Kane Ballmer Berkman Legal Opinion CCDC Cap 05 162011

8/12/2019 Kane Ballmer Berkman Legal Opinion CCDC Cap 05 162011

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ATTACHMENT B

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51 5 S. F IGUEROA STREET

S U IT E 1 85 0

LOS

ANGELES,

CAL I FORN IA 90071

TELEPHONE 213 617 -0480

FAX 213 625 -0931

i E Mailjgraham@ccdc com

K A N E

LLMER

ERKM N

A LAW CORPORATION

WWW.KBBLAW.COM

BRUCE D.

BALLMER

RETIRED

ROBERT P

BERKMAN

1919-2001

September 23 2 1

402 WEST BROADWAY

4TH FLOOR

SAN

DIEGO,

CAL IFORNIA

92101

TELEPHONE 619 567 -3450

F AX 6 19 567 - 3 448

Writers:

Murray Kane

[email protected]

Direct 213 452-0121

Gustavo Lamanna

[email protected]

Direct 213 452-0131

File

No. 029 191

Mr

JeffGraham

Vice President, Redevelopment

Centre City DevelopmentCorporation

4 1

B Street, Fourth Floor

San Diego, California 92101

Dear

Mr

Graham:

We have been asked to provide this opinion concerning an agency s ability to expend tax

increment outside its own redevelopment project area. The Centre City Development

Corporation is considering a recommendation to the Redevelopment Agency of the City

of

San

Diego to utilize tax increment from the Centre City Redevelopment Project Area to pay for the

value

of

land and cost

of

installation

of

improvements that are to be publicly-owned and outside

the Centre City Redevelopment Project Area.

Two specific projects were identified. The first involves the development of a 15.64 acre

park improved with a community swimming pool, recreation centre building, multi-purpose

fields, ball field lighting and spectator seating, site furniture, public restrooms, children s play

area, landscaping public art, storm water channel improvements and public parking lot

improvements ( Park Project ). The land proposed for by the Park Project is presently owned by

the City

of

San Diego and due east from the Centre City Redevelopment Project divided only by

Interstate

5

The Park Project is to be publicly-owned. The Park Project does not appear to

contain any affordable housing.


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K NE

B LLMER

BERKM N

Mr JeffGraham


Centre

City

Development Corporation

September 23 2010

Page 2

The second involves unspecified public improvements in neighborhoods to the east o the

project area in Golden Hill and Sherman Heights, and southeast

o

the project area in Barrio

Logan. These areas are part o Council District 8

We

note that the eastern boundary

o

the

Centre City Redevelopment Project Area ends at Interstate 5 and the western boundaries o the

Golden Hill and Sherman Heights areas commence east o Interstate 5 The southeastern

boundary o the Centre City Redevelopment Project Area abuts the northwestern boundary

o

the

Barrio Logan Redevelopment Project Area along South 16

th

Street, Newton Avenue, Sigsbee

Street, Harbor Drive and Beardsley Street. The public improvements proposed are unspecified

but appear to include street improvements, pedestrian improvements, and other public

infrastructure improvements that are to be publicly-owned ( Neighborhood Public

Improvements ). At this point the Neighborhood Public Improvements do not appear to include

a payment for the value o land and involve only the payment for the cost o installation and

construction o improvements that are to be publicly-owned.

is unknown whether there are

any affordable housing developments that are to be considered at, near, or around the

Neighborhood Public Improvements.

further appears that no part o the property under the Park Project or Neighborhood

Public Improvements project is partially located in the project area.

Based on the foregoing information, we provide the legal requirements the Centre City

Development Corporation ( CCDC ) must consider when preparing a proposal to the

Redevelopment Agency o the City

o

San Diego (the Agency ) concerning the Park Project

and Neighborhood Public Improvements. Additional, different, or new information may yield

additional, different, or new legal requirements.

Health Safety Code section 33445(g) reads, in relevant part: an agency may pay for all or

part o the value o the land for and the cost o the installation and construction o any building,

facility, structure, or other improvement that is publicly owned and is partially located in the

project area, but extends beyond the project area's boundaries, the legislative body makes the

determinations required by subdivision (a). We point this out because CCDC appears

to

be

considering a development proposal separate from the Park Project and Neighborhood Public

Improvements project along Newton Avenue involving publicly-owned property within the

CCDC project area but abutting the Barrio Logan project area. To the extent that CCDC

development proposal (Monarch School) on Newton Avenue involves Neighborhood Public

Improvements that extend beyond the CCDC boundaries into Barrio Logan the unique aspects o

Section 33445(g) may be implicated and may be considered separately

requested.


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K NE B LLMER BERKM N

Mr JeffGraham


Centre CityDevelopment Corporation

September23,2010

Page 3

With these facts and qualifications to date, we separate the legal opinion into the

following two questions, the subsequent short answers, discussions

the applicable law, CCDC

implementation and redevelopment plans, and analysis each answer.

QUESTIONS PRESENTED

May the Agency use 80 CCDC tax increment funds to pay for both the

value land and cost installation and construction improvements for

the Park Project?

2 May the Agency use 80 CCDC tax increment funds to pay for the cost

installation and construction improvements incident to the

Neighborhood Public Improvements?

SHORTANSWER

The Agency may, after conforming with all legal requirements imposed

by

the recent enactment Senate Bill No. 93 (2009-2010

Reg

Sess.)( SB 93 ), expend only 80 CCDC tax increment funds on the Park

Project. As set forth below in more detail below, the legal requirements

include, but are not limited to, making a finding

benefit, that

no

reasonable means financing the Park Project exist in the community,

and the Park Project is consistent with the Fourth Implementation Plan for

the Horton Plaza and Centre City Redevelopment Project for the period

July 2009 to June 2014 ( Implementation Plan ) and provided for in the

Centre City Redevelopment Project, which was initially approved

and

adopted on December 29, 1976 ( Redevelopment Plan ).

2 The Agency may, after conforming with all legal requirements imposed by

SB 93, expend 80 CCDC tax increment funds on the Neighborhood

Public Improvements project on only those identifiable public

improvements in the Implementation Plan in only those areas contiguous

to the CCDC project area and provided for in the Redevelopment Plan; the

areas include the western boundaries Golden Hill and Sherman Heights

directly adjacent to Interstate 5 and that area on the northwestern boundary

Barrio Logan (South

6

th

Street, Newton Avenue, Sigsbee Street,

Harbor Drive and Beardsley Street), that are adjacent to the CCDC project

area and divided only by a public street or highway. Other non

contiguous areas and unspecified public improvements under the


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K NE B LLMER

BERKM N

Mr

JeffGraham


Centre CityDevelopmentCorporation

September 23, 2010

Page 4

Neighborhood Public Improvements project are not likely to conform with

the requirements for non-contiguous expenditures under of

SB 9

DISCUSSION OF APPLICABLE LAW

SB 9

from the last Legislative session set forth certain requirements before tax

increment may be spent outside a project area to pay for the value of land and cost of installation

of

improvements that are to be publicly-owned. The bill amended the California Health

Safety Code Sections 33000

s q

[Community Redevelopment Law] and amended Sections

33445 and 33679 and added 33445.1 and 33505

3

to the Community Redevelopment Law.

SB 9 requires additional o f primary benefit findings based on substantial evidence and

essentially make more difficult than before for agencies to spend tax increment outside the

project area on parcels that are non-contiguous. For instance, contiguous, pursuant

to Section

33445 f), means that the parcel on which the building, facility, structure, or other improvement

that is publicly owned is located, shares a boundary with the project area or is separated from the

project area only by a public street or highway, flood control channel, waterway, railroad right

of-way, or similar feature. So as to parcels that are contiguous, Section 33445 applies. For those

parcels that are not contiguous, Section 33445.1 applies.

Section 33445 Applies

ifthe

Parcel is Contiguous

The following legal requirements of Section 33445 apply

if

the parcel is contiguous to

the project area:

a) ... .

an

agency may, with the consent

of

the legislative body, pay all or a part of the

value

of

the land for and the cost of the installation and construction of any building,

facility, structure, or other improvement that

is

publicly owned and

is

located inside or

contiguous

to

the project area,

if

the legislative body determines all

of

the following:

1)

That the acquisition of land or the installation or construction of the

buildings, facilities, structures, or other improvements that are publicly owned

2 All section references shall be to the Community Redevelopment Law unless otherwise noted.

3

Section 33505 involves the settlement of legal actions and the facts concerning the Park Project

and Neighborhood Public Improvement Project do not implicate this section of the Community

Redevelopment Law.

f

there are additional facts, please advise and we will review and amend

this opinion accordingly.


5/19


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K NE B LLMER

BERKM N

Mr

Jeff

Graham


Centre City Development Corporation

September23,2010

Page 6

committed, notice and publish that notice in a newspaper o general circulation under Section

33679.

4

Section 33445.1 Applies Parcel is Not Contiguous

The following legal requirements o Section 33445.1 apply the parcel is not contiguous

to the project area:

a ... an agency may, with the consent

o

the legislative body, pay all or a part

o

the

value

o

the land for and the cost

o

the installation and construction

o

any building,

facility, structure, or other improvement that

is

publicly owned and

is

located outside and

not contiguous to the project area, but

is

located within the community,

the legislative

body fmds, based on substantial evidence in

the record, all o the following:

1

The acquisition

o

the land or the installation or construction

o

the


are

o

primary benefit to the project area.

2 The acquisition

o

the land or the installation or construction

o

the


benefits the project area by helping to eliminate blight within the project area, or

will directly assist in the provision

o

housing for low- or moderate-income

persons.

3 No other reasonable means

o

fmancing the acquisition o the land or the

installation or construction

o

the buildings, facilities, structures, or other

4 Section 33679 reads: Before an agency commits to use the portion

o

taxes to be allocated and paid to an

agency pursuant to subdivision b

o

Section 33670 for the purpose

o

paying all or part

o

the value

o

the land

for

and the cost o the installation and construction of, any publicly owned building, other than parking facilities, the

legislative body shall hold a public hearing.

Notice

o

the time and place

o

the public hearing shall be published in a newspaper o general circulation in the

community for at least two successive weeks prior to the public hearing. There shall be available for public

inspection and copying, at a cost not to exceed the cost

o

duplication, a summary that includes all

o

the following:

a Estimates o the amount

o

the taxes proposed to be used to pay for the land and construction

o

any publicly

owned building, including interest payments.

b Sets forth the facts supporting the determinations required to be made by the legislative body pursuant to Section

334450r the fmdings required to be made by the legislative body pursuant to Section 33445.1.

c Sets forth the redevelopment purpose for which the taxes are being used to pay for the land and construction o

the publicly owned building.

The summary shall be made available to the public for inspection and copying no later than the time o the first

publication

o

the notice

o

the public hearing.


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K NE

B LLMER

BERKM N

Mr

Jeff

Graham

Vice

President Redevelopment

Centre City

DevelopmentCorporation

September 23,2010

Page?

improvements that are publicly owned, are available to the community,

including, but not limited to, general obligation bonds, revenue bonds, special

assessment bonds, or bonds issued pursuant to the Mello-Roos Community

Facilities Act

o 1982 Chapter 2.5 commencing with Section 53311 o Part 1

o

Division 2

o

Title 5

o th

Government Code . In determining whether other

means o fmancing are feasible, the legislative body may take into account any

relevant factors, including, but not limited to:

A Legal factors, such

as

the eligibility

o

the improvements for

funding under the governing statutes.

B Economic factors, such as prevailing interest rates and market

conditions.

C

Political factors, such as the priority

o

commitments

o

other

public funding sources, the ability or willingness

o

property owners or

taxpayers to bear the cost

o

any special assessments, taxes, or other

charges, and the likelihood

o

obtaining voter approval,

i

required.

4 The payment

o

funds for the acquisition

o

land or the cost

o

buildings,

facilities, structures, or other improvements that are publicly owned is consistent

with the implementation plan adopted pursuant to Section 33490.

5 The acquisition

o

land and the installation

o

each building, facility,

structure, or improvement that is publicly owned is provided for

in

the

redevelopment plan.

b An agency shall not pay for the normal maintenance or operations

o

buildings,

facilities, structures, or other improvements that are publicly owned. Normal maintenance

or operations do not include the construction, expansion, addition to, or reconstruction of,

buildings, facilities, structures, or other improvements that are publicly owned otherwise

undertaken pursuant to this section.


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K NE B LLMER

BERKM N

Mr

JeffGraham



September 23,2010

Page 8

DISCUSSION OF IMPLEMENTAn PLAN

We reviewed, identified and set forth below certain provisions of the Implementation

Plan that support the subject projects. Note that the Park Project and Neighborhood Public

Improvements project must be consistent with the Implementation Plan and to the extent

possible, each project proposal should be crafted around the Implementation Plan to assure

conformity with under Sections 33445 a 3 :

III. Project Area Goals and Objectives

Creative implementation of catalyst projects which spur reinvestment on

surrounding blocks [Page 3]

Land acquisition for the creation

of

public facilities which serve both the

immediate neighborhood and the community at large [Page 3]

Improvements to existing water and sewer lines, streets, sidewalks, parkways, and

lighting in the public right-of-way; continued participation in the enhancement

of

the public transit system [Page 4]

Acquisition and disposition

of

property to abate blighting influence uses and

provide for future development [Page

4]

IV. Goals and Objectives, Proposed Projects, and Contribution to Blight Alleviation for

the Five-Year Period

Construct Off-Site Improvements; [Page 8]

Other Public Infrastructure/Facility Projects Area Wide

Downtown Street Lighting [Page 2]

Street Enhancement [Page

2]

Miscellaneous Public Improvements Facilities [Page

2]

Increase Availability

of

Parking [Page 2]

Linear Park Improvements [Page 2]


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BERKM N

Mr Jeff Graham



September 23,2010

Page 9

Government Offices [Page 2]

Park to Bay Link [Page

2]

Parks, Open Space RecreationS [Page 2]

Interstate 5 Enhancement [Page

2]

Water, Sewer

Storm Drain Upgrades [Page

2]

Transit Corridor Enhancements [Page 2]

Elimination o Toxic Substances [Page 3]

Under/above ground Utility Lines/Facilities [Page

3]

DISCUSSION OF REDEVELOPMENT PLAN

addition to the Implementation Plan, the Redevelopment Plan contains numerous the

provisions which would apply to the projects. Section 33445 b) 2) requires that the projects be

provided in the Redevelopment Plan. A review

o

the Redevelopment Plan may also provide

specific ideas to assist in developing characteristics for the projects. Here is a sampling o the

objectives we believe apply. As noted in the discussiono the Implementation Plan, the projects

should be crafted around provisions o the Redevelopment Plan to assure conformity with

Section 33445 b) 2).

S The Implementation Plan also suggests there is a desire by the community to develop and

support a Ballpark Project. may be worth determining

there may exist any linkage between

that community desire and the Park Project. For instance, page 4 o the Implementation Plan

lists certain objectives concerning the support to a Ballpark Project within a unique

SportsiEntertainment District so as to: ... Provide parks and open space for existing and future

downtown residents; provide additional parking for downtown businesses and residences during

non-even periods; Provide another regional facility for civil events amateur athletics, concerts,

multiple day trade shows, private parties and other gatherings. seems that

the will in the

community were to find a method

o

connecting and integrating the Park Project to the Ballpark

Project, the Implementation Plan would support such a nexus. Further investigation would be

necessary.


10/19

K NE

B LLMER

BERKM N

Mr

JeffGraham

Vice President Redevelopment


September23 2010

Page 1

Here are selected objectives o the Redevelopment Plan that appear to apply:

Provide for development in which a full range o activities and uses may occur and where

a living and working environment exists for the use and enjoyment o all San Diegans

[Section 110.1A]

Eliminate blighting influences including incompatible and obnoxious land uses obsolete

and deficient structures and inadequate or surplus streets and rights of way [Section

110.1C]

Eliminate environmental deficiencies including among others small and irregular lot and

block subdivision economic and social deficiencies and inadequate utilization

o

land

and public facilities [Section

11

O.ID]

Coordinate the location o neighborhood/community based facilities such as parks

plazas commercial recreational uses open spaces recreational centers and other

community facilities which serve the needs o the entire downtown area [Section 110.II]

Coordinate the upgrading

o

sewer water and storm drains and other community

facilities that serve the needs

o

the entire downtown area [Section 110.1

J]

Accommodate parking needs in a manner which will reduce the negative impact

o

parking needs o the environmental quality o the area [Section 110.1K]

Provide strong physical linkages in order to create attractive vehicular and pedestrian

connections between major downtown activities and the San Diego waterfront [Section

110.IL]

Strengthen and encourage retail entertainment business cultural social and other

commercial functions including but not limited to the establishment o a safe healthy

and attractive environment in which business commercial cultural and social services

activities can thrive and residents live [Section 110.1M]

Provide for maximum participation in the redevelopment and restoration process by

property owners and tenants [Section 11O.IP]


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K NE B LLMER

BERKM N

Mr

Jeff Graham


Centre City Development COIporation

September 23,2010

Page

Provide for development in which a full range activities and uses may occur where an

attractive urban living and working environment exists for the use and enjoyment all

San Diegans [Section 110.1U]

Encourage the rehabilitation and upgrading historical and architecturally significant

6

structures and sites [Section 110.1

X]

Strengthen the economic base

downtown through the installation

needed public

improvements, including transit and parking facilities, to stimulate new commercial,

residential, employment and economic growth, and to improve the circulation

people

and vehicles [Section 110.1Z]

Create an urban open space system that is designed to take advantage

San Diego s

climate and setting that offers both formal and informal gather places, active recreational

and quiet areas for downtown workers, residents and visitors [Section 110.IAA]

Emphasize development and use

efficient mass transit [Section 110.1CC]

The Redevelopment Plan provides the following provisions which may also satisfy

Section 33445 b) 2) under General Redevelopment Actions:

Demolition, clearance, site preparation and construction buildings, and public

improvements [Section 400B]

Disposition

property for uses in accordance with this Plan [Section 400F]

Development transportation concepts and related facilities [Section 400B]

Participation opportunities in connection with construction, realignment, widening or

abandonment some streets and public rights-of-way [Section 430.7B] and

construction or expansion

public facilities [Section 430.7E]

6

We were uncertain whether the existing City use the Park Project site may involve historical

or architecturally significant structures and sites and therefore include this Redevelopment Plan

objective.


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K NE B LLMER

BERKM N

Mr JeffGraham



September23,2010

Page 2

The Agency is authorized under Section 440.2 to install and construct, public

improvements and public utilities within or outside the Project Area necessary to

carry out this Plan. Such public improvements include, but are not limited to, over-

or underpasses, bridges, streets, curbs, gutters, sidewalks, streetlights, water

distribution systems, sewers, storm drains, traffic signals, electrical distribution

systems, parks, plazas, playgrounds, motor vehicle parking facilities, landscaped

areas, street furnishings and transportation facilities

The Agency is authorized under Section 440.3 to construct foundations, platforms

and other structural forms necessary for the provision or utilization o air rights sites

for buildings to be used for residential commercial, industrial, public or other sues

provided in this Plan

The Agency is authorized to pay all or part o the value for the land for and the value

o the land for and the cost o the installation and construction o any building,

facility, structure, or other improvement which is publicly owned either within or

without the Project Area, the City Council determines that the buildings, facilities,

structures, or other improvements are o benefit to the Project Area or the immediate

neighborhood in which the Project is located, and that no other reasonable means o

financing such buildings, facilities, structures, or other improvements are available to

the community. The Agency may enter into contracts, leases and agreements with the

City or other public body or entity pursuant to Section 460.10 and the obligation

o

the Agency under such contract, lease or agreement shall constitute an indebtedness

o the Agency which may be payable out o the taxes levied in the Project Area and

allocated to the Agency under subdivision b

o

Section 33670

o

Community

Redevelopment Law and under Section 710 o this Plan, or out o any other available

funds.[Section 460.10]

Satellite parking sites may be established on property near freeway egress/ingress and

other peripheral locations near the Project Area for parking purposes [Section 480.2]

Certain public bodies are authorized by state law to aid and cooperate, with or

without consideration, in the planning, undertaking, construction or operation

o

this

Project. The Agency shall seek the aid and cooperation o such public bodies and

shall attempt to coordinate this Plan with the activities o such public bodies in order

to accomplish the purposes

o

redevelopment and the highest public good [Section

490.1]


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K NE

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BERKM N

Mr Jeff Graham

Vice President Redevelopment


September 23 2010

Page

3

The Agency is authorized to assist in the development

o

publicly owned buildings

facilities structures or other improvements as provided in Section 460 10

o

this Plan

[Section 490 2]

Open space within the Project Area includes: King Promenade Embarcadero

Marking Parks Pantoja Park Park at the Park in addition to a number o small parks

Together these parks total approximately 42 acres Additional new parks plazas and

open space will be provided by extension o the King Promenade the North

Embarcadero Bayfront Esplanade the County Administration Center Waterfront

Parks and through the creation

o

a variety

o

smaller parks throughout the Project

Area These new parks total approximately

75

acres [Section 510 9]

The Agency shall require that all utilities be placed underground when physically and

economically feasible as determined by the Agency [Section 510 10]

After adoption

o

this Plan and from time to time during the period

o

the Plan the

Agency shall proceed with reasonable diligence to identify specific strategies

obtained through public input for implementation which may include more specific

plans and programs and which shall include geographical and topical focus areas

The Agency shall emphasize the use o

implementing actions including those set

forth in Section 400 o this Plan in the identified topical and geographical areas as

necessary and appropriate to make the most efficient use o its resources and so that

the impact

o

its activities stimulate private redevelopment [Section 550]

According to the Redevelopment Plan the City shall aid and cooperate with the

Agency

in

carrying out this Plan and shall take all actions necessary to ensure the

continued fulfillment o the purposes

o

this Plan and to prevent the recurrence or

spread in the area

o

conditions causing blight Action by the City shall include but

not be limited to:

institution and completion

o

proceedings for widenting or

changing the grades o streets alleys and for other necessary modifications o

streets all other functions and services relating to public health safety and physical

development which will permit the redevelopment

o

the Project to be commenced

and carried to completion without unnecessary delays and the undertaking and

completing o any other proceedings necessary to carry out the Project [Section 800 1

A G and

H]


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Mr Jeff Graham



September 23,2010

Page 4

ANALYSIS

Park Project

According to the facts presented to us, the Park Project appears contiguous as defined by

Section 33445 f) to the Centre City Redevelopment Project Area. As a result, Section 33445

applies. Here are the steps necessary to accomplish the Park Project:

To the extent necessary, the details

o

the Park Project should be consistent with the

Implementation Plan. Many examples are set forth above, but this list is not exhaustive and the

facts concerning the Park Project should be developed around particularized sections o the

Implementation Plan to assure the payment

o tax increment is consistent with Section

33445 a) 3).

2 The Agency initiate and finalize a summary report under Section 33679 in compliance

with Section 33445, which requires seeking the consent o the City, and the City s determination

that: 1) that acquisition

o

land or installation or construction o buildings incident to the Park

Project are

o

benefit to help eliminate blight within the Centre City Redevelopment Project

Area[as set out in detail in Section 33445 a) I)]; 2) that there are no other reasonable means o

financing the acquisition

o

the land or installation or construction o the improvements related to

the Park Project[as set out in detail in Section 33445 a) 2)], and 3) the payment proposed

concerning the Park Project is consistent with the implementation plan [as set out in detail in

Section 33445 a) 3)].

3 The details o the Park Project, once fully discerned, must be provided for in the

Redevelopment Plan. Many examples are set forth above, but this list is not exhaustive and the

facts concerning the Park Project should be developed around particularized sections o the

Redevelopment Plan. [Section 33445 b) 2)]

4 The Agency expenditure may not include any payment for maintenance or like

operations incident to the Park Project.[Section 33445 b) 3)]

5 the details o the Park Project include the City s initial contribution o the land and

improvements to the Park Project, under Section 33445 c), the Agency may contract with the

City for payments over a period o time. This option essentially permits contractual financing

with the City, which, i exercised, should be included in the summary report, presentation to the

City and joint public hearing.

6 The Agency would also have to comply with Section 33679, hold a joint public


15/19


Mr

JeffGraham



September 23,2010

Page 5

hearing, set out the exact details of the transaction in the summary report, and publish the notice

of

hearing in a newspaper

of

general circulation such as the Daily Transcript.

7 In addition, and if facts suggest and apply hereunder, under Section 33421, gives the

Agency additional powers. The section reads: An agency may develop

as

a building site any

real property owned or acquired by it. In connection with such development it may cause,

provide or undertake or make provision with other agencies for the installation, or construction

of streets, utilities, parks, playgrounds and other public improvements necessary for carrying out

in the project area the redevelopment plan. Additional facts are likely necessary to determine

the applicability

of

this section to the Park Project.

8 To the extent billboards or like air rights are part of the Park Project, under Section

33440, an agency may construct foundations, platforms, and other like structural forms

necessary for the provision or utilization of air rights sites for buildings to be used for residential,

commercial industrial, or other uses contemplated by the redevelopment plan.

Please advise if you wish additional assistance in moving forward with the Park Project

or the preparation

of

a recommendation for the Agency.

Neighborhood Public Improvements Project

According to the facts presented to us, the Neighborhood Public Improvements project

fails to identify exactly what public improvements

r e

sought to be installed and exactly where

the installation is proposed. Such facts would be vital to determine (i) whether Sections 33445

concerning continuous parcels or 33445.1 regarding non-contiguous parcels apply, (ii) if the

payment

is

consistent with the Implementation Plan under Sections 33445(a)(3) or

33445.1(a)(4), and (iii) whether the public improvments are provided in the Redevelopment Plan

under Sections 33445(b)(2) or 33445.1(a)(5).

Furthermore, the facts would also avail the e

of

the ability to access set asides. For

instance, if there were any affordable housing projects within the Golden Hill, Sherman Heights,

or Barrio Logan areas, there may be avenues to explore the possibility

of

Agency-assistance

under the affordable housing sections of Community Redevelopment Law and such expenditures

would have the benefit of the statutory authorization to encourage affordable housing under

Section 33445(a)(1) or 33445.1(a)(2). With such facts and affordable housing redevelopment

public purpose, such expenditures would able to

be

froin 20 tax-increment set asides. At the

present time, we

do

not have such public purpose and as a result, this opinion rests on 80 tax

increment from the CCDC project areas.


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Mr

JeffGraham



September23,2010

Page 6

For the foregoing reasons, we believe the Agency is limited in its ability to expend only

80 CCDC tax increment only on those contiguous areas,

as

defined in 33445(f). We also

believe there must be some showing o how these public improvements on the other side o

Interstate 5 in these neighborhoods actually eliminate blight in the Centre City Redevelopment

Project Area.

We

believe the Neighborhood Public Improvements project details must be further

developed to show the payment

o

such funds are consistent with the Implementation Plan and

provided for in the Redevelopment Plan. Assuming such barriers are overcome,

as to

those

sections o Golden Hill, Sherman Heights, and Barrio Logan, that are actually contiguous the

Agency must only comply with Section 33445(a). Further development o facts may also reveal

the Agency may also possess the powers under Section 33445(c), 33421, and 33440,

necessary.

For instance along those western parcels o Golden Hill and Sherman Heights directly

adjacent to Interstate 5 and those northwesterly parcels o Barrio Logan, CCDC may recommend

that the Agency undertake only those improvements that are publicly-owned that eliminate blight

in the Centre City Redevelopment Project Area. Further inquiry would be necessary as to what

is the state o the parcels adjacent to the Centre City Redevelopment Project Area to determine

exactly what blight exists and what improvements should be installed or constructed in and

around those parcels. For instance, the Redevelopment Plan does encourage all utilities be

placed underground when physically and economically feasible, as determined by the Agency

[Section 510.10]. In addition, the Agency is authorized under Section 440.2 o the

Redevelopment Plan to install and construct, public improvements and public utilities (within or

outside the Project Area) necessary to carry out this Plan. Such public improvements include,

but are not limited to, over- or underpasses, bridges, streets, curbs, gutters, sidewalks,

streetlights, water distribution systems, sewers, storm drains, traffic signals, electrical

distribution systems, parks, plazas, playgrounds, motor vehicle parking facilities, landscaped

areas, street furnishings and transportation facilities. Further review o the discussion sections

concerning the Implementation and Redevelopment Plans may also assist in further development

o the Neighborhood Public Improvements project. Please advise you wish for

us

to meet with

you further to determine how such aspects o the Implementation and Redevelopment Plans may

yield a revised Neighborhood Public Improvements project to accomplish CCDC and Agency

goals.

With respect to those specific contiguous areas

o

Golden Hill, Sherman Heights, and

Barrio Logan that are to be part o the Neighborhood Public Improvements project, these areas

are the only parcels that appear contiguous to the Centre City Redevelopment Project Area as

defined by Section 33445(f). The Agency may follow Section 33445 for only those contiguous

parcels in the Neighborhood Public Improvements project. Here are the steps necessary to


17/19


Mr Jeff Graham



September23,2010

Page 7

accomplish this revised scope for this project:

To the extent necessary, the details o the Neighborhood Public Improvements project

should be consistent with the Implementation Plan. Many examples are set forth above, but this

list is not exhaustive and the facts concerning the Neighborhood Public Improvements project

should be developed around particularized sections o the Implementation Plan to assure the

payment o tax increment is consistent with Section 33445 a) 3).

2 The Agency initiate and finalize a summary report under Section 33679 in compliance

with Section 33445, which requires seeking the consent o the City, and the City s determination

that: 1) that installation or construction o any facility, structure or other improvement incident

to the Neighborhood Public Improvements project are o benefit to help eliminate blight within

the Centre City Redevelopment Project Area[as set out in detail in Section 33445 a) 1)]; 2) that

there are no other reasonable means o financing the installation or construction o any facility,

structure or other improvement incident to the Neighborhood Public Improvements project [as

set out in detail in Section 33445 a) 2)], and 3) the payment proposed concerning the

Neighborhood Public Improvements project

is

consistent with the implementation plan [as set

out in detail in Section 33445 a) 3)].

3 The details o the Neighborhood Public Improvements project, once fully discerned,

must be provided for in the Redevelopment Plan. Many examples are set forth above, but this

list is not exhaustive and the facts concerning the Neighborhood Public Improvements project

should be developed around particularized sections

o

the Redevelopment Plan. [Section

33445 b) 2)]

4

The Agency expenditure may not include any payment for maintenance or like

operations incident to the Neighborhood Public Improvements project.[Section 33445 b) 3)]

5 the details

o

the Neighborhood Public Improvements project include the City s

initial contribution o improvements to the Neighborhood Public Improvements project, under

Section 33445 c), the Agency may contract with the City for payments over a period o time.

This option essentially permits contractual financing with the City, which,

i

exercised, should be

included in the summary report, presentation to the City and joint public hearing.

6 The Agency would also have to comply with Section 33679, hold a joint public

hearing, set out the exact details o the transaction in the summary report, and publish the notice

o hearing in a newspaper o general circulation such as the Daily Transcript.


18/19

K NE LLMER ERKM N

Mr

JeffGraham



September 23,2010

Page 18

7 In addition, and i facts suggest and apply hereunder, under Section 33421, gives the

Agency additional powers. The section reads: An agency may develop as a building site any

real property owned or acquired by it. In connection with such development it may cause,

provide or undertake or make provision with other agencies for the installation, or construction

o streets, utilities, parks, playgrounds and other public improvements necessary for carrying out

in the project area the redevelopment plan. Additional facts are likely necessary to determine

the applicability o this section to the Neighborhood Public Improvements project.

8

To the extent billboards or like air rights are part

o

the Neighborhood Public

Improvements project, under Section 33440, an agency may construct foundations, platforms,

and other like structural forms necessary for the provision or utilization o air rights sites

for

buildings to be used for residential, commercial industrial, or other uses contemplated by the

redevelopment plan. A review o consistency with the Redevelopment Plan would also be

necessary

i

this becomes part

o th

Neighborhood Public Improvements project. Because these

areas are adjacent to Interstate 5 this may show promise as a revenue generator but should

be

vetted through a public process.

As to those areas o Golden Hill, Sherman Heights, and Barrio Logan that are not

contiguous to the Centre City Redevelopment Project Area, Section 33445.1 applies. Unlike

33445,

SB

93

was made to limit the Agency s role in purchasing or improving non-contiguous

parcels outside the project area. As noted above in the discussion o applicable law, Section

33445.1 would require that the City and Agency evaluate other financing facilities, like

assessment bonds, Mello-Roos, and the like under Section 33445.1(a)(3) before using tax

increment for the Neighborhood Public Improvements project. As a result, i the public

improvements are not specified and the land to be improved is not contiguous, it

is

vital to

demonstrate how the unspecified public improvements under the Neighborhood Public

Improvements project are o primary benefit to the project area without any other reasonable

means

o

financing.

While we believe there may exist some recognizable nexus to show that contiguous

parcels under the Neighborhood Public Improvements project are

o

benefit to the Centre City

Redevelopment Project Area, we have not yet seen such facts. However, at this time, we do not

see how the Neighborhood Public Improvements project on non-contiguous parcels may

be

o

benefit to the Centre City Redevelopment Project Area.

We

would be happy to assist in the

investigatory process

i

and as necessary.


19/19

K NE

B L l

ME H

BERKM N

Mr

Jeff

Graham


Centre City DevelopmentCorporation

September

23 2010

Page 19

We are pleased

to

have

provided

this opinion on the Park Project

and Neighborhood

Public Improvements project. As and when

p p r o p r i t ~ kindly

advise if

you

wish any further

assistance

in

connection with this assignment.

you have any further questions, please do not hesitate to call us.

Very truly yours,

KANE BALLMER BERKMAN

cc: Elisa Cusato, Esq., Office

o

General Counsel Via E-Mail [email protected])

Kane Ballmer Berkman Legal Opinion CCDC Cap 05 162011

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