Frequently Asked Questions Related to Redevelopment
Last Updated: June 18, 2012
When was Santa Clarita’s Redevelopment Agency formed and why?
The Redevelopment Agency was created by the City Council on November 28, 1989, which later initiated the Newhall Redevelopment Plan on July 8, 1997. The Agency was formed to revitalize this area by eliminating blight and providing affordable housing. The presence of aged buildings, severely deteriorated structures, lack of public infrastructures and a declining economy, made this area qualified for redevelopment.
What has the Redevelopment Agency accomplished?
You can read more about the accomplishments of the Santa Clarita Redevelopment Agency. You can also watch a video called “Newhall – New Direction: A Redevelopment Story in the Making.”
Is the Redevelopment Agency still active?
In June 2011, when the State legislature adopted AB1X26, this legislation effectively ended Redevelopment Agencies throughout the state of California. A challenge was filed in the State Supreme Court which upheld the legislatures desire to end redevelopment in California and, effective February 1, 2012, the Santa Clarita Redevelopment Agency was dissolved and a Successor Agency was tasked with fully dissolving the Redevelopment Agency.
What is the Successor Agency and what do they do?
The City of Santa Clarita took on the role of Successor Agency. In this capacity, the City may wind down the activities of the former Redevelopment Agency, dispose of financial and physical assets, and continue to make approved payments for obligations deemed enforceable. Any action taken by the Successor Agency must be approved by a 7-member Oversight Board appointed by various entities as outlined in AB1X26 and financial related actions must also be approved by the Department of Finance. A graphic that shows the new paradigm of redevelopment can be found here.
Who is the Oversight Board and when do they meet?
The appointees of Santa Clarita’s Oversight Board are as follows:
- Ken Striplin, appointed by the City of Santa Clarita to represent the former Redevelopment Agency employees. Mr. Striplin was elected to serve as the Chair of the Board;
- Sharlene Coleal, appointed by the California Community Colleges. Ms. Coleal was elected to serve as the Vice Chair of the Board;
- Darren Hernandez, appointed by the City of Santa Clarita;
- John Dortch, appointed by the Los Angeles County Board of Supervisors as the County’s appointee;
- Susan Hoerber, appointed by the Los Angeles County Office of Education;
- Brian Koegle, appointed by the Los Angeles County Board of Supervisors as the member of the public; and
- Robert Swartz, appointed by the Los Angeles County Board of Supervisors to represent the largest special district in the former Redevelopment Area, which in our case is the County Fire District.
The Oversight Board meets when there are items required to have action taken by the Board. Meetings are generally held on the third Tuesday of the month at 2:00 p.m. in the Century Room at City Hall. The Oversight Board meetings are open to the public and subject to the Brown Act. A listing of meetings held and actions taken can be found here.
Are there currently bills in the State Legislature to keep Redevelopment alive?
While the legislature has indicated that their intent was not to end Redevelopment, unfortunately the result of the Supreme Court’s decision made the end of Redevelopment a reality. California is now one of only two states without some form of tax increment financing, which makes redevelopment projects difficult to implement given the current economic climate. The City is committed to working with the State to create a new type of redevelopment/economic growth program, which maintains the spirit of redevelopment.
How does the dissolution of Redevelopment affect projects in Newhall that are on going or in the works?
There are a number of capital projects in various stages of design and construction. The status of each project is below:
- Old Town Newhall Library
The Old Town Newhall Library continues to be under construction and will open in September 2012.
- Roundabout w/ Public Art
Without Redevelopment, an important traffic calming measure and gateway to the downtown may not be possible to implement. This modern roundabout proposed for the Southern entrance onto Main Street would serve as an anchor into Old Town Newhall (with a public art component in the center) and slow traffic to further encourage pedestrian activity in the area. This roundabout would also serve as a complement to the entrance of Hart Park, the 265 acre estate where silent film star William S. Hart resided in the 1920s, and encourage pedestrians to explore that hidden jewel. The City continues to seek for funding sources for this project.
- Catalytic Project
In 2009, the Agency had the opportunity to purchase an entire block of land in Old Town Newhall to use for redevelopment purposes. The intent of purchasing that property was to relocate the existing tenants and release an RFP to the business community to solicit a full-block development that would further the goals of the Redevelopment Agency. Unfortunately, without the existence of the Redevelopment Agency, it becomes impossible to create that public-private partnership that becomes the catalytic development to further revitalization efforts for the area. That property has since been transferred to City ownership.
- Affordable Housing Development
Redevelopment is the main source of funding for projects that impact low- and moderate-income people in our community. A partnership of The Related Companies (Related) and National Community Renaissance (CORE) have worked with the City for a number of years to identify a location and funding for an affordable rental housing project. In 2010, the City acquired the former Caltrans park and ride lot on Newhall Avenue and another adjacent parcel of raw land. CORE/Related developed a proposal, identified funding sources, and designed a 30-unit 100% affordable family development. Planning Commission approvals for this proposed project were obtained on 7/19/11. Due to the status of redevelopment, this project has been placed on hold. In its current form AB1X 26 requires that the balance in the housing redevelopment fund be put into a trust fund to pay down debt, so these funds will no longer be available to use for the Newhall Avenue Development. The City will continue to work with the affordable housing developers to find other sources of funding to complete the development.
What happened to the bills that the legislature was considering related to AB1X26?
In an attempt to fix some of the disparities in AB1X 26, the legislature has introduced a number of bills that will significantly impact how the dissolution of Redevelopment will unfold. The City Council has adopted a support position on the three bills listed below:
- SB 654 – This bill would allow the balances in the housing fund of redevelopment agencies to be retained and be utilized by the City for housing construction and other housing-related programs.
- AB 1585 – This bill seeks to make technical fixes to AB1X26, to clarify the functions of the successor agencies and oversight boards and to also protect affordable housing funds.
- SB 986 – This bill would allow the City to expend the bond proceeds in the manner outlined at the time bonds were issued.
The legislature is currently using the language proposed in these three bills and merging it with language from a proposal from the Department of Finance to create “clean up legislation.” This legislation is designed to make technical fixes to the redevelopment dissolution process to help clarify and streamline the process.
What happens to the properties that the Redevelopment Agency owned?
The Redevelopment Agency did not own any property at the time the Agency was dissolved.
On average, how much money did the City’s Redevelopment Agency receive annually?
The Santa Clarita Redevelopment Agency received approximately $4 million per year in property tax increment funds.
How much money did the Redevelopment Agency have when it dissolved? What happens to that money now?
All of the money the former Redevelopment Agency had, including tax increment and bond proceeds, has been transferred to the Successor Agency. By state law, Redevelopment financing is split in to two categories – housing and non-housing. When the Redevelopment Agency dissolved, the non-housing Redevelopment Fund had $381,347; the housing Redevelopment Fund had $8,986,406 ($3,822,466 in tax increment funds and $5,073,940 in bond proceeds). The cash balances are being used to help pay down the former Agency’s debt. The bond proceeds are currently being held until further direction is provided by the State legislature on how to handle.
How much outstanding debt does the Redevelopment Agency have?
The Agency has bond debt in the amount of $72,541,866 (includes both principal and interest) for both housing and non-housing related bonds. Additionally, the Agency owes $18,097,224 (as of 12/31/2011) to the City of Santa Clarita to repay loans made by the City to the Agency to fund certain public works projects.
What happens to that debt now?
No General Fund money will be used to pay off the debt. The Successor Agency will be responsible for ensuring that the debt is paid off according to schedule using the same property tax (tax increment) that the Agency has been collecting. Essentially, for each six month period, the Successor Agency will submit an invoice (or Recognized Obligation Payment Schedule) to the County. The Recognized Obligation Payment Schedule is also approved by the Oversight Board and the Department of Finance. The County will then provide tax increment to the Successor Agency to make the required payments. You can find approved Recognized Obligation Payment Schedules here.
When do the bonds get paid off?
The bonds are set to be paid off in 2042 as identified when the bonds were issued in 2008. There is no change to this repayment schedule as a result of AB1X26.
What is the rating of the Agency’s Bonds?
The bond rating remains at A-. Moody’s recent downgrade did not affect the Agency’s bond rating as our bonds were rated by S&P.
What about the money the City’s General Fund loaned the Agency?
That is unclear at this time. According to AB1X26, only debt incurred between the City and the Agency in the first two years after the establishment of the Agency would be enforceable. State legislators are currently working on a proposal that would makes loans between the two entities enforceable obligations.
Is the City’s General Fund liable to pay back the Agency’s debt?
No. The General Fund is not responsible to pay back the Agency’s debt. The tax increment that would have been received by the Agency will be provided to the Successor Agency to pay the Agency’s financial obligations.
Will the City still invest in revitalizing Old Town Newhall?
The need for community revitalization still exists and the City will continue to play a role in creating jobs, affordable housing, and a healthy environment in distressed communities with the tools available.
What can I do as a resident/business owner to help restore Redevelopment?
Speak out to your elected representatives at the State level and tell them how Redevelopment has impacted you. Encourage them to introduce and vote on legislation that will restore Redevelopment in our community.
- Governor Edmund G. Brown
State Capital, Suite 1173, Sacramento, CA 95814 – (916) 445-2841
- Senator Sharon Runner
23920 Valencia Blvd. Suite 250, Santa Clarita, CA 91355 – (661) 286-1471
- Senator Tony Strickland
2655 First St., Suite 230, Simi Valley, CA 93065 – (805) 306-8886
- Assemblyman Cameron Smyth
23734 Valencia Blvd. 303, Santa Clarita, CA 91355 – (661) 286-1565
Who should I contact for more information?
Please contact the City’s Redevelopment Division at (661) 286-4141.