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Morro Bay Redevelopment StudyDoes downtown Morro Bay "look tired" to you? If you are from Orange County, maybe. Looking tired is the way one of the planing consultants from Orange County characterized at least part of Morro Bay on June 17 when they appeared at a public workshop to explain their recommendation that the City of Morro Bay undertake a highly-controversial "redevelopment" project covering 469 properties and 250 of the developable acres in the "Potential Project Area" that spreads in an irregular strip from the city's top to bottom. Since that workshop, word has been spreading slowly throughout the community about the proposed redevelopment, mainly through the efforts of a small group of residents who have been distributing flyers seeking to inform the community about the issue and who have established a web site (www.mbredevelopment.info) for that purpose. And also about a scheduled 5 p.m. public hearing on Monday, Aug. 10, before the City Council, which is scheduled to vote on creating a redevelopment agency afterward. That provides an opportunity for residents to have their say about proposed redevelopment and the way it has been handled by the city. The outgrowth of this campaign to alert citizens has been concern and sometimes alarm over the potential effect redevelopment would have on individual property owners and the values of their residents as well as the community at large. Do we want to change the way Morro Bay looks now, and would redevelopment change it in some way? some have asked. The biggest single source of apprehension has been the possibility that the city as a redevelopment agency could seize certain properties through the use of eminent domain over the objections of owners. That Potential Project Area runs largely between Highway 1 and Pacific Street in the southern part of town, and between Main Street and Ironwood and Hemlock in the north. The Morro Bay Power Plant, is included, since its owner has said it may close in 2015, although the study says the city "faces a conundrum" on whether to leave it in. But left out is the downtown business area--despite its perceived tiredness--and its absence has been questioned by some. Also left out is everything south of Pacific Street, including Morro Heights, which is mostly upscale. None of those areas apparently meets whatever blight standards were used in deciding they do not. But included as blighted area is huge acreage across Highway 1 at the Morro Bay Blvd. interchange that is believed to be owned by Tri W Enterprises, which was the center of a major community controversy in the late 1970s and early 1980s over its attempt to develop 30 acres it owned there into a shopping center and condominiums. A citizens ballot initiative reduced that acreage to 12 acres and eliminated the condos, and the project was dropped. Designation as blighted seems to represent encouragement to develop, which could be significant because it may tie in with the study's recommendation that more larger businesses be encouraged that would serve residents, instead of tourists. Within that Project Area, 132 or 28% of the parcels and 68% of the acres have been designated in the consultants' study as being "blighted," which means they could be targeted for "planning, developing, replanning, redesigning, clearing, reconstructing or rehabilitating (or any combination of the foregoing)" under a city redevelopment plan. Many of the houses in the potential project area along with additional properties in a category called "Other Surveyed Areas" were photographed and placed in the study. But it would not be a case of seeking to redevelop selective and limited allegedly blighted properties, the study emphasizes. In order to launch such a project, the redevelopment agency is required under state law to find that "conditions of of physical and economic blight are '...so prevalent and so substantial...that it constitutes a serious physical and economic burden on the community which cannot reasonably be expected to be reversed or alleviated by private enterprise or governmental action, or both, without redevelopment.'" After reading that, some have asked, "Wait a minute. Are we talking about Morro Bay?" To be designated as blighted in the study, a property must have been assigned--by the consultants--a certain number of points derived from a list of 40 blight indicators in the study, which include:
Although the "Other Surveyed Areas," the study says, are "not likely" to be included in the Potential Project Area, a map of the Other Surveyed Areas identifies properties with numbers that correspond to pictures of them in the study, which is making not a few owners uneasy, even though their properties are not specifically designated as blighted. But that area weaves in and out of the Potential Project Area, which means some in the Other Surveyed Areas are situated close or even right next to what might be blighted properties in the Potential Project Area. State law, the study says, "still does not define the specific conditions which cause physical or economic blight through the use of any quantifiable metrics or minimum threshold conditions...Therefore, it becomes incumbent upon a city council to make its own determination as to how the 'facts on the ground' do, or do not, fit definitions of these terms." Those two areas--Potential Project and Other Surveyed--were drawn from what the study calls an "Area of Interest," defined as "the area of the City that is the focus" of the study and which was "defined by City staff" and "based upon an awareness of physical and economic conditions in the City." No mention was made of the criteria staff used, if any, to identify that Area. Defining it also grew out of discussions with the consultants about the "basic criteria" on which that designation should be based, the study noted. So it is clear that the city staff had a big hand in determining the areas to be considered for inclusion in a redevelopment plan, which was not, as might otherwise be assumed, just the product of professional consultants' expertise. Redevelopment caught the attention of residents after the City Council very late during the night of July 13 rejected the strong urging of city staff and Mayor Janice Peters to authorize a redevelopment agency starting in 2009-2010. The Council balked after members were informed with documentation how the staff over the previous month had put out unclear, confusing and sometimes erroneous information about city meetings on redevelopment, including no mention in public notices about the hearing that was held that very night. And, as a result, only a handful who were aware of the redevelopment hearing were in the audience as the clock approached midnight on July 13. And only 15 people attended the June 17 workshop--the only one to be held on redevelopment by the city despite the fact that, a city staff report says, the idea of redevelopment was introduced before the Council in July, 2005, the Council commissioned a preliminary study on the fiscal aspects of redevelopment in April, 2007 and "reaffirmed the need" for redevelopment almost a year ago. A subsequent workshop was promised at the June 17 workshop, but none has been scheduled or held. After refusing to approve the redevelopment plan on July 13, the Council majority then agendized another hearing and possible action on the redevelopment plan on Monday, Aug. 10. The implication of the vote was that more time should be provided to allow the community to familiarize itself with the pending redevelopment action. (Although the hearing has been scheduled for 5 p.m., there is no mention of that time on the city's web site, even after all the previous noticing errors made on this matter). Still, none of uncertainties, unknowns and potential effects are what has a growing number of residents aroused. It is the fact that the redevelopment plan nearly went through with almost no one even being aware of it--homeowners and business-owners alike. Now, more and more are trying to find out what it is all about--and where these blight-tagged properties are, and more importantly, whether one might be in their neighborhood or...might be their own house. Those properties are only identified in the study by parcel numbers, and the city has not notified the owners. Almost no one knows or has learned enough about the proposed redevelopment to even ask: how would it work? But that is the key question, and the study and information put out by the city seem to provide few, if any, answers. Elsewhere in the study, eminent domain is described as the right of an agency to "acquire by gift, purchase, lease or condemnation all or part of the real property in the project area." Historically, it added, redevelopment agencies have used "condemnation as a last resort in their efforts to assemble parcels for development."And it requires a two-thirds majority vote of the agency board, the study states, which would mean four votes of the five-member Council acting as the board. The Council would have the options of making all properties within the project area subject to eminent domain, using it only for certain land use types (using as an example: "prohibit the taking of residential properties") or elect "not to have any eminent domain authority," the study said. Determination of whether to use it should be based in part on "the needs and desires of the local community," it noted. It added this caution: "Careful consideration of this authority and its real potential for use...should be given by the Agency and its staff. Intense public concern over redevelopment agencies' eminent domain authority has derailed proposed plan adoptions in other communities." Peters, at the July 13 Council meeting, stated emphatically that she would never support the use of eminent domain. And some feel certain the Council would stand behind that vow unanimously. But it is not clear whether a subsequent council--say 10 years in the future--might change its mind and could decide to exercise that authority as an agency board. If eminent domain is ruled out, what is the process that the agency would use to go about seeking to redevelop blighted properties? That seems not to have been mentioned in public discussions or public discussions. While stating the "purposes" of California Community Redevelopment Law (Health and Safety Code Section 3300 and on) in authorizing redevelopment projects is "to protect and promote the sound development and redevelopment of blighted areas, and improve the general welfare of the inhabitants of the community," the study also focuses on redevelopment "as a tool for economic development" of areas "suffering from physical or economic dislocations." But it is most specific on the increase in property tax revenue that redevelopment would "generate." And that is what most of the public discussion has been about among the Council and staff. The study estimates redevelopment would produce an "estimated $25.4 million for the City over the 45 years the Agency would be able to collect tax increments" from the plan. But about $14.3 million of that would have to be devoted to development of low and moderate-income housing under state law. That would leave a gain of about $10 million, or $222,000 a year on average over the 45 years, not counting expenses. City staff estimates about $210,000 would need to be spent to start the redevelopment agency and for the first year. There apparently have been no estimates on administrative or consultant costs beyond. The city would receive little if any revenue gains for the first six to eight years, the Council reportedly has been told. Ten years ago, the city of San Luis Obispo considered forming a redevelopment district, but the City Council decided not to because, as a staff report said,"at least initially, there are minimal fiscal benefits." Although "in the very long run, there could be very favorable fiscal benefits," which the staff calculated "might" be as much as $54,800 a year, "there are a number of significant ongoing administrative and accounting responsibilities that go with redevelopment agencies, and these are likely to be equal to (or greater than) projected revenues, at least in the early years. "...given that this effort would significantly detract from achieving other high-priority City goals, we do not recommend taking further action in forming a redevelopment agency in the foreseeable future," the report concluded. It also emphasized that "redevelopment 'tax increment' revenues are a 'zero-sum' game: no 'new revenues' are The report explained: "For most school districts in California, this change in apportionment (of tax revenues) would not result in lower overall revenues, because the State would back-fill the difference. However, ...San Luis Coastal is a relatively high-wealth district and is classified as a 'basic aid' district. This means that most of their revenue comes from property taxes, and under State funding formulas for basic aid districts, they would not receive any State back-fill for the tax increment revenues allocated to our (redevelopment) agency." "Accordingly, we are concerned that we would simply be taking away revenues from two other agencies that provide important services to our community—something we have strongly criticized the State for doing to us," it said. "Is there a compelling reason for transferring property tax revenues from schools and the County to the agency?" it asked in closing. The reasons the Morro Bay staff is so eager to start redevelopment are not clear. Staff has indicated it would benefit the city financially to be able to use 2009-2110 as the base year because of the recession, and starting from that low point, the margin of gains from increases in property values and resulting revenues will be greater as the economic recovery sets in. The study, however, simply says, "Establishing 2009-10 as the base year would ensure that the City could begin collecting tax increment and implementing its targeted redevelopment projects and programs at the earliest possible date." The one commitment the Council should support is to make certain that a significant portion of the Morro Bay community is aware of the redevelopment proposal and has a bona fide opportunity to express its views before any decision to go ahead is made. And that obviously can't be accomplished by Aug. 10. Click here to view the Redevelopment Map. (in pdf format) Hard copies of the study are available at City Hall and the library. There you can see which exactly properties are proposed to be designated 'blighted." |
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