Item No. 3.
| MEETING DATE: 04/04/2022 |
|
| TO: | HONORABLE CHAIR AND DIRECTORS |
| FROM: | JIM SADRO, EXECUTIVE DIRECTOR By: Miranda Cole-Corona, Housing and Economic Dev Manager |
| SUBJECT: | APPROVE A RESOLUTION OF THE SUCCESSOR AGENCY TO THE LA HABRA REDEVELOPMENT AGENCY OF THE CITY OF LA HABRA APPROVING THE RE-DESIGNATION OF PROPERTY IN THE LONG-RANGE PROPERTY MANAGEMENT PLAN
|
RECOMMENDATION:
That the Successor Agency to the Redevelopment Agency of the City of La Habra APPROVE AND ADOPT RESOLUTION NO. _______ ENTITLED: A RESOLUTION OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF LA HABRA APPROVING REDESIGNATION OF CERTAIN PROPERTY IN THE LONG-RANGE PROPERTY MANAGEMENT PLAN FROM "FUTURE SALE" TO "GOVERNMENTAL USE" PROPERTY
DISCUSSION:
Re-designation of Certain Property within the LRPMP:
AB X126 (The "Dissolution Act") was enacted in June 2011 as part of the Fiscal Year 2011-2021 State budget package. Under the Dissolution Act, all redevelopment agencies in the State of California were dissolved as of February 1, 2012. The Successor Agency to the La Habra Redevelopment Agency assumed the duties of unwinding the affairs of the City's Redevelopment Agency.
The Successor Agency was required by AB X126 to prepare a Long Range Property Management Plan (LRPMP) that addressed the disposition and use of the properties of the former Redevelopment Agency. Pursuant to Health and Safety Code 34191.5, the LRPMP is required to be reviewed for approval by the Successor Agency, and once approved, submitted to the Oversight Board for their approval and forwarded to the Department of Finance (DOF).
AB X126 (The "Dissolution Act") was enacted in June 2011 as part of the Fiscal Year 2011-2021 State budget package. Under the Dissolution Act, all redevelopment agencies in the State of California were dissolved as of February 1, 2012. The Successor Agency to the La Habra Redevelopment Agency assumed the duties of unwinding the affairs of the City's Redevelopment Agency.
The Successor Agency was required by AB X126 to prepare a Long Range Property Management Plan (LRPMP) that addressed the disposition and use of the properties of the former Redevelopment Agency. Pursuant to Health and Safety Code 34191.5, the LRPMP is required to be reviewed for approval by the Successor Agency, and once approved, submitted to the Oversight Board for their approval and forwarded to the Department of Finance (DOF).
- On July 15, 2013, the Successor Agency approved submittal of its initial LRPMP to the Oversight Board. On August 1, 2013, the Oversight Board approved submittal of the draft LRPMP to the DOF.
- On October 20, 2014, the Successor Agency considered the first revision to the LRPMP, and recommended Oversight Board approval of the modified LRPMP for submittal to the DOF. On October 30, 2014, the Oversight Board concurred with the action of the Successor Agency and approved the first revision of the LRPMP, which was then submitted to the DOF.
- On July 20, 2015, the Successor Agency considered the second revision to the LRPMP, and recommended Oversight Board approval of the modified LRPMP for submittal to the DOF. On July 30, 2015, the Oversight Board concurred with the action of the Successor Agency and approved the first revision of the LRPMP, which was then submitted to the DOF.
All properties within the LRPMP have now been transferred or sold, with the sole exception of a remaining surface parking lot that is part of the larger parking lot for the La Habra Marketplace. The permissible use of this property is identified in the LRPMP as "Sale of Property"; however, staff has determined that the sale of this property is not feasible due to restrictions in the grant deed that limit its use solely as parking for the La Habra Marketplace.
Owner Participation Agreement Obligation:
Additionally, the entitlements for the shopping center require the parking lot parcel to be used as parking for the shopping center. Entered into at the time of the entitlement of the shopping center, the RDA and the La Habra Associates entered into the attached Owenr Participation Agreement (OPA) which requires the parking lot property to be irrevocably used for parking. See Section 7(v) of the OPA as excerpted below:
.png)
The OPA is still in full force and effect and failure to comply with this provision will potentially expose the Successor Agency to liability.
Transfer of Parking Lot:
Finally, Health and Safety Code Section 3418 (1)(1) provides "that the oversight board may instead direct the successor agency to transfer ownership of those assets that were constructed and used for a governmental purpose, such as roads, school buildings, parks, police and fire stations, libraries, parking facilities and lots dedicated solely to public parking, and local agency administrative buildings, to the appropriate public jurisdiction pursuant to any existing agreements relating to the construction of use of such an asset."
At the time the Original LRPMP was approved, the position of the DOF was that public parking lots owned by redevelopment agencies would not be treated as governmental use properties for purposes of provisions of the Dissolution Act, which provided that governmental use properties were eligible for transfer from successor agencies to host cities without payment of compensation therefor, SB 107, approved in 2015, provided that if a Successor Agency's plan was previously approved it could be amended to allow for the transfer of parking lots. In addition, Section 34181 was specifically amended as highlighted above, to designate parking lots as public purpose properties. Health and Safety Code Section 34191.3 allows successor agency to amend its LRPMP once, solely to allow for retention of real properties that constitute "parking facilities and lots dedicated solely to public parking" for governmental use. The Successor Agency has not previously amended its LRPMP to address the designation of parking lots as governmental use properties.
Conclusion:
Based upon the erroneous use designation of the Property in the Original LRPMP, and pursuant to HSC § 34181 (a) (1), staff recommends that the property be re-designated from “future sale” to “public use” property and transferred to the City for continued use as a public parking lot. This modification is consistent with intent of SB 107, which allowed for the transfer of parking lots from successor agencies to cities. Failure to re-designate this property could expose the Successor Agency to potential litigation for failure to comply with the terms of OPA. If the re-designation is approved by the Successor Agency, OB, and DOF, a staff report and action to execute the transfer of the property, along with any other agreements that may be necessary, will be brought back to the City Council/Successor Agency at a future meeting for review and approval.
Owner Participation Agreement Obligation:
Additionally, the entitlements for the shopping center require the parking lot parcel to be used as parking for the shopping center. Entered into at the time of the entitlement of the shopping center, the RDA and the La Habra Associates entered into the attached Owenr Participation Agreement (OPA) which requires the parking lot property to be irrevocably used for parking. See Section 7(v) of the OPA as excerpted below:
The OPA is still in full force and effect and failure to comply with this provision will potentially expose the Successor Agency to liability.
Transfer of Parking Lot:
Finally, Health and Safety Code Section 3418 (1)(1) provides "that the oversight board may instead direct the successor agency to transfer ownership of those assets that were constructed and used for a governmental purpose, such as roads, school buildings, parks, police and fire stations, libraries, parking facilities and lots dedicated solely to public parking, and local agency administrative buildings, to the appropriate public jurisdiction pursuant to any existing agreements relating to the construction of use of such an asset."
At the time the Original LRPMP was approved, the position of the DOF was that public parking lots owned by redevelopment agencies would not be treated as governmental use properties for purposes of provisions of the Dissolution Act, which provided that governmental use properties were eligible for transfer from successor agencies to host cities without payment of compensation therefor, SB 107, approved in 2015, provided that if a Successor Agency's plan was previously approved it could be amended to allow for the transfer of parking lots. In addition, Section 34181 was specifically amended as highlighted above, to designate parking lots as public purpose properties. Health and Safety Code Section 34191.3 allows successor agency to amend its LRPMP once, solely to allow for retention of real properties that constitute "parking facilities and lots dedicated solely to public parking" for governmental use. The Successor Agency has not previously amended its LRPMP to address the designation of parking lots as governmental use properties.
Conclusion:
Based upon the erroneous use designation of the Property in the Original LRPMP, and pursuant to HSC § 34181 (a) (1), staff recommends that the property be re-designated from “future sale” to “public use” property and transferred to the City for continued use as a public parking lot. This modification is consistent with intent of SB 107, which allowed for the transfer of parking lots from successor agencies to cities. Failure to re-designate this property could expose the Successor Agency to potential litigation for failure to comply with the terms of OPA. If the re-designation is approved by the Successor Agency, OB, and DOF, a staff report and action to execute the transfer of the property, along with any other agreements that may be necessary, will be brought back to the City Council/Successor Agency at a future meeting for review and approval.
FISCAL IMPACT/SOURCE OF FUNDING:
Approving this Resolution will have no impact to the General Fund.
GENERAL PLAN RELEVANCE:
ED 9.1 - Balanced Fiscal Practices