REDEVELOPMENT
General
Information & FAQ
What is
Redevelopment? Why was it established?
Redevelopment
is a process to assist city and county governments to eliminate blight
within designated Project Areas. It
encompasses residential, commercial, industrial, and retail development.
The redevelopment law in California was adopted in 1945 as the
Community Redevelopment Act. Its
main emphasis at that time was to rebuild blighted and inadequate housing
within California cities. As
the years have progressed, so too has redevelopment.
Affordable housing programs are
a critical component, along with commercial, retail, and industrial
development and revitalization.
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Why
do we need Redevelopment?
Neighborhoods
and communities follow a cycle of birth, growth, stabilization, decline and
rejuvenation. Redevelopment is
the catalyst that can reduce the time an area is in decline and accelerate
the process of revitalization. Redevelopment
can provide incentives to a developer to build in a community that will
benefit greatly from the improvements vs. building in an area that will
greatly benefit the developer.
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How
does Redevelopment work?
A Redevelopment program is
but one of many tools available to a local community to bring about
positive change consistent with a community's vision. Redevelopment
is based on the concept of increasing tax increment (TI).
When a Project Area is established, the
property tax dollars that are
currently collected establish a base amount of property tax.
These dollars do not change in that they are still collected and
allocated to the same entities as previously determined.
The
difference occurs in taxes that are collected after the base amount has been
determined. As property taxes naturally increase due to new sales of
property and development, the increases are allocated as redevelopment
funds. These funds are then
used to entice development to occur. Not
all the increased funds are given to the Redevelopment Agency however; some
of the money is passed through to other entities such as the school
districts, counties, etc.
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What
is a Redevelopment Project Area?
A Project
Area is a specific area within the Redevelopment Agency’s
jurisdiction that has been identified and adopted as a redevelopment project
area. When the process of
establishing the project area is complete, the project area will begin
reaping the benefits of redevelopment.
Pasadena currently has eight Redevelopment Project Areas:
Downtown, Old Pasadena,
Fair Oaks,
Lincoln Avenue,
Lake-Washington,
Villa-Parke, Orange
Grove and Halstead-Sycamore.
The Pasadena Community Development Commission (PCDC) is currently considering consolidation of three project
areas located in the
Northwest Plan
area.
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What
are the benefits of Redevelopment Areas?
Redevelopment’s
main mission is to improve the quality of life in project areas by providing
business incentives, and improving infrastructure such as streets, curbs and
gutters, and sidewalks. As a
resident in the project area, you may benefit with increased property
values, expanded employment opportunities, better community services,
affordable housing, elimination of poor health and safety conditions, more
recreation and leisure opportunities, and improved traffic circulation
patterns.
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How
long does a Redevelopment Area last?
A
typical redevelopment project area typically lasts between 30 to 45 years.
Once all debt incurred is repaid, the project area will cease to
exist. Information on specific expiration dates for Pasadena’s eight
redevelopment project areas can be found in each project area description.
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Who
oversees Pasadena Redevelopment activities?
The
Pasadena Community Development Commission (PCDC) is separate from other city
entities. The PCDC consists of
the City Council members, which oversee the activities of eight
redevelopment project areas established within the City.
The
Community Development Committee is a board of resident volunteers appointed by the Commission to review
and make recommendations to the PCDC on issues of concern with in the
redevelopment project areas. In some project areas, Project Area Committees are also
active in assisting the Commission regarding redevelopment issues.
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What
are the PCDC's Redevelopment goals?
The
PCDC’s redevelopment program was established to 1) Encourage and aid the
economic development of all redevelopment project areas; 2) Provide for
Economic
Development in all
project areas; 3) provide public facilities which benefit the project areas;
4) provide “Affordable” Housing
programs (in seven of the
project areas, Halstead/Sycamore does not receive tax increment).
For specifics please refer to
Redevelopment
Goals
& Objectives.
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What
is a PAC?
A
Project Area Committee or PAC is the advisory group that assists the Agency
in establishing priorities within the Project Area.
The PAC is established by election concurrently with the project area
formation or amendment and continues for three years. After this time, the
PAC may be continued on an annual renewal basis.
The PAC consists of representatives from local business, residential
owner-occupants, residential tenants and community organizations.
All representatives must own property or live within the project
area. In addition, the public
is invited and encouraged to attend PAC meetings to provide additional
input.
In
Pasadena, the
Fair Oaks and
Lincoln Avenue
Redevelopment Project Areas
each have established Project Area
Committees (PACs). The PAC is a
group of volunteers comprised of local business owners and residents who
serve as advisors to the CDC and PCDC on specific matters within their
specified project area.
Additionally,
there are a number of laws that govern redevelopment agencies in the State
of California. Primarily,
within the California Health and Safety Code beginning with 33000et. seq.
And Article XVI, Section 16 of the California Constitution adopted in 1952.
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How
are Redevelopment funds secured?
By
law, redevelopment will receive tax increment only if the project area has
created debt. Debt may be created by the sale of bonds, the receipt of
loans or advances of funds. Debt
incurred by the PCDC is an obligation of the Commission (agency) only and
not the city. At the
conclusion of the project, and after all debt is repaid, tax increment funds
then revert back to the taxing agencies.
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Are
my property taxes raised for Redevelopment activities?
The
tax increment funds that redevelopment receives is generated from the
increases in property values on subsequent sales, new construction and
overall improved valuation within the specific Project Area, and only
applies to those property owners within the boundaries of the Project area.
Redevelopment does not increase the amount of taxes people pay.
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How
does the revenue affect other taxing services?
When
redevelopment establishes a project area, there are certain laws that govern
the amount of money that is passed-through to the other taxing agencies such
as schools and the county. Twenty-percent
of all tax increment money is set aside for low and moderate-income housing.
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Eminent
domain, what exactly is it?
Eminent
domain is one of the tools of redevelopment.
It allows the Agency to acquire property to assist in creating
projects that are in the public interest.
It is not used lightly and the agency is required to pay fair market
value and relocation cost to the property owner, lessee and renter.
If the fair market value cannot be agreed upon, evidence, including
appraisals is submitted and a judge and jury will make the final
determination regarding value. Sometimes,
because of tax benefits, an owner will request a “friendly” eminent
domain action.
As of 1999, eminent domain is no
longer available as a redevelopment tool i n
the Downtown Redevelopment Project Area.
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What
are Relocation costs?
Relocation
costs include, but are not limited to: assistance in finding a new location,
payments to cover moving fees, and differential payments for rent increases.
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What
are housing set-asides and how do they affect me?
Twenty
percent of all redevelopment tax increment is set aside for housing opportunities for families and individuals in the low to moderate income
category. The houses are built
by developers and afford residents an opportunity for home-ownership, which
in turn increases pride and well being within the community.
For information on Pasadena’s housing programs, please click on
Housing
and Community Development
web link.
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If you are interested in more information, the California
Redevelopment Association (CRA) is a good
source for information on redevelopment activities.
Visit the CRA on the web at www.calredevelop.org.
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