Redevelopment

Small Town Revitalization

A feature in this month’s Planning magazine highlights the efforts of nonprofit regional planning organizations to revitalize small towns in New York State. These organizations seek to bring people back to cities and walkable communities with “good, urbanistic street networks and underutilized building stock.”

Regional planning organizations provide services to municipalities, such as demographic and issues research, strategic planning, and grant writing. The priorities of the organizations described in the article are to keep and attract young people while also preserving an area’s character.

Despite the vast distance that separates them, many California towns have much in common with their New York counterparts. Many were founded early, before automobiles, which means their development patterns could be similar. Similarly, an historic, underutilized building stock presents an asset for towns on both coasts. With such shared features, successful strategies for revitalization are more similar than one may initially expect.

If your town might be interested in developing a revitalization strategy, please contact RSG to help you through the process.

Written by Dima Galkin, an Associate at RSG

Could Now Be the Time for a CRIA?

 Copyright American Planning Association Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Copyright American Planning Association
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

AB 2492 extends Community Revitalization and Investment Areas to wealthier regions of the state, without much change to financial benefits of these tax increment financing (TIF) districts.

Last month, RSG discussed the limited financial benefits of Enhanced Infrastructure Financing Districts, one of several newer tax increment financing tools that provide limited benefits similar to redevelopment financing. Community Revitalization and Investment Authorities (CRIAs) are similarly structured and provide these tools AND opportunities for other community development tools. These characteristics have attracted some of our clients to evaluate their benefit. As it turned out, most of California could not benefit from a CRIA given the narrow socioeconomic requirements. 

However, just this week, the Governor signed Assembly Bill (AB) 2492 (Alejo) into law that makes changes to CRIAs, so we took a hard look at these changes and how they affect cities looking for help on community development projects. As it turns out, AB 2492 primarily expands the net on eligibility for CRIAs, but fails to provide much needed new capital to communities.

Here are the main changes:

  • More communities qualify – a greater number of lower income neighborhoods qualify because AB 2492 allows wealthier areas of the state to identify CRIAs in areas that have a median income less than 80 percent of the city or county median income, not just the state;
  • More flexibility - Added flexibility in measuring what parts of communities qualify by allowing the use of census tracts and/or block groups;
  • Any California Environmental Protection Agency-designated “disadvantaged community” automatically qualifies for CRIA - this certainly helps some very low and low income neighborhoods that would otherwise not qualify under the old law; and
  • Some added financial benefit – in addition to tax increment generated by the CRIA, special districts may now have the authority to allocate funds from certain tax and assessment revenues to the CRIA.  Cities and counties already had this ability.

We would love to see more done to make these districts more attractive by:

  • increasing the amount of tax increment revenues,
  • lowering the costs for startup, and
  • providing some other efficiencies like those RSG outlined in last month’s article for EIFDs. 

It’s important to note -  qualifying alone does not mean this tool is right for you.  It’s important to look at the financial feasibility carefully before jumping ahead.

Written by Jim Simon, a Principal at RSG

EIFDs: Redevelopment 2.0?

 

When Governor Brown signed Senate Bill 628 in 2014, many were surprised about the return of tax increment financing in the form of enhanced infrastructure financing districts (EIFDs). But little was known about how the tool works. At RSG, we have looked closely at the details and honestly, we have yet to find many situations where it makes sense for a community to form an EIFD. Why?

First, unless you have a project that can only happen if an EIFD is created, an EIFD doesn’t generate any new dollars. Rather, your city offers up future General Fund dollars to get back those same dollars for investing into projects.

Second, school districts cannot participate – so in many cases, the largest share of property tax is unavailable. Getting other taxing entities to participate can be a challenge at best.

Third, forming an EIFD is an onerous process, which RSG estimates costs at least $500,000 from…you guessed it – the General Fund.

Finally, everything you fund is built at prevailing wage; the fiscal benefits of government underwriting don’t get stretched too far when you are paying 25% or more for added labor costs. 

To be candid, EIFDs are just not that great of a tool. Not yet, at least. In my next post, I’ll offer some ideas for improvement. I hope the law is cleaned up in the upcoming legislative sessions. If not, I suspect only a few of these will be created. 

Written by Jim Simon, a Principal at RSG

San Carlos Breaks Ground on a Landmark Hotel

 

The City of San Carlos recently broke ground on a new four-story, upscale, extended-stay Landmark Hotel. The hotel will include 204 guest rooms with individual kitchens, outdoor patio areas with a pool and sport court, fitness and laundry center, and a meeting room.

 

 

The hotel will be located near the City’s gateway entrance off the 101 freeway. It will provide much needed transient occupancy tax revenue to diversify the city’s tax base and increase revenues to fund services for the community. All buildings previously on the site have been demolished, and the entire project is expected to be completed in August 2017

RSG was involved in every step along the way from site assembly and acquisition, drafting purchase and sale agreements, relocating existing businesses, developer negotiations and agreements, and obtaining approval from local agencies. Call us to find out how we can facilitate your next project.

Written by Suzy Kim, a Senior Associate at RSG

Are CRIAs or EIFDs Right for You?

Community Revitalization and Investment Authorities (CRIA) and Enhanced Infrastructure Financing Districts (EIFD) are receiving a lot of hype as the “new” redevelopment options. While they offer many valuable tools, they have many restrictions. CRIAs and EIFDs are not one-size-fits-all solutions and may not work for every community.  

The major benefit is the ability to collect tax increment revenues and issue bonds to fund projects such as infrastructure and building improvements, environmental remediation, business assistance, and affordable housing. Unlike EIFDs, CRIAs allow the use of eminent domain, but they also mandate a 25% set-aside for affordable housing.  A big hurdle is that either your agency’s share of property tax must be large enough to fund desired projects or other taxing agencies must agree to contribute. Lastly, CRIAs can be challenged by a protest vote, and EIFDs require voter approval to issue bonds

The main questions to consider are:

•    Do CRIAs or EIFDs fund the projects we need?
•    Are the proposed boundaries eligible?  
•    Will my agency’s share of property tax revenue be enough to fund projects, or will there be enough support from other taxing agencies to share the cost?
•    Will elected leaders and the community support a new CRIA or EIFD?

RSG can help you determine which tool is best, based on your area’s eligibility and needs.  Call us to learn more.

Written by Suzy Kim, a Senior Associate at RSG

Push to Expand Brownfield Cleanup in California

As developable land becomes increasingly sparse in California, federal and state governments have implemented initiatives to push developers toward the abundance of contaminated sites throughout the state. 

Among these initiatives is the recent introduction of Senate Bill (SB) 820, that seeks to extend the California Land Reuse & Revitalization Act of 2004 (CLRRA) beyond its set expiration date of January 1, 2017. The law has helped propel the cleanup and development of vacant hazardous waste sites across the state. CLRRA encourages revitalization of blighted properties by allowing purchasers of contaminated lots to negotiate a cleanup plan with the state in exchange for liability protection from damages associated with the original contamination. Senator Bob Hertzberg, along with sponsorship from CALED’s Brownfield & Land Revitalization Committee (BLRC), have been the leading force behind SB 820.

Another big movement to clean blighted sites has been the availability of numerous funding programs, all with varying eligibility requirements and fund limits. The Center for Creative Land Recycling recently held its “Back in Business: Resources for Redevelopment & Land Recycling” workshop, highlighting the major players involved in funding within California, including: US Environmental Protection Agency (EPA), California State Water Resources Control Board (SWRCB), and California Department of Toxic Substances Control (DRSC).

RSG understands that recycling abandoned and under-utilized properties is challenging for all parties involved, but with the right team and knowledge it can be a truly rewarding project. RSG is experienced with all facets of brownfield remediation, such as identifying and obtaining funding; projecting assessment, cleanup and development costs; community outreach; and management of third party consultants. We are also actively involved with CALED’s Brownfield & Land Revitalization Committee and pursuing new development opportunities with clients continually. Call us to find out how we can help you navigate the process.

Written by Nate Gunderman, an Associate at RSG

Bring on the Brownfields

burke site.jpg

Brownfields—sites previously used for industrial purposes and possibly contaminated by petroleum and other hazardous substances, pollutants, or contaminants (including hazardous substances co-mingled with petroleum)—present real estate development opportunities that are often ignored because of the complexity and risk involved. These sites can be cleaned up and used for a variety of developments, which protects the environment, reduces blight, and takes development pressures off greenspaces and working lands.

The U.S. EPA Brownfield Program encourages such development by offering financing in the form of grants, as well as technical assistance to communities, states and other stakeholders, giving them the resources they need to fully assess, safely clean up and sustainably reuse America’s estimated 450,000  brownfields. Brownfield grants may be used to address contaminated sites. Opportunities for funding are: Brownfields Assessment Grants, each funded up to $200,000 over three years; Assessment Coalitions, funded up to $600,000 over three years; Brownfield Revolving Loan Fund Grants, funded up to $1,000,000 over five years; and Brownfields Cleanup Grants, funded up to $200,000 over three years. 

RSG is actively involved in brownfields properties that are being developed currently and can help clients navigate through this process. Call us and let us help you to make the most of this interesting type of opportunity.

Written by Jim Simon, a Principal at RSG

Top Priority Issues Identified at the League of California Cities Conference

On Monday, we told you about our attendance at the League of California Cities conference. As we live in a time of emails and social media, RSG truly enjoys face-to-face interaction with our existing clients, as well as staff and Councilmembers from other cities throughout the State.  We had many interesting and productive conversations with attendees about the important issues currently facing cities.

Many of these conversations were sparked by the unique game that we had at our booth. Using poker chips as voting tools, we had six jars representing six priority issues for many cities:
           •    Aging Infrastructure
           •    Affordable/Workforce Housing
           •    Sales Tax Generators
           •    Hotels
           •    Closing Budget Deficit
           •    Job Creation

We received over 100 votes over our two days at the exhibit hall.  And the winner was…….        

!!! Affordable/Workforce Housing !!!

Those who provided a business card at the conference will receive an infographic on Affordable/Workforce Housing that contains valuable data and research on the subject. We’ll delve a bit deeper into affordable/workforce housing solutions without tax increment financing in a post later this week.

At the booth, we also offered an infographic that summarizes the key points of both Senate Bill 107 (Redevelopment Dissolution Trailer Bill) and Assembly Bill 2 (Community Revitalization and Investment Areas that allow for tax increment financing). There was considerable interest from many conference attendees regarding both bills and how the new laws would affect their particular communities.  The infographics are shown here. 

All in all, the conference was a wonderful experience and gave RSG partners and staff the opportunity to connect with clients and others about the challenges and triumphs experienced by communities across the State.

For more information on any of the topics mentioned above, please contact Hitta Mosesman at hmosesman@webrsg.com

Written by Hitta Mosesman, a Principal at RSG.

TAPping into Knowledge: Solving Land Use Issues as Part of a ULI Technical Advisory Panel

 Photograph of drawing by Thomas Ventura, Gensler.

Photograph of drawing by Thomas Ventura, Gensler.

This past July, I participated in an Urban Land Institute (ULI) Technical Advisory Panel (TAP), in which ULI members volunteer their time to address challenging land use issues and give back to the community. 

TAPs are the advisory service program of ULI, in which professionals from fields related to land use -- architects, planners, financial analysts and others -- come together to research and analyze complex land use issues and make recommendations to solve them. We conduct a deep level of research and education and provide advice and recommendations to public agencies and charitable organizations.

In this case, we worked for Cal State Dominguez Hills and AEG to help them improve the land use, circulation, and development financing for their shared campus. The university leases land to AEG, which developed and operates world class athletic facilities including the StubHub Center. In implementing its master plan, the university is seeking guidance for site planning and land use recommendations to accommodate future planned uses of both the university and the StubHub Center; energize the campus, shared sports venues and AEG venues; and create a place that attracts additional students, athletes, and visitors.

The exercise is similar to RSG’s work in that a team of professionals works together to solve local land use issues. Nonetheless, TAPs are condensed into a much shorter time frame than the average RSG project.

Cal State Dominguez Hills and AEG will use our recommendations as part of their long-term campus planning process. It is gratifying to be part of the process.

Written by Dima Galkin, Senior Analyst at RSG.

Westfield Launches Lifestyle Destination

Last weekend, Westfield successfully opened the 550,000 square foot Village at Westfield Topanga in the West Valley area in Los Angeles. The new lifestyle center offers a unique variety of shopping, dining, events, entertainment and leisure activities, giving local residents and visitors an experience unlike any other in the San Fernando Valley.

The 30-acre Village at Westfield Topanga, which is being called the new “downtown” of the San Fernando Valley, provides a unique, integrated, and community-friendly environment not available elsewhere in the West Valley.  It’s already being compared to The Grove. Features include trendy local fashion and lifestyle brands, top-notch restaurants providing al fresco patio dining, a full-service gym, a spa, a yoga studio, a weekly farmer’s market, and more under a canopy of native trees and shrubbery. Pedestrian walkways and interesting water features lead to children’s play areas, bocce ball courts, and outdoor lounges. There are lightscaped event spaces for special events and entertainment, exhibits by local artists, and year-round music performances.

It’s not just a commercial center  - visitors can enjoy the communal “birthday party table”, hang out in a hanging basket chair, or hop on the trolley connecting the Village with Westfield’s other two properties in the area. Some of these unique features were a result of City-developer-community discussions as to how to make this project not just another retail center, but a destination for the entire community.
 
RSG was hired by the city a few years ago to review the development’s $350 million construction pro forma and fiscal analysis. We also helped to draft the subvention agreement to underwrite the city’s contribution towards the construction. While we didn’t work for Westfield, it’s a good day for the City of Los Angeles and Westfield, and we congratulate the developer, community, and city for their success.  I’m hoping to check it out in person soon.

Written by Jim Simon, a Principal at RSG.