CONTRA COSTA COUNTY GRAND JURY
2002-2003

REPORT NO. 0306

Time to Redirect the County Redevelopment Agency

To: The Contra Costa County Board of Supervisors

BACKGROUND

The goals of redevelopment are to eliminate blight, promote economic development and provide affordable housing.

The California Community Redevelopment Law is contained in the California Health and Safety Code Section 33000 et seq. In 1952, California voters adopted Article XVI, Section 16, of the California Constitution. This article provided for tax increment financing as follows:

Base year property tax is established with the introduction of a redevelopment area. Schools, special districts, etc., continue to receive the base year property taxes. With the tax base set, increases in value of property over time within a redevelopment area increases the property taxes. These additional taxes, or increments, flow to the Redevelopment Agency. This financing method is the key mechanism for implementing redevelopment law.

The Contra Costa County Redevelopment Agency (RDA) was established on December 6, 1983. While the redevelopment law was passed in the 1950s, it was enabling legislation, which gives the counties and cities the right to form redevelopment agencies but does not mandate them to do so. However, most cities in the state now have redevelopment agencies, while unincorporated areas within a county are the responsibility of the county RDA.

There are presently four redevelopment areas in the unincorporated area of the county: Pleasant Hill BART area established in 1984, Bay Point in 1987, North Richmond in 1987 and Rodeo in 1990.

The Pleasant Hill BART Redevelopment Area was explicitly designed to reduce regional traffic by locating new offices and housing next to a transportation hub.

This report focuses solely on the RDA's activities at the Pleasant Hill BART redevelopment area.

FINDINGS

  1. The County Board of Supervisors is the governing board of the RDA.

  2. The RDA raises capital dollars primarily through the sale of tax exempt bonds. It can incur bonded indebtedness without voter approval.

  3. Close to 70% of the RDA's current budget is devoted to the Pleasant Hill BART (PH BART) redevelopment area.

  4. The current indebtedness of the PH BART redevelopment project is just over $83 million.

  5. While established in 1984, the redevelopment of the PH BART area has not yet been completed. There is no specific timetable for the development of the rest of the PH BART area.

  6. A development company, Millennium Partners, has exclusive right to the development of the PH BART redevelopment area.

  7. The RDA has purchased the Las Juntas Swim Club for the purpose of providing parking for BART. The RDA paid $2 million for the property, which had been appraised at $1.8 million. The appraisal states "The Highest and Best Use of the property was determined to be to demolish the swim club improvements to allow residential development as allowed by the General Plan and zoning".

  8. The Swim Club property has been purchased for the use of BART parking. BART has not agreed to pay any of the costs of improvement of the property for parking, estimated at $590,000, nor for its on-going maintenance.

  9. Assembly Bill 1855 (AB1855) was passed in 2000 to allow the RDA to buy the Las Juntas property which is outside the redevelopment area and within the city limits of Walnut Creek.

    AB1855 permits this property to be used solely for the purpose of constructing affordable housing. AB1855 says:

    "The funds shall be used only for the acquisition of land for, and the design and construction of, the development of housing containing units affordable to low- or moderate-income persons."

  10. The request from the Board of Supervisors asking various Senators and Assembly persons to support the bill did not reveal that the purchase would be for parking, but stressed affordable housing.

  11. AB1855 also grants permission for the RDA to use its funds outside the redevelopment area "anywhere in the unincorporated territory" for the "provision of low-and moderate-income housing".

  12. The RDA also has plans to build a $25 million parking garage for BART on BART property. When it has been completed, RDA plans to give ownership of the garage to BART without payment.

  13. The RDA is planning to build a bridge over Treat Blvd. (at Jones Road) for easier pedestrian and bicycle access to the BART station at a cost estimated to be $4 million.

  14. There has been opposition by residents in the surrounding areas to both the use of the Las Juntas Swim Club for BART parking and the construction of the bridge over Treat Blvd.

  15. Affordable housing goals as required by RDA law, have been met by subsidizing rents in apartment complexes within the PH BART redevelopment area.

  16. There has been no owner-occupied, affordable housing built within this redevelopment area.

  17. Health and Safety Codes 33421 and 33445 are cited by the RDA as its authority for the actions it proposes to take within the redevelopment area.

CONCLUSIONS

  1. The County Redevelopment Agency is a separate legal entity with its own revenue, budget, staff and power to issue debt and condemn property.

  2. Redevelopment law, specifically Health and Safety Codes 33421 and 33445, is being interpreted liberally by the RDA to justify its decisions and actions.

  3. The continued development of the PH BART area is moving very slowly under the agreement with Millennium Partners.

  4. The obligation for providing parking for the convenience of BART and its riders lies with BART and/or Millennium Partners, not with the RDA.

  5. The use of $25 million in redevelopment funds to build a parking garage on BART property is inappropriate. Again, parking for its riders should be BART's obligation. If parking is displaced by a developer, it should also be the responsibility of that developer to replace it.

  6. AB1855 does not give the RDA authority to acquire the Las Juntas Swim Club property for the purpose of BART parking.

  7. The expenditures of $2.6 million of redevelopment funds to provide BART parking on the swim club site is inappropriate.

  8. The expenditure of some $4 million for a bridge over Treat Blvd. is improper. Whatever the increase in pedestrian or bicycle traffic, the building of the bridge is not an appropriate use of redevelopment dollars.

  9. A more proper use of these funds would be to provide more low- and moderate-income housing either within the PH BART redevelopment area or elsewhere within the county as permitted by AB1855.

RECOMMENDATIONS

The Contra Costa County Grand Jury recommends the following actions to the Contra Costa County Board of Supervisors as the governing board of the RDA.

  1. Since the purchase of the Las Juntas Swim Club property has been finalized, use the property as AB1855 intended, for multi-family affordable housing.

  2. Do not spend any redevelopment dollars to turn the Swim Club property into a parking lot.

  3. Do not build the parking garage for BART.

  4. Do not proceed further with plans to build the bridge over Treat Blvd.

  5. Redirect the monies designated for BART parking and the Treat bridge into low- and moderate-income housing within the PH BART redevelopment area or elsewhere within the unincorporated territory of the county.

  6. The Board of Supervisors, in its capacity as the Redevelopment Agency Board of Directors closely supervise the Redevelopment Agency to insure that the agency is spending redevelopment money in prudent and appropriate ways and in the best interest of the public.

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