be happy to I'/ork ~/ith. In that case. the Agency operated almost like the City Planning Commiss.ion I~ith the, Executive Director of tne Agency operating under the control of the City l1anager...the Agency operating under the control of the City Cour.ci 1... the, contract stated lithe City Council shall be the ultimate decision makers", but tlie Agency being the day to day decision maker and the work...but the City 1,Ianager being the ultimate-administrator ~1fth tlle Executive Director being the day to day administrator. There's been a problem or two as they are in any operation,-DUt the fundamental struggle has never taken place. Bakersfield d~s it the same way, except Bakersfield is not too good an example. They , haven't done too much there, now they have t~/O' projects that are finally moving... they-'diaiiT have-ni'rojeC'taeVelop very-quickly. Covington: Then to summarize, there are, 'in YOOI" opinion, many " cities that have agencies which operate independently and do so effectively because of modifications that were made in the original plan or because the plan was written in such a ~ay to permit' appropriate control by the Council. I \ Jacobs: Yes,'or one clear example is, is the large cities in which the amount of work, like Los Angeles with 10 projects or San Francisco ~/ith 8 or 10, Oakland with 6 or 7.... they are so large that the City Council's, like the City of Los Angeles, operate to a certain extent like a State Legis1ature.....there"s no ~/ay they want to run the program on a daily basis.....dtTferent ~ind of of government...totally-different government structure. Even then there's a struggle as ,to where the power 1ay...but then, its a basic constitutional problem, not like some of the smaller cities. Jackson: What is required to add these modifications to ~e plan... just.... Jacob~: They have found in a number of p1aces__.in Pasadena we had it in the plan. Even there we had a series of contracts between the separate Agency and City Council. It's done in a , number of l'/ay,>, Pasadena, had a totally i ndepend'.ent agency and had, a great deal of stl'ugg1e because of the independent.. .not the board and the Counti1 get along fine.....the Staff had the struggle with the City. Very reasonably, the Executive Director I " .", ' p----~--_._"----_..~~.__.. - - _.- - .-.- -~. -. -- --~-<:r--'.., '11-1-71 1~9 Page Ten - Redevelopment Agency Minutes - November 1, 1971 I , j resigned and a new Director was named. The n~1 Director was also named the assistant to the City Manager...so, you have there a separate board, separate director on staff salary, away from City, Hall, but hE1 had a City title... there's no t\10 agencies, incidentally, they say wants the general rule...I haven't found two cities the same. Torrance has the City Council as the board...City Manager as the Executive Director on salary in the City, the Assistant Director on - Agency salary, away from City Hall. tong Beach has a separate agency board but all their empJoyees are city employees, labe11ed ~xecutive director operating under the control of the City Manager. I could run down the list...Redondo Beach, the City Manager is' the Executive Director.:. the old independent Executive Director is nO~1 his assistant consultant under contract,.....they're still a separate agency board. There is now, two cities that were drafted up as a public administration framework---each city seems to work,out what seems to work best for each city. The totally independent situation is all but dead or dying. Lindstrom: In how many of these cities is the ,City Attorney also act as the Attorney for 'the Agency? Jacobs: In almost everyone of them he starts out that way...in the fifteen or twenty that I'm most active in now...I'm only general \ counsel in about five of them...in the rest of them my contract reads that the City Attorney is, the general counsel and I'm special counsel operating through and under the supervision of the City Attorney. That's the most common contract I have. In many _ ' instances the City Attorney"'tells me....it's up to you, you're under my supervision, but you basically handle it...eyen though I'm general counsel. In other cases, I'm only called when the City Attorney needs the he1p....in other cases I'm called in only on say... land sales. And this differs again...there's about five that I'm general counsel. Quite often the City Attorney is on flat salary and its on a basis where he gets no additional remuneration or compensation if he handles it. Or, if he's so loaded he doesn't - want to deal with it...so then we become general counsel. By and , large we aren't too interested in becoming general counsel except when we find they've actually needed it --- it means tha~ we can't cover as many clients in the sense of being helpful with our special expertness - and in becoming general counsel there's all kinds of daily details really normal everyday routine that the City Attorney could handle as he handles the city hall matters... ~' and particularly where there's a full staff of attorneys like in Long lleach...the 'City Attorney's staff. We even...but by and large I have suggested that we come in only as special counsel aod he normally operated as a general counsel. Lindstrom: What is the possibility of there being a conflict of legal ethics with the City Attorney and the City Council sitting as the Agency and the.City Attorney as the Agency Attorney? I I . 'I' " Jacobs: You mean with the City Attorney sitting as the Agency counse 17 Lindstrom: Yes, what's the possibility of a conflict of legal ethics? Jacobs: I don't know, its worrying some cities...it certainly has bothered me...I had a situation for instance, in one city, Torrance, ~lhere someone came in ~/ith an attempt to get a referendum. The City Attorney had to write a legal opinion, the City Council didn't follow his opinion, he was then placed in the position in court of supporting one thing or the other...He asked me to come in as Agency Counsel in - -.., ,', ' .. , --11-1-71 1~O . : Page Eleven - Redevelopment Agency ~iinutes - .November 1 ~ 19n that case so we wouldn't get that conflict. ~n)at we normally do 1f any conflict appears, you ask a consulting attorney to come in and handle"one thing, he handles the other.. .occasiona11y if there's any question, we double check documents for you. This is rather common, this use of separate entities such as a redevelopment agency, its become much more politicallY explosive in the redevelopment agenoies but this is very common with park authorities, with housing authorities, various districts, assessment parking districts. Actually have a separate legal entity for the purpose of doing certain things. The City,Attorney, and the Council and the City Staff operate in both roles. The.' courts do not find this to be incompatible \qi th- the office... certainly no conflict. In the conflict you usually find the City Attorney for his own...if your talking conf1ict...the City Attorney gaining a personal thing by going one way or the other... like his law firm gaining something by a rol~ he played Tn the City. Incompatibi11ty of office is generally what you're referring to... of course, the law has very little trouble with this...and most, attorney's are.sensitive enough to it where th~. if they feel that ther.e's some part that they just can't play properly in both roles, they ask someone to come in and play the other role for them. , \ Covington: Mr. Jacobs; to the best of your kn0!11edge, were most of the Redevelopment Agencies formed in this State'for the purpose of urban development.. .which is ~/hat ~/e normally think of.. .or for other purposes??' ~Jell, j;he Redevelopment Agencies that are in this State, I believe you mentioned ear1ier...there were how ~~ - Jacobs: I don't knOw...I haven't actually checked them out, but I kno~1 that three or four years ago, there ~lere,10 of them.':' I expect there is over a hundl'ed_nolq ~ovington: Most of the time, when'I, as a layman, thought of Redevelopment Agency, I thought,of it in terms of housing,.. urban improvement. But is that the purpose that most of these... . Jacobs: Well, the Redevelopment Law in California was create~ in '45, the one in Nel'l York \'Ias created in '41-. The Federal ~aw as it started out, said that you had to have a project which involved doing away \'/ith liad housing, or creating new housing,:- one or the other...not necessarily low 1ncome...but doing ~way' ~lith bad housing or creating new housing; one or the other.' Very rapidly, hO~lever, they created a whole series of studies on this...so rapidly on checking what projects were actually happening...you would find that more and more were doing away with bad hOUSing and were not necessarily building new housing. They were getting a great many central business districts in those projects----llunker Hill downtown, Redondo Beach project, the West Beach project in Long Beach, the Mall project in Fresno. the Major Capital Mall project in Sacramento, the \'Iho1e nature being derived...some residential being off some other direction but by and large its been used in almost every way. Redevelopment La~/':", r.alifornia has a1.1o~/ed public, residential - residential to industrial, industrial to public. commercial to offices, offites to retai1...any type of combination you want. In Pasadena, they ~/ent from empty hills to residential,...one project in Richmond went from empty land, federal land from World War II, to a major Safeway warehouse - a major distribution point for Safeway in northern California in one project. Ther~ is really no two projects that are exactly the same. ' . .. . 1 .1 . I J .I I I I .._.... __ __ w" _._ , 11-1-71 Page T~/elve - Redevu10p,nent Agency Ninutes - November 1, 1971 Covington: Sq.,. it is determined by the imagi,nation and the needs of each Clty... Jacobs: That's right, and if you limit it only to federally funded projects there is more or an emphasis on hOllsi,ng. Until very recently, last year, all the emphasis was on housing. You could not get a federally approved project, in my judgment, today primarily for central business district. Covington: The majority of the agencies in the state were not, se federally funded. Jacobs: Well, for a long time almost all I'/ere federally funded. The project in Los Angeles I~as the first project in Ca1 ifornia probably and it was done entirely to do away with housing' and intersperse industrial areas and allow Carnation Creamery in downtown Los Angeles that was the industrial project, one of the first ones in California that was not federally funded. But, later on" hov/ever, most of them were federally funded and then recently, starting probably with the Long Ilcach project whi~h vias totally non-federally funded. :,Now l'/e have in my office alone, something like fifteen projects where for awhile there was almost none. ' , \ . Covington: Are there any questions from the audience? ---- l.liss Dorr: Yes, I had a couple of questions...one ~/as...you . . , referred to the rederendum vote in Torrance...Is the Redevelopment Agency subject to r~ferendum? Jacobs: No. I didn't go on and finish that; The signatures had been obtai ned to bri n9 -a- refer-endum-aga,i-ns,t-the-Redeve,l opment project and it was ruled by the City ^t~orney that they could not referendum the project and the Court sustained that. The CIty Council refused to go ahead I~ith it. ..or they .went ahead with it. The City Clerk refused to certify and the court upheld the Clerk. It was upheld by the Court that it was not a referendum application that the referendum did not apply to Redevelopment. The on1Yl referendum ~n redevelopment is the referendum in creating the agency in the first place. · , . ' I Hiss Dorr: IL~;dnlt go to Appellate Court? I ' !' Jacobs.: It's been'to Appellate Court on a differenct occasion... that one did not. The law is clear on that. It went to the Appellate Court for a housing authority that established it. The Redevelopment Agency and the City Council actlng under t~e Redevelopment Law are State agencies not subject to referendum and typical ordinances that you might have under the City Charter and therefore not subject to referendum. The San Bernardino case is the one that established the Redevelopment matter. . Hiss Dorr: Has it ever gone beyond appellate to supeeme Court.. .' t t' J~cobs: California Supreme Court? I think they tried to bring ,it before the Supreme Court but it was turne~ dOI'/n. There vias 'a California Supreme Court ruling ,on the housing authority that established the same principle. There is no question about it in California. The only time that it'does get questioned is \~hen , the political pressures 'in the City are so strong that in spite of. ~Ihat the City Attorney says, the City Council went ahead and' had the referendum any\1ay,' and then politically decided to fo'I10w \'/hat the referendum said until the board said that they didn't I'/ant to go forl'/ard. They ~/ould then just not challenge it. Alamitos is a case of this, and even in that case the legislative counsel's office said that legally it had no meaning. I i '1 ,i,'?1: 'lh ~... - . . . . .. " . J.. -, " 11':1'-71' :1'72 . Page Thil"teen - Redevelopment Agency l'\i.nl!lltes - November'l, 1971 Jacobs (continued): Or in the San llernardiiifilD case that said that it is merely an advisory opinion and is not legally binding and in San Bernardino~ even after a vote, the Council went forward and adopted tne project later anyway. And the chal1ange was that there had been a vote against it and the Court said there l'las no legal relationship;' There is no question about this. 11iss Dorl": The second question has to do with the school district reimbursement from redevelopment agencies...1 know that this is quite a drawn out process... .has that been cOlllll1On? Jacobs: Yes, it has been conmon, and ( thiok properly so. Th~ contract that was entered into here between the Redevelopment Agency and the School District; 'for example. there are five or six others we have in the office. The first one I was involved in was in the City of South Pasadena where they were going to permit the AGency to build 600 homes and create almost a' ~lho1e nelf grammar school and the school district had taken on a remendous pressure. Ilecause of that unique kind of project where almost every home there l'Iould have either, b/O, three, four, or five kids. complete ,single family dwellings, and the Federal Government at that time Ifould not let us help the school district and I became the attorney to get the 1 al'l changed in the 1egi sl ature to help do , ' this and we ended up, in effect, after a series of contracts, giving' the school a free site.and paying for all the landscaping and made a , high qual i ty school... then they had money from other sources to continue. 14e IJorked out a di fferent kind of ar.rangement on tile same legal base w~th -the Cerritos College. In regard to the' Cerritos program. Redondo Beach, I'm not involved anymore, but unless the Redondo situation has changed, the Redeondo Beach situation became politically, in newspaper terms...very explosive... because of a fi ght Deb'men the Agency and the City Counci 1, and \~hen that vias settled, the school district was satisfied, in fact they introduced a bi 11 in the, StatlLle.gisJ,a.tur..EL1o-change.....SDme.,of the authority in the kind of re1ationsliip we're talking about here..: ~nd when the bill was derived in Sacramento, not a single school district appeared up there in opposition or in support of this bill, to take the power al'lay. So, we found out the schpol districts actually, those that knew I'Ihat was going on and how it was l'Iorking, were much more happy to have the Agency have this authority t1' help, so we are he1pjng the school district in many. many instances I have worked just this ,'!eek in some other cities that are deve oping a project to make sure that'the pressure...the financial pressure...be taken off the school district. I ; Covington: Any other questions? r.tiss Dorr: ~lr. Jacobs. The thing thilt bothers me the mos't is to have this Agency established at a time when ~aQy ~eop1e l'Iere not aVlare it was even being proposed. r10\1 I recognize that people don't go to Council meetings...but we've been going for the last three years...since the Agency started. 45 years is supposed to be a hand over this City. Isn't there anybody... ' Jacobs: You and I have been over that 45 year problem many times... You can get over t"t tomorrol'l morning with either this board or the City Council if they become the board...merely amending the plan, reducing that to zero years...if you want to...or you can destroy the plan if they want to...there's no prob1en. Nrs. Dorr: You mean we call get rid of the Agency? Jilcobs: Certainly, anytime the City Council wants...I've made that point five thousand times in these meetings., -, - , I I I J I I I '""'""! , 11-1-71" ' 1 "'3 Page Fourteen - Redevelopment Agency Hinutes - November 1, 1971 Hrs. Dorr: Yes, but you've made it diffE:rent 11ays.. . NOl1 one time, you ,suid that if the Agency... Jacobs: I merely sai d they :1ad to foll OH the 1 a~/, is all; it can I t be done automatically. ~lrs. Dorr: Oh no, but you said if l'le had a unanimous vote on the civilian agency...to recommend to the Council, the Council then by 3 to 2 could dissolve. Jacobs: Right. \ i \ \ I I I , ! 1 I Dorr: Yes, well we couldn't get either one. Jacobs: It's a political problem, not a 'legal prob~em. Mrs. Dorr: Yes, well, this is what I'm trying to get at. If there is even a political prob1em...then we can get rid of the Agency, that's. final. Jacobs: Well, you have, I have pointed out many times, you do have, certain contracts that you have to live up to with or w thout the Agency...that have been signed with property owners...that have been signed,..I'm not positive now as I'm not as involved recently...with the sewer people and so forth...so there's....,if you do this, you won't have the money to make up the agreement so you're in troub1~, maybe with the taxpayer's-themse1ves...I'm not sure if you could follow that through. You have certain debts now.that have to be paid whether~ you dissolve the Agency or not. ~~ , "". , Mrs. Dorr: l~ell ;-it's sort of like taking the nioney from Paul's pocket and putting it in... . -..----- . Jacobs: Oh no, not if they've gone 'fo~/ard with the sewer commitment in which you're supplied a se\'/er solution: You have done so in such a way that you have guaranteed to make certain payments to the sewer district. If that money does not come from the tax increment, then it's going to have to come out of somel1here else in the City and, those t~x increments are being produced by the new development project. Mrs. Dorr: Well yes, but they're still there, aren't they? Couldn't they be used )/hether they ~Iere.... . . , Jacobs: Oh no, not if you don't use the redevelopment project. Nrs. Dorr: So they have to go over to the County. Jacobs: They go to the County... they go to the school di strict. '.. and l> all you'd get is 11hatever...~/hat is it...10 cents, twenty cents on the do1lar...in the City. All you'd be left with is ten or twenty cents of the do11ar...this way you get one hundred cents of the dollar... to be used for this City!s sevier problem. Mrs.'porr: Where is the other twenty cents then? Jacobs: You're talking about a whole dollar of tax increments that wou1d,come to this City to pay for the sewer problem. Whereas, it you kill the Agency, you would be getting only twenty cents, for that money, and that twenty cents is all you'd have to handle the problem with. ' , . Mrs. Dorr: Wel1......what happens in the County if every City in the County of Orange had a Redevelopment Agency and all thp. mor~y would not go to the County and they're not getting any.....? .... . , ,_,...J -, -.. '. 11-1-7i'" ,.---" ..' 1~4 ,I -, Page Fifteen--Redeve10pment Agency l4inut~ - tlovember 1; 1971 Jacobs: Well, you're talkin!J about the fact that every Agcncy covers every square ~cre'of every City. T~is is~'t what's going to happen. The best thing that can happen to the School Districts.. .and to the County...wou1d be to have the areas which are blighted~..thc areas which are not producing taxes, and havc those areas start producing taxes.. .and therefore increase the areas around them, Takc Bunker Hill do\~ntO\'m Los Ange1es....the,re ~/e were in the heart of the largest City in acreage in the United States...one of the largest cities in the U. S., one of the we&lthiest cities in the U. S. and at the heart of that...the core of that...10 to 12 million peop1e...depending what year we're talking about...Thdt 130 acres was only bringing in $400,000 dollars a year ~o all taxing agencies. The property was worth on the average of $15 dollars a square foot. ' The center of Manhattcn Island, comparable to thi~, ~taS worth $100 dollars a square foot. This meant that all of the outlying suburbs were subsidizing downtown on taxes, plus because of that situation, the weight and the burden of fire, police and other'kind of protection, and the fact that that land \~as not working efficiently, was costing the city more....so, the area was costing the City somewhere between $600,000 and a million dollars a year and all they were taking in was $400,000 dollars for all taxation to pay for it. Now, with that land, with redevelopment, is not bringing in $400,000 dollars a year, it is bringing in 7 ,\ million a year. When its finally built out it will be bringing in 20 million a year. People don't realize that they are subsidizing 'their blighted areas. ' . " Nrs. Dorr: Hell, v/hat happens to the County of Los Angeles? They're not getting any money. ~ -~ Jacobs: Certainly they are. You know the Atlantic Richfield Towers that are going up? 'All right. The people that bought that land , paid an average of $70 dollars a square foot'to bring that together... tha t' s ri ght next door to -1 and- tha t-\~a-s-v/ol'-th-.$-15-do-l-1 ar-s-a-square foot to at most, $30 a square foot b~fQre the project developed... . now it is worth $70. Thcy paid as,much as $160 dollars a square foot...the taxes surrounding that project, alone are making up anything that would have been coming out of the project itself. ,This is a fundamental economic problem that is gradually being understood, particularly by the businessmen in the City. As to how the sl'ng1e family homes have been'carrying the subsidy of underdeveloped underused land...it's a f4ndamenta1 problem that redevelopment projects, if they were developed...and proper development, even if it is brought fO~lard even a year or two sooner than it wo~ld 'have 'normally, you are bring'ing in amounts of inoney that justify the costs of what these projects are. In this City, for instance, if you vlere to pay for thi s sewer some other \'/ay, it's got ta come out of the community in some other direction. But usually, frankly, my advise to most cities po1itica11y...and for good "reason, J. think, they are generally very closely related to school districts and they usually desire to do what they can to help. I haven't found a city I'm representing that has given any difficulty to this. It doesn't get reduced to whether they owe any legal right, in fact, I dislike very much the situation where nobody does anything unless the law makes them. That's just no \~ay to run any kind of a railroad. The point about that f, ! the'sevler situation is that if they decide not to build the sewer, they decide not to help the school district... decided not to do this or that they \'lou1dn't have anything to do with the money...they would not have a debt...they wouldn't even have a tax increment...it wouldn't even come to the Agency. It has to have something to do with the project. The only thing to do with the project here, basically talking about any money lending of any size at all, is take care of any sewer problems. because without question, there would not have been a project if there hadn't been a serious sewer problem... ' ,- . I' I ,I ",I 'w _....t_~..__....:_~._...... ....J.__._...-..._.....___._ .._ _.__ , . , - ... . ._..______0_____ _.____.._ ___......_..._ __.__"u 11-1-71 '_1~5 ' Page Sixteen - Redevelopment Agency Minutes - November 1, 1971 -.' ~ . I Nrs. Dorr: Hell nOl'1 Mr. Jacobs, they didn't put the ~lodu1.ar Technology plant dO~/n the middle of the P., E. tract, so they aren't going to get increments from that immediately. So, is there going to be enough from the R & B plant and Suburbia to pay for..... Jacobs: Without question...unless the numbers are changed, I don't have any doubt it... . Covington: I will have Nr. r'lyers give a brief summary of the proposed financing for the major commitments that ~Iere identified earlier in the evening for the status report, but they are... , , ~lrs. Dorr: ....,......First Street comes to the Marina Drive, then they want to go to Ocean for the benefit of the people who live at R & B.... . . Covington: Well, perhaps Nr. ~~ers can give you a summary that you asked for... - Mrs.,Dorr: They were the ones, when they...........and they'came in and ,we protested on that R & II and we had tried our best to stop it, they said that they would not be overflowing the beach because they ,had all their OI'/n sauna baths and what have you back there and they '. wouldn't be interested,in the beach...now they want a street that takes ,them right down to the beach and they can have thei~ way to there and, they were the first ones to get a signal....everyting is for something like that.... .. --~--..... I Mr. ~~ers: Well, perhaps I should go back a little ways, Mrs.' Dorr. Just as a matter of statement of facts, not for any other purpose... The general plan re~resents the First Street Extension back in 1965, actually before there was any development in,this space...as far as R & B or Bridgeport or anybody e1se....we are planning from Pacific Coast High\~ay, as a matter-of fact--;Trom Westmlnffier clear-to'the . ocean....the general plan outlines that as being a major arterial street in 1965, now, after that fact, what when R & B came in and they had a particip~tion agreement that the City would participate in the' extension of First Street and a signal light at P. C. H~ at First. , So, actually, you had a planned street before there was development of this type around it. Now to answer th~ first question, aboutlfinancing, last year the Redevelopment Agency received, I believe, $97,000 in tax '. increments and this year we anticipate $142,000 and the year following," because R & B is riO~1 complete.. .~Ie would anticipate $242,000. " flow, in the finance summary that I presented and with the general summary to the Redevelopment Agency, approximately four to six months ago, it shows where the Redevelopment Agency can participate in acquisi~ion of land, unspecified land as far as the finance summary i$ concerned, participation in the se~ler project by'paying the .annexation fees and the engineering plans and'specs and the school agreement, $137,500 over a -' five year period, and I think that....maybe I am skipping a few of the projects.. .but that is the highlights of it...and on the schedule of revenue, they could expect to participate in these projects, and , actually 'accomplish all of this within a 15 year period...which was one of the problems that the Redevelopment Agency, as it is now constituted face, ~~d that was whether it would be a 45 year life. or if it would be'd 'lesser one. On this summary, they anticipated that it could be done within a 15 year period...That's just this project... ... '.. I Jacobs: That 45 years is very confusing. 45 years has ,nothing to do with financing. When this plan was ad1pted, the idea was that it , would be used in such a ,way that it would all be paid off in 5 - 8 years. - .' ---, , ,I " ,. , ... 11-1=-71'- 1"='6 " Page Seventeen - !ledeve 1 opment Agency t-li n!1i:es - Hovembe1" 1, 1971 . ~ ~ . The extension to 15 years is because you nOl'1 des'i.re to have less intense development and not development of the P. E. and do a little bit more on tlie public side and therefore, its a greater cost and less tax increments, so it takes 15 yeal's. There I~as never any idea that the project ~lou1d take 45 years to finance. The 45 years is the land use control... the land to be used for the purp05e establ ished in that , plan for 45 years... there ,is no relationship bebleen'tha.t and the financing. I know of no financing in California in redevelopment that has gone over 30 years and most of it has gone considerably less than that...no relationship..... Myers: :The question was asked though, if the Redevelopment Agency, on this particular project, if they would have to commit tax increments or tax increment funds for a full 45 year period and the financing ,summary showed clearly that it would not have to commit tax increment for the full period of this 45 year related to this 1and.use,.....it's for a 15 year maximum period. . Covington: In. other words, its over a period of '5 and 15 years, but certainly much less time than is possible to ur>e the tax diversion from that land. The Agency would have been able to accomplish the goals that Mr. Myers mentioned which were quite different from the origi~al Agency goals, in such a l'lay that the City and tlle individual citizens would benefit in these' three main areas. For at least the next , five years certain.,. the school district 110uld r:ed!ive the amount of. money approximate to what they would have recef.ved for the same period of time if there had.been.,nQ. Redevelopment Agenc;y. Secondly, rather than have the large group of citizens that were involved as participants in the Sanitation District 4 on a 20/25 year plan pay somevlhere between' $50 and $150 each year as their share based on the value of,their property for annexation to District 3, instead 1!:'hey would have I entered that annexation with virtually no cost~ and then third, with the remaining amount of. divers,ion_mone.Y-tha.Lthe-AgeDqLl1ad_.~eceived. diverted tax money instead the County and the various other taxing . pgencies, that money would have been used to fulfill the qther part of the major turn around of the p1.an that this Agency had initiated, and that is...to acquire as much of the remaining open 1anq as possible for public use, 11hich is directly opposite of vlbat vias originally intended. You may say in summary, the,maximum amount of 1andLfor corrrnercia1 dev,elopment I'lith only incidental pub,l'ic acquisitio~ and you turned around to just the opposite. Maximwu amount of 1and,to be acquired for public recreational use with the mjnimum amount of commercial development, so all the tax money ~/e are talking about is to accomp1 ish those three purposes. EquaJ amount of money back to the schools that was lost, the possibility of getting a far superior sewer system with no additional cost to tnose peQp1e in . that district...but otherwise they wo~ld have had to pay on a district, only basis. All the remaining monies in someti~ beb1een 5 and less than 15 years acquire irrevocably deeded, irrevocably to the City that land for public use for whatever the pub1tc shall deem that they, wanted that land for...not committed once and for all, ,for commercial development. 'I Mrs. Dorr: I think that's just great, but what ~akes me nervous is that in 15 yea.... you never know what somebody else is going to do I and that mea'ns that you have to keep coming to Council meetings for, 15 years' to watch it. Covington: Let's hope, Mrs. Dorr, that people always come to their Council meetings...I1o matter hovl many years in' the future that we have Council meetings. .'. n--, " I I I - ...-._-._-- , I j , i1-1-7J, 1~ Page Eightecn - Rcdcveloll,nent Agen~y t-linutes - November 1, 1971 \ \ \ \ \ I Nr. Smi th: . . . . . . ques ti on the compari son bet\-/een Ne~1 York City ,and stated that Ncw York hadn't solved their problems... Jacobs: You Ol'issed my point.. .v/hat this City is considcring doing right now is maybe better than going to that original density,...I wasn't necessarily in favor of the original density...I am mcre1y saying that- you have to look at this whole thing in dollar terms...you should be making the policy decisions.. .In South Pasadena they could ,have made it great deal more money if they would have made it apartmcnt house~ or commercial....They made the policy decision that they were going to go singlc family dl'/ellings and they did. NOIV, the point is, that if, they decide to make that decision...was there enough moncy ,to make it work...Yes, the taxes before hand were $12,000 a year and after they wer~ $600,000 a year. That'v/as more than enough to take care of the debt over that period of time and to handle the thing properiy. so a11,I am saying is that you have to do this in return. Hhat you have to do" ...you cannot get the soci~l goals you need unless you have the fiscal and financial responsibility and ways of doing it...The problem in Mew York City is exactly what you say...over density. If you were to take the densities in Harlem and spr.ead them over the entire city of lielv York City...that's how densc thosc people are living. ~lftli \ one another in Harlem. ,That's l'lhat is l'/rong Ivith New York...there's - too many people living there...there's too many...Ca1ifornia has no density prob1ems...you may have a block here or a tract there, but by in large, and I'm talking about the number of people per acre..., it's very, very low in .CaljfPrnia.....compared with New York. In- - New York for instance, from a blight standpoint, for the kind of financing that we have to have to adopt a project, we could use density alone... it's just so over dense. The point is, that'you don't need high rise to settle your problems here...a11 you need is a sewer here. I think that Suburbia alone would have taken care of your sewer,...worked properly under the right circumstances., _What_I~m_~r.yjng_to_say__is_that you' have to figure out what level of density you have to have for the proper financing.. .somctimes it's very, very low. I ,think that the original. plan a~ adopted is probably too dense...but I'm saying that is everybody" is upset about the finacning cost, the financing costs a little more with these pressures than the other way, but the goals you want... ' the social goals you want... ' Mr. Smith: ' But the high density that they are trying to put in that small area...that worries me. " , f - Covington: Not in this City, sir...because you see, because the Agcncy as presently constituted in the last year...with the assistance of the Council and its original direction and ~Iith the assistance of many , public hcarings an d individual citizens have completely turned around the original intent of the plan to accomplish just the opposite.~.to go from maximum commercial development and only incidental public use to just the reverse..,.the limited amount of commercial use whose increased t~x revenue provides the funding capability to acquire the rest of the land for public use... .' , , 14r. S!I1ith: Hhen you hear them talking about widening Seal ~!ay...it should be a one-way al1~y...there's no need to widen Seal Way... Covington: That commitment was made back when it was stated policy, according to the City Ma~ter Plan to so widen it in a participation, agreement that was entered fnto...that was a bidning contract...with thc parties that were going to develop that parcel at that time. The City, in a sense, gave away' nothing, or so they thought at the time., Because they were agreeing to do somcthing that the master plan had already committed them to do as a good thing. The City presently has under direction, a nelv l,iaster Plan ,vhich is to be reported back sometime next ycar, right Bob???..and then, based on the changes \'/ished in Seal lleach, individual citizens l'/ant. that [-laster Plan f, .1 11-1-71 :1 "=18 ," Page Ni nf'!teen - Redevelopment Agency 1,Ii nutes - ~lovember 1, ''111 will redirect the goals and the destiny fQr th~ ~ity'to accomplish these new commitments of the future.. .but \'/hat ~/e are lI..alking about is the difference between what was committed to originally by this Agency when it l'/as represented by Councilmen who ~/ere dea1irr.g ~/ith the ~iaster Plan that was, in effect, so to speak...their Gospel io 1965, and \~t the public l'lishes today and l'/hat this Agency as presll!ntly constituted has tried to change around the' plan and to conform, to and ~/hich hopefully, 11hen they take over the Agency, 11ill appropriate that same momentum for the change in direction and continue on to accomplish those same goals. That is. -a maximum public acquisition and use and'minfmum commercial development limited only to necessa~. to apparently what l'/e already have and cannot change,for that tax f10~1 to accomplish everything else that we want to which has noth10Q t~ do with commercial. Jacobs: Some cities are using redevelopment to assure themselves that the high densities cannot happen.. .you can get l:ega1 conmitments to the people who are building in such a \fay to ho,l,d it down. If you work from a I.taster Plan on zoning, there is nothing: in the lalf that says that zoning has to follo~1 I'laster Plan. ..so ~/ha't: bap'pens is that you are 'forced to respond to the rampant economic pressures that are on the City because somebody can take single fami,1.y land and chaRge it \ from cheap land to exp~nsive land merely with ~ change of zone. Once ,you get a redevelopment p,roject in there, that can!.t happen if you , once go thro~gh the proper steps...it is much mare difficult to break. ~Ihereas in redevelopment you have to.. .by 1at/. .'. foll ow the r'laster Plan. In zoning, the zoning,does:not have to follow tbe Master Plan. The key document in any, City, once they get operati'~g. is a \1ell established, Master Plan based on economic reality for the density you w~nt and then purely to implement. it by developing your City i1\Ccording to the ',laster Plan. Almost no city that I know of anywhere" ihas done this. The' only way that it is done successfully is throug~ redevelopment. The legal controls are 11haj;'.mal:e it' nappen... tlie con't:Fo1s are not-there. by themselves...because week after next somebody can come in because they can make more money on that 1and...get a i:ooing change in the City in spite of tht) Plan. ' , 1.1rs. Dorr: Can a private citizen Agency incurr. 'indebtedness without the appi'oval 0: the City Coun~iJ? ...... I. don"t see how they rn..... Jacobs: The City Council ,approves it when the City Council adoptes the redevelopment plan. There never has been a!ll independent agency, you can caJl it independent if you want, ,but it lbas never been an independent agency. The Cfty Council adopted the redevelopment plan they wanted,...the City Council then decided to create a separate ' agency board...and they did not change the redevelopment plan or . change the rules. 1.le discussed that earlier, s'B.they tlere in the legal position to do whatever the redevelopment plan a11m1ed them to do. 1/011 the City Council has the legal right to take, it back to themselves, and then has the legal right to put it out to another board,...if they want to. It has always been u3der the power of the City Council...it has never been,any different. Covington: Now, I think that it would be app.ropriate at this,point,' to the best :If my' I\"low1edge, unanimously, and ilJ every instance from I the moment that the citizens independent agencY''lfas constituted last October....we have operated on a basis as though the ~gency Plan had been rewritten....In other words, there were no major changes ,or commitments ' that ~Ie under took that l'Ie did not first rece;.ve.. submit to and receive from the City Council, appropriate approval for t~at direction...and so. although as ',lr. Jacobs pointed out, there was nCII modification of the agency plan last fa11, as perhaps there should have been when individual citizens ~':ere eppointed to it :nd Councilmen no l'Onger sat as it, the individual citizens 1'/!l0 l'/ere appointed, have operated continually that the agency as though those changes had been uade in ~he agency plan. ..., I I i -~t 11-1-71 ;4i?S' Page Twenty - Redevelopment l\gcncy f'li nutes - tlovember 1, 1971: - . I we had-not unilaterally or autonomously undertaken various projects or business \'/ithout having first submitted them to the Council and received their approval. Is that not correct...to the best of your knol./ledge 11r. Holden? Is ,that not correct, Mr. Smith? Is that not correct, to your recollection, 'ilhile you \~ere in office, 1,lr. l~gard? So the ppint is, that it is true, that it is unfortunate and it certainly I~ould have been far superior if the Council, when. last October appointed individual citizens to this board, did not also at that time, perhaps with appropriate public hearings, modify the agency plan that would place additional controls and constraints and checks and balances over the independent operation for that agency. But even though that was not done, this Agency as operated by individual citizens have always, while we have been members of this agency, operated as though those changes had been made and we would certainly hope that should this ever occur in the future, if'it ever becomes independent again, with individual citizens, those changes \'/ould' be ~/ritten into the la~/.. . because Mrs. Dorr is certainly correct in pointing ou~ that it might be possible that some future agency as operating as an individual one...cou1d take back the powers into their own hands, \1hich this agency presently hifS and would, never- change last October. , " , \ Mrs. Morton: Now that it is going back again to the City Council, they will be the agency, can't they at some future time change things again and decide that they want another big apartment complex with the redevelopment property ~ven though this body has decided that it will go to pub~ic facllities.-'--...' ' _- Covington: Any so change to my understanding,"can only occur until either one or two things' that happen.. .either the Agency is dissolved or this is my personal preference.. because I feel the tax diversion advantages of the Agency offer incredible advantage to every citizen of this city...or the alternative and that is that every square incn , of land which is presently in the area plan has been committed obtained irrevocably for public use or use that the p,!blic fully agrees to._ jo. Jackson: Or the Redevelopment Agency plan, itself, be modified. You see we're still working with the same Agency Plan. ~~at w~ have done here in the past year is simply not gone ahead with some of the plans that have been there as far as the dense housing development... we stopped that and have taken advantage of some of the a1~ernate uses... ~ the Pacific Electric Right of Way...which could have been either fairly dense housing or could be for public open use...those alternatives are, _____ still thet'e. -I I 'I I Jacobs: An example of this was the contract with the O'Su11ivans which had it been signed would have put the O'Su11ivans in a position of going ahead themselves with developing apartements on the st~ip or ~ the Agency would ha~ retained it and sold it to somebody else and improved it that if that had gone through...then it \10u1d have been irrevocably committed to apartments. This has not been changed so it is not going that direction nm1. Up until the time that legal documents are signed that could be changed, but personally I have more faith in City government than most people dO...ln the sense that I. think that until a thing is settled, the decision is best made by the people at the time and the place that the decision is to be made not like they used to have in the law where a father could say he had a million dollars and he could will it and he could control his lids and '.... their kids and their kids. Of course, the court finally s~tt1ed that a .. dead man can't control down fifty - sixty years and five generations... there has to' be some end to thfs...wel1, in that sense the law generally and pub1ic~11y administration generally, doesn't say the City Counci1 happened to be uffice at any given moment and irrev~cably settle what is going to happen to that City when its the wrong thing to do a year or two later. And in a City that's been flowing back and forth as this one has for the last couple of years, it seems .~ ", (' ". ." . '. . '-:-l - - , ,- -.... - ---- -, - '-- .. - --, ' - ..1......_.___ _......._ ..__ ,.).1-1-71 :18u " -, ____...__.........L..~ ._.. ____'._._. 1- ,-- -.'- I [ .... ---__-1_ _..__...._-~. ._._. ...:. . ' , Page T~/enty-one - Redevelopment Agency Hinutes - fkiwe.moer 1, 1971 tumultuous in a sense, but its part of the political process, part of the democratic process, ultimately it will straighten its21f out and go one way or another. Mrs. Dorr: We fought the.R & B as hard as we could to no avail... Jacobs: Hell, that vIas not part of the original project, if you go' I back and look in the original documents. That was something that happened later. ~ws. Steiner: Requested information on Department of Water and PO~ler 1 and. ' , \ I \ \ 1 I -j i , ~~ers: We have only discussed it to the extent that they have declared it surplus property...and are making an appraisal of that property. After that,is made, they \~ill discuss that tlith the City. They have not completed it to my knowledge, you may be talking about three different parcels. One lies toward the oceanside of Ocean Avenue... that's the one \'/e discussed earlier as part tile Redevelopment. Agency would like to buy as part of the ocean front for public use. There's anotber parcel b,etween Marina Drive and First Street.... Mrs. Steiner: That's ~he one I was referring to. /1Yers: That also has been declared surplus. The there's one more parcel just North of r.larina Drive... that ~lill probably. at this point, be attempted to be purchased by the City as part of the First Street right of \~ay. But what \~T1..ultimate1y happen to thi's D.W.P. property bet\~een r~arina Drive and Ocean is hard to.tel1 at this point. _/ Nr. Brand~ lihat are the legal conmitments of the Agen.cy as of this moment. I refer to contractual agreements that has to be carried forth by the City regardless if the Agency exists or not. And how, much are those commi'tiiieiils--and-Iiiil,i-long \~,T1-i1 take-tile Agency if it assumed no more commitments....if it did not carry forth any mor~ portions of this plan...how long would it take us to payoff the " commitment that it now has? I ~~ers: You'll have ,to give me the latitude of a fe\~ bucks. First of all, in the status report...First Street is a commitment,on participation agreement. The language here says the "Agency will diligently pursue the extension of First Street from r.larina Drive to P.D.H." . Mr. Brand: If we didn't do that would we be illegal? Jacobs: If that is the'partfcipation agreement, yes~ You would be ' subject to an action suit. . Mr. Brand: I only I~ant to know hwat they are, how much they are and ho\~ long to payoff..;., ' Jacobs: If you abolish ~he Agency, it would take you triple the time to pa~ it off. ,With the Agency it would be a shorter period of time. Myers: The cost....it is very difficult to say...the expenditure on I just one part of First Street is something like 50 to 70,000 dollars .....that does not inc1~de the full width development and does not include what ~re have to, by this year, complete the construction... we don't even have those costs. The signal light was $38,000, th2 agreement with the School for the five year period was $137,500. .~ ..:.-:.~ '" . " _.l._.. , ~ '. I I , , 'I --, .-..,-- 11-1-71 1-Rf - Page Twenty-two - Redevelopment Agency Minutes - !~ember 1,1971 The conmitment by the Agency to pay the City back $140,000 for the ,construction of the r'larina Conununity Center. And there I~as no time certain on these. The Agreement between the City Caunci~, ~/hen they advanced funds and the Redevelopment Jl.gency said that the funds will be repaid by the Agency at the rate of 5 percent per annum and shall be repayable at such ;ime as the Redevelopment Agency is financially capable and ~omp1eted their other proJects. This doesn't help in terms of me saying there is $200.600 payable, in 10 years. 11r. Brand: You should be able to boil it dOl'1n to it.. .p1us the se~/er...it should be "II" number of bucks and the Agency brings in "X" number of bucks per year and there's obviously a loan fee in there... you should be able to give me an estimate. . Jacob~: This is in the original report...to the City Council, as far as projections' at that time. Its in there in detail. , ~'yers : But it,' s changed. Jacobs: But one of the things that changed is they found a better \ and I think, a considerably less expensive method to tie in the sewer rather than doing the sewer itself....and that's one,substantia1 thing that's changed. It's much less expensive...and in addition land has been developed considerably faster in some instances, than it was before and therefore_the tax increment is coming in faster, and therefore the borrowing would be less. So, it has all 'changed . more favorably. /~ /1r. Brand: I'd like a direct answer. Jacobs: Not in this kind of a meeting....come to my office'ciuring" the day and we might work it out for you. f Myers: I can't give you a direct answer, even' if you come in, for the next six months. Until I knO\~ l'lhat the costs of the project is going to be on the section of First Street. We do not have the acquisition costs...and we do not have the construction costs... and until those are ~nown, then I really can't answer that question. . . Jacobs: No, but all it would take is to take your report to ~he City Council that was, put out in the first place and adjust the estimated project figures' into it. ..and it could be I~orked out. This is done' .. --- all the time, it isn't done at this kind of a meeting. This has been in such a state of f1ux...and the primary thing though is that decisions have nQt been made...maybe they are now being made...and properly being made between the Council and the Agency. ...' Mr. Brand: Could I have an answer to my question? Jacobs: It could be worked out, without question, I mean we could l'/ork it out...I'll do it free for you if you want. It \~~11 be merely an adjustment of a f~~ numbers... we worked that out in the first place. Part'of our problem is that for the. last six months or a year, the ultimate purposes of the Agency have been in a state of flux...if you were talking about maximum density as you wer~ objecting to back here I~ith the minimum amount of public improvement... developing as fast as you can, you could pay it off probably in about . 50% or 100% faster than you were going to pay it off in the first place. If you are now moving and you are moving to a certain extent' to somewhat less density, considerably more in pub1ic.~.and little more extended into what you 'want to,do...it may stretch it out a little bit. That ;- , ' : ,\ i . ,! . -, 11-1-'7'1, ., 1Q2 , Page Twenty-Three - Redevelopment Agency Minutes - Nnve~ber 1; 1971 has not been done ri ght nO~1 in the sense that i t ~Ias done when the project first started. Primari ly re,:ently because ther,~ I s been a difference in opinion of what should h,lppen here. Hhen that's finally settled, and that's taking certain assumrtions and I'm not saying that accurate, merely an assumption from where you appt!ar to be going. Those numbers can be worked out rather simply. But not at this type of meeting. it should be ~Iorked out quietly in a room. . I \ , \ I I I \ \ , , I Jackson: Refers to the budget submitted to Council in May, 1971...and says.....If the figures were at all meaningful, it ran out to something like 10 years on a payout. Discussion followed with estimated figures to he provided Mr. Brand, by the City 1'1anager within $100,000 dollars. Mrs. Dorr: ~1r. I'lyers, the l1arina 'C9mmunity Center, which .I 'thought was dedicated by Modular Technology....why do we have to pay for it? ~lyers: They may have dedicated the land, I don't know... I haven't searched that record, I know that the City advanced the Redevelopment Agency $120,000 dollars to build a r'larina Community Center 'building \ and appurtances and the Redevelopment Agency has to repay that. There may have been some ,land dedication, I don't know... Miss Dorr: Mr. Jacobs,..you mentioned Cerritos College District.... as I understand it, the'Rcdevelopment Agency funds could only be used within the Redevelopment Agency boungaries, so..... ......... Jacobs: T.hat's not true. Miss Dorr: Okay. That answers my question then. I r~rs. Morton: Can the Redevelopment Agnecy continue to acquire other property in the future? . , " Jacobs: The Redevelopment Agency is the legal entity that exists separate and distinct from the City as a legal entity. It covers the entire City I~hether or not the City ever uses it. It comes into ~se when the City Council adopts an ordinance to bring it into use. ~Iithin that City then, the Agency can operate i,f the City Council lets them in, various areas called "Project Areas". There is only one project area now....it cannot go to another project area without the City Council starting something.... .ho1ding a ~/ho1e nel'l series of public hearings...creating a new redevelopment area project. Covington: And in terms of acquiring property, it might be , appropriate for Mr. Myers to specifically define the exclusions that are made in our City's Agency Plan in connection with condemnation. Hyers: One' specific provision, I suspect you','e talking about, is that the Agency shall not acquire any land that is either developed or residential or zoned for residential purposes. However, there is another part of the plan that says...if an owner does not wish to sign a participation. agreement or does not follow that . participation agreement, then the City does have the right to or the Agency, rather, has the right to filing eminent domain. , , I Covington: But that applies, of course, only to vacant land that constitutes the Agency area. '. . . Mrs. Dorr: Mr. Risner had said that they had the right to condemn all across the street here for parking. . - - I , ,I . .. "11-1-71 ~5iJ rage Twenty-Four - Redevelopment Agency r'linutes - Ilovember 1, 1971 I Covington: Certainly, that the then consisting Council had, ~/hi1e sitting as the Agency, had been submissive or had agreed to change the Agency area. Jacobs: ~!e 11, you can't expand the Agency boundari es after its once adopted...you have to start a new project. For public parking, you don't even need the Agency, you can use the pO~/er of eminent domain without it. In this situation, it ~as never the intention to file eminent domain with the' usual, if probably in any instance; land. , would be purchased, except with the limited purpose of public uses. This is the only project we have in ~/hich probably no prior land will be bought...and then re~old for private use, that's what usually happens in development. I would be very surprised if this happens in this situation. The only instances of public purchase is going to be for public purposes...pub1ic uses such as a parking'lot or a park or something of that sort. So, this is the least use of eminent domaiR, the least use of the buying pOI.ter of an Agency that,~te have as a client. . l'lrs. ~lorton: Why couldn't the City have taken part of the P. E. through the use of eminent domain at one time. I , Jacobs: They could, if they wanted to. That's not \'Ihat they wanted' to do at the time. They wanted a certain portion of it...was to be ' taken for pub 1i c purposes'... but by and 1 arge they \'Iere goi ng to enter into owner participation aqreements almost throughout the project, and 1 et t~e OIiners at tha t-' t-i me, or the peop 1 e thems elves, deve lop the land privately wi~hout bein9 taken by the public... . , , ,,/' Mrs. Morton: Can they still take it by eminent domain? Jacobs: Ccrtain1y, that is I.that the struggle is right nOli...is to decidc l'/hether it should go parking or park or private density on sorile of it or..... ,I I Covington: The associated fact \'lith this is, should the City take' title to any land under eminent domain...it must be prepared at that time to pay for that land at it"s going market value. .,.subject to ~that- ever negotiations or condemnations or judgemcnts should determine the appropriate value for that land. But they must at the time of condemnation, be prepared to spend tax money and have it available to, in a sense, have it available in escrow, is that not true? . Jacobs: Oh yes: you can't go ahead with eminent domain without the ,------------ money to buy it. , That lias my point made earl ier that' this' plan, at almost no expenditure, that almost entire taxes were comingin, in fact the ta~es were almost far and away more than you needed. Almost none will be used in comparison with need, except for the sewer situation. The se~/er situation Ii,as the:'primary cause that evolved this. Mrs. Morton: That property that has already been purchased, has that been purchased^for cash? Covington: The two acres 'at the southern tip...yes, that lias acquired for cash for $100,000. isn't that correct, Mr. Holden? ,( Mayor Holden: (from the aUdience) Yes, by the City. 'I , . Covington: The specific point we're talking about, that theoretically, the City had the capacity to do everything that the Agency has indicated in the last year that it wishes to do...in terms of public acquisition and dedication. But practically, it becomes impossible for the City to accomp1 ish the same contro1~ in anYl'lhere the same amount of time, because to do so they must have the money immediately available when they condemn...when they assume such property by eminent domain. Because the City just does not have that money....there are many priorities that every citizen in the City certain feels comes before ,~ 1R4 . 11-1-71,. ,- Page T11enty-five - Redevelopment Agency t,liniJit..es 1'111/71 Covington (continues) acquiring a large amount of land at relativelY' high price per acre ~Iithin a short period of til'\le. It ~lou1d increase our tax rate dramatically...or it 110u1d force us to lose many valuable servtces that we give high priority to. So technically, its possible, but practically, it is not possible. Any other questions from the audience under old cusiness? Any,items under New busincss? Lindstrom: I would like to ask the other Agency members ,'if we would 1 ike a resolution'dravm and fOr\'/ardcd to the Ci"ty Council' and the nel1 Redevelopment Agency outlining those restraining factors that ~/e ~lou1d deem necessary under the current law...and political clime in Seal Beach, just in case they decided to appoint another dtizen agency so that they, it'wou1d be a matter of record that citizens of this City would know exactly what kind of controls can be imposed-on a citjzen Agency. ,I , \ I i I . , 1 ,j \ i I " Covington:, "1y thought is that I think that the' present COllncil as constituted, if they wished ,to do this, would certainly take advantage of the numberous instances that Mr. Jacobs referred to earl ier this evening. Hhere this has been done by other cities and they have drawn up specific new Agency plans that contain all the controls and restraints, and under those circumstances, probably, the AGency plan that has been so written and the backlog of expertise that Mr. Jacob's office and other similar men v:001d havc available to our Council would probably be far superior to whatever we could, as non-professional peQp1e, could gender here.' So I think there's' a large volume of avai1ab1~-materia1 that they ~ou1d have awai1abla to utilize that 110uld be very effective. ,I agree \'/ith you, I ~lould certainly hopc they 1'/ou1d do so and I ~/ou1d expect them to do so. llut I feel that probably it \'lou1d be ineffectual for us to try and codify these stringent controls, because they have already been done in a much superior manner many times and could be available to the, Council should they desire'-to -do"so'. ,'- , Lindstrom: I have the feeling that the AGency as constituted is gOlng ': back to fifteen minute,meetings...prior to Council meetings and the public just isn't going to be informed. I just have that fee1ing...that's ~ own personal humble opinion but... its there... I Ihave that feeling. ~lrs. Baum: . (indistinguishable)...genera1 asked about effectivity of prigina1 plan.... Jacobs: No, 'the original plan, the densities g~ up rather high~ but nothing is said that they have to dwell on this high density. They can develop I.lith lower densities and let.. .as it, is now they can ...the way the plan is phrased....it's merely phr~sed in terms of maximums....so th~y could either put the develo~nt that high or develop it lower. Mrs. Baum: In order to take the reconmendations of the outgoing agency l'li 11 they have to 1101 d pub 1 i c heari n9s. ~acobs: No. In order to take the recommendatio9s' of the outgoing agency they will have to get that land developed at a lower density immediately. Of course that's how you're going to solve all this is to get the I land developed the way you want it as soon as pGSsible...that's where all this will end. I don't care how many times you hold public h~arings or hO~1 many times YOll bring densities'down or plrt them up...if, five years from now the land is still empty, you sti'n won't know hOl1 its going to be developed. Until the land is committed and until its , built on, 'you don't know....the rest of this is, merely making money for lawyers. Which I don't mind. ' I ,j 11-1-71 ,1~5 - . Pagc Twenty-six - Redevclopment Agency Minutes 11/1/71 , Ilrs. Baum: 11iss Dorr mentioncd refercndum, is, initiative the! same a~ referenduml (generally my words, cannot understand) Jacobs: No. Initiative is 1~llere you go out and gather the votes and create nevI lal'/. You vote 'on this ultimately.. .they are familiar on State ballots. A refcre!ndum is when an ordinance is ,adopted by the City Council, you don't wil'nt that ordinance to become lal'I, you go out and gather the number of signatures, you haVe! people vote on it and you stop it, before that ordinance becomes law. Initiative is when you go out and make up the! lavl in the first place '~Iithout it ever golin9 through thc City Council. Neither of these are appli- cable to Redevelopment Law. Except when the Agency was created in the first place... for that thirty dayperiod v/hen a referendum petition could have been f~led...once that ,passes then there's no way. Lindstrom: l'd like to talk about something 'here. The thing that we've tried to do, it changed the olij redevelopment plan to something that is more desirable for the citizens of old town and the hill with respect to the,sewer problem which only old tOV/n and the hill is involv,ed, \'/i,th respect to the P E right of l'/ay \'/hich is the direct effect on the hill and downtown area, especially the downtown area. District One and District Three are involved, as political districts., The other thing vie did was to submi t to the City Counci lour recommended changes to the Redevelopment Plan to the General Plan. ^1l they did 'was to accept our recommendations, to my knowledge: They have not completely defined the general plan or the redevelopment plan per se and its still in state...a~l_they did was accept our recommendations there's no reason vlhy tomorrOl'I, I'/i thi n the next \'Ieek or the ne<<t three weeks, v/hen the Ci ty Council takes over, as the Redevelopment Agency.. .couldn't suddenly adopt a whole new' general plan and thEm submit it for public hearing as a tentative general p1an....but that~s the time 'to get stormy...that's the only time you can get stormy...right nO\'1 there's nothi ng. . . it' s- non-ex,i s-tant-.~~l-tl.s- her-esay....,~.-i,ts!.. thi sand that...its still in study, its' in the ,hands of our City Fathers it'f in the hands of your City Staff. ,^nd a group of citizens r~viewing th~ genrea1 p1an...there's nothing., Jacobs: Let ~ add one thing...so it's fully understood. One city, Santa 1o10nica, has a redevelopment project that says the densities have to go no less than 100 units per acre...and no more than '150 ~nits per acre. That is extremeJy dense. That's be!en fourhgt out, they decided that's what they wanted and that's where it is. This ~lan,was.not drafted that way...generally plans that I draft, if my advice is followed, is that is supply as much flexibility as is possible so that you can make the decision ct. the time its developed. And therefore there,' s nothing here that says it has to be developed into. high del'lsi,ty. So if you develop it the way the Board suggest it be developed this is no more different'... its being fought out diffe"rently in this city... but its no more different than what we do in 90Z of thep1an when the plan allows certain maximum, but actually, in ,most cases, it's " developed at maximum considerably lower than that. Your maximums here are consideraably 10~/er than the maximum. in say Santa 1.10nilla. The maximums there are extremely high compared to some other cities. ~ It's higher than you like to see it developed. So all you do is take care of that end r ~ "the ilc'Ielopment of. it all, not in the major changes.. . it's being fought out as through threre has been a major change take place, but it's taken place more in terms of hour you want it developed, not in the necessity of changing the redevelopment plan. The redevlopment plan is flexible enough to take either one of these approaches yo~ have here. ' Co.vington: There, is sufficient latitude in the existing 'plan, ~/ith the alternative uses that are avi,lable ~/ithin the plan' that the major change of direction that this agency approved, submitted to the Council and subsequently approved in late /lay or early June, all these changes could bc implemcnted without waiting for the general plan. . However except for those that was necessary to begin now, that is the sewage... ... I" 1 I' , -, l' . i ... -" .- I.- .J 11-1-71 .s:~6 . :' I \ \ \ Page T\~enty-seven - Redevelc~ment Agency r'iinute,s 11/1171 Covington continued: it tlas 'deemed 'advi.able and understandably so, in my opinion, by the Council and I ,'/ould concur as an ,\gency H ember to wait on any mdjor committnlent, you can begin your negotiations but wait until the nel'/ mastel" plan has been release d sometime next year., I'lrs. [laum: ......?., : Taxf:s \'Ii thin the agency project are to be spent here.. .now those taxes outside are goint to have to be made liP I sometime and the County still wants taxes.. .people 1 iving around the agency are going to have thei r taxes increased to make up for that... ' - Jacobs: This is true to some extent, althrough it's infinitisimal across the County as a \'Ihole or the -School Districts' as a ~Ihole. If you're talkin~ about the city tax rate...and you 'figure it out on paper and assume you're still going to do all the things y6u,'are talking about here...b~y ...stop that strip from going one way and buying it and putting it into public parking....do all the thi~gs you're talking about aoi~g...you're going to have to raise t~e city tax rate, property taxes, in 'order to be able to do that. And you're not going to have the dollars that would come from teh schools and the County. So if you're still going to do those same things...the taxes of teh city taxpayer has to go up. With redevelopment project, as l'ar as the city taxpayer is concerned, assuming you're still going to do those same .tnings...the taxes of the city taxpayer's taxes are going to go down: The reasons for redevlopment is very simple and can be put out in t~IO phrases... ..Number 1., you get all the taxes that are going to be paid into' that project area, and LIse it back in and around the project area, \'lh1ch you can't do l'lith it. and ['Iumber 2, you are able to use emirient-domain to do assembly and what's ever necessary in a way you couldn't do it before. Everything else, generally speaking, are things you could do I~ith some other govel"nmE!l1tal process. That's the key and that's the heart of the Redevelopment Agency in terms of these additional techniques that are available...and in that sense and thi s is a lI-/ays a 11 ttl e bit of irony to me as 'I \'Iork in: ci ti es; .. but this is why there-is' absol utely-no-reason--in-finanC:ial'terms; fiscal term~, for anybody in the City of Seal Beach to be opposed to this project. I can see density prolllems'and I can see other problems ", you might argue about. ..but in fiscal terms, you the taxpayer, each one of you individually, are better off with this project than you would be without it. If you're going to do what you're talking about ...talking in pur financial terms. This is no~ understood very often. ~ut that is, l'lhat the situation is. !lOI'1 if you don't \'Iant to do these things, you want to let the strip develop privately, and not pay for the parking 10t...you don't \'Iant to put parks in, you don't I'lant to help the school. district.. . some of these other ,things. Then, of course, obviously, the taxes are going to be paid but you are getting less for ...you're not doing the same. t&ing. I Nrs. Norton: You're saying then that if we go ~lide open spaces \'Ie are better off 'as a redevelopment agency, but if we go apartment house$, commercial. then it goes privately the other way. Jacobs: It, doesn't matter...it would, come out the same way, fiscally. I'm talking about dollars. It's coming out exactly the same way with or without the project if you are going to build in any way. Assuming that ~rivate loans can be exactly the same with or without the project. and you are not going tEl have any public expenses... then all you need I to have the project for is control over housing development. I mean you've got better legal contl"Ol here than you do thro\lgh zoning. ,'But - you wouldn't be spending any money at all. taking your assumption all the \'Iay. because there \'Iouldn't be any money to spend it for...assuming you are not going to do the sewer. " " , .I I I I ._, .. .,- - -. -. .. , ' Page Twenty-eight - Redevelopment Agency Minutes 11/1/71 , " .. ~ . Covington: I1r. Jacobs, I think it might be t;orth\~hile, for clarification in the audience, because I sense that jt's unknown to some individuals,.. the fact that.xhe tax diversion money to the ^gency is not all the taxes on a particular parcel, it is only part of the subsequent taxes. Jacobs: It's only the increase in assessed value that takes place after the project starts. But the point is that you .still don'~ get the taxes.. ..you just don't keep the taxes automatically, you get the taxes only if you've got something to spend it for. I.'ve got a project where they don't 'hold back the taxes at all. they have nothing to spend it for, the project is being used primarily for land use control. It's a much better technique to control the use of that land. the density control you \~ere referring to... than any other technique known to lawyers. It's a much better way of controlling the land use for ~he way you want it to be used. Even if you never use eminent domain and you never use tax increments. If you are going t to use tax increments you have to create a debt.. .you hav'e to spending it for something. You've got to be puilding a sewer...you've got to be getting land, taking it off the rolls for parking...you've got to be paying for something to put it in.:..you don't just get that money and put it in a big pool and swim-in it. You take it only if you can spend it for something. And if you decide you don't want to spend it for anything., .and you still have the project, then \ it works out exactly as though you 'didn't have any project. except you've got a better land use control. you've got a petter legal 'technique to make sure you don't get the high density. t~r. DiPiazza: Some people--ar.e concerned about the net affect on 'the County.' - ~,,' -- r Jacobs: Right now I'm working with three University of Southern' California law students...to do an analysis exactly like that. It's. too complicated to go into it fully tonight.:.but assume the situation in which you bring all the,unused--.l-and,-or-m-l-sused-l-a-na..-or-badlY used 1 and, . . . back into producti ve use, .then the impact woul d be ni 1 . on the County. In fact, the County would come out on the plus side, because ultimately you'd be taking care of the problems. He've got one or tl'/O projects where. in the middle of the project, a major building was going to be constructed whether or not ther.1e had been a project. But it was in the middle of a blighted area. Let's assume we don't take any taxes fr:om that building and let those taxes, go back - to the tax agencies and only finance the project on the new things.that are going to be developed. If we do that those are coming/along much more slowly in order to buy the land, in order to do some of the things you have to borrow your money early....so you borrow it early ,before your flow starts properly. In borrowing it early, you have to fund interest, in borrO\~ing it early you have to pay i1 higher rate of interest.. .also a longer term, so \'Ihen you figure it out. over a thirty,. year period, and I've done this, I had a: project the other day..wh,ich). we're doing it jneffectively this way, we're paying 6 to 8 million ' dollars more in this particular project over a blenty year period to pay it off. Rather than \~hen you get the flol~ front-end from the new building that's going up. The County may say that I'm losing that right no~/, but you take it over a tl'lenty year period. they I~ould, be saving 5 or 8 mi11:~~ dollars by letting that front-end money come ' out more effe~tively. more efficiently. to operate the financing technique. < " , ~ " " '! ': I ,.. . .~'lt~ -, ~ ! l , \ I , l I \ ! \ 11-1-71 \ \ -., - ----- ,-. - ,- \ I I I ." :<oL'> . . .' " l. I ~ Page TI~enty"nine - Ilede'/elopnwnt ME.'ncy t,jinutes 11/1/71 Jacobs continued: ~lost people never realize and I've been at meeting after meeting after meeting like this. People get upset by the sewers and the streets and the parks and so forth, but every project that I'm' working :In, if I'm goin~1 to spend in that project 10 million dollars and.finance it over a tl'ienty year period it's going to cost me trleoty I million dollars. And you doublc the final cost and you find some way of cutting down the cost of money which you are able to do in this project vcry effcctively...thcn the effectiveness ,is not there. I mean the efficiency is there, the inefficiency and the ineffectiveness is not involved in this project. So Hhat l'lc're searching for and what what I'm doing l'/orking I'lith these la\'l students is to find a technique to measure one project versus another in terms of its efficiency, fiscally, and financially...and be able to come out with a better way , so that we can ten immediately as to whether t1Jat project is being planned efficiently. Most of us that are around it kn~/ but the citizens generally 1'/il1 knol'( more about hO~1 much that sel~er cost and won't know a thing about how much it cost for the money you borro~led. And the money l'li 11 be the major cost in any project... financed over a twenty year period. It's going to be the money, not the sewer itself, not the parking lot. but the cost of your money. So, if yo~ can pull it off so you can do it in 5 years or only 10, years you are usually coming out with moderate cost in terms of money and it's bettcr to do it today or the cost of construction will eat , you up anyway. If you finance it in twenty-twenty-five, thrity years, then it becomes very inefficient.... wel~, one efficient way to ' do it is to find a tax flow imediately that would help you pay it off just as quickly as posslbie and so this gets into a very complex fiscal.... . , / . Mr. Dipjazza: Does the County and all the other ~gencies really do I better over the long run? Jacobs: No question-ab-oot--it-:::tlie day they get rid of slums and blight is the day that your taxes will go down substantially. . Myers: l1e did that, ,by the way. ~Ie did a bond interest study and found out h01'1 much money it ;.Iould save us in bond interst money if \'/e used redevelopment agency money. Mrs. Dorr: I have so much more confidence"in the people on the , Agency than,... Jacobs: I don't have any confidence in these"people..:I don't even knol~ them. I have confidence in \'Ihat this process is all about and I also have confidence in elected and appointed officials and I have worked in 20 and 30 cities in my lIfe professionally and I do not plan to be fooled and I do not plan to be dishonest, But you get an occassional fool and an occasional dishonest man...but fundamentally I find that the P,merican system of government works pretty well. in California it ~ic:rl:s even better and I have plenty of confidence in these people in terms of having confidence in the system. I don't have any idea whether these men beat the:fr. wives and kids or not...I don't know anything about them but I have conf~dente in the City Council, I find that the main thing in a City like this that has a project that is as effective as this one...and it's rather interesting the cities where I have the biggest fights going on ar~ the cities with the least problems and best projects.-.if' , you have a real problern'in your city you usually are buckling down and get working on them. Miss Dorr: I was at a Planning conference not'too long ago where the p planning directors from other cities around and lawyers, that had been involved in the city plarning and t:l(; outcume of that I~as that a fundamental change in any redevelopment agency I~ould be to change the process of evaluating the land..,the property tax basis from the outset...so it would be nice if the... I Page Thirty - Redevelopment Agency rlinutes' HIl/71 Jacobs: I am working on this all the time, there is no question that the tax increment system, I~hich' is a very efficient system... it is like perpetual motion in one sensc.-.if'you really think it out all the l'lay. The tax increment system is the best possibl thing that you co~ld use right now in light of a very, very bad tax system. What is needed is tax reform which the California Supereme Court recently is forcing by its decision on the school financing being unconstitutional and the State Legislature has forced this to the COUI.t because since 1965 the State Legislature has not 'been able to come ar~und with a tax reform bill because of the influence of lobbyists and other people TI'-e thing that is needed in California is a fundamentu'l reform of our tax system. When that happens, the negative problems will all go away, we will get at. this problem sensibly. But in lieu of that. the, law firm ~Ihich created tax increment and throught it out 20 Oil 30 years ago, created a very. very interesting system to develop on one way of doing it and to bring about the doing away with our plight until we get a better tax system. Some places like Australia dnd New Zealand have tax systems which work on the basis that is...the tax collector doesn't stop you from building they stop you frqm not building, and if you are s'itting there with empty land, wastefully, and you are not using it for some kind of useful purpose, you get taxed heavier than if you build a building. The way our system works. if you build something better, if you add a new beautiful room. or if: you paint your house. if you do something better to your house, your taxes go up and it works against you. Our system stinks..~and people don I t real i ze thi s. The sys tem has to change but. Sa'crament,o has not ' been reacting to it and therefore in the California Supreme Court when everything becomes intolefab-le.. .Courts finally have to get in and say its intolerable and a~cording to the constitution .... that's what is happing to us and if the Ca,lifornia legislature-'doesn't react..and they are not reacting apparantly in the end of this session. the Courts are going to be forced to do it next year. . Miss Dorr: I have to disagree with holding up the Bunker Hill project' as an exemplory project for redevelopment in a sociological sense. I'd like jou to tell me I~hat,tt'~.\$'are using this ina promising \'Iay as far as providing a real impact in clearing out blight areas and providing for the people they have displaced. Bunker Hill simply moved them over, a fel'l blocks. . ' Jacobs: I refer to Bunker Hill as far and a\'lay the most successful project fiscally. There is no question about it. Let me give you ~ an example of the Bunker lIill project in Los Angeles versus the San Francisco, project. San ,Francisco is in debt gO million dollars. . _ .______ right now because it's create~ sociological projects. What they did is they took high land value land and reduced it to lo\~ laM value. took high density land and reduced it to low density land they had absolutely no way to make up their local share to the federal government. There's no way to remake American without understanding fiscal and budgets. The America of tomorrow is founded on the budgets of today. If you haven't got your fiscal world in tune here you aren't going to redo any of the social problems. In Los Angeles what we did is we worked a project first, Bunke~ Hill, which created a high fiscal return... which meant we paid the entire 3/3rds share of the net loss....al,... one hundred per~ent share of the net loss in Bunker ,Hill. The Feder~J . Government let us take the two-thirds of that and apply it to t/atts. We we're getting almost 100% grant out of the Federal Government for Watts. We're redoing Watts, based on the success of the Bunker Hill project. We're redoing other black projects and other sociologigal projects that way. San Francisco, on the other hand, is only now creating a fiscally strong project, twe~ty years later. And they are 90 million dollars in debt in terms of the local share. , -~ ~ 11-1-71 i ~. .to ._ I I I NI)~I there arp. things here that -:!I)n't appe'l.r on t.~e surface...i1ot:that there are any that have been done in this dield. and 90 percent of what we knol'l about any of the projects is emotional... this one included. And one of our problems in this field is we've got to stop dealing with this in emotional terms and start dealing ~ith it in absolute .- - ~ . ~....- - ------ , . " ,1'~9 .' l . . j .1-1-1-71 ,.)jrftO "0, . 1- ,I , ... .' .:. '. " r ~ .' Page Thirty-one = Redeve10pmcnt Agcncy Minutes 11/1/71 Jacobs continued: impact terms. To deal with this problem this \'lay' is no way near as effective ~s dealing \'lith actual numbers and time and place and getting to the project, I I 1 I I I I I \ Miss Dorr: We11, you jus~ have to turn it over to computers, then. ,Jacobs: ilo. This is the challange-to Amel"ica in my judgcr.1ent. Is that you have to find some l'lay of getting the appropriate facts to the decision makers at the proper time. r.10st decision makers... councilmen, mayors, everyone else...finds it extremely difficult to get the real facts before them at the time that the decision has, to be made and that's the tough problem. \~e've got so much in the vlay of information today, that hOl1 do you retrieve it out at the right time and place and tio the right things...it's extremely difficult. Hc're going througha total reorganization in local ,government similar to some of the revolutions the federal government went through a long time ago. Let me give you an example, if you want to !let the pm1er away from the federal government. all you do is stop requiring the vote of the people on bonds. Then local government can do it and hot have to go to the federal government. As it is nO~1 the ' only reason you have to go to the Federal Government is they don't have to have a ~~te of the people. therefore, they've got full taxing pO\'ler. If we require them to have the vote of the people every time and the 10!;aLgover.nment didn't, then you can make your Oltn way in the City. The ~I:lole system is out of \'Ihack right now. I~here l'le are going to come out. I don't knOl'I. But it titally needs reconsideration and-'reorganization. You could never run the federal government or the state government if they had to run it the way vie do. The la\'ls just work against local government ever solVing its problems. So we become artful dodg~rs to find ways to solve it in spite of the 1a~IS. I I , I , ; . , Covington: The next item-on-the-agenda~s-a~most-an-anti-climax. ' oral communications. . If we have no oral c~nmunications, I'd like to take this opportunity...my last opportunity...as Chairman of the Agency to thank each of the members present tonight and those I~ho are not present. .. those that Nere with us and no longer sit on the board... for their patience and cooperation, their di1igent interest, their conscientious approach to all the problems and just the pleasure of getting to' know them and work with them. As Mr. Jacobs said, and I fully agree with him as an individual' who has observed how the system works...you can take a number of people of virgin attitudes, personalities, interests, but \'Iho have a con~on interest in a specific problem and are conscientiously concerned as citizens for the betterment of their community, and you can achieve very significant resu1ts ana should have justifiable confidence in expecting that system to work in the future and I have observed it to work in the past year. Thank you_ Lindstrom: I would like to make a short statement. I have enjoyed being on the Agency. I would have enjoyed even more seeing a little l~rg~r attendance because most of our meetings were dealing directly Nlth these problems. ~le didn't have the audience and citizens '1- sitting out there, even though Ne advertised and posted our agendas at th~ library and the City. The thing that I would 1ike to see is morf;! of you people attending Agency meetings Vlhich is just as i~po~tant.as your City Council meetings, because now they are sltting w1th two hats on. In fact, three hats...the Sanitation District. the Redevelopment Agency and the City Council are all tied up in one little knot now...as far as the'financing goes on what we have been proposing. So it behooves you to see to it that '. 11-1-71 :~.I1;~:l ~. ,~ " ~. Page Thirty-two - Redevelopmcnt Agency Minutes ~ Nov~mber 1, 1971 'I the proper pl ans are adopted for the City... they haven't been adopted yet,..theY'loe still in a state of limbo, So, you're going to have to be the haSsler at everyone of the meetings to keep everyone honest.. ,keep things going for the betterment of the City and enjoy the democratic process. Jackson:' I'd certainly iike to se~ond that...Sven's re~arks about the citizens taking an active part in the Agency and just knowing. what it's doing...attending meetings because \~e have not had very many ,people. The only time people get out is when there is something hot going. But the plan itself is really not very complicated and you can'get a copy of it and read it and know what is possible for the Council acting as the Agency. to do within the project area. They have to know what you want...what,these people 1 iving here l'lant.. .because there are alternatives in the p1an...you know they have to have feedback. We didn't have ~hat three 'years ago. four years ago. The plan I~as put together, it was pushed through.... the legally required publ ic meetings.. .but very fel'l people attended...very fe\'t people knevl \'lhat.\'Ias going on. The only way to keep them doing what you want them to do is to be involved in it. I'd like to thank Jay very much for a very good , job of Chairing these meetings. Lindstrom: I'd like to thank him too, for being my buffer. The meeting vIas adjourned.by the Chairman at 10:15 p.m. . . ~ - ./" . I ~ ~~ . \ Executive Director-Secretary I ..~