Issues meeting notes

10/21/10

Frank Kasimov, Redevelopment Agency and Housing Authority,  City of Santa Rosa

Our guest was Frank Kasimov, with the City’s Redevelopment Agency (RDA) and Housing Authority. These two boards are the same group of people, putting on different hats at different meetings.

With limited time (Giant’s game was starting) we only started our learning process. Frank has worked for five years in the area and says he’s still learning the ins and outs.
The basics: Santa Rosa has these Redevelopment Districts: Central Santa Rosa (downtown), the Grace Brothers site (now the Hyatt Hotel), the Southwest Area, Roseland (shared with the county), the TORPA district where the station area plan will unfold, and the Gateways Area, the most recent and largest one.

Now that the court has ruled for the City on the Gateways District (at a cost to the city of about $150,000), it can start accruing tax increment funds and start borrowing for projects. Its “base year” is 2006. Each district has a 20-year life span, with a 30-year period for incurring debt. RD districts operate by incurring debt to pay for projects, done either by the city or by funding private developers. They say that their goal is to provide “gap” financing, to pay only the last portion of otherwise private development that might not occur without the City’s help. When the tax increment money starts to come in, the Agency has two requirements: paying 20% into the Housing Trust Fund for affordable housing, and paying debt service for what they’ve borrowed.

The plans for how RD money is spent are formulated during the RDA's five-year implementation planning sessions and during the RDA's budget-setting sessions, both of which are public meetings. The RDA budget for 2010/2011 is $8 million. Income includes payments such as the $1 million annually from the Hyatt Hotel, as the city owns the property on which the hotel sits.

With the economy in such bad shape, the normally expected 2% annual increase in property values isn’t happening.

From a look at the 2010/2011 budget, it looks like about 60% is for salaries and benefits, about 21% is for Capital Outlays and Projects, with the rest going to “Services and Supplies” and “Indirect Costs”.

If the RDA borrows money from the city (alternatives are issuing bonds, or putting together bank funding), the RDA pays back with 6% interest. This is why, when the “issue” that Council candidate Jake Ours brought up was examined in public session, it was shown by staff that the city would be foolish to ask the RDA to repay the $6 million it had borrowed from the city. The city would give up the $250,000 annual interest payment it receives.

There is loads of info on the City’s website about agency activities and finances.

Frank has promised to return, to speak with other interested people and delve further into the subject of redevelopment

Anne E. Seeley