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HomeMy WebLinkAboutReso 42-2005RESOLUTION NO. 42-2005 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION ADOPTING FINDINGS IN RESPONSE TO WRITTEN OBJECTIONS TO AMENDMENT AND FISCAL MERGER OF REDEVELOPMENT PLANS WHEREAS, on March 10, 2004, the City Council adopted Resolution No. 25-2004 which designated a Survey Area for the purpose of amending the Downtown/Central Redevelopment Project Area ("Project Area") to add territory to the Project Area; and WHEREAS, on April 15, 2004, the Planning Commission of the City of South San Francisco ("Planning Commission") adopted Resolution No. 2633 establishing the boundaries of the area proposed to be added to the Downtown/Central Project Area (the "Added Area"), approving a Preliminary Plan for the Added Area in accordance with Health and Safety Code Section 33324, and recommending that the Agency accept the Preliminary Plan; and WHEREAS, by Resolution No. 06-2004, adopted on May 12, 2004, the Redevelopment Agency of the City of South San Francisco ("Agency") approved the Preliminary Plan and directed staff to prepare amendments to add the Added Area to the Downtown/Central Project Area and to fiscally merge the Downtown/Central, Gateway, and U.S. Steel/Shearwater project areas; and WHEREAS, the Agency subsequently resolved that the fiscal merger should also include the E1 Camino Corridor project area; and WHEREAS, on December 8, 2004, the Agency approved the Preliminary Report prepared in connection with the proposed Plan Amendments and Fiscal Merger and authorized transmittal of the Preliminary Report to the Planning Commission and the City Council; and WHEREAS, on March 9, 2005, the Agency adopted Resolutions accepting the final Report to Council ("Report to Council") and authorizing transmittal of the Report to Council to the City Planning Commission and the City Council; and WHEREAS, on April 7, 2005, the City Planning Commission adopted a resolution finding that the proposed Plan Amendments are consistent with the City's General Plan; and WHEREAS, following publication and delivery of notice required under the Community Redevelopment Law (Health & Safety Code Section 33300 et seq.) (the "CRL") and consultation with affected taxing entities and with project area property owners, business owners and residents, the Agency and the City Council held a joint public hearing on April 27, 2005 (the "Joint Public Heating") to consider the Report to Council, the Supplement prepared in connection therewith (the "Supplement"), and the proposed implementation plan included as Appendix H to the Report to Council (the "Implementation Plan"), and (i) an amendment to the redevelopment plan for the Downtown/Central project area to add the Added Area to the project area, (ii) amendments to the redevelopment plans for the E1 Camino Corridor project area and the Downtown/Central project area to extend the time period within which the Agency will have authority to acquire nonresidential property by eminent domain within such project areas, and (iii) amendments to the redevelopment plans for the Downtown/Central project area, the E1 Camino Corridor project area, the U.S. Steel/Shearwater project area and the Gateway project area in order to effectuate a fiscal merger of such project areas, (collectively the foregoing amendments are referred to herein as the "Plan Amendments and Fiscal Merger"); and WHEREAS, pursuant to Sections 33363 and 33364 of the CRL, the City Council is required to adopt written findings in response to all written objections received from affected property owners or taxing entities before or at the Joint Public Heating. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco as follows: Section 1. The City Council acknowledges receipt of a letter dated March 29, 2005 from Vanessa Clark (the "Clark Letter"), a copy of which is included in the Supplement. The City Council hereby: (A) approves the Agency's response to the Clark letter dated April 12, 2005 and included in the Supplement, and (B) finds that (i) the proposed Implementation Plan and the Plan Amendments and Fiscal Merger do not contemplate any project involving the property that is the subject of the Clark Letter, nor do they contemplate any projects that will involve displacement of residents, and (ii) pursuant to the CRL and the redevelopment plans for each of the City's project areas as proposed to be amended, no persons shall be displaced prior to the identification of suitable replacement housing and the provision of relocation assistance as provided by law. Section 2. The City Council acknowledges receipt of letters from the San Mateo Community College District ("College District"), one dated April 12, 2005 (a copy of which is included in the Supplement) and one dated April 27, 2005 (a copy of which was provided to the City Council at the Joint Public Heating and is on file with the City Clerk) which address the issue of the Agency's obligation to make statutory passthrough payments to the College District for the U.S. Steel/Shearwater Project Area pursuant to CRL Sections 33607.5 and 33607.7 as a result of the 2004 amendment eliminating the time limit for debt incurrence from the Redevelopment Plan for the U.S. Steel/Shearwater Project Area. The City Council hereby: (A) approves the Agency's response to the College District dated April 22, 2005 (a copy of which is included in the Supplement), and (B) approves the payment of statutory passthrough payments to the College District for the Shearwater Project Area in accordance with CRL Section 33607.5. Section 3. The City Council acknowledges receipt of a letter from the County of San Mateo dated April 27, 2005 (a copy of which was provided to the City Council at the Joint Public Hearing and is on file with the City Clerk) which addresses the projected diminution in revenue to the San Mateo County Flood Control District ("District") as a result of the Proposed Plan Amendments and Fiscal Merger, the anticipated revenue loss to the Colma Creek Flood Control Zone ("Zone"), and the resulting negative effect on the District's ability to construct and maintain flood control improvements. The letter asks the Agency to prepare an agreement that would "exempt the Zone from any loss resulting from redevelopment." The City Council hereby (i) finds that pursuant to CRL Sections 33352(n)(1 ) and 33607.5 (f), the Agency is not authorized to make monetary payments to any taxing entity other than payments made pursuant to CRL Section 33607.5 or pursuant to a passthrough agreement entered into prior to January 1, 1994, and (ii) directs Agency staffto continue discussions with the District regarding District projects which the Agency may assist. Section 4. The City Council acknowledges receipt of a letter from the County of San Mateo ("County") dated April 27, 2005 (a copy of which was provided to the City Council at the Joint Public Hearing and is on file with the City Clerk) which addresses the projected diminution in revenue to the County General Fund as a result of the Proposed Plan Amendments and Fiscal Merger, and which asserts that (i) the County's projected revenue loss over the life of the merged project areas would be $45 million; (ii) all work has been completed in the Gateway Project Area, and the Gateway Project Area should terminate in Fiscal Year 2009 when the tax increment cap for the project area is projected to be reached; (iii) the Downtown/Central Project Area should terminate in Fiscal Year 2021 when the tax increment cap for that project area is projected to be reached; (iv) the Added Area is not characterized by conditions that support the establishment of a redevelopment area, and development of the Added Area is economically viable without redevelopment; and (v) the Agency has not satisfied requirements for the provision of affordable housing and does not adequately address such requirements in the proposed Plan Amendments and Fiscal Merger. The letter asks the Agency to prepare an agreement that would "mitigate the unanticipated revenue loss" resulting from the proposed Plan Amendments and Fiscal Merger. The City Council hereby finds that (i) as set forth in Exhibit A-1 attached hereto, the projected revenue loss to the County from the merger is less than the County's estimate, ranging between $20 million and $30 million, provided however, if the Agency's receipt of tax increment from the Gateway project area were to terminate by June 30, 2020, it is estimated that the County's projected revenue loss would be reduced by approximately 50%, amounting to between $10 million and $18 million; (ii) this financial detriment does not take into account the fiscal benefit of higher property taxes payable on the increased assessed value of projects that are assisted by or catalyzed by redevelopment activity; (iii) CRL Section 33485 provides that project area mergers "are desirable as a matter of public policy if they result in substantial benefit to the public and if they contribute to the revitalization of blighted areas through the increased economic vitality of such areas and through increased and improved housing opportunities in or near such areas"; (iv) as set forth in Exhibit A-2 and the Report to Council, significant blight remains in the existing project areas, including the original Downtown/Central and Gateway project areas; (v) redevelopment of the Gateway, original Downtown/Central, and other existing project areas is not complete, and as set forth in Exhibit A-3, and as further described in the Report to Council and the Implementation Plan, the Agency plans to undertake significant public improvements which will alleviate blight and contribute to the economic revitalization of the existing project areas; (vi) as set forth in Exhibit A-2 and the Report to Council, significant blighting conditions exist in the Added Area, and as set forth in Exhibit A-2 and the Report to Council, the cost to mitigate seismic hazards and environmental contamination make it unlikely that the Added Area would be redeveloped absent Agency participation; (vii) as set forth in Exhibit A-4, and as further described in the Report to Council, the Supplement, and the Implementation Plan, the Agency has met or exceeded its obligations to provide low and moderate- income housing, and plans to develop or assist in the development of a significant amount of affordable housing in the future; (viii) pursuant to CRL Sections 33352(n)(1) and 33607.5(f), the Agency is not authorized to make monetary payments to any taxing entity other than payments made pursuant to CRL Section 33607.5 or pursuant to a passthrough agreement entered into prior to January 1, 1994; (ix) upon compliance with all requirements of law, including without limitation, the completion of any required environmental review and the adoption by the County, the Agency, and the City Council of the findings required under CRL Section 33445, the Agency shall pay up to an amount not to exceed $5,000,000 of the cost of the installation and construction of public improvements and other projects mutually agreed upon by the Agency and the County; and (x) provided that the County and the Agency reach agreement, the City Council approves the addition of language to the proposed amendment to the redevelopment plan for the Gateway project area to provide that the Agency will not receive property taxes pursuant to Health and Safety Code Section 33670 with respect to the Gateway project area after the earlier of(a) June 30, 2020, or (b) the date upon which the combined tax increment allocation limit for the merged project areas is reached. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a regular meeting held on the 11th day of May 2005 by the following vote: AYES: Councilmembers Richard A. Garbarino, Pedro Gonzalez and Karyl Matsumoto, Mayor Pro Tem Joseph A. Fernekes and Mayor Raymond L. Green NOES: None. ABSTAIN: None. ABSENT: None. ATTEST: Exhibits Exhibit A- 1 Exhibit A-2 Exhibit A-3 Exhibit A-4 Financial Impact on County Revenue Blight Remaining in Existing Project Areas; Added Area Blight Conditions Public Improvements and Projects to be Undertaken in Existing Project Areas and Added Area Affordable Housing Production and Furore Projects Exhibit A - 1 Financial Impact on County Revenue Through the proposed fiscal merger, the Agency proposes to invest tax increment generated in the Gateway Project Area into the Downtown/Central and E1 Camino (Original and Added) Project Areas, so that ultimately the County will receive more property tax revenues as a result of the fiscal merger because the Agency's redevelopment efforts will result in greater increases in assessed value (AV) sooner. As soon as the Agency reaches the merged plan limit on receipt of tax increment, the County will start receiving its share of property tax from full AV (base AV + incremental AV) in all Project Areas. Furthermore, following amendment of the Downtown/Central Project Area Plan, the County will start receiving new statutory passthrough payments from the Downtown/Central Added Area, where the County is currently not receiving any property tax or passthrough payments. The existing contractual passthrough agreements will stay in place whether or not the fiscal merger (and/or the amendment) are adopted. The County's entitlement to receive contractual passthrough payments will be unaffected by the fiscal merger and the amendments. However, the fiscal merger will have a financial impact on the County in the near term, as described below and summarized in Table 1. Downtown/Central Added Currently, the proposed Downtown/Central Added Area contains no property that generates property taxes. Due to seismic hazards and environmental contamination, it is unlikely that development will occur in the Added Area absent the participation of the Agency. Without the proposed plan amendments, it is likely that private development will not occur in the Added Area and that the Added Area will continue to generate little or no property tax revenue. With the addition of the Added Area to the Downtown/Central project area and with the financial resources that will be available if the fiscal merger is approved, the Agency will be able to facilitate private development in the Added Area at a much more accelerated pace than would be possible without the proposed plan amendments. As a result of the proposed plan amendments, the County will start receiving statutory passthrough payments as soon as tax increment is generated by development in the Added Area, and will continue to receive such payments through the end of the plan. Upon termination of the plan, the County will receive its share of property tax revenues from the full assessed value of property in the project area, which is expected to be greatly increased as a result of the development facilitated by activity undertaken by the Agency. Thus, amendment of the Downtown/Central Plan to add the Added Area will result in an overall gain in property tax revenue for the County. Downtown/Central Original With the fiscal merger, it is anticipated that the duration of the Downtown /Central redevelopment plan will be extended, with the result that the County would receive contractual passthrough payments rather than its share of full AV for a longer period. The County's contractual passthrough is equal to approximately 80% of the County's property tax share. E1 Camino Corridor Original and Added Due to the fiscal merger, the County is projected to receive a higher amount of contractual passthrough payments from the E1 Camino Original Area. The merger will enable the Agency to stimulate growth in incremental assessed value faster, thus triggering an increase in the County's share of tax revenue under its contractual passthrough agreement to 80% and then 100% sooner. In addition, the County will also start receiving its share of property tax revenues from increased property valuation sooner, resulting in an overall gain to the County. Due to the fiscal merger, it is projected that the E1 Camino redevelopment project area will terminate much sooner because it is anticipated that the Agency will reach the merged cap on allocation of tax increment earlier than the Agency would reach the allocation cap for the E1 Camino plan alone. Thus, it is anticipated that the County will begin receiving its share of property tax revenues from full AV sooner, again resulting in an overall gain to the County. Gateway This plan will continue longer due to the fiscal merger. The County will receive statutory passthrough payments until the merged cap is reached; however, statutory passthrough payments are significantly less than what the County would receive as its share of property tax revenues from full AV, resulting in a negative fiscal impact to the County. Shearwater Due to the fiscal merger, the plan will likely end sooner, and the County will start receiving its share of property tax for full taxable value sooner. However, the County's contractual passthrough payments are approximately equal to the County's share of full AV thus the County receives approximately the same amount under the passthrough agreement as it would without the redevelopment plan. Therefore, the fiscal impact is neutral to the County while the plan is in place and thereafter. In summary, the proposed fiscal merger will ultimately have a beneficial impact through the creation of increased assessed value in the project areas resulting in a greater level of property tax revenues to the County once the redevelopment plans have ended. However, while the redevelopment plans are in place, the County is projected to have a negative fiscal impact, primarily related to the extension of the duration of the Gateway redevelopment project. The Agency estimates that the overall financial detriment to the County from the merger would range between $20 million to $30 million, depending upon how quickly tax increment increases due to projects facilitated by redevelopment and how long it takes to reach the merged cap on allocation of tax increment. This financial detriment does not take into account the fiscal benefit of higher property taxes payable on the increased assessed value of projects that are assisted by or catalyzed by redevelopment activity. If the Agency's receipt of tax increment from the Gateway project area were to terminate by June 30, 2020, it is estimated that the County's projected revenue loss would be reduced by approximately 50%, amounting to between $10 million and $18 million. Exhibit A- 1 Table 1 Exhibit A-2 Blight Remaining in the Existing Project Areas; Added Area Blight Conditions All of the existing Project Areas and the Downtown/Central Added Area suffer from blighting conditions as defined in the California Community Redevelopment Law (CRL). The existing blighting conditions in all four project areas are described in Chapter II of the Report to Council. The Project Areas each suffer from some combination of seven of the nine statutorily defined blight factors. · Deficient or Deteriorated Buildings Buildings in which it is unsafe or unhealthy for persons to live or work. These conditions can be caused by serious building code violations, dilapidation and deterioration, defective design or physical construction, faulty or inadequate utilities, or other similar factors. [33031(a)(1)] · Factors that Inhibit Proper Use of Buildings or Lots Factors that prevent or substantially hinder the economically viable use or capacity of buildings or lots. This condition can be caused by a substandard design, inadequate size given present standards and market conditions, lack of parking, or other similar factors. [33031(a)(2)] · Incompatible Uses Adjacent or nearby uses that are incompatible with each other and which prevent the economic development of those parcels or other portions of the project area. [33031(a)(3)] · Substandard Lots in Multiple Ownership The existence of subdivided lots of irregular form and shape and inadequate size for proper usefulness and development that are in multiple ownership.[33031(a)(4)] · Depreciated Values/Impaired Investments Depreciated or stagnant property values or impaired investments, including, but not necessarily limited to, those properties containing hazardous wastes that require the use of agency authority as specified in Article 12.5 (commencing with Section 33459). [33031(b)(1)] · Economic Indicators of Distressed Buildings or Lots Abnormally high business vacancies, abnormally low lease rates, high turnover rates, abandoned buildings, or excessive vacant lots within an area developed for urban use and served by utilities. [S 3OS l (b)(2)] · Residential Overcrowding or Problem Businesses Residential overcrowding or an excess of bars, liquor stores, or other businesses that cater exclusively to adults, that has led to problems of public safety and welfare. [33031¢)(4)] As the County's comments focus on the blighting conditions in the Gateway, Downtown/Central Original and Downtown/Central Added Area, the blighting conditions for these areas are summarized below. Gateway Project Area Redevelopment activities in the Gateway Project Area have resulted in substantial improvements to the Project Area. However, blighting conditions still remain in the Gateway Project Area, including poor soil conditions, the presence of hazardous materials, accessibility problems, and vacant and underutilized land at the CalTrain station. As presented in the Report to Council (pages 1I-6 to II-11, II-65), the Gateway Project Area has poor soil conditions and is vulnerable to earthquake hazards, which inhibits the proper use of buildings or lots. These conditions result in increased development costs that will continue to inhibit the build-out of the Project Area. The Project Area is primarily comprised of an industrial site with a long history of contamination, as described in the Report to Council (page II-65). Bethlehem Steel operated a mill and fabrication plant producing steel from iron ore from 1903 to 1977, and Edwards Wire Rope produced galvanized steel wire and netting from 1916 to 1978. Over the plants' operational lives, slag, oil and debris containing heavy metals, oil and acids were deposited or used as fill material throughout the site. In addition, the Project Area has leaking underground fuel tanks (LUFTS) as described and mapped in the Report to Council (pages II-17, II-65). These conditions may inhibit development or impair investment in the area. Circulation and accessibility in the Project Area is a constraint to development. The upgrade of the Oyster Point interchange is almost complete, but the local contribution from developer impact fees has not met the project budget, requiring the Agency to borrow funds from the County Transportation Authority. Furthermore, as described in the Report to Council (pages II-66 to II-67 and Appendix C) the CalTrain station is difficult to find, problematic to access, and has poor circulation within the site. It has a single ingress and egress point, informal circulation to the station, no designated way to turn around in order to exit the station, and defunct rail lines that impede traffic flow, all of which contribute to safety concerns for pedestrians. The presence of vacant and underutilized parcels in an urbanized area is often an economic indicator of blight because the private sector on its own has been unable to develop the properties. Many factors may deter private investment on vacant and underutilized parcels, including small or irregularly spaced parcels and configurations, inadequate infrastructure or public improvements, and poor traffic circulation and accessibility. The CalTrain station and adjacent vacant lot suffer from poor accessibility and circulation as well as incomplete infrastructure. The vacant lot is unpaved and is underutilized as a parking lot. The large parcel also contains inoperable rail lines, which act as a further disincentive to investment. Original Downtown/Central Project Area The Original Downtown/Central Project Area has numerous indicators for blight. In summary, as described in the Report to Council, the Downtown/Central contains unreinforced masonry buildings (URMs), deteriorating commercial and industrial buildings as well as an aging housing stock (pages II-20, II-24 to II-25, and Appendix C). URMs are potentially hazardous buildings during a seismic event, while deteriorating and dilapidated buildings present health and safety hazards to owners and occupants. The Project Area also has poor soil conditions and is vulnerable to earthquake hazards, which inhibit the proper use of buildings or lots, as referenced in the Report to Council (pages II-6 to II-1. I1-26). The Downtown/Central Original Area has a large number of hazardous sites, including five "Spills, Leaks, Investigations and Cleanups" (SLICS) and 53 LUFTS (pages II-26 to II-27).The environmental risks associated with these sites could inhibit the redevelopment of these sites. The Original Downtown/Central also contains incompatible uses, such as industrial uses adjacent to lodging, as well as traditional downtown uses, such as restaurant, retail and residential uses, abutting auto shops (pages I1-28 and Appendix C). The mismatch of uses in Downtown/Central puts pressure on parking, circulation and land use compatibility. Several small, inadequately sized lots exist on Grand Avenue, Third Lane, Fourth Lane and Linden Avenue (page II-28). The parcels are narrow with limited access--conditions which hinder their development. Although the Downtown/Central Project Area contains the commercial core, sales tax revenues are stagnant and declining for the Project Area. This is an indicator that economic progress is slow in the Downtown/Central, as cited in the Report to Council (page II-29). In addition, the total number of businesses has declined over the past three years, another indication that businesses are straggling in the Downtown/Central Project Area. Furthermore, the lodging establishments are underperforming as evidenced by the decline in the growth of the annual transient occupancy taxes (TOT) for the establishments in the Project Area as compared to the City as a whole, as cited in the Report to Council (pages II-30 to II-32). Finally, as referenced in the Report to Council (pages II-30, II-33 to II-34), residential overcrowding for both renters and owners is a significant problem in the Original Downtown/Central Project Area, where approximately 40 percent of all housing units are overcrowded. Lastly, Grand Avenue is oversaturated with businesses catering to adults, as shown by the large number of liquor licenses on Grand Avenue within the Project Area, as presented in the Report to Council (pages I1-33, II-35 to II-38). Downtown/Central Added Area As presented in the Report to Council, the proposed addition to the Downtown/Central Project Area, known as the "Added Area," suffers from three of the CRL defined blighting conditions. In summary, the following adverse conditions exist in the Added Area: earthquake hazards, poor soil conditions, flooding hazards, deficient and deteriorated buildings, as well as the presence of hazardous materials (presented on pages 11-40 to II-49). As presented in the Report to Council (pages 11-40, 11-43 to II-46), the Added Area is the site of the former Oyster Point Municipal Landfill, which was in operation fi'om 1957 to 1970. The shoreline in the Added Area was filled during the operation years of the Municipal Landfill. The fill consists of up to 45 feet of municipal and industrial waste that includes paper, cardboard, organic matter, wood, glass, metal, rocks, concrete, metal cans, bottles, wire, rubber, 55-gallon drums, paints and other materials. These materials likely contain hazardous materials such as polynuclear aromatic hydrocarbons (PNAs) and volatile organic compounds (VOCs). As further referenced in the Report to Council (page II-45), in addition to the potentially contaminated fill materials, the landfill received liquid industrial waste for disposal into two sumps between 1961 to 1967. The waste disposed in the industrial sumps included paints, thinners and coagulated solvent sludge. The San Francisco Regional Water Quality Control Board's (RWQCB) inspections in 1965 and 1967 noted disposal of drummed industrial wastes outside of the sump area. The landfill was closed and an initial soil cover was placed on the waste between 1970 and 1975. From 1977 to 1979, a clay cap was constructed on the landfill. The City and Harbor District then developed public open space, commercial space and harbor offices from 1979 to 1981. However, the landfill was not remediated. The hazardous materials at the former landfill, particularly the two industrial waste disposal cells, have been a concern for the County. In a letter dated February 16, 2000, from Scott Morrow, San Mateo County Health Officer, to Michael Wilson, City Manager, he states that, "The November 1999 Human Health Risk Assessment prepared by Gabewel in association with PES Environmental concluded that, the baseline cancer risk for benzene in an "unmitigated exposure setting" is exceeded for several populations evaluated...Based on this analysis, the cancer risk to human health from the proposed residential usage [hotel and timeshare units] is too great to allow this type of development." Furthermore, the engineering properties of artificial fill are highly variable due to the random mixture of materials and the probability for movement and settlement. Earthquake damage due to the poor soil conditions can be extreme in buildings constructed on improperly engineered fills or artificial fills (Report to Council, pages II-13 to II-16, II-40). The cost of addressing the poor soil conditions and earthquake hazards present in many portions of the Added Area would be substantial. This is of particular concern where new structures would place heavier loads than existed in the past. The environmental and site conditions described above will increase site preparation and construction costs for future development, affecting the feasibility of development. A private developer investigated the possibility of building a hotel at this location in the late 1990s, but concluded that it wasn't financially feasible for the private sector because the costs of development were too great in relationship to potential revenues. Redevelopment assistance is needed to help offset the costs ofremediation and extraordinary site improvement costs from the property's former use as a landfill. The Downtown/Central Added Area is susceptible to inundation from tsunami (tidal waves) or seiche (oscillating waves in enclosed water bodies) caused by earthquakes. Estimates for wave run- up are approximately 4.3 feet for tsunami with a 100-year recurrence, and 6.0 feet for a 500-year tsunami, as cited in the Report to Council (page II-10). In addition, most of the land adjacent to the shoreline and the low lying portion of the Added Area northwest of the Marine Center are within the 100-year flood hazard zone (Report to Council, page 11-46). Lastly some buildings in the Added Area suffer from deficient or deteriorated conditions that inhibit the proper use of some buildings in the Added Area, such as the large vacant and underutilized commercial building located at 671 Marina as well as the modular snack shop that lacks adequate foundation and could be at risk during an earthquake (Report to Council, page II-46). Exhibit A-3 Public Improvements and Projects to be Undertaken in Existing Project Areas and Added Area In adopting Health and Safety Code Section 33485, the Legislature acknowledged that California Community Redevelopment Law is "designed to assure (1) that project areas are terminated when the redevelopment of such areas has been completed and (2) that the increased revenues which result from redevelopment accrue to the benefit of affected taxing jurisdictions at the completion of redevelopment activities in a project area.." The Legislature went on to acknowledge that "although mergers may have the effect of extending the life of redevelopment project areas, such mergers are desirable as a matter of public policy if they result in substantial benefit to the public and if they contribute to the revitalization of blighted areas through the increased economic vitality of such areas and through increased and improved housing opportunities in or near such areas." Redevelopment of the existing project areas is not complete. As detailed in Exhibit A-2 and the Report to Council, the project areas continue to be characterized by blighting conditions, and as summarized below, the Agency has proposed a number of projects which would provide substantial public benefit and serve to catalyze continued revitalization of the project areas. As described in Exhibit A-4, the Agency's proposed activities will result in increased affordable housing opportunities within and near the project areas and will leverage significant private investment in expansion and improvement of the housing stock. Thus, the proposed plan amendments and fiscal merger fall squarely within the spirit and intent of Health and Safety Code Section 33485. The following projects and improvements will foster economic vitality, alleviate blight, and will provide substantial benefit to the community. These projects and improvements could not otherwise be funded by the private sector or public sector absent redevelopment. Provided below is a summary of projects proposed by the Agency and a description of how they meet the criteria set forth in Section 33485. The Agency's cost estimates are provided as parenthetical references following each description. Proposed housing activities are described in Exhibit A-4. Mitigate contaminated site, provide infrastructure improvements, and construct Ferry Terminal proposed by MTC at Oyster Point in the Downtown/Central Added Area. This will facilitate continued vitality of East of 101 areas as job center for the region, as more commuters could reach their jobs without relying on automobiles. Matching funds would be required by federal and state agencies. (Agency's share: $10 million) Remediation and improvement of the closed Oyster Point Landfill, as required by federal, state, and County environmental agencies is necessary to protect public health and the environmental condition of San Francisco Bay and to foster development. (Agency's share: $6 million) Acquire CalTrans Maintenance Facility, clean up contaminants, and construct CalTrain Station/Airport Boulevard inter-modal transportation center located in the Gateway and Downtown/Central Project Areas. This will reinvigorate an aged, underused CalTrain station for commuters, and will provide quicker, easier access to jobs East of 101 and to downtown businesses, further fostering redevelopment of the Downtown/Central and Gateway Project Areas. (Agency's share of inter-modal transportation center: $5 million; Agency's share of acquisition for CalTrans Maintenance Facility: $1 million) Complete Oyster Point flyover and hookramps in order to provide improved access to the Downtown/Central, Gateway and Shearwater Project Area. This massive freeway interchange was undertaken with local dollars to match County transportation dollars. Local development impact fees collected have not met projections, and the County must be repaid for the County Transit Authority loan. Freeway interchange was a needed link from Highway 101 to the developing businesses and jobs East of Highway 101. (Agency's share: $6 million) · Purchase abandoned utility right of way property to relieve blight and foster housing, commercial, and public improvements adjacent to BART station. (Agency's share: $14 million) Complete new Downtown Fire Station and Training Facility/Fire Administration Facility. This will replace an aging fire station that serves the Downtown/Central Project Area and will provide a modernized training facility. (Agency's share: $6.1 million) Identify, study, and develop new surface public parking lots, including construction of temporary lots during redevelopment projects. As the Downtown/Central continues to redevelop, the need to relieve traffic congestion and facilitate commercial transactions will also continue. (Agency's share of identifying, studying and developing new lots: $1 million; Agency's share of constructing temporary parking lots: $300,000; Construct parking lot improvements: $1.2 million) Develop bikeway along South San Francisco BART Linear Park in the E1 Camino Corridor Project Area. This will facilitate alternative modes of transportation and recreation for residents and commuters. (Agency's share: $300,000) Acquire land to expand and improve Orange Memorial Park in the E1 Camino Corridor Project Area as well as the Linear Park, which will provide recreation opportunities and benefit the residents of the E1 Camino Corridor and Downtown/Central Project Areas. (Agency's share: $16 million) Construct a Community Center at Willow Gardens to provide a positive gathering place for the neighborhood. This area suffers from several blight indicators such as deteriorated, unsafe housing, and overcrowding and crime problems, and a community center could assist in the alleviation of blight and would provide public benefit to the community. (Agency's share: $500,000) Design, develop and construct a new main library, which has outgrown its original design, and does not provide adequate space for the community, including the numerous low-income residents who use the library and take advantage of literacy and other programs. (Agency's share: $7 million) Extend Oak Avenue from Mission Road to E1 Camino Real by acquiring and improving the PUC site in order to make BART and transit-oriented development more accessible, relieve congestion, and foster affordable housing projects near the BART station. (Agency's share: $8 million) · Improve streets and circulation in all of the Project Areas in order to support development and relieve congestion. (Agency's share: $5 million) Assist with commercial building facade improvements in the Downtown/Central Project Area in order to revitalize the downtown area and provide renewed economic vitality to the area (Agency's share: $5 million). Implement a business retention and development assistance program, including a rehabilitation program in order to improve economic development opportunities in the Downtown/Central and E1 Camino Corridor Project Areas. (Agency's share: $12 million) Exhibit A-4 Affordable Housing Production and Future Projects The City of South San Francisco recognizes the vital role it plays developing affordable housing. In 2001, the Association of Bay Area Governments (ABAG) published its final determination of housing needs for cities in the Bay Area. ABAG determined that the City of South San Francisco's fair share allocation of affordable housing units between 1999 and 2006 was 277 very low income, 131 low income, and 360 moderate income units. The City has been working diligently to provide its fair share of housing using every possible resource, from a stringent inclusionary housing requirement to the use of the Redevelopment Agency's Housing Set Aside funds. The paragraphs below describe the significant accomplishments to date, development efforts underway, and a description of future affordable housing opportunities. Since 1999, the Agency has directly participated in the development or substantial rehabilitation of 203 very low income units. Projects include 40 new units at Chestnut Creek; 33 new units at Greenridge; the rehabilitation of the Metropolitan Hotel, including 65 rehabilitated units; 24 rehabilitated units at the Grand Hotel; and other small scale projects containing 1 to 4 units. The Agency has also provided 3 low income families and 5 moderate-income families with low-cost first time homebuyer loans. The Agency has contributed more than $10.7 million to these projects leveraging an additional $8.0 million in other local and private funds. Current projects underway include BRIDGE Housing Corporation's 43 very low income units being developed on the County land at Oak and Grand Avenues, and 4 very low income ownership units being developed by Habitat for Humanity on Agency owned land. In all, the Agency is contributing $3.9 million to these projects leveraging an additional $11.2 million in other public and private financing. While substantial work remains to be done, there is no question about the Agency's commitment to affordable housing--particularly in providing housing for very low income residents. By 2006, the City will have met 90 percent of its very low income fair share obligation using the Agency's Housing Set Aside fund. Adding inclusionary housing and other City assisted projects completed or under development, the City will have also met 46 percent of its low income unit obligation (or 60 units) and 26 percent of its moderate income unit obligation (94 units). In meeting these goals the Agency has provided or committed more than $14.7 million that has helped bring an additional $19.2 million in funding from other sources for affordable housing. For the future, the Agency plans to continue to aggressively pursue affordable housing opportunities through the life of the Redevelopment Plans. Potential future projects include: Purchase and substantially rehabilitate units in the Willow Gardens neighborhood. The Agency could potentially purchase the entire subdivision (an additional 57 four-plex buildings containing 228 units). The cost to purchase and rehabilitate each unit would be approximately $250,000 per unit, totaling $57 million. Purchase and develop the Public Utilities Commission (PUC) property primarily located at Chestnut and E1 Camino Real. This property could potentially yield up to 260 units at an estimated cost to the Agency of approximately $14 million. Additional funds could be needed to subsidize the project. · Develop Agency owned land at 616-700 Linden Avenue (up to 24 units) at an estimated cost of between $290,000 to $420,000 per unit, or $7 million to $10 million total. Develop housing at Agency owned land at 915 Linden Avenue, possibly in conjunction with the Paradise Valley site (6-25 units) at a cost of $300,000 to $370,000 per unit, dependent on the number of units developed for the project. · Develop up to 40 units of housing over a City owned parking lot at a cost of$10,000,000 to $15,000,000, and · Enter into public-private partnerships to develop affordable housing at any of the remaining 10 to 15 vacant or underutilized sites across the City.