Approval is requested for the award of a contract to Seifel Consulting, Inc., of San Francisco to study potential amendments to the redevelopment plan to increase the tax increment limits. The contract includes economic and financial analyses, a feasibility study, tax increment projections and the preparation of base maps for the recordation of blight and an analysis of urbanization. Included in this contract is a subcontract with John B. Dykstra & Associates to help prepare the Existing Conditions Survey.

The City of Sunnyvale’s Redevelopment Plan for the Central Core Project Area was first established in 1975 to alleviate the conditions of blight affecting the original business district and adjacent residential and commercial areas. It was first amended in 1986 to conform to SB 690, which set limits on the amount of tax increment the Redevelopment Agency could receive at $118 million. The deadline to receive tax increment is 2025.

The intent of this project is to determine whether it is feasible to increase the Redevelopment Agency tax increment limit.

Seifel Consulting, Inc., (formerly Seifel Associates) has been the City’s redevelopment consultant for a number of years and are very familiar with the Sunnyvale Redevelopment Agency. Section 2.08.070(b) of the Sunnyvale Municipal Code exempts professional services from competitive bidding.

The scope of services of the contract are as follows:

• Prepare a Preliminary Report in accordance with the required statutory steps for a plan amendment.
• Document remaining blight in the Existing Project Area. Seifel Consulting and John B. Dykstra & Associates will conduct a field survey to observe existing conditions.
• Describe and evaluate proposed redevelopment project activities.
• Evaluate the financial feasibility of the Redevelopment Plan Amendment, including updating the tax increment projections.
• Prepare a Report to the Agency on the Plan Amendment in accordance with the statutory requirements for a plan amendment.
• Attend meetings, as necessary, to coordinate tasks in the scope of work.

The benefit of this project is to increase the Redevelopment Agency’s ability to collect tax increment revenues to repay existing debt. Increasing the tax increment limit will also increase the City’s capability for public improvement projects in the downtown. This will be essential if funds are needed to support the redevelopment of the Sunnyvale Town Center Mall.

The current maximum tax increment the City can collect is $118 million which was projected in 1986. With the current projects (Mozart and Town Center), the tax increment limit of $118 million will be reached around FY 2015. If the limit were not increased, the Redevelopment Agency would not realize any tax increment for the remainder of the life of the plan which ends in 2025.

This project includes preparation and review of the amendment, ordinances, resolutions and notices for legal sufficiency by Goldfarb and Lipman, the Agency’s outside legal counsel.

The total cost of the contract will not exceed $100,000. The cost of this contract would be a cost to the Redevelopment Agency. Funds have been budgeted in Special Project 824430 - Redevelopment Plan Amendment.

It is recommended that the Board of the Redevelopment Agency award a contract to Seifel Consulting, Inc., in substantially the same form as the attached draft and in an amount not to exceed $100,000, to prepare an amended redevelopment plan, including economic and financial analyses.

Reviewed by:
Mary Bradley
Director, Finance Department - Treasurer