AgdaPkt 2012-11-19 - Laserfiche WebLink

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6.3.A. - Page 2 Three of the properties (707 Bradford Street, 777 Bradford Street, and 611 Heller Street) are affordable housing assets held by the City as the housing successor agency. These affordable housing properties have been disclosed to the State and the Department of Finance has no objection to these properties being held by the City. The three remaining properties were purchased with the RDA's general funds. Two of these properties are located along Lathrop Street, across from the Franklin Street Apartments. The RDAA envisioned developing these properties for childcare, but the sites and the project did not work in the end. The third site (1012 Main Street) is the parking lot fronting Middlefield Road at the Main Library. This property was acquired for the purpose of providing public parking for this public facility. Health and Safety Code Section 34167.5 of the Dissolution Act directs that any asset transfer occurring between redevelopment agencies and other public bodies after January 1, 2011 is not valid. If such an asset transfer did occur, the Controller is directed under certain circumstances to order the available assets to be transferred to the Successor Agency, to the extent not prohibited by state or federal law. Furthermore, AB 1484, which amended the Dissolution Act, requires the City to conduct a due diligence report that in part must identify all assets transferred after January 1, 2011. AB 1484 may require that the City pay to the Successor Agency the value of the property transferred to the City by the former RDA. ANALYSIS During the State of California's review of the Successor Agency's reports on property and obligations, these sites may be identified as properties that should be held by the Successor Agency, not the City. As a result of the ambiguities created by the Dissolution Act (identified above), this may result in unintended consequences to both the City and Successor Agency. As such, staff recommends that the three general fund properties located at Lathrop and at 1012 Main Street be transferred to the Successor Agency. Consequently, the action to grant the properties to the Successor Agency avoids potential conflict with the state of California, which makes the close out of the former Redevelopment Agency a smoother action. This is desired because there are still some significant areas of dispute among the City, Successor Agency, and State involving millions of dollars and resolving the ownership of these properties is simple and straightforward and meets the State's objectives for dealing with real property. ALTERNATIVES The Council may opt not to grant the properties and leave the status and disposition to future discussions between the Successor Agency and the state , but this may result in the value of these properties being added to the amount determined to be payable by the City to the Successor Agency (and that amount will not be valued at $10 — the amount paid by the City for the acquisition in 2011). FISCAL IMPACT There is no fiscal impact to the City with these actions.