New Information Casts More Doubt on Redevelopment Study

by Kari Olsen

Synopsis: The City of Morro Bay might have avoided wasting more than the $80,000 dollars spent on the 2009 Redevelopment Feasibility study, had the City Council known of a court decision issued in 2008. Resident researchers recently discovered details of a 2008 case involving the City of Glendora. The decision in that case appears to indicate that Morro Bay's redevelopment plans were doomed before the Redevelopment Feasibility Study even began. However, there is no evidence to indicate that the Council was given any information about it.

The City of Morro Bay might have avoided wasting more than the $80 thousand dollars spent on the 2009 Redevelopment Feasibility study, had the City Council known of a court decision issued in 2008.   Resident researchers recently discovered details of a decision that appears to indicate that Morro Bay's redevelopment plans were doomed before the feasibility study even began. 

Morro Bay's alleged blight conditions are, in many ways, very similar to those professed in Glendora, which is located in Los Angeles County.  In 2006, Glendora attempted to initiate a redevelopment project, but its claims of blighted neighborhoods were challenged in court.  The city lost the case, and its redevelopment plans were canceled. 

On December 6, 2007, case M82091, which pitted the County of Los Angeles against the City of Glendora, came to trial in the Monterey County Superior Court. The case had been moved due to concerns that the case could not be tried fairly in the county that had brought the suit. 

The County of Los Angeles charged that Glendora did not have sufficient evidence to prove blight when it attempted to establish several redevelopment areas.  The County won its case. On February 15, 2008, the 63-page decision in case M82091 was filed.  Judge Robert A. O'Farrell performed a detailed analysis of Glendora's blight claims and found them without merit.  The decision was later appealed by the City of Glendora but the city lost again in case H032945, also tried in Monterey County.  The new decision was filed June 15, 2010.

The 2008 decision was filed over a year before the Morro Bay Redevelopment Feasibility Study was completed.  Yet, despite striking similarities between key blight indicators alleged in both cities, there is no evidence to indicate that the Morro Bay City Council was ever warned of the possible implications of the Glendora case.  Without that information, the Council did not have the opportunity to postpone Morro Bay's redevelopment study until the final outcome of the Glendora case was known.

In response to a resident's email, Morro Bay City Attorney Robert Schultz stated that, "Superior Court Decisions are not published nor considered controlling law."  However, some allege that whether or not it was "controlling law," the case should have been a warning to other cities to study the judge's findings carefully, and to proceed with caution on their own redevelopment projects.

Similarities in Alleged Blight in Glendora and Morro Bay

The blight factor most often cited by Urban Futures, Inc., the redevelopment consulting firm hired by Morro Bay, was "Deteriorated/ Absent Private Infrastructure" which was defined as driveways, walkways, etc. that are either unpaved or deteriorated. In Morro Bay, 153 properties(33%) were cited as having this type of defect.  In Glendora's Project Area, 3, 166 (25%) properties had sidewalk and driveway issues.  Of that number, 51 had broken driveways," 40 had "broken or missing sidewalk," 39 had "uplifted sidewalk," and 36 had "broken or missing driveway approach." 

The second-most-often cited blight indicator in Morro Bay was "Paint-related issues." Glendora did not break this out as a separate item.  They included paint problems in a grouping.  In the Glendora Project Area, 3, 240 (36%) buildings were said to have "roof damage, cracked stucco/plaster, wood rot, chipped or peeling paint."  In Morro Bay, 167 (36%) properties were said to have equivalent issues. Paint problems were cited 107 times, roof problems 36 times, and plaster/stucco/wood /termite damage problems 24 times.

Morro Bay's third-most-frequently-cited blight factor, with 74 occurrences (16%), was "Inoperable vehicles/Inadequate vehicle storage," described as situations where vehicles which appear to be inoperative or are visibly under repair, are visible from in the public right of way."  In Glendora, 34, or (5%), instances of inoperable vehicles were cited.

The blight factor most frequently cited in Glendora's Project Area 3 was inadequate parcel size.  It was noted that over 81% (approximately 539 properties) of the buildings could not be built today because of inadequate parcel size.  This issue was cited much less frequently in Morro Bay, where 60 (13%) properties had issues that could be attributed to inadequate parcel size.  These issues were described by the consultants as "Poor Site Layout (exceeds FAR, access to parking, onsite circulation, turning radius)." 

It is clear that each city used its own unique set of indicators. For example, Morro Bay's consultants were concerned about hazardous vegetation, security fencing and unsafe stairways.  Those factors were not used in the Glendora study. In Glendora, consultants were concerned about ADA compliance, asbestos,  lead paint, and visible trash bins—issues not included in Morro Bay's consultant's set of 40 blight indicators. 

Yet, while there are some differences, there are striking similarities between the kinds of blight indicators cited in both cities, and in some cases, in the percentage of properties alleged to have the specified defects.  Given that Glendora's alleged blight claims were rejected by the court over a year before Morro Bay's study was published, Morro Bay residents have noted that this seems significant.

Of particular interest to Morro Bay resident researchers is this statement  from page 24 of the 2008 Glendora court decision:  "The fact that(1) the survey revealed that 37% of the buildings were in some degree if disrepair and that these 240 buildings needed substantial reinvestment based on roof damage, cracked stucco/plaster, exterior wall damage, wood rot and chipped and/or peeling paint and (2) a significant number of commercial buildings likely need rehabilitation, is not substantial evidence of conditions so "prevalent and so substantial . . . that it constitutes a serious physical burden on the community." (Health & Safety Code §33030(b)(1)"

In Morro Bay, the consultants alleged that 132 of the 469 parcels evaluated (about 28 percent)  had enough defects to be considered "blighted."  This is substantially less than the 37% cited in Glendora.

Below are separate lists, by community, of blight indicators cited in the subject areas.  For Morro Bay, only one area of interest was addressed by the consultants. Glendora blight data provided is for that city's Project Area three, which was chosen for this discussion because its size and alleged blight issues, are similar to those for Morro Bay's area of interest.

Morro Bay Blight indicators and Frequency of Occurrence

Resident researchers reviewed and analyzed Morro Bay Redevelopment Feasibility Study blight data, which covers a total of 469 parcels, to determine the most frequently-cited blight indicators.  Listed below are all those factors for which at least 20 instances were alleged.  Note that in many cases a single property was cited for more than one of these alleged conditions of blight.  The list of indicators is organized by number of occurrences cited.

· 153 properties had "Deteriorated/ Absent Private Infrastructure," which was defined as driveways, walkways, etc. that are either unpaved or deteriorated.

· 107 properties had "Paint-related issues," such as checking, peeling, cracking, chalking, dry rot, or warping.

· 74 properties had "Inoperable vehicles/Inadequate vehicle storage," where vehicles which appear to be inoperative or are visibly under repair from the public right of way.

· 73 properties had "Unsafe Stairways or Walkways," defined as deteriorated (often evidenced by broken steps, unevenness, etc.), missing handrails, no traction on surface, (creating danger of being slippery when wet), or have obstacles limiting access to their safe usage.

· 60 properties had "Poor Site Layout (exceeds FAR, access to parking, onsite circulation, turning radius)."  This may include poor access to structures, parking irregularities, excessive FAR, onsite traffic issues (narrow rights of way, poor turning radii), and lack  of minimum space between buildings.  Conditions are often found on irregular parcels.

· 55 properties had "Overgrown/Hazardous Vegetation."

· 46 properties had "Security Fencing."

· 40 properties had "Secondary Structure" which are currently deteriorated or dilapidated.

· 33 properties had "Defective Outdoor Wall Structures," which may include deteriorated paint, missing or broken sections, lurching, leaning, cracking, or loose concrete blocks.

· 36 properties had "Roof Problems."

· 24 properties had "Holes in Plaster/ Stucco/Wood, Termite Damage."

Glendora Blight indicators and Frequency of Occurrence 

Project Area three has about 666 buildings, making it a bit larger than Morro Bay's "area of interest," which has 469.  Listed here are only those blight indicators for which there were at least 20 instances cited in the target area.  This data is from the decision in case M82091.

· Over 81% of the buildings (approximately 539) could not be built today because of inadequate parcel size.

· 240 buildings (37% of those in the area) are in some degree of disrepair due to roof damage, cracked stucco/plaster, wood rot, chipped or peeling paint.

· 118 properties are ADA noncompliant.

· 99 properties missing anti-siphon valves.

· 97 have asbestos and/or lead paint. 

· 63 properties have trash bins in the open.

· 61 have miscellaneous hazardous conditions such as handrail non-compliance, concrete drain swale broken, and/or exposed gas lines.

· 51 have broken driveways.

· 48 show evidence of dumping of washing of contaminated liquid into storm drains.

· 43 have broken or missing gutters.

· 40 are missing tempered glass.

· 40 have broken or missing sidewalk in need of replacement.

· 39 have uplifted sidewalk in need of replacement.

· 36 have broken or missing driveway approach.

· 34 properties have storage of inoperable vehicles.

· 34 have broken or missing curbs.

· 34 encroach into City right of way. 

· 29 have in-ground utility boxes with hazardous vertical alignment. 

· 24 have storage of auto parts on the ground.

Alleged Weaknesses in the System Used to Classify Morro Bay Properties as Blighted

Morro Bay residents have questioned whether an area can reasonably be considered "blighted" when the  alleged "blight indicators" most frequently cited are unpaved or deteriorated walks and driveways, paint-related issues, and inoperable vehicles.  In addition, residents allege that the system used by the consultants made it easy to inappropriately categorize a property as exhibiting significant blight problems.   For example, the system allows a property cited as having "poor site layout," overgrown shrubs, and chalking paint to be classified as "blighted."

The consultants assigned points to each blight factor for each parcel and added them up.  Any parcel that had a total of 20 points or more, with at least one blight factor receiving five points or more, was considered blighted.  On page 29 of the study, the consultants stated, "The employed methodology provides that structures on parcels which have received at least twenty blight points and exhibit one Blight Indicator totaling at least five points might be found by the legislative body to exhibit physical deterioration or are otherwise substandard or are functionally obsolete and are unsafe or unhealthy for persons to live or work in."

Numerous properties received 10 points for just one alleged blight indicator.  Sixty Morro Bay parcels were assigned 10 blight points for having "poor site layout," described as "exceeds FAR, access to parking, onsite circulation, turning radius."  Such issues are characteristic of many of the small lots in Morro Bay.  Thirty-six properties were assigned 10 blight points for having roof problems.  Only five properties were cited as exhibiting both of these characteristics.  With two blight indicators assigned 10 points each, under the consultants' system, those five properties were automatically classified as blighted.   The other 91 properties were assigned 10 points for exhibiting one of these characteristics. 

Once a property received 10 points for its site layout or roof issues, adding five points each for two more additional blight indicators, such as chalking paint, an uneven area on the sidewalk, cracked driveway, or some overgrown shrubbery brought the property up to the 20 points needed to classify it as blighted.  In fact, a majority of those properties cited as having poor site layout or roof issues did receive a total of 20 points or more. The consultants' blight ratings assigned, by parcel, can be reviewed in the online Feasibility Study document. 

Infrastructure Blight Claims

In light of the Glendora decision, Morro Bay residents have disputed the consultants' allegations that infrastructure problems can be viewed as contributing to blight in the area of Morro Bay that was targeted for redevelopment.  Infrastructure deficiencies are discussed in several sections of the Feasibility Study.  For example, on page 55 it is stated that, "Buildings may become "unsafe or unhealthy" if they are not properly served by specific public utilities. Under current law, the legislature has limited the relevant public utilities to water and sewer services. A number of areas within the Area of Interest are affected by such faulty utilities to some degree."

Glendora's evidence of  "faulty or inadequate infrastructure" was summarized in the 2008 court decision, and included the following:

· "Sewer system 42 years old . . . in dilapidated and failing condition. Capacity inadequate and sanitation district staff have observed sewage backflows on public streets"

· "Five properties have street drainage problems"

· "There are cross lot drainage problems that result in flooding of properties or areas"

· "There is inadequate water flow to fire hydrants"

The court rejected Glendora's claims that faulty infrastructure was a significant factor contributing to blight.  On page 36 of the 2008 decision, the judge stated, "Glendora, in very general terms, cites to evidence of problems with an aging sewer system, flooding or perhaps pooling of water during some unknown measure of precipitation, and that fire protection is wanting in some areas.  This is not substantial evidence of inadequate infrastructure that is so serious as to be "injurious and inimical to the public health and safety, and welfare of the people."

Also referring to infrastructure issues, on page 32 of the Glendora decision is the statement,  " At best, Glendora appears to suggest that the $35 million need for infrastructure improvements constitutes blight, assuming that physical blight exists, plus that fact that blighted properties are worth 20% less, constitutes a showing of depreciated property values."  However, inadequate infrastructure alone does not constitute blight and the fact that the court has found no substantial evidence of physical blight whatsoever, negates the application of the 20% reduction to "blighted" property.

Definitions of "Blight" in Large Part Left to Municipalities and the Courts

In the Morro Bay Redevelopment Feasibility Study, the consultants stated, "UFI research has found countless 'definitions' of deterioration, dilapidation or substandard, but none which provide a quantifiable and indisputable description of what makes a structure either deteriorated or dilapidated."  The consultants also state that, "While SB 1206 has 'clarified' certain definitions of blight, the CCRL still does not define the specific conditions which cause physical or economic blight through the use of any quantifiable metrics or minimum threshold conditions. Such core terms as 'prevalent,' 'substantial,' or 'necessary for effective redevelopment' are not defined. 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."

In discussing their system of analyzing properties for multiple blight indicators, the consultants noted that, "If a sufficient number of these conditions are found on one or more structures on a parcel, the legislative body of a community may appropriately find the parcel is blighted, unless it could also determine that private enterprise or governmental action, or both, would rectify this situation in a reasonable period of time."

These statements appear to indicate that the consultants regarded the Morro Bay City Council, rather than themselves, as being primarily responsible for deciding whether or not there was sufficient blight to warrant formation of a redevelopment agency in Morro Bay.  The consultants further stated that, "UFI can make no recommendation regarding the Morro Bay City Council's policy-making decisions, including those relating to the possible inclusion of the Power Plant facility within the Potential Project Area. However, the issue of whether 'physical and economic dislocations' rises to the status of blight, as defined in the CCRL, is essentially technical in nature, one which the Feasibility Study does address."

The courts have clarified definitions of blight in their decisions, such as the Glendora redevelopment case and those filed against other municipalities, including the city of Diamond Bar,  In the 2008 Glendora decision, the Court made many references to the Diamond Bar case, Barbara Beach-Courchesne v. City of Diamond Bar, No. B130244.   That case was settled in 2000, and is discussed in a California Planning and Development report titled "Court Clamps Down on Redevelopment Abuse: Diamond Bar Project Rejected When City Fails to Prove Blight."

The report quotes the court's statement that the Community Redevelopment Law "is not simply a vehicle for cash-strapped municipalities to finance community improvements," and goes on to say, "A unanimous three-judge panel of the Second District Court of Appeal ruled that Diamond Bar did not prove that its 1,300-acre redevelopment project area suffered from 'blight,' as defined by the Community Redevelopment Law (Health and Safety Code §§33000 et seq., 33030)."  In addition, the court reportedly rejected Diamond Bar's contention that insufficient infrastructure constituted blight, stating that,  "redevelopment . . .  is not intended to deal with future growth."

Apparently referring to such cases, Morro Bay's consultants stated, "This Feasibility Study presents evidence which was gathered and analyzed in a manner that might be found to be sufficient to meet or exceed threshold conditions set forth in the CCRL, and in various appellate court cases which bear upon redevelopment plan adoption actions."  Yet the study contains no references to specific legal precedents and the 2008 Glendora case was not an "appellate court case."

Morro Bay City Council Not Warned

It appears that prior to commencement of the Feasibility Study, City staff had some familiarity with the condition of the properties targeted for redevelopment.  Staff directed the consultants to a particular area, as indicated in this statement from the consultants' proposal:  "City staff has provided UFI with an exhibit showing an 'area of interest' (included here as Attachment B). This proposal is based upon the geography included in the area of interest. With proposal preparation in mind, UFI staff met with City staff, and participated in a preliminary field reconnaissance of the area of interest and other areas of the community."  Since the consultants engaged in a "preliminary field reconnaissance" even before they were hired, it has been alleged that they had a general idea of the condition of the area.

Some residents are asking if, prior to commencement of the Feasibility Study, the consultants and/or any of the Morro Bay City staff also knew of the 2008 Glendora decision, or if they became aware of it during the time the study was being conducted.  According to a statement made to a resident by the Morro Bay City Attorney, "The case was not discussed with Staff or Council." 

The question, "Who knew what when?" is of particular concern since, residents allege, the Council might have halted the Feasibility Study if they had been aware 2008 Glendora decision, and of the nature of the data that the consultants were gathering.  It has been suggested that the Council might have preferred to avoid spending more money on the project until the outcome of the Glendora appeal was known.

Material from the Glendora decision that residents believe would have influenced the Council to stop or suspend the project includes this statement from page 35:  "Glendora's recitation of data of physical and economic blight is long but thin, and the Court is not persuaded that Glendora has provided substantial evidence that significant physical or economic blight remains in Project Area 3, and certainly not to the extent that the blight 'is so prevalent and so substantial that it causes a reduction of, or lack of, proper utilization of the area to such an extent that it constitutes a serious physical and economic burden on the community,'"and this statement from page 24, "Glendora does not provide substantial evidence of serious building code violations that provide for unsafe buildings, dilapidation or deterioration, or any other factors that result in unsafe or unhealthy buildings for a person to live or work."

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