November 11, 2003

SUBJECT: Update of Redevelopment Agency’s Owner Participation Rules 

REPORT IN BRIEF

The Community Redevelopment Law requires the Agency to have rules for owner participation and preferences for businesses dislocated as a result of the Agency's redevelopment activities to re-enter business in the redevelopment project area. The general rules in the Redevelopment Plan are somewhat outdated. Staff proposes to update the Agency’s owner participation rules so that they will operate effectively. 

BACKGROUND

The Redevelopment Plan for the Central Core that covers the downtown Sunnyvale area has, in Section VIII, rules for owner participation and tenant preference.  These rules were included in and adopted as part of the adoption of the Plan in 1975. 

DISCUSSION

Staff proposes to update the Rules of Owner Participation to bring them into line with current owner participation and tenant preference concepts and practices and to make the rules more specific in operation.  In addition, by adopting a set of rules separate from but consistent with the Plan, it will make it easier for the Agency to make minor changes in the rules without going through the lengthy and complicated process required under state law for adoption of a redevelopment plan.  Notice of any such change would still be given to the public.  In addition, because owner participation is an element of the land acquisition process and the Agency will be considering a plan amendment to re-institute the Agency's eminent domain authority, staff desires to update the Agency's rules so they operate effectively in conjunction with any possible future acquisition. 

The proposed rules have three basic elements.  The first is a tenant preference element for dislocated businesses.  The rules require the Agency to maintain a roster of businesses displaced by Agency activities.  The rules also require developers with whom the Agency has agreements to give preference for displaced tenants and for the Agency to give displaced tenants notice of relocation opportunities. 

The second element encompasses owner participation where there are several parcels that would need to be assembled in order for effective redevelopment of the parcels to be implemented.  The process that is established involves designating an area that requires assemblage as a master developer area and then soliciting proposals for redevelopment of the designated parcels.  All owners of those parcels would have an opportunity to submit a proposal for development of the assembled parcels.  Because of the need for assemblage and unified development, an individual owner may not have an opportunity to redevelop his or her individual parcel.  Parcels designated for assemblage could be acquired by the Agency either before or after solicitation and selection of a master developer for the assembled parcels.  In addition, the Agency could determine, based on the submitted proposals that less than all the designated parcels be assembled.

The third element establishes a process whereby the Agency can request the owner of an individual parcel to redevelop his or her own parcel.  The process involves the Agency declaring the parcel to be not in conformance with the Plan.  The owner could then be required to enter into an owner participation agreement establishing the steps the owner would be required to take to redevelop the property.  If the owner failed to do so, he or she would lose owner participation rights, and the Agency could acquire the property.  All parcels in the Project Area are presumed to conform to the Plan unless and until the Agency acts to specify that they are non-conforming.

FISCAL IMPACT

Adoption of the resolution will not have direct fiscal impact on the City as a result of this action. 

PUBLIC CONTACT

Public contact was made through posting of the agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page and the availability of the report in the Library and the City Clerk’s Office. 

ALTERNATIVES

1. Adopt the attached resolution updating Rules for Business Tenant Preference and Owner Participation.

2. Do not adopt the attached resolution.

RECOMMENDATION

Staff recommends that the Agency Board approve Alternative #1. 

Prepared by:

Brice McQueen
Redevelopment Manager

Reviewed by:

Mary J. Bradley
Director, Finance Department - Treasurer

Reviewed by:

Bob Paternoster
Director of Community Development

Approved by:

Robert S. LaSala
Executive Director-Secretary 

Attachments

1. Resolution of the Redevelopment Agency adopting Rules for Business Tenant Preference and Owner Participation with Rules attached as “Exhibit A”.