What is Redevelopment?
Redevelopment is a process created by the State legislature to assist city and county government in eliminating
blight from a designated area, and to achieve desired development, reconstruction, and
rehabilitation goals including, but not limited to: residential, commercial, industrial, and retail properties.
What is a Redevelopment Agency?
In most cities, the city council members are also the governing board for the redevelopment
agency, however, the council and the agency are two separate, distinct legal entities. The
City of Redding provides staff to carry out the day-to-day operations of the Redding Redevelopment Agency and its redevelopment
plans.
How does a citizen benefit from being in a Redevelopment Project Area?
Redevelopment is one of the most effective ways to breathe new life into deteriorated areas
plagued by social, physical, environmental or economic conditions which act as a barrier to
new investment by private enterprise. Through redevelopment, a project area will receive
focused attention and financial investment to reverse deteriorating trends, create jobs,
revitalize the business climate, rehabilitate and add to the housing stock, and gain active
participation and investment by citizens which would not otherwise occur.
What is a Redevelopment Plan?
A redevelopment plan represents a process and a basic framework within which specific
projects will be undertaken. The plan provides the agency with powers to take certain
actions such as to buy and sell land within the area covered by the plan (project area),
improve dilapidated facilities, and to use tax increment funding.
What is a Project Area?
A project area is the area within which actual redevelopment will take place. The project
area must first go through a public hearing (giving citizens who will be included in the project area
a chance to express their views) after which the redevelopment agency acts on the adoption
of the project area and becomes primarily responsible for future projects.
Why do we have Redevelopment Project Areas?
The basic reason for establishing redevelopment project areas is to provide a tool to secure
funds that can be used to attract commercial, industrial, and residential development in order
to eliminate blight and improve an area.
How do Redevelopment Agencies secure funds?
State law makes available to redevelopment agencies a method of obtaining funds called
"tax increment financing." On the date the city council approves a redevelopment plan, the
property within the boundaries of the plan has a certain total property tax value. If this total
assessed valuation increases, most of the taxes that are derived from the increase go to the
redevelopment agency. These funds are called "tax increment" revenue. Usually, the flow
of tax increment revenues to the agency will not be sufficient in itself to finance the full
scope of redevelopment activities and development projects. Therefore, agencies issue
bonds. These bonds are not a debt of the city or county and are repaid solely from tax
increment revenue. Tax increment revenue primarily is used within the same project area where it originates, except for revenue utilized on residential projects which benefit low- and moderate-income
households.
Will property taxes be raised?
It is important to note that taxes assessed from the sale, development or rehabilitation of property
generally reflect a rise in property value and not an increase in tax rate. Assessed values and tax rates
in redevelopment areas are restricted by Proposition 13 limitations.
What is relocation?
Relocation is the displacement of a business or family for the purpose of clearing land and
preparing it for its designated use. When a person or business meets the legal qualifications,
the redevelopment agency pays for: assistance in finding a new location, payments to help
cover moving costs, and payments for certain other costs as provided by law.
If a citizen should decide to sell property to the Agency, who determines the selling price?
The Agency would hire an independent appraiser to establish the fair market value of the
property. If the owner is not satisfied with the appraised value of the property, he may hire
his own appraiser to re-evaluate the property after which both appraisals will be compared
and a selling price negotiated. Fair market value is the value that the property would have
if it were placed in today's market place and sold.
How will the establishment of a redevelopment project affect the city/county and other taxing agencies in regard to tax revenue loss?
Other taxing agencies will typically receive some, but not all, of the new property taxes
generated by redevelopment. In addition, they will continue receiving the base revenues.
In most blighted areas, property values would not increase without redevelopment activities.
Other taxing agencies will receive non-property tax revenues and revenues generated outside
the project area as a direct result of redevelopment activities, i.e., sales taxes, hotel room
taxes, and property taxes.
Why does the Agency fund affordable housing projects and programs?
By State law, the Agency is required to "set aside" a minimum of 20% of the gross tax increment it receives to be used to increase, improve, and preserve the community's supply of housing affordable to its low- and moderate-income households. |
