I. RECOMMENDATION:
Financial Services Director recommends City Council adoption of Resolution No. 3956 extending the time period for the development and or disposition of housing properties transferred from the former Coalinga Redevelopment Agency pursuant to Health and Safety Code Section 34176.1(e).
II. BACKGROUND:
The City Council, serving as the Housing Successor Agency of the former Coalinga Redevelopment Agency (“RDA”), may consider an extension of five-years to initiate the affordable housing development and/or disposal of the remaining housing assets that were transferred from the RDA to the Successor Agency.
III. DISCUSSION:
The City of Coalinga (“City”) is the Housing Successor Agency (“Housing Successor”) to the former Coalinga Redevelopment Agency. Properties transferred from the former Agency to the City as Housing Successor must be developed for affordable housing purposes or sold by December 15, 2017, unless the City Council extends this time period by five years as permitted by state law.
The attached resolution would extend the time period to initiate development or disposal of the remaining housing assets to December 15, 2022.
All California redevelopment agencies were dissolved by State law on February 1, 2012. The former RDA’s affordable housing rights, powers, assets, liabilities, duties, and obligations, excluding any amounts in the Agency’s Low and Moderate Income Housing Fund, were transferred to the City as the Housing Successor Agency. Housing assets and liabilities were transferred to the City through a Housing Asset Transfer Form approved by the Department of Finance (“DOF”) on December 15, 2012.
As a consequence of redevelopment dissolution, the former RDA transferred a total of three real properties to the City, as listed in the following table, and on the maps shown in Attachment B. All three properties remain to be sold or developed.
PROPERTIES TRANSFERRED FROM THE
COALINGA REDEVELOPMENT AGENCY
HAT ITEM #
|
PROPERTY ADDRESS/APN
|
PROPERTY TYPE
|
1
|
180 Pierce Street (APN: 071-123-18)
|
Vacant SFR Lot
|
2
|
083-020-58ST (portion)
083-020-63ST
083-020-60ST
083-020-56ST (portion)
|
Vacant Land
|
3
|
071-162-16S
|
Vacant Land
|
Note: S extension is surface rights only, mineral rights owned by a third party and not subject to disposition.
Under Redevelopment Law, real properties acquired with housing funds had to see some initiation of development activities within five years, and the law allows a single extension of this timeframe for another five years. The Dissolution Act, specifically Health and Safety Code Section 34176.16, starts the first five-year time period from the date that the Department of Finance approved the transfer of housing assets from the former RDA to the housing successor agency. For Coalinga, the DOF sent their approval letter dated December 15, 2012 approving the transfer of housing assets to the City, meaning that the City would need to initiate activities for development or disposition by December 15, 2017, or seek an extension of this time limit by another five years.
Handicapped without funding to acquire or underwrite projects, most housing successor agencies are limited in their ability to initiate development activities without an extension. The City has been unable to initiate development on the properties due to the loss of funding from redevelopment dissolution. For this reason, City staff is recommending that the City Council extend the time period for initiation of housing activities on these three property assets to December 15, 2022 as described in the attached resolution.
The extension allows for the orderly and prudent use of affordable housing assets. While the City might consider selling some of the properties, staff must adhere to several restrictions imposed by State Law on Housing Successor financing and housing production. State law requires housing successor agencies to spend Housing Asset Funds within certain limits based on income levels, age restrictions, and excess surplus thresholds. Therefore, city staff does not recommend selling the properties right away in order to preserve opportunities for future affordable housing development within the limits imposed by law, and to avoid accumulating an excess surplus. If the properties are sold, the sales proceeds would be deposited into the Housing Asset Fund, and if they are not spent on qualified expenses within a certain timeframe and threshold, the City could be forced to transfer funds to the State.
IV. ALTERNATIVES:
None.
V. FISCAL IMPACT:
There will be no fiscal impact to the General Fund at this time. |