TITLE
Recommendation to declare ordinance eliminating the existing time limit on incurring bonded indebtedness for the Redevelopment Plan for the West Long Beach Industrial Redevelopment Project, read and adopted as read. (District 1)
DISCUSSION
On November 11, 2003, the City Council adopted Ordinance No. C-7887 related to the WLBI project area, thereby eliminating the time limit on the establishment of loans, advances, and indebtedness, with the exception of the establishment of bonded indebtedness.
The Redevelopment Agency (Agency) and the WLBI Project Area Committee (PAC) now desire to amend the WLBI Redevelopment Plan in order to pursue the incurrence of additional bonded indebtedness to fund improvements. However, prior to taking these actions, Ordinance No. C-7887 requires that the Agency provide the WLBI PAC with a 90-day written notice, and hold a public hearing regarding such amendment. The notice was submitted to the WLBI PAC and a public hearing held at their March 9, 2011 meeting. The PAC supports this action and has approved the Agency's request to proceed with a potential bond sale after the 90-day waiting period. While a bond issue is being considered, it cannot proceed absent resolution of litigation regarding statewide redevelopment issues. Staff wishes to be prepared as soon as possible thereafter, and believes the recommended action is prudent at this time.
The WLBI Redevelopment Plan was adopted on July 1, 1975, Ordinance No. C-5188. On November 11, 1986, City Council adopted Ordinance No. C-6312 capping the cumulative total of tax increment the project area could receive over the life of the project at $1,174,000,000. City Council amended the project area termination date to July 1, 2015 with the adoption of Ordinance No. C-7297 on December 13, 1994. The time limit for repayment of indebtedness is July 1, 2025.
The WLBI project area nets approximately $4.2 million annually to fund infrastructure and public improvements, neighborhood and corridor revitalization, open space/public art, and project area operations, after the transfer of the 20 percent tax increment to the Low-Mod Housing Fund, payment of AB1290/SB11 tax sharing agreements, existing debt obligations, and County administrative charges.
Upon the termination of the WLBI project area on July 1, 2015, the Agency can only collect tax increment in an amount sufficient to pay outstanding project area debt. Eliminating the time limit to allow for bonded indebtedness will provide the Agency with the authorization to pursue additional infrastructure funding through the sale of tax allocation bonds, the proceeds of which will be used to fund much needed improvements in the project area.
This letter was reviewed by Chief Assistant City Attorney Heather A. Mahood and by Budget Management Officer Victoria Bell on July 25, 2011.
TIMING CONSIDERATIONS
City Council action is requested on August 9, 2011, in order to allow the Agency to proceed with a tax allocation bond sale at the appropriate time, pending resolution of litigation to statewide redevelopment issues.
FISCAL IMPACT
There is no fiscal impact and no local job impact as a result of the recommended action.
SUGGESTED ACTION
Approve recommendation.
BODY
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LONG BEACH ELIMINATING THE EXISTING TIME LIMIT ON INCURRING BONDED INDEBTEDNESS FOR THE REDEVELOPMENT PLAN FOR THE WEST LONG BEACH INDUSTRIAL REDEVELOPMENT PROJECT
Respectfully Submitted,
AMY J. BODEK, AICP
DIRECTOR OF DEVELOPMENT SERVICES
APPROVED:
PATRICK H. WEST
CITY MANAGER