February 15, 2005

SUBJECT:     Adoption of the Redevelopment Implementation Plan for FY 2004/05 to FY 2008/09.

REPORT IN BRIEF

Section 33490 of the California Redevelopment Law (CRL) requires that a redevelopment agency administering a redevelopment plan prepare and adopt a five-year implementation plan for its project areas. The attached document constitutes the FY 2004/05 through FY 2008/09 Implementation Plan for the Sunnyvale Central Core Redevelopment Project Area, which was established in 1975. This Implementation Plan outlines the program of revitalization, economic development, and housing activities of the Redevelopment Agency of the City of Sunnyvale for this five-year planning period. Staff recommends that the Agency adopt the attached resolution adopting the Implementation Plan.

BACKGROUND

Assembly Bill 1290, passed in 1994, imposed planning and reporting requirements on redevelopment agencies throughout California. Agencies are required to prepare an Implementation Plan every five years. The Agency’s first plan was adopted in December 1994. This proposed Implementation Plan would be the Agency’s third Five-Year Implementation Plan.

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 tax increment revenues after repayment of existing bonds and the repayment of the existing City loan. The Agency defers making deposits into its Housing Fund and is accumulating a deficit obligation because no tax increment revenue remains after the Agency has paid on its existing debt obligations.

EXISTING POLICY

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

DISCUSSION

Section 33490 of the California Redevelopment Law (CRL) requires that a redevelopment agency prepare and adopt a five-year implementation plan for its project areas. The attached Implementation Plan conforms to the requirements of Section 33490 of the California Redevelopment Law. The plan is divided into three sections: Introduction, Non-Housing Implementation Plan, and Housing Component. The goals and objectives are defined, programs and projects are outlined, and the alleviation of blight is discussed. The implementation plan is a guide for the five-year period, while providing flexibility so the agency may adjust to changing circumstances and new opportunities.

The plan is based on existing planning reporting documents, including the Downtown Specific 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 component of the plan anticipates that there will not be sufficient tax increment revenue in the next five years to reduce the deficit in the Agency’s Housing Fund, 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.

FISCAL IMPACT

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.

PUBLIC CONTACT

Public contact was made through posting of the Council 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. A legal add was published once a week for three weeks and notice was posted four places within the project area.

ALTERNATIVES

1. Adopt the resolution for the Five-Year Implementation Plan for the Redevelopment Project Area.
2. Modify and adopt the Five-Year Implementation Plan for the Redevelopment Project Area.
3. Do not adopt the Five-Year Implementation Plan for the Redevelopment Project Area.

RECOMMENDATION

Staff recommends Alternative 1.

California Community Redevelopment Law requires that the Agency prepare and adopt a Five-Year Implementation Plan. The Implementation Plan is intended to provide general guidance for the implementation of the Agency’s programs and activities. The Agency expects that particular constraints and opportunities, not fully predictable at this time, will arise in the course of undertaking the projects and activities described in this Implementation Plan over the next five years.

Reviewed by:

Robert Paternoster, Secretary, Redevelopment Agency

Prepared by: Brice McQueen, Manager, Redevelopment Agency

Reviewed by:

Mary Bradley

Treasurer, Redevelopment Agency

Approved by:

Amy Chan

Executive Director, Redevelopment Agency

Attachments

A.       Implementation Plan (pdf format)

B.       Resolution of the Redevelopment Agency of the City of Sunnyvale approving an Implementation Plan for the Redevelopment Project Area.