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<br />II I I I I II
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<br />Agreement. Historically, under the original Development Agreement, the original
<br />City District was obligated not only for facilities, streets, roads and services, but
<br />-- also for all of the reclamation work at Redwood Shores.
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<br />"In 1982/83, when the new Facility Fee program was set, the Developer undertook
<br />all of the reclamation work that was formerly District responsibility. That
<br />represented 40% of the historic City/District obligation. In exchange for that, in
<br />part, there was an agreement reached, specific with the land owner, and that was
<br />the Development Agreement. And that Agreement was that the land owner,
<br />having undertaken this additional obligation which was formerly public, in
<br />addition, the land owner would allow its property, its then vacant property, to be
<br />in effect, taxed, in order to fund the additional public improvements: the roads,
<br />services and facilities. And when they did that, in practice what they were doing
<br />was in effect, offering to pay for them. Because the effect of the Facility Fee over
<br />time, has been that it has come out, for the most part, out of the value of the
<br />property. Because every purchaser of land, the purchase from Mobil, the purchase
<br />from Redwood Shores Properties, for the most part, had taken out, or deducted the
<br />impact of the Facility Fee from the price they would pay for the land. Not in total.
<br />There has been a certain amount of pass forward, particularly in good times. But,
<br />when the Developers signed that Agreement they knew going in what the risk
<br />was, that over time they were in fact going to have to also fund the facilities, in
<br />effect. Now, what went into that Agreement was a commitment by the City that if
<br />the Developer allowed the properties to be taxed, in effect, that the Developer then
<br />--- would have a say in how that money was collected and how it was spent. Ergo
<br />this six-member committee. The committee was struck specifically with three
<br />members on the City side and three on the Developers side.
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<br />"These monies, the Facility Fees monies, are collected only on lands which were
<br />at that time vacant, and were in the then ownership of Mobil Corporation. None
<br />of the lands at Redwood Shores, in any of the other subdivisions, Dolphin, Marlin,
<br />any of the earlier subdivisions, were part of the area that could in fact be taxed.
<br />Therefore all the homes in those areas after the formation of the Facility Fee
<br />Committee had no more funding obligation to future improvements. The bonds
<br />that were sold up to 1979/80, those bonds, the money was spent from the sale of
<br />those bonds for public improvements that serviced the entire community. Most of
<br />the last issue, the $10 million last issue, was spent building a major pipeline, a
<br />water pipeline from Redwood City to Redwood Shores to service Redwood
<br />Shores and build a water tank. Since that time, all the money has come from the
<br />vacant lands. There is no more money being collected from the older
<br />subdivisions.
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<br />"How has the Development Agreement worked over time? It has been an
<br />outstanding example of a public/private partnership. Certainly the best example
<br />-- of a functional, working public/private partnership that I have ever participated in
<br />or seen take place. It has worked marvelously. It shouldn't have worked, frankly.
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<br />REGULAR COUNCIL MEETING MINUTE BOOK NO. 55 JULY 14, 1997
<br />MINUTES Page No. 461 PAGE 24
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