The Hollister council this week approved transferring three
redevelopment agency properties to the city in an effort to prevent
possibly losing those assets to the state. The city manager also
acknowledged it is
”
highly unlikely
”
the local RDA would continue operating if a plan succeeds to
allow the agencies to continue functioning but only under
much-tighter guidelines.
The Hollister council this week approved transferring three redevelopment agency properties to the city in an effort to prevent possibly losing those assets to the state. The city manager also acknowledged it is “highly unlikely” the local RDA would continue operating if a plan succeeds to allow the agencies to continue functioning but only under much-tighter guidelines.
The city council in a special meeting Wednesday approved an array of RDA moves preceding the governor’s signing of the state budget. Those decisions included moving three RDA properties to the city – including the fire station under construction on Fifth Street, the former Leatherback Industries site and the downtown grassy plot in the 400 block of San Benito Street.
City Manager Clint Quilter alluded to the fire station and said that regardless, state law eventually would allow the city to own the property because it is for a public use. Officials transferred it along with the other two properties to “ensure terms” are more favorable locally, he said, adding how a theoretical example could be having to pay market value to move into the new fire station when it is done.
As for the 400 block and Leatherback properties, he said, “The other two were to avoid having those being liquidated and the money being sent off to the state.”
Gov. Jerry Brown signed a budget Thursday that includes largely eliminating the RDA program with hopes of saving $1.7 billion this fiscal year. Once he signed the document, local governments no longer could enter into contracts or make commitments, Quilter said.
In February, the Hollister council already had unanimously approved a resolution officially opposing the proposal. In a flurry of last-minute actions Wednesday, the city joined many of the other 425 California municipalities with RDAs in maneuvering properties or funds in last-ditch efforts to protect those dollars from the state.
Quilter contended the fire station transfer was “easier” to pull off than the other two. As for those other properties, he said government agencies “can transfer stuff back and forth.”
The state RDA law declares – in section 33396 of the health and safety code – that agencies can acquire property and then “dispose of such property to private persons or to public or private entities.” It goes on to note that: “All or any part of the funds derived from the sale or lease of such property may at the discretion of the legislative body of the community be paid to the community, or to the public entity from which any such property was acquired.”
Still, officials here realize that actions taken by local governments – along with the fate of RDAs as a whole – are subject to whatever outcomes occur in the courts, as a legal challenge is expected soon from the California Redevelopment Association.
“A lot of it will depend on – we’re assuming they’ll get an injunction,” Quilter said. “It depends on what it will say.”
One of the unclear factors revolves around the notion that the state will allow some sort of “successor agency” to replace the RDAs as they stand. It would come with stricter regulations and the requirement to pay millions of dollars from the local tax increment each year to other public entities, such as schools.
“It’s highly unlikely,” Quilter said, when asked about Hollister potentially taking that route. “I don’t believe we can pay the voluntary payments and maintain the agency.”
Assuming the city can keep the recently transferred properties, it would have to amend its recent request for proposals – from the RDA to prospective builders – on the Leatherback site. Hollister officials hope to entice commercial development there, and plans include setting aside space for a new YMCA of San Benito County facility.
Officials expect to use the “same general process” with the development plan under city ownership, but the terms will have to change in some manner, Quilter said.
He surmised that the 400 block property “may end up being used for a public purpose or something.” He expects difficulty finding someone to buy and develop it.
“That’s a tough one, particularly if it ends up having to be done at market value,” he said.
Look for more in Tuesday’s edition of the Free Lance, along with a story on the potential impact an RDA elimination could have on Hollister’s payroll.
