RDA 2.0 – A Really Bad Idea!

On Friday morning, August 2nd, the Development Committee met with only one real item on their agenda. “Enhanced Infrastructure Financing Districts (EFIDs) with presentation by Staff and Larry Kosmont, Kosmont Companies. The presentation from Kosmont, centered around “How do you capture vitality and quality of life in a digital economy?” However a good dose of “state mandates fear” formed the foundation upon which the presentation was built.

Let’s get to the heart of the matter.

There appears to be a growing interest in rejuvenating an old idea, redevelopment. This new… call it RDA 2.0… is a rebirth of tax increment financing for local/regional projects.

Managed by Brea’s Public Financing Authority, new redevelopment districts would be created, property taxes frozen and new “redevelopment” bonds issued to finance some sort of infrastructure projects.

No public vote is required to create these new “enhanced infrastructure financing” districts!

The mantra “no new taxes” is repeated over and over as if that will lull us into a false sense of trust and comfort.

Look, when the property values are reassessed and the taxes unfrozen, the properties will be paying at a much higher rate and the difference will be used to retire the bond debt.

What about this suggests no new taxes?

So, where are these new EIFDs?

The report listed: Central Park Village, Brea Place (Hines), Aera Energy Brea 265, 2830 East Orbiter (adjacent property owned by firm of Planning Commissioner James McGrade), Embassy Retail Court, Brea Mall, Brea Plaza, Former Improv, Gaslight Square, Regal Theatres, Mercury Lane Residential, Downtown hotel, Brea Community Center, Brea Library, and Suzuki Motor of America.

To me, 90% of these properties are either doing quite well as is or they’re in various stages of development… not even yet completed. And the United States Bankruptcy Court confirmed American Suzuki’s plan of liquidation (Chapter 11) on February 28, 2013.

The first city/county EIFD tax increment partnership is the Placentia Old Town district. Over 300 acres with taxes frozen at $365 million and anticipated to be unfrozen at $460 million. For what?

Kosmont lists the following: $22M net fiscal impact to City; $15M to County; 1,600+ housing units; 3,900+ construction jobs; $800M+ construction period economic output; 1,150+ permanent jobs; $164M+ in annual ongoing economic output.

Prove it.

Here is what Kosmont proposes to do in Brea: Kosmont to evaluate: Project and land use review; EIFD boundary alternatives; infrastructure improvements required; Tax increment funding capacity / complementary sources; Orange County cooperation; Implementation strategy and roadmap.

Kosmont proposed timing: Feasibility evaluation – 2 to 3 months; District formation activities – 6 to 12 months.

Stop the madness!

Not a whisper about seeking public review or approval.

In December 2011, the California Supreme Court upheld the complete elimination of redevelopment agencies and TIF along with it. The legal wrangling that followed is complicated and not worth going into detail here.

Suffice it to say Redevelopment was terminated for good reasons. Why, just 8 years later, has it suddenly become a good idea again?

Nothing in life is free.

They try and seduce us with parks and community projects. But where’s the money come from? From schools and our pockets!

From the mid-seventies through 2011 Brea built a boatload of RDA projects. Some were on private land and made reasonable use of the tax increment. Many, like the Civic Center, Community Center, Senior Center, Sports Park and Rails-to-Trails were on public land for which no tax increment existed!

District borders were repeatedly expanded, bonds were repeatedly refinanced and cash was created at every opportunity. Hell, they even tricked us into passing the Paramedic’s Tax, almost half of which never paid for a single thing related to emergency medical services.

No one in city hall can give you an accurate price for one single project. The web of financing hijinks was so complicated they’ve lost all comprehension of what they pulled off for over 40 years. Millions upon millions.

You know what really hurts? We still owe $193,871,104 million dollars which we’ll be paying off all the way through June 2036.

Revenue is down, expenses are ever on the increase, we’re hovering on the edge of unbalanced budgets for several years to come.

Now is not the time to start some fiscal boondoggle, proven to be a failure years ago. Especially if it does little more than provide job security to a handful of city planners having a tough time justifying their jobs anymore.

Tax increment financing (TIF) is no way to defray the cost of urban revitalization… assuming that’s what we want to do in the first place.

Hines: A Tale Of Two Cities.

HinesIt was the worst of times… period. We’re fighting a war on two fronts and threatened with losing both. On one side Breans are going head-to-head with Hines Properties, a megacorp hell bent on building a hulking monstrosity on St. College north of Birch. On the other we have a runaway Planning department who seems to consider themselves above the law, repeatedly overreaching their authority.

Neither situation bodes well for the people of Brea. The fact that both are connected makes the threat exponentially larger. As the policy and procedural issues can only be addressed by City Council I’ll leave that for another blog and focus on the development issues that need to be solved by the Planning Commission.

Reining in Hines.

At their April meeting, under the less than subtle steering of Chairman McGrade, the Planning Commission ended up desperately trying to patch one small element of the Brea Place project and calling it done.

Commissioner Schlotterbeck made the observation that the project fell short, by about 20%, of complying with our 14 year old General Plan’s maximum density guideline. Next thing you know the much larger southern building and the hotel were tucked aside, seemingly approved and focus was turned to the northern building… Building B.

In a miraculous demonstration of redesigning-on-the-fly, the Hines architect made most of the fourth floor disappear and reduced the building’s density by almost 20%. That’s 22 apartments for those who nitpick numbers. Commissioner Schlotterbeck was quick to point out that the disappearing act also removed parking for 38 units, throwing the building into noncompliance with the 1.78 spaces per unit parking requirement.

Maximum vs. minimum standards.

So, the push seems to be to stay within maximum allowed density while meeting a minimum parking standard. Ok, I’ll say what you’re thinking. What the hell? This is like getting open heart surgery done on a low bid basis.

Why do these city planners think the best policy is to always operate at the fringes of acceptability? Why is building as close as possible to the maximum allowable density the best idea? Why are parking conditions always targeting the fewest number of spaces that might accommodate the demand?

How about building comfortably below the maximum density and designing a parking plan that would actually meet peak demand? What a novel damned idea.

Speaking of minimum standards.

While we’re on the subject, it’s this same unsupportable mentality that led to adopting an addendum to a 14 year old General Plan EIR as the best way to comply with CEQA. Again, operating at the very fringe.

Going with the addendum is the weakest, least defensible means of minimizing or mitigating environmental impact. Hell, the addendum claims there isn’t sufficient environmental impact to warrant doing a new EIR. Circular logic. Inexcusable.

Once again staff dances on the edge of rational choices. Why? To cut public comment out of the conversation? To fast track the project and save Hines the $1.5 million cost of an EIR so staff could extort it later to help defray the cost of some politician’s pipe dream or rock garden?

Drawing a line in the sand.

HinesHey… Commissioners, Planners and Mr. Ninty-Five Billion Dollar Out-of-town Developer… we’re putting you on notice. Nothing less than a blanket 20% reduction in density across the entire project is acceptable. Nada. Nothing.

And that’s the starting line… not the finish line. We still need to talk traffic, parking, building mass and setbacks, in lieu fees and retail that won’t cannibalize local business.

You walked out of the April meeting fist bumping and trading high fives. Listen carefully, you never count your money when sitting’ at the table, there’ll be time enough for countin’ when the dealin’s done.

Markman & Flower

 

Planning Commission Blindsides Breans.

commission meetingI am still dumbfounded. With Chairman McGrade at the helm, carefully steering the Planning Commission towards an all too obvious destination, there was no hint of addressing the larger issues.

As people gathered for last night’s meeting, Director of Community Development David Crabtree was asked how he expected things would go. He smiled and responded, “It’s in the Commission’s hands now.”

Where did that confidence come from? What might he have known that the rest of us, on pins and needles, failed to understand?

My opinion? He knew the Commission had been prepped that process issues were not their responsibility, but Council’s. I think Commissioners realized that if they challenged process issues the City Attorney would have interjected and shut them down.

Consequently, there wasn’t a whisper about document destruction, the Records Retention schedule, arbitrary limitation of what the Commission was allowed to see or using an addendum to restrict public input.

Also my opinion, Chairman McGrade began his path to orchestrating the flow of discussion last night in January 2016, when he interjected himself into the selection process for Vice Chair.

Coincidently, this occurred at the exact same time that Planning Staff was rejecting the ICF proposal, deleting it from public record and moving forward with the addendum to the 2003 General Plan EIR.

Back to the meeting.

Dejected but still hopeful, a half dozen folks addressed the Commission during Matters from the Audience. They restated their concerns over density, building mass, traffic and parking — the big four.

The standout comments came from Dwight Manley. He shared a legal opinion from an environmental attorney clearly pointing out the gross error in using a General Plan EIR, which is a program level document, to assess a specific project… 14 years after the fact.

Right as rain, Dwight’s comments fell on deaf ears and Chairman McGrade moved on, without comment, and opened deliberation.

First to speak, Chairman McGrade set the tone by establishing his support for the project and his belief that everything was above board and legal.

Next up, Commissioner Schlotterbeck who went to great lengths to share the impressive extent of her due diligence. She reviewed thousands upon thousands of pages of highly technical and legal documents.

She also remarked that the public, whom she cared deeply about, had only a very limited understanding of CEQA. She cited specifics from the California Public Resource Code that proved there was nothing in the Hines project that violated law.

She also suggested that the project only complied with about 80% of the General Plan but failed to offer how to mitigate that shortfall. That’s like a transplant surgeon telling you that your new heart will work really well 80% of the time.

There are two solutions. Amend the General plan to accommodate the project so it is 100% in compliance or alter the project. Neither was done or even suggested last night.

Commissioner Schlotterbeck also raised the possibility that building “B” on the north lot might best be changed to condo/townhome product to lower density and add a very needed type of housing to Brea’s inventory. Other than weak applause from a few residents, the idea went nowhere. Why?

I’m wondering if changing from apartments to single family homes would trigger the need to change the zoning from Mixed Use to Residential. Such being the case, a new EIR would be automatically required. Not what Staff or Hines wanted.

Commission hits an impasse.

Chairman McGrade suggested a short break for Hines to discuss what options they were comfortable with moving forward. With Building “A” and the Hotel apparently in the bag, all that remained was to fix the density complaint for Building “B”.

Interjection: There is no way in hell Building “A” and the Hotel should have been given a free ride at this point! Everything should have remained on the table 

The likelihood that a creative solution could be instantly designed when it took the better part of a year and a half to get to this point was nonsense.

During the break I asked one Commissioner, if none of them cared about the breakdown in process and the look I received in return said it all. There was clearly the presence of a sad inevitability in their eyes. Their shoulders shrugged and they plodded, dejectedly, back to their seat.

For weeks, if not months… Hines, their attorneys, architects, engineers and consultant, John Koos, hunkered down in a conference room playing “what if” with every scenario Koos might imagine.

Over the break, all they did was find the right page in their playbook.

They didn’t even mention the condo/townhome option but jumped straight to a mashup of 3 and 4 stories reducing the density from 285 units to 228 units, leaving the total number of project units at 690.

This reduced the “B” building by this mystical magic number of 20% but something markedly less is true for the entire project. Neither the massive Building “A” on the corner or the Hotel across the street has been touched.

Back to deliberations.

As they did earlier, Vice Chair Willis and Commissioners Fox and Grosse added little to the discussion… all echoing concerns for density, building mass, traffic and parking — reaffirming their lack of support for the project as proposed.

Armed with this get-out-of-jail-free card, all that remained was to morph Brea Place into something different than what was currently proposed. The Commission moved on with a single minded determination.

I was reminded of the used car salesman eye-to-eye with the first prospect of the day… “What will it take for me to put you in this little jewel today?”

No interest in whether the heap of junk was even close to meeting the prospect’s needs, let alone their dream of a new car. No concern that the rattling valves and acrid smoke coming from the tailpipe were clear signs of a car on it’s last legs. Unworried that the greater expense of maintenance would likely crush the prospect later.

It was all about closing the sale.

The people of Brea got steamrolled last night. Staff knows it. The Commission knows it. Hines, their consultant, attorney, architect, traffic engineer… they know it.

The last to realize the unthinkable had occurred were the folks with the red buttons and the high hopes.

Will there be an appeal when, inevitably, the project with it’s crushing density, easily foreseeable flood of traffic and long list of overlooked negative impacts is approved?

Maybe, maybe not.

“Leadership is disappointing your constituents in increments they can absorb.”

This O’Donnellism, this longstanding municipal mantra, once again proved prophetic. I’m not fond at all of the fatalist’ mentality, but this feels a lot like, “Game over.” 

I’m unwilling to give up. How about you? Are you ready to roll over or will you take some time out of your busy day to become part of the solution?

Markman & Flower