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RES-8662 In Response to Written Objections to the Proposed Third Amendment to the Redevelopment Plan for Southwest Redevelopment ProjectRESOLUTION NO. 8662 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ORANGE CONSIDERING, RESPONDING AND MAKING WRITTEN FINDINGS IN RESPONSE TO WRITTEN OBJECTIONS TO THE PROPOSED THIRD AMENDMENT TO THE REDEVEWPMENT PLAN FOR THE SOUTHWFST REDEVEWPMENT PROJECT WHEREAS, the City Council of the City of Orange (the "City Council") and the Orange Redevelopment Agency (the "Agency") has prepared a Third Amendment to the Redevelopment Plan for the Southwest Redevelopment Project; and WHEREAS, on June 11, 1996, a duly noticed joint public hearing on the proposed Third Amendment was conducted at a joint public meeting of the City Council of the City of Orange and the Orange Redevelopment Agency; and WHEREAS, said joint public meeting was continued to June 25, 1996 for the purpose of responding to written objections to the proposed Third Amendment; and WHEREAS, written objections were received from affected property owners, businesses and tenants, and also nearby residents, and the City Council directed staff to respond to such written objections in detail, giving reasons for not accepting specified objections and suggestions; and WHEREAS, the City Council has received and considered such objections and the responses thereto as set forth in the "Findings and Responses to Written Objections to the Proposed Third Amendment" attached hereto as Exhibit" A" and incorporated herein by this Reference. NOW, THEREFORE, BE IT RESOLVED, the City Council of the City of Orange as follows: 1. The City Council hereby makes and adopts the findings in response to each written objection received from affected property owners, businesses and tenants, and also nearby residents, as set forth in said Exhibit "A. " 2. The City Council hereby fmds that said Exhibit "A" adequately addresses, analyzes and responds to each of the written comments in the manner required by law. ADOPTED this 25thdayof June 1996. r of the City of Orange ATIEST: Lh~(!a,vAA:C City Clerk of th City of Orange I hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the 25th day of June 1996, by the following vote: AYES: NOES: ABSENT: ABSTAIN: CO~CIL~~~S: MURPHY, COONTZ, SPURGEON, SLATER CO~CIL~~~S: NONE CO~CIL~MBERS: BARRERA COUNCILMEMBERS: NONE City Clerk of the . of Orange Ic/re80/8662 EXHIBIT "A" THIRD AMENDMENT TO THE SOUTHWEST REDEVELOPMENT PLAN FINDINGS AND RESPONSES TO WRITTEN OBJECTIONS The Agency received five written comments objecting to the proposed Third Amendment to the Southwest Redevelopment Plan: 1. A letter from Denise C. Bryant, dated May 15, 1996, raises concerns regarding the Main Street/La Veta Avenue widening but does not identify any issues pertaining to the proposed Third Amendment. Her letter has been forwarded to the City Attorney to address issues pertaining to the street widening. 2. A letter from Simon Goodyear and family dated May 23, 1996, who lives across the street from the proposed Third Amendment Area and does not want to see the east side of Alpine Road commercially developed. This letter does not directly oppose the proposed Third Amendment, but opposes the change of General Plan land use designation of a portion of the Third Amendment Area from residential to commercial. The General Plan Amendment requires a City Council action, which is separate from the Redevelopment Plan Amendment; the land use designation may be changed with or without the Third Amendment proceeding. 3. A letter from Stuart Dygert dated June 10, 1996, transmitting a copy of the Project Area Committee's recommendation, comments, and a preliminary site plan. Response to this letter follows below. 4. A form Letter of Opposition signed by 25 individuals--three from within the proposed Third Amendment Area and 22 from outside but near the Third Amendment Area.Although these letters state they have serious concerns about the negative impact the Amendment would have, there are no impacts identified.5. A letter from Ed Cieslak dated June 4, 1996, questioning the blight [mdings for the properties on the east side of Alpine Road. He also inquired if the Agency's intent is to replace the single family homes with apartment complexes. As cited in the Report to Council and the proposedGenerJ.! Plan Amendment and zone change, future development would be commercial in nature. Neither the existing zoning nor that proposed would allow construction of apartment complexes.Copies of these letters have been made a part of the record of the June 11, 1996 Public Hearing. The concerns and objections raised in these letters as well as those orally expressed at the Public Hearing primarily focused on issues related to eminent domain, blight and the reasons for selection of the Third Amendment Area, the aesthetics of potential new development and the potential loss of low- and moderate-income housing. Each of these concerns is addressed in the following discussion. Exhibit A Page EMINENT DOMAIN Concern was expressed about the Agency having the power of eminent domain over residential properties, particularly that if it was allowed in the Third Amendment Area, it could then be allowed anywhere. The Agency already has the power of eminent domain in the existing Southwest, Northwest and Tustin Street Project Areas. Although these project areas have primarily commercial and industrial uses, there are residential uses within these Redevelopment Project Areas. The Agency has never used the power of eminent domain to acquire any property because it has always been able to successfully negotiate the acquisition of properties needed for redevelopment without using eminent domain. The downside of not retaining the power to be able to use eminent domain if necessary would be the inability to offer the tax benefits to owners of property being acquired for purposes of redevelopment. If the Agency did not have the ability to threaten the use of eminent domain, it would not be able to make the required findings needed to assure the tax advantages to an owner whose property is acquired. This would have a negative impact on the Agency's ability to carry out redevelopment activities throughout the project areas including the proposed Third Amendment Area. The power of eminent domain does not infringe on the private property rights of existing owners, nor does it restrict the ability of owners to sell, rent, maintain or improve their property. The Agency can only purchase property after paying the market value of the property based upon its highest and best use. If the property is well maintained, the condition of the property will be considered in determining its value. Any occupant (owner or tenant) must be provided relocation benefits by the Agency which include the cost of moving and other payments as discussed in the Agency's Relocation Plan (see the Report to Council). General Procedures for Usinl! Eminent Domain Property which is the object of a condemnation action by the Agency must be appraised before the initiation of negotiations. The Agency must make every reasonable effort to acquire the property by negotiation, and must offer the owner the full amount of what the Agency determines to be just compensation, which shall not be less than the Agency's approved fair market value appraisal, as determined by independent appraisal. The offer to purchase must be accompanied by a written statement of the basis for the amount the Agency has established as just compensation. The statement should include (1) a general statement of the public use for which the property is to be acquired; (2) a description of the location and extent of the property to be taken; (3) an inventory identifying the buildings, structures, fixtures, and other improvements; and (4) a recital of the amount of the offer and a statement that is the full amount believed to be just compensation and is not less than the approved appraisal of the fair market value of the property. At this time of negotiation, the Agency should also inform the owner and all tenants of the pertinent relocation benefits and payments available, the possible right to compensation of loss of goodwill, and other procedures and policies of the Agency for acquisition and relocation. The Agency is required to adopt rules and regulations to implement payments and relocation assistance to displaced occupants or businesses and has done so by Resolution No. ORA-0314, adopted on June 11, 1996.Exhibit A Page 2 Before acquiring real property through its condemnation power, the Agency must give notice to the property owner, hold a public hearing and make certain findings pursuant to the Eminent Domain Law. Prior to the commencement of a condemnation action, the Agency shall implement the following procedures: 1. Preliminary Notice of Acquisition. Inform the owner of the Agency's preliminary intent to acquire, setting the date to appraise the property and inviting owner to accompany appraiser. 2. Ap-praisal of Property. Agency shall schedule and conduct the appraisal by an independent qualified appraiser.3. Written Offer to Acquire. Prepare and deliver to owner a written statement of the Agency's determination of just compensation; a written statement of the basis for determination of compensation, which must be at least the amount of the approved appraisal. If the Agency's offer is found to be unreasonably low, the Agency has to pay all of owner's appraisal, attorney and court costs.4. Notice of Public Hearine: Re: Resolution of Necessity. Notice of opportunity to be heard at public hearing is given to each person whose property is to be acquired by eminent domain.5. Hearin~ on Ado-ption of Resolution of Necessity. Contents: (a) general statement of public use, (b) description of property, (c) declaration that Agency has found ( i) public interest and necessity for project, (ii) proposed project compatible with greatest public good, least private injury, (iii) property described is necessary for project and ( iv) offer required by Government Code 17267.2 has been made.6. Eminent Domain Liti~ation Filed. Action filed after the adoption of a Resolution of Necessity.As outlined above, the law requires that:Every owner must be paid what their property is worth.The Agency does not determine the purchase price. Either the owner agrees with the Agency's offer or it is determined through negotiations or the matter is taken out of the hands of the Agency and determined by a judge or jury. Exhibit A Page Procedures Pursuant to Health and Safety Code Section 33399 Mr. Dygert had indicated that, in three years, the Agency might be faced with a large expenditure of funds to acquire property. The Agency does not have to purchase properties within the Third Amendment Area within three years of adoption of the Amendment. Section 33399 of the Community Redevelopment Law provides that when three years have elapsed from the adoption date of the Third Amendment with no action by the Agency to acquire or condemn property, owners of property in the Third Amendment Area subject to condemnation may offer to sell that property to the Agency for its fair market value. The Agency then has 18 months from the date of the owner's offer either to acquire the property, institute an eminent domain action to acquire it or agree to exempt the property from eminent domain. Should the Agency fail to do so, the owner may institute an action for damages against the Agency in inverse condemnation. The inverse condemnation action must be commenced by the owner within one year and six months after expiration of the Agency's 18-month period to acquire. The mere passage of time does not result in Agency liability in the inverse condemnation action. Under case law, even if the Agency neither acquires the property nor exempts it from eminent domain in the periods mentioned above, the owner would still have to show damages resulting from the Agency's inaction. Case law provides that there is no inverse condemnation liability of the Agency where the Agency diligently and in good faith seeks to implement the Project. In no event is any large amount of funds needed three years after Third Amendment approval.Exhibit A Page 4 BLIGHT AND REASONS FOR SELECTION OF THE THIRD AMENDMENT AREA Concern was expressed that the three reasons for selecting the Third Amendment Area do not substantiate need for the Third Amendment. In his written response, Mr. Dygert indicates that the Third Amendment is not needed to provide public improvements because there are no public improvements proposed for Alpine Road and the City already owns or the City's acquisition powers can be used to purchase the property needed for the La Veta Avenue and Main Street improvements. While this statement is true, it fails to recognize that the reasons for the Third Amendment as outlined in Section A of the Report to Council work together, not independently. If the City did not need to widen Main Street and La Veta Avenue, there would not be a need for the Third Amendment because the buildings at the northwest comer of Main Street and La Veta Avenue could remain as they are today. The fact is that the Main Street/La Veta Avenue widening is needed to address mitigation measures required from prior environmental documents to accommodate existing and future development in the area. Mr. Dygert indicates that the residential properties facing Alpine Road are not needed for public improvements and that, furthermore, the commercial properties along Main Street could support a 33,000 square foot development without the need to include the residential properties along Alpine Road. The site plan submitted by Mr. Dygert for a 33,000 square foot development fails to prove that an adequately sized development site can be assembled without the residential properties. Problems associated with Mr. Dygert's site plan area include: Inaccuracy of the right-of- way taking The conceptual site plan submitted fails to account for a substantial amount of the widening along Main Street and a small amount of widening along the lWnh side of LaVeta Avenue. The plan shows a site approximately 132, 000 square feet in size. Based on an actual site survey and deducting the area for a fuJure bus turn-out, the site is actually closer to 115,440 squarefeet--over one-third of acre smaller than the plan illustrates.Failure to consider market and real estate economic realities The site plan presents a development which is too small to secure or interest an anchor tenant. The depth limitation of the building as proposed would suppon only small and more risky tenants, and therefore, construction of such a development would likely lWt be able to be financed. The cost today to purchose an existing commercial center of similar standards would be approxi-mately $3.3 million. The cost to build the center as proposed would likely be nearer to $5 million because of the need to purchose the existing mall. Rents at 1.25 (which is likely difficult to achieve) would produce a value of only $4.3 million and therefore couldlWt suppon the level of financing needed to suppon construction of the center as proposed by Mr. Dygen. The fact thot the actual site is smaller than the conceptual drawing would result in a project with a lower value. It should be noted thot the project, even as proposed, would lWt provide for any return on Mr. Dygert also expressed an opinion that the residential lots along Alpine Road do not exhibit blight so prevalent and so substantial as to cause a burden on the community and there is not a compelling need for government intercession. While the Report to Council documents the presence of some blighting conditions within the Third Amendment Area, the Report to Council further documents that the Third Amendment Area needs to be added to the Southwest Project Area because without its addition, effective redevelopment of the combined properties of the Third Amendment Area and the adjoining properties within the existing Southwest Project Area is not possible. The Report points out that while there are the physical blighting conditions of defective design, deteriorated buildings, incompatible land uses and inadequate lot sizes for proper usefulness, and the economic blighting conditions of business vacancies and a high crime rate when compared to adjoining area, the predominant reason to include the Third Amendment Area within the Southwest Redevelopment Area is to address the inadequate lot size, ingress/egress, vacant and underutilized land and parking deficiencies which would result from a piecemeal approach to redeveloping the properties within the existing Southwest Project Area or those combined with the commercial properties recently purchased by the City at the northwest comer of Main Street and La Veta Avenue. Health and Safety Code Section 33321 provides that non-blighted properties may be included within a redevelopment project area if it is found necessary for the effective redevelopment of the area of which they are a part. The most effective way to implement redevelopment of the properties bounded by Main Street, La Veta Avenue, Alpine Road and Culver Avenue is to develop an integrated development plan for the entire area. Failure to plan for redevelopment of the entire block will result in piecemeal development which will leave in place the problems of incompatible land uses, ineffective ingress/egress, parking deficiencies, and economic underutilization as discussed in the Report to Council.AESTHETICS OF NEW DEVEWPMENT Oral objections were raised in regard to the ultimate site plan and elevations of any new development which could occur on the block and the potential impact on nearby residential parcels. Site planning and elevation issues are addressed at the time that plans are submitted to the City for review. The City has not received any proposed development plans for properties adjacent to the residential parcels on Alpine Road. Issues pertaining to a potential buffer wall,lighting, traffic and noise are addressed in the Final EIR.Exhibit A Page 6 LOSS OF LOW- AND MODERATE-INCOME HOUSING The Community Redevelopment Law imposes the following requirements when low- and/ or moderate-income housing is demolished or removed by Agency project activities: Reolacement Housinl!Whenever dwelling units housing persons and families of low- or moderate-income are destroyed or removed from the low- and moderate-income housing market as a part of Agency project activities, the Agency shall, within four years of the destruction or removal,rehabilitate, develop or construct, or cause to be rehabilitated, developed or constructed, for rental or sale to persons and families of low- or moderate- income, an equal number of replacement dwelling units at affordable housing costs, as defined by the California Health and Safety Code. This replacement housing may be rehabilitated, developed or constructed by the Agency inside or outside the Project Area, in accordance with all of the provisions of applicable sections of the Community Redevelopment Law.The Agency may not remove or destroy dwelling units housing persons and families of low- or moderate-income prior to the adoption of a Replacement Housing Plan pursuant to provisions of the Community Redevelopment Law. The Replacement Housing Plan must be adopted by the Agency not less than 30 days before the Agency enters into any agreement which will lead to the destruction or removal of dwelling units from the low- and moderate-income market.The Replacement Housing Plan shall: (1) identify the general location of housing to be rehabilitated, developed or constructed to replace the housing units destroyed or removed; (2)identify an adequate means of financing such replacement housing; (3) identify the number of low- or moderate-income dwelling units planned for construction or rehabilitation; and include a timetable for meeting the Plan's relocation, rehabilitation and replacement housing objectives.Relocation Benefits In addition to the replacement housing provisions, the following requirements for relocation assistance also apply to persons and families displaced from low- and moderate-income housing:1. The Agency must have a feasible method and plan for the relocation of all families and persons displaced, temporarily or permanently, from any housing facilities in the Third Amendment Area. As indicated, the Agency has adopted a Relocation Plan.2. The Agency's Relocation Plan addresses the provisions of the Community Redevelopment Law concerning potential displacement of families and persons. When such displacement occurs, the Agency must provide the persons and families displaced by Agency activities with monetary and advisory relocation assistance consistent with the California Relocation Assistance Law (Government Code, Section 7260 et seq.), the State Guidelines adopted and promulgated pursuant thereto, Relocation Assistance Rules 3. No resident may be moved unless the Agency has provided, within the Project Area, or within other areas not generally less desirable with regard to public utilities and public and commercial facilities and at rents or prices within the fmancial means of the displaced families and persons, decent, safe and sanitary dwellings equal in number to the number of and available to such displaced families and persons and reasonably accessible to their places of employment. 4. At the time the Third Amendment is adopted, the City Council must fmd that it is satisfied that permanent housing facilities will be available within three years from the time occupants of the Third Amendment Area are displaced, and pending the development of the facilities there will be available to displaced occupants adequate temporary housing facilities at rents comparable to those in the community at the time of their displacement. Exhibit A Page 8 of8