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.