HomeMy WebLinkAboutOversight Board - 2017-14 RESOLUTION NO. 2017-14
A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO
THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH
FINDING THAT THE LOAN MADE BY THE CITY OF HUNTINGTON BEACH TO
THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON
BEACH REGARDING THE EMERALD COVE BONDS WAS FOR LEGITIMATE
REDEVELOPMENT PURPOSES, AND APPROVING THE LOAN AS AN
ENFORCEABLE OBLIGATION AND THE SCHEDULE FOR REPAYMENT OF SAID
LOAN BY THE SUCCESSOR AGENCY TO THE CITY OF HUNTINGTON BEACH, IN
ACCORDANCE WITH HEALTH AND SAFETY CODE SECTION 34191.4(b)
WHEREAS, the Redevelopment Agency of the City of Huntington Beach
("Redevelopment Agency") was a redevelopment agency in the City of Huntington Beach
("City"), duly created pursuant to the California Community Redevelopment Law (Part 1
(commencing with Section 33000) of Division 24 of the California Health and Safety Code)
("Redevelopment Law"); and
Assembly Bill No.Xl 26 (2011-2012 1st Ex. Sess.) ("AB 26") was signed by the
Governor of California on June 28, 2011, making certain changes to the Redevelopment Law and
to the California Health and Safety Code ("H&S Code"), including adding Part 1.8 (commencing
with Section 34161) ("Part 1.8") and Part 1.85 (commencing with Section 34170) ("Part 1.85")
to Division 24 of the H&S Code; and
Pursuant to AB 26, as modified by the California Supreme Court on December 29, 2011
by its decision in California Redevelopment Association v. Matosantos, all California
redevelopment agencies, including the Redevelopment Agency, were dissolved on February 1,
2012, and successor agencies were designated and vested with the responsibility of paying,
performing and enforcing the enforceable obligations of the former redevelopment agencies and
expeditiously winding down the business and fiscal affairs of the former redevelopment
agencies; and
The City Council of the City elected for the City to serve as the successor agency to the
Redevelopment Agency upon the dissolution of the Redevelopment Agency under AB 26
("Successor Agency"); and
H&S Code Section 34179 of AB 26 establishes a seven (7) member local entity with
respect to each successor agency with fiduciary responsibilities to holders of enforceable
obligations and taxing entities that benefit from distributions of property taxes, and such entity is
titled the "oversight board." The oversight board has been established for the Successor Agency
(hereinafter referred to as the "Oversight Board") and all seven (7) members have been
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appointed to the Oversight Board pursuant to H&S Code Section 34179. The duties and
responsibilities of the Oversight Board are primarily set forth in H&S Code Sections 34179
through 34181 of AB 26; and
As part of the FY 2012-2013 State budget package, on June 27, 2012, the Legislature
passed and the Governor signed Assembly Bill No. 1484 ("AB 1484"), which amended certain
provisions of AB 26. AB 26 and AB 1484, as further amended, are collectively referred to
herein as the "Dissolution Act"; and
On May 13, 2014, the Department of Finance ("DOF") issued a Finding of Completion to
the Successor Agency pursuant to H&S Code Section 34179.7 of the Dissolution Act; and
Pursuant to the Dissolution Act, "ROPS" means a "Recognized Obligation Payment
Schedule", as set forth in the Dissolution Act; and
Pursuant to H&S Code Section 34191.4(b)(1) of the Dissolution Act, after the Successor
Agency receives its Finding of Completion and upon application by the Successor Agency and
approval of the Oversight Board, loan agreements entered into between the former
Redevelopment Agency and the City shall be deemed to be enforceable obligations provided that
the Oversight Board makes a finding that the loan was for legitimate redevelopment purposes.
Upon the Oversight Board's approval and making of the required finding, the loan is deemed an
enforceable obligation and may be listed on a ROPS for repayment, subject to the repayment
terms and conditions specified in H&S Code Section 34191.4(b)(2); and
The City Council of the City adopted Ordinance Nos. 2576, 2577, 2578, 2582, and 2743
approving and adopting the Redevelopment Plan for the Yorktown-Lake Redevelopment Project,
the Redevelopment Plan for the Talbert-Beach Redevelopment Project, the Redevelopment Plan
for the Main-Pier Redevelopment Project, the Redevelopment Plan for the Oakview
Redevelopment Project, and the Redevelopment Plan for the Huntington Center Commercial
District Redevelopment Project, respectively; and
The former Redevelopment Agency and the City entered into a Cooperative Agreement,
dated June 20, 1983 ("1983 Cooperative Agreement"), by which the City agreed to provide to
the former Redevelopment Agency certain assistance and to otherwise cooperate with the former
Redevelopment Agency in carrying out redevelopment projects; and
Pursuant to the Cooperative Agreement, the former Redevelopment Agency and the City
entered into various Operative Agreements for the Yorktown-Lake, Talbert-Beach, Main-Pier,
Oakview and Huntington Center Redevelopment Projects (collectively, the "Constituent
Projects"), by which the City provided the former Redevelopment Agency with both
administrative and/or technical services, constructed required public improvements and facilities
as appropriate and necessary, and provided funds to carry out the Constituent Projects; and
The Operative Agreements also identified the terms under which the former
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Redevelopment Agency would reimburse the City for the associated costs of such services,
improvements, facilities and funds. The Operative Agreements were amended from time to
time; and
The City Council adopted Ordinance No. 3343 on December 16, 1996 amending and
merging the Constituent Projects into the Redevelopment Plan for the Huntington Beach
Redevelopment Project ("HBRP"); and
The City Council adopted Ordinance No. 3561 on June 17, 2002, approving and adopting
the Redevelopment Plan for the Southeast Coastal Redevelopment Project ("SCRP") (The
Redevelopment Plans for the Constituent Projects and the SCRP may be collectively referred to
herein as the "Redevelopment Plans".); and
The former Redevelopment Agency and the City entered into a Cooperation Agreement,
dated September 2, 2003 ("SCRP Cooperation Agreement") regarding redevelopment projects
and capital improvements to be carried out in the SCRP Area(the 1983 Cooperative Agreement,
the SCRP Cooperation Agreement and the various Operative Agreements (as amended) may
collectively be referred to herein as the "Cooperative Agreements"); and
Pursuant to the Cooperative Agreements, the City made a loan ("City Loan") to the
former Redevelopment Agency regarding the Emerald Cove 2010 Series A Lease Revenue
Refunding Bond. In 1984, the City's Park Acquisition & Development Fund advanced
$1,740,834 to the former Redevelopment Agency to purchase the Emerald Cove Property. In
that same year, the former Redevelopment Agency sold $4.6 million of Certificates of
Participation ("COPS") to finance the construction of the Emerald Cove Senior Housing Project,
which COPS were defeased in 2000 with the issuance of COPS by the City's Public Financing
Authority. As a result of the issuance of COPS by the City's Public Financing Authority, the
City retained possession of the Emerald Cove Property. In May 2009, the former
Redevelopment Agency purchased the Emerald Cove Senior Apartments for the sum of
$8,483,931, which included a pledge of tax increment to the City related to the debt service on
the outstanding bonded indebtedness of the City-issued COPS in the amount $5,170,931. A
Promissory Note from the former Redevelopment Agency to the City for the amount of the
outstanding bonded debt was issued on May 18, 2009, with annual payments matching those of
the outstanding debt service due on the City-issued COPS. Tax increment was pledged as
security for the payments due under the Promissory Note per Section 203 of the Cooperation
Agreement. The sale of Emerald Cove to Jamboree Housing Corporation-Acquisitions, LLC was
approved in September 2009 with the approval of an Affordable Housing Agreement between
the former Redevelopment Agency and the developer. In June 2010, the former Redevelopment
Agency approved an $8 million loan to the developer evidenced by a Residual Receipts
Promissory Note; and
The Successor Agency has recalculated the current outstanding balance of the City Loan
in accordance with H&S Code Section 34191.4(b)(3), which provides that any interest on the
remaining principal amount of the City Loan shall be recalculated from the date of origination of
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the City Loan, at a simple interest rate of 3 percent (3%). The year of origination of the City
Loan was 2010. The current outstanding balance of the City Loan (recalculated as of September
30, 2016 in accordance with H&S Code Section 34191.4(b)(3)) is $3,649,834; and
On January 17, 2017, the Successor Agency found, and recommended that the Oversight
Board find, pursuant to H&S Code Section 34191.4(b)(1), that the City Loan was made by the
City to the former Redevelopment Agency for legitimate redevelopment purposes; and
On January 17, 2017, the Successor Agency found and approved the City Loan as an
enforceable obligation of the Successor Agency and approved the repayment of the City Loan as
an enforceable obligation listed on a ROPS beginning with ROPS 17-18 consistent and in
accordance with the maximum repayment amounts specified in H&S Code Section 34191.4(b),
with the remaining balance of the City Loan to be paid on successive ROPS in the maximum
repayment amounts consistent and in accordance with H&S Code Section 34191.4(b) until the
City Loan is repaid in full, subject to other applicable loan repayment terms and conditions set
forth in H&S Code Section 34191.4(b); and
The Oversight Board desires to find, pursuant to H&S Code Section 34191.4(b)(1), that
the City Loan was made by the City to the former Redevelopment Agency for legitimate
redevelopment purposes; and
The Oversight Board further desires to approve the City Loan as an enforceable
obligation of the Successor Agency and to approve the schedule for repayment of the City Loan
as an enforceable obligation listed on a ROPS beginning with ROPS 17-18 consistent and in
accordance with the maximum repayment amounts specified in H&S Code Section 34191.4(b),
with the remaining balance of the City Loan to be paid on successive ROPS in the maximum
repayment amounts consistent and in accordance with H&S Code Section 34191.4(b) until the
City Loan is repaid in full, subject to other applicable loan repayment terms and conditions set
forth in H&S Code Section 34191.4(b); and
The activity proposed for approval by this Resolution has been reviewed with respect to
applicability of the California Environmental Quality Act ("CEQA"), the State CEQA
Guidelines (California Code of Regulations, Title 14, Section 15000 et seq., hereafter the
"Guidelines"), and the City's environmental guidelines; and
The activity proposed for approval by this Resolution is not a "project" for purposes of
CEQA, as that term is defined by Guidelines Section 15378, because the activity proposed by
this Resolution is an organizational or administrative activity that will not result in a direct or
indirect physical change in the environment, per Section 15378(b)(5) of the Guidelines; and
All of the prerequisites with respect to the approval of this Resolution have been met.
NOW, THEREFORE, the Oversight Board of the Successor Agency to the
Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows:
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1. The Oversight Board hereby finds and determines that the foregoing recitals are
true and correct.
2. The Oversight Board hereby finds, pursuant to H&S Code Section 34191.4(b)(1),
that the City Loan described in the Recitals above was made by the City to the former
Redevelopment Agency for legitimate redevelopment purposes in connection with the
preparation and implementation of the Redevelopment Plans.
3. The Oversight Board hereby finds and approves the City Loan as an enforceable
obligation of the Successor Agency and approves the repayment of the City Loan as an
enforceable obligation listed on a ROPS beginning with ROPS 17-18 consistent and in
accordance with the maximum repayment amounts specified in H&S Code Section 34191.4(b),
with the remaining balance of the City Loan to be paid on successive ROPS in the maximum
repayment amounts consistent and in accordance with H&S Code Section 34191.4(b) until the
City Loan is repaid in full, subject to other applicable loan repayment terms and conditions set
forth in H&S Code Section 34191.4(b).
4. The Executive Director, or designee, of the Successor Agency is hereby
authorized and directed (i) to include the repayment of the City Loan on ROPS 17-18 and on
successive ROPS until repaid in full consistent and in accordance with H&S Code Section
34191.4(b), and to comply with all other applicable loan repayment terms and conditions set
forth in H&S Code Section 34191.4(b); (ii) provide such notifications as required by the
Dissolution Act; and (iii) take such other actions and execute such other documents as are
necessary or desirable to effectuate the intent of this Resolution on behalf of the Successor
Agency and/or Oversight Board.
5. If any provision of this Resolution or the application of any such provision to any
person or circumstance is held invalid, such invalidity shall not affect other provisions or
applications of this Resolution that can be given effect without the invalid provision or
application, and to this end the provisions of this Resolution are severable. The Oversight Board
declares that its board would have adopted this Resolution irrespective of the invalidity of any
particular portion of this Resolution.
6. The adoption of this Resolution is not intended to and shall not constitute a waiver
by the Successor Agency or the Oversight Board of any constitutional, legal or equitable rights
that the Successor Agency or Oversight Board may have to challenge, through any
administrative or judicial proceedings, the effectiveness and/or legality of all or any portion of
the Dissolution Act, any determinations rendered or actions or omissions to act by any public
agency or government entity or division in the implementation of the Dissolution Act, and any
and all related legal and factual issues, and the Oversight Board expressly reserves any and all
rights, privileges, and defenses available under law and equity. The Oversight Board does not
intend, by adoption of this Resolution, to waive any constitutional, legal and/or equitable rights
of the Oversight Board, the Successor Agency or the City of Huntington Beach under law and/or
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in equity by virtue of the adoption of this Resolution and actions approved and taken pursuant to
this Resolution and, therefore, reserves all such rights of the Oversight Board, the Successor
Agency and the City of Huntington Beach under law and/or in equity.
7. The Oversight Board determines that the activity approved by this Resolution is
not a "project" for purposes of CEQA, as that term is defined by Guidelines Section 15378,
because the activity approved by this Resolution is an organizational or administrative activity
that will not result in a direct or indirect physical change in the environment, per Section
15378(b)(5) of the Guidelines.
8. This Resolution shall take effect upon the date of its adoption and is subject to
review by DOF as may be set forth in the Dissolution Act.
PASSED AND ADOPTED by the Oversight Board of the Successor Agency to
the Redevelopment Agency of the City of Huntington Beach at a meeting thereof held on the
25th day of January, 2017.
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REVIEWED AND APPROVED: I ThAT� AND AA N ROVED:
E" ecut' e Director Deputy Executive Director
APPROVED RM:
r'�7oard Counsel
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STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF HUNTINGTON BEACH )
I, ROBIN ESTANISLAU, Secretary of the Huntington Beach Oversight Board of
the Successor Agency of the Former City of Huntington Beach Redevelopment Agency,
Huntington Beach, California DO HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Huntington Beach Oversight Board of the Successor Agency of the Former City
of Huntington Beach Redevelopment Agency at a meeting held on January 25,2017 and that it
was so adopted by the following vote:
AYES: Board Members: Bone, Delgleize, L. Dunn, Fritzal, Hardy
NOES: Board Members: None
ABSENT: Board Members: Delgado, A. Dunn
ABSTAIN: Board Members: None
Secreta of the Huntington Beach Oversight
Board of the Successor Agency of the Former
City of Huntington Beach Redevelopment
Agency, Huntington Beach, California