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HomeMy WebLinkAbout0006_1_SA Staff Report - Transfer of Cultural Ctr 062816REPORT TO SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE To:Honorable Chairman and the Successor Agency From:Grant Yates, Executive Director Prepared By: Barbara Leibold, Successor Agency Counsel Date:June 28, 2016 Subject:Transfer of the Cultural Center and Downtown Parking Property as Governmental Purpose Properties to the City of Lake Elsinore in accordance with Health & Safety Code Section 34181(A) Recommendation Adopt A RESOLUTION OF THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE APPROVING THE TRANSFER OF THE CULTURAL CENTER AND DOWNTOWN PARKING PROPERTY AS GOVERNMENTAL PURPOSE PROPERTIES TO THE CITY OF LAKE ELSINORE IN ACCORDANCE WITH HEALTH & SAFETY CODE SECTION 34181(a) Background As part of the dissolution of the former Redevelopment Agency of the City of Lake Elsinore (Agency), Health & Safety Code (HSC) Section 34181 requires the Oversight Board to direct the Successor Agency to transfer ownership of assets constructed and used for a governmental purpose, such as roads, parks and parking facilities and lots dedicated solely to public parking. On January 27, 2016, the Oversight Board approved the transfer of various properties held by the Successor Agency to the City of Lake Elsinore (City) as governmental purpose properties. In accordance with applicable law, the Oversight Board’s resolution approving the transfer was submitted to the Department of Finance (DOF) for approval. On May 6, 2016, the Successor Agency received a letter from DOF approving certain properties for transfer but disapproving the transfer of the five parcels across the street from the Cultural Center. In 1994 the City leased the Cultural Center and Downtown Parking Property expressly for parking. Every City Council meeting agenda since that time has directed the public attending the meeting to park in the lot across the street from the Cultural Center. In 2008, the former Redevelopment Agency entered into a Purchase & Sale Agreement to acquire the vacant property consisting of two parcels together with 3 small parcels improved with retail businesses. That transaction closed in 2009 and the structures were later demolished to Transfer of Governmental Purpose Properties June 28, 2016 Page 2 of 3 expand the parking lot. The use of the Cultural Center and Downtown Parking Property for public parking has continued uninterrupted. Staff believes DOF denied the transfer of the Cultural Center and Downtown Parking Property in error. Accordingly, the Executive Director proposes that the Successor Agency re-approve the transfer of the Cultural Center and Downtown Parking Property to the City and make certain findings in connection therewith. Discussion In accordance with the various HSC sections applicable to the dissolution of the former redevelopment agency (Dissolution Law), the Successor Agency must dispose of real property in accordance with HSC sections 34177(e) and 34181(a). Section 34177(e) states that an oversight board may direct the successor agency to transfer ownership of certain assets pursuant to subdivision (a) of Section 34181. Subdivision (a)(1) of Section 34181 states that an oversight board may direct the successor agency to transfer ownership of those assets that were constructed and used for a governmental purpose, such as roads, school buildings, parks, police and fire stations, libraries, parking facilities and lots dedicated solely to public parking, and local agency administrative buildings, to the appropriate public jurisdiction. Subdivision (a)(2) of Section 34181 states that “parking facilities and lots dedicated solely to public parking" do not include properties that generate revenues in excess of reasonable maintenance costs of the properties. The Cultural Center and Downtown Parking Property does not generate revenue, so it meets the standard set forth in subdivision (a)(2) of Section 34181. In its letter, DOF notes that the Cultural Center and Downtown Parking Property is unpaved and considered a vacant lot, and therefore does not meet the definition of governmental purpose pursuant to HSC section 34181 (a), which includes the language “constructed and used for.” Notwithstanding the fact that the lot is unpaved, the Agency engaged in construction activities with respect to the property after it was purchased in 2008. BusinessDictionary.com includes in the definition of “construction” “clearing, dredging, excavating, and grading of land and other activity associated with buildings, structures, or other types of real property such as bridges, dams, roads.” When the property was purchased, it contained several structures, which included three tenants. The former Agency engaged a relocation consultant, paid relocation benefits to the tenants and remediated asbestos in the buildings. After the Lake Elsinore Fire Department conducted training operations in the building in March 2011, the Agency Board approved demolition of the building, fine grading and preparation of plans for paving and further improvement to the downtown parking lot. The buildings were demolished and the vacant unimproved parking area was expanded to include all five Agency-owned parcels. Staff is documenting the actual amount the Agency spent on these construction activities for submittal to the Oversight Board and DOF. Estimated cost is approximately $35,000. Plans and cost estimates were prepared for additional parking improvements, estimated at approximately $80,000 for paving, curb planters, landscaping and irrigation. About that time, Transfer of Governmental Purpose Properties June 28, 2016 Page 3 of 3 the Dissolution Law and subsequent court challenge prohibited the Agency from expending any funds for further improvements or construction. Accordingly, further parking lot improvements were put on hold. Though the additional parking improvements were put on hold, the public’s expectation that the dirt lot will be paved remains. In 2012, a petition was submitted to the City Council by some of the downtown merchants requesting that the unimproved parking lots be paved. Pressure from the community to improve the parking lot continues as the downtown area is revitalized. The attached Successor Agency Resolution SA 2016-0 re-approves the transfer of the Cultural Center and Downtown Parking Property to the City for governmental purposes and makes certain findings with respect thereto. After approval by the Successor Agency, the Oversight Board must approve the transfer. The Oversight Board’s Resolution approving such transfer must be transmitted to DOF. DOF has five (5) days after submittal to request a review and forty-five (45) days to review the Oversight Board Resolution if it decides to do so. Detailed information from the LRPMP regarding the Cultural Center and Downtown Parking Property as governmental purpose properties is attached for informational purposes only. Please note that the property ID #s in these detailed sheets correspond to the LRPMP and do not match the ID #’s in Exhibit A to the Resolution. Parcel #37 is the Cultural Center which DOF has previously approved as a governmental purpose property to be conveyed to the City. Attachments: Cultural Center and Downtown Parking Property as Properties Data Sheets and Maps Letter from Department of Finance dated May 6, 2016 Successor Agency Resolution No. SA 2016-0 Exhibit A – List of Cultural Center and Downtown Parking Property to be transferred to the City of Lake Elsinore for Governmental Purposes