Assembly Bill 1290, passed in 1994, imposed planning and reporting requirements on redevelopment agencies throughout California. Agencies are required to prepare an Implementation Plan and a Housing Deficit Reduction Plan every five years. Attachment A is the Implementation Plan and Housing Deficit Reduction Plan. Staff recommends that the Agency adopt the attached resolution (Attachment B) adopting the Implementation Plan and the Housing Deficit Reduction Plan

Assembly Bill 1290, passed in 1994, imposed planning and reporting requirements on redevelopment agencies throughout California. Agencies are required to prepare an Implementation Plan and a Housing Deficit Reduction Plan every five years. The Agency’s first plan was adopted in December 1994. The proposed Implementation Plan would be the Agency’s second Five-Year Implementation Plan for the period January 1, 2000 through December 31, 2004.

The Implementation Plan covers anticipated redevelopment activities over the next five years. The plan must describe specific goals and objectives of the Redevelopment Agency, specific programs, including potential projects, estimated expenditures to be made during the next five years, and how these projects will improve or alleviate blighting conditions in the project area. It must also contain a section on the Agency’s housing responsibility.

The original Implementation Plan had a primary goal to pay off existing bond obligations and repay debt to the City. The other activities were quite limited, including planning and assisting development within the project area consistent with the Downtown Specific Plan.

In June 1994 the Agency adopted a Housing Deficit Reduction Plan. That plan called for the Agency to reduce its Housing Deficit by making additional payments from excess tax increment revenues after repayment of existing bonds and the repayment of the existing City loan. The plan was later amended to allow for the repayment of debt for future redevelopment activities prior to any additional payments into the Housing Fund.

The Redevelopment Implementation Plan Goal 1 states: Meet the Agency’s Existing Financial and Administrative Obligations

The Implementation Plan conforms with the requirements of Section 33490 of the California Redevelopment Law. The plan is divided into three sections: Introduction, General Redevelopment Activities, and Affordable Housing Activities. The goals and objectives are defined, programs and projects are outlined, and the alleviation of blight is discussed.

The plan is based on existing planning reporting documents, including the Downtown Specific Plan and the Block 1 Master Plan. The goals in the Implementation Plan are as follows:

• Meet the Agency’s existing financial and administrative obligations.
• Establish the downtown as the cultural, retail, financial and entertainment center of the community, complemented by employment, housing and transit opportunities.
• Implement specific actions such as the provision of public improvements in an attractive and cohesive physical form, which clearly identifies Sunnyvale’s downtown.
• Develop and implement an overall parking strategy that meets the needs of retail, office, housing and visitor demand.
• Increase housing opportunities.

The Housing Deficit Plan anticipates that there will not be sufficient tax increment revenue in the next five years to reduce the deficit, and that the deficit will almost double over the next five years. Even though the Redevelopment Plan ends in 2025, the Agency can continue to receive tax increment revenue to fund the housing deficit fund.

The financial projections outlined in the Implementation Plan reflect that towards the end of the Five-Year Plan the tax increment revenue will increase from new development. However, there will not be sufficient funds to reduce the Housing Deficit.

The Implementation Plan allows for additional investment by the City, either as an increase to the Agency’s loan or direct investment in infrastructure. To the degree that new City investment will result in a positive return on investment, the overall long-term financial position of the Agency, and therefore the City would improve.

This report was noticed through the publication of the City Council and Redevelopment Agency agenda.

Staff recommends approval of Alternative 1.

Prepared by:

Dyane Matas
Housing and Neighborhood Preservation Officer

Reviewed by:

David Boesch
Director, Community Development

Approved by:

Robert S. LaSala
Executive Director-Secretary