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Successor Agency
The Community Development Agency of the City of Menlo Park was created in 1981 under the California Community Redevelopment Law. This law enabled a local government to form a community development agency when a determination was made that economic, physical or social blight or blighting influences exist within a community or designated area.
Deteriorating or blighted areas have serious adverse social, economic, and physical conditions which constitute a danger to the health, safety, and general welfare of the people of the community. These conditions also act as a barrier to new investment by private enterprise. Some examples of deterioration or blight in a community include: deteriorating, unsafe, and poorly maintained buildings and structures; inadequate and obsolete infrastructure, such as street lighting and inefficient street systems; high business vacancies; and unsafe and substandard housing conditions, including overcrowding.
The Menlo Park Community Development Agency (the "Community Development Agency" or the "Agency") worked to eliminate or reduce blight and reverse deteriorating trends within the boundaries of the Las Pulgas Community Development Project Area (the "Project Area"). The Agency used tax increment financing in order to fund projects and programs. Common projects included property rehabilitation/repair, development of quality affordable housing, economic development/job creation, and capital improvements such as improved traffic circulation and neighborhood beautification.
Successor Agency
The California Community Redevelopment Act was created in 1945 to give local governments tools to address problems such as blight, degraded buildings and a lack of affordable housing. Redevelopment agencies develop a plan and provide the initial funding to encourage and attract private investment that otherwise wouldn’t occur. Redevelopment activities created jobs and expanded business opportunities, provided housing for families most in need, helped reduce crime, improved infrastructure and public works, and cleaned environmentally-threatened and rundown areas. Menlo Park’s redevelopment area (see map) was established in 1981 when the City was searching for a way to address problems facing the Belle Haven neighborhood and had limited resources to do so. Housing deterioration, overcrowding and the high unemployment rate of area residents were seen as the major concerns that needed to be addressed. The original project proposal indicated the area included “an undesirable mix of residential, commercial and industrial uses” and that some parts of the area were suffering from “advanced stages of physical decline.” The physical blight and unemployment were accompanied by a relatively high crime rate compared to the Bay area and City police were concerned about increasing symptoms of the presence of gangs.
Menlo Park’s redevelopment agency continued to reduce blight and crime and promote economic development and housing until, in February of 2012, it was dissolved by the State.
Q: What’s a Successor Agency and why does Menlo Park need one?
A: In order to address the State’s estimated $17.2 billion budget gap, Governor Jerry Brown has proposed a mix of expenditure reductions and tax increases. The broad set of budget cuts touch nearly every area of State funding and include a significant redistribution of local property tax revenues via the elimination of the state’s local redevelopment agencies (RDAs). The governor’s proposal includes (1) dissolving the state’s 425 RDAs, and (2) transferring their revenues (over $5 billion of annual property tax revenues) to local “successor” agencies. The successor agencies are charged with using these funds to retire redevelopment debts and contractual obligations and redirect remaining revenues to other local governments in the county, including K-14 education and fire service districts. For more information on the origin and history of RDAs, see (LINK to our RDA web page). To see a copy of the California Supreme Court Decision that created “Successor Agencies” follow this link (Goldfarb Lipman summary).
Q: What will the Successor Agency do?
A: By serving as the Menlo Park Redevelopment Agency’s “successor agency,” the City agrees to wind up the affairs of the former redevelopment area in a way that maximizes the amount of funding that will eventually be redistributed to other local entities (mainly San Mateo County, area schools and the Fire District). As the Successor Agency, the City will play a key day-to-day role in assuring that the existing obligations of the former Agency are properly paid, and that the former Agency's properties and other assets are disposed of in an appropriate manner. While the Successor Agency will be overseen by an "Oversight Board" of seven representatives selected largely by the County and various local education districts, the staff of the Successor Agency will have a strong role in initiating and implementing actions in a way that achieves not only the requirements of the dissolution act but also is sensitive to the long-term development needs of the City and local community, and that protects the good name of the City in the financial markets by assuring timely repayment of the former RDA’s existing debts. One of the main tasks of the Successor Agency is to develop an “Enforceable Obligation Payment Schedule” or EOPS, that will include all loans, bonds, contracts and legally binding agreements that the former RDA was responsible for paying for. The EOPS, once approved by the Oversight Board, will then be designated as an ROPS or Recognized Obligation Payment Schedule which will allow the City to retain property taxes from the former RDA in the amount needed to cover those obligations. See these links for staff reports approving the City as Successor Agency and establishing the EOPS . Menlo Park’s EOPS is available )
January 24, 2012 Staff Report
March 13, 2012 Staff Report CRA Final EOPS
Q: Who makes up the Oversight Boards for the Successor Agency?
A: Oversight Boards, whose membership must be completed by May 1, 2012, will include seven members representing or appointed by:
- The County Board of Supervisors (two members)
- The Mayor (one member)
- The County Superintendent of Education (one member)
- The Chancellor of California Community Colleges (one member)
- The Largest Special District taxing entity (for Menlo Park this is the Fire District) (one member)
- A former RDA employee appointed by the Mayor (one member)
The Oversight Board’s job is to determine whether contracts, agreements and other arrangements between private parties and the former RDA should be terminated or renegotiated to reduce the Successor Agency’s liabilities and to increase net revenues to the taxing agencies. The actions of the Oversight Board are overseen by the State Director of Finance and may be subject to modification.
Each of the 13 cities in San Mateo County that had an RDA (and now serve as Successor Agencies) will have an Oversight Board. These 13 Oversight Boards will be consolidated into one body in July, 2016. Watch this page for more information on the Menlo Park Oversight Board as it is formed.
Q: What special challenges does Menlo Park face in winding down its redevelopment activities?
A: Redevelopment activities in Menlo Park have been largely successful in planning and implementing improvements in the redevelopment area and promoting the area as a safe and healthy place to live and do business. To this end, ongoing activities include code enforcement, continued blight mitigation, narcotics abatement, graffiti control, economic development and affordable housing programs. With the loss of dedicated redevelopment funding, the City must determine to what extent each of these activities will be retained and funded from other limited City resources. In addition, Menlo Park’s Community Development Agency operated under a “hybrid” staffing model, in which City staff provided a percentage of their time in support of redevelopment activities and projects. The City has already determined that affordable housing programs will not be continued, and other activities may need to be curtailed. Still, the additional costs to the City’s General Fund budget exceed $1.2 million, an increase of over 3 percent in General Fund expenditures. Retain public safety services in the area will require new revenues for the General Fund or reductions in services in other areas of the organization.
Q: Where can I get more information about the dissolution of RDA’s and their Successor Agencies?
A: Go to the California Redevelopment Association web page to find out more about the history of redevelopment in California and the legislation that currently guides the dissolution of redevelopment agencies. http://www.calredevelop.org/
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Project Area Plan
The Community Development Project Area Plan established the basic goals of the Menlo Park Community Development
Agency and identified the range of activities to be undertaken
by the Agency in order to improve the Project Area over time.
The Community Development Agency's first Project Area Plan was adopted when the Agency was established
in 1981. In 1991 the Plan was updated, producing the Amended
and Restated Las Pulgas Community Development Project Area Plan.
This plan included a comprehensive and coordinated set
of project activities related to the following areas:
- Planning and code enforcement
- Real estate development and improvements,
including significant activities to continue to improve, increase,
and preserve the community's supply of affordable low and moderate-income
housing
- Public infrastructure and facilities
improvements
- Community facilities
- Other support projects
The Plan also identified specific Project
Area goals. General goals for the Project Area included:
- To enhance
the overall living environment of the Project Area.
- To promote
home ownership and home improvement opportunities throughout
the Project Area.
- To encourage
private sector investment together with the provision of additional
public amenities.
- To increase
local employment opportunities and the expansion of existing
commercial enterprises within the Project Area.
- To promote
commercial and industrial rehabilitation and infill construction.
- To promote
the development of affordable rental and ownership housing.
- To remedy
present overcrowded housing conditions and seek to prevent them
in the future.
- To accomplish
these goals with a minimum displacement of any residential homeowner,
tenant, or business.
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Frequently Asked Questions
Q: What is Community Development?
A: Community development is a process
created to assist local government in eliminating blight from
a designated area (the "project area") and to achieve desired
development, reconstruction and rehabilitation including (but
not limited to) residential, commercial, industrial and retail.
Through this process, the project area receives focused attention
and financial investment to reverse deteriorating physical, social,
and economic trends; enhance the overall living environment; and
encourage private sector investment together with the provision
of improved/additional public amenities.
The process
of community development involves:
- Comprehensive planning for revitalization
- Citizen and property owner participation
- Public and private enterprise
partnerships
- Improved public facilities
Q: Where is the Project Area in
Menlo Park?
A: The City of Menlo Park has
one community development project area, the Las
Pulgas Community Development Project Area, which was established
in 1981. It is generally located in the northeastern part
of the city, primarily to the north of Highway 101. The
Project Area covers approximately 857 acres and was bounded generally
on the north and northeast by the San Francisco Bay, on the northwest
by Redwood City, and on the southeast by the City of East Palo
Alto. It consists of the following five sub-areas:
(1) The
Belle Haven Neighborhood
This mostly residential neighborhood is the population center of the Project
Area. It is located in a triangular area bounded by Highway
101, the Peninsula Corridor Joint Powers Board railroad line,
and Willow Road. The neighborhood offers several amenities
and services including a community center, swimming pool, library,
childcare center, schools, senior center, and a police substation.
(2) The Willow Road/O'Brien Drive Industrial Area
This area includes Willow Park, Menlo
Business Park and O'Brien Drive to the southeast of Belle Haven
and the Facebook (previously Sun Microsystems) site to the north of Belle Haven.
(3) The Willow Road corridor between Highway 101 and
Middlefield Road
Over 95 percent developed, this narrow
area south of Highway 101 has a mixture of residential and commercial
development and includes the Department of Veterans Affairs, Palo Alto Health Care System, Menlo Park Division.
(4) A small area that includes Flood Park
This area is located to the south of
Highway 101 and to the north of Bay Road and includes San Mateo
County's Flood Park.
(5) The Haven Industrial Area off of Marsh Road
This area does not adjoin the other
areas and is located to the northwest, between Highway 101 and
the Bay.
Overall, the Project Area consisted of
approximately 1,050 single-family housing units and 680 multi-family
housing units. The area's non-residential development consists
primarily of light manufacturing and research and development,
and also includes office and retail use. The central roadway
in the area is Willow Road, which is one of the primary access
points to the city via the Dumbarton Bridge.
Q: How Did Community Development
Work?
A: The Community Development Agency
of the City of Menlo Park was the legal entity that undertook
improvement activity in the Las Pulgas Community Development Project
Area. City of Menlo Park Council members made up the governing
board of the Community Development Agency, however the City Council
and the Agency were two separate, distinct legal entities.
Agency and City Staff carried out the day-to-day operations of the
Agency's improvement plans.
In addition to the Community Development
Agency Board, there was also an Advisory Committee made up of Project Area residents, property, and business owners. The Las
Pulgas Committee was created in 1981, the same year that the
Agency was established.
Improvement activities were undertaken
following an adopted Community Development Project Area Plan and
were financed by tax increment funds.
Q: What are Tax Increment Funds?
A: State law established a method of obtaining funds for
community development agencies called "tax increment financing."
On the date a community development agency adopted its Community
Development Project Area Plan, the property within the project
area had a certain total property tax valuation. Improvements
to property had resulted in higher assessed value for those properties
and a portion of the taxes that were derived from the increase
went to the agency. These funds were called "tax increments."
Tax increment revenue could only be used in the project area (which
generated that revenue), except in the case of residential projects
benefiting low-and-moderate income households.
In order to accomplish significant projects, a community development
agency could issue bonds that were then paid off by using the tax
increments over time. |
Revelopment Implementation
The Community Redevelopment Reform Act
of 1993, as amended by SB 732 in 1994, required community development
agencies in California to prepare a Redevelopment Implementation
Plan for all their project areas every five years and to conduct
a Mid-Term Review of this five-year plan in the form of a public
hearing between two and three years after the initial adoption
of the plan. The five-year Redevelopment Implementation
Plan expanded on the Community Development Project Area Plan
and included specific goals and objectives of the Agency for the
Project Area, including specific programs and potential projects.
The Redevelopment Implementation Plan also documented the Agency's
efforts to ensure that a specific percentage of the housing developed
in the project area was made available to low-and moderate-income
households.
The Redevelopment Implementation Plan for the Las Pulgas Community Development Project Area was for fiscal years 2009/10 to 2013/14. It was based on information presented in previous Implementation Plans and Mid-Term Reviews, annual budgets, City staff input regarding the status of projects and housing construction, community input from area businesses and residents, and past and present rehabilitation activity.
Traditionally, the Las Pulgas Committee serves as the primary mechanism for community input to the Redevelopment Implementation Plan. However, as the Committee is not currently active, extensive community involvement was utilized to allow the plan's priority projects to emerge from community needs and input. Over 130 people, including business representatives and residents, participated in three community meetings in the spring of 2009 that were held to develop the Redevelopment Implementation Plan.
The Redevelopment Implementation Plan was adopted at the November 10, 2009 meeting of the City Council/Community Development Agency Board (Staff Report #09-148).
Council/Agency Board members requested an addendum be prepared for the plan to highlight some additional information that they felt should be included.
The impementation plan is currently suspended, given the status of the State's dissolution of the RDA's in February 2012.
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Neighborhood Involvement
The community development process required comprehensive planning among residents, business and property owners in the Las Pulgas Project Area, as well as Agency Advisory Board Members, City Council, Agency and City Staff and other City residents. Neighborhood input from residents and property owners was vital to the success of redevelopment in a project area. Menlo Park's Community Development Agency encouraged community members to be involved in the redevelopment process and invited community input.
- Belle Haven Neighborhood Meetings were
held three or more times a year. As the community center of the
Project Area, this mostly residential neighborhood has been
active in the community development process. For more
information, please call the Community Development Department
at 650 330-6702.
- The Belle Haven Homeowners Association
meets on the first Wednesday of every month from 6:30-7:30 p.m.
in the Menlo Park Senior Center, located at 100 Terminal
Avenue. For additional information, please call the Housing
and Redevelopment Department at 650 330-6706 or write to: Belle
Haven Homeowners Association, P.O. Box 2630, Menlo Park, CA
94026-2630. Note: this is not a City-based organization
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History and Current Status
The State's attempts to abolish redevelopment agencies have raised important issues including: the loss of permanent jobs, the loss of a key local government tool for meeting state environmental land use objectives; and the loss of one of the state's leading tools for building workforce housing. Throughout their history, Menlo Park's RDA and other RDAs throughout the state have created jobs and expanded business opportunities, provided housing for families most in need, helped reduce crime, improved infrastructure and public works, and supported cleanup of environmentally-threatened and rundown areas. For more information about the history of RDAs in Menlo Park and California and the impacts of the loss of redevelopment agencies follow this link:
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Project Area Bulletin
To learn more about the Menlo Park Community Development Agency please call Carol Augustine, Finance Director, at 650-330-6645. |
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