8F Consent 2012 0507 - Laserfiche WebLink

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File Number: 12 -212 Although the language of AB x1 26 is relatively clear regarding the treatment of City- Agency agreements as unenforceable, many cities throughout California have questioned the Legislature's authority to invalidate financial agreements that pre -dated the dissolution bill and had the full force of law. Nevertheless, given the DOF's determination, the recommended course of action for the Successor Agency at this time is to take advantage of a clause in AB x1 26 that allows a Successor Agency to re -enter into an agreement with the City. This clause is contained in Health and Safety Code Section 34178 (a) and reads as follows: "Commencing on the operative date of this part, agreements, contracts, or arrangements between the city or county, or city and county that created the redevelopment agency and the redevelopment agency are invalid and shall not be binding on the successor agency; provided, however, that a successor entity wishing to enter or reenter into agreements with the city, county, or city and county that formed the redevelopment agency that it is succeeding may do so upon obtaining the approval of its oversight board." This action will also have to be approved by the Successor Agency Oversight Board, an action that is scheduled for May 10, 2012. If approved by both the Successor Agency (City Council) and the Oversight Board, staff believes that the Agency's debts under the Cooperative Agreement will be restored as an enforceable obligation on the ROPS. Funds to pay the obligation will be provided to the Successor Agency by the Alameda County Auditor Controller via the Redevelopment Property Tax Trust Fund and then the Successor Agency can pay the City, consistent with the terms of the Agreement. The original January 17, 2011 Cooperative Agreement pledged Agency funds for four projects: 1. Eden Road Construction: The estimated cost for this project is approximately $5,800,000, of which $800,000 represents land acquisitions costs already paid. The requested Agency contribution is $1,500,000. Remaining costs will be funded by an assessment district and other sources. 2. MacArthur Boulevard Improvements: The estimated cost for this project is $1,274,143 all of which was to be funded by Redevelopment tax increment. 3. Doolittle Drive Improvements: The estimated cost for this project is $4,193,611 all of which was to be funded by Redevelopment tax increment. 4. Hays Street Improvements: The estimated cost for this project is $2,000,000 all of which was to be funded by Redevelopment tax increment. At this time, staff is recommending that the City and the Successor Agency only re -enter in the portion of the Agreement covering Eden Road and Hays Street. This is because the City has already made a significant investment in these projects and that investment could be wasted if the committed redevelopment funding were lost. In the case of Eden Road, the Agency purchased the needed right -of -way, the City has completed project design, and a process has been put in place to form an assessment district to secure the balance of the required funding. In the case of Hays Street, the City's TOD Strategy identified the adjacent "Town Hall Square" location as a key opportunity site for future development. After several years of analysis, staff believes that this development would be severely hindered without the Hays Street Improvements. City of San Leandro Page 2 Printed on 51112012