Redevelopment is doable in Truckee, report says
Creation of a redevelopment agency in Truckee is both legally and economically feasible according to a study presented to town councilmembers by the consulting firm of Shannon Davis Associates last week.
Jim Williams of Shannon Davis Associates said RDAs were established by state legislation in 1948 and more than half of California counties have them. RDAs are designed to “kick-start” blighted and deteriorating urban areas by freezing property tax bases.
Redevelopment agencies create funding mechanisms to encourage downtown development and associated infrastructure. It imposes no new taxes and uses only new growth in the project area’s assessed value to generate revenue.
“A redevelopment agency does not levy or increase taxes but uses a tax increment,” Williams said. “When the agency and associated projects are adopted the tax base is frozen. Taxing agencies (such as the town and special districts) still get property taxes, but the agency gets about 35 percent of tax base growth.”
Investing in the community
In example, Williams said if a parcel’s tax base is frozen at $1,000 and the assessed value rises to $1,500, the increment is $500, which is split 65-35 percent between taxing agencies and the RDA, respectively.
“It allows you to invest money in your community that would otherwise be dispersed across the county,” Williams said.
The redevelopment study area in Truckee is roughly 880 acres and includes the Downtown Specific Plan area, the Sha Neva industrial area north of Interstate 80, a narrow section along Donner Pass Road and the Teichert property along Cold Stream Road. Williams said this area meets two main criteria for establishing a RDA – it is blighted and zoned for urban use.
Along Commercial Row, for instance, assessed land values are approximately $2.80 per square foot, which Williams said should be in the $15 to $20 per square foot range, making a prime target for redevelopment. Williams said the idea is to freeze the tax base when assessed values are low, as is the case with some downtown properties.
Councilman Ron Florian questioned when the town would see the first benefits of a redevelopment agency.
“One year after adoption of the agency you would start collecting,” Williams said, adding Truckee could be have a plan adopted and generating money as soon as 1999.
Councilman Josh Susman said he experienced the effects of redevelopment first-hand on a trip to Park City, Utah, with other councilmembers and town officials. He said he was excited about bringing an agency to Truckee, saying it could help with the town’s road dilemma.
“It is the direction Truckee should be going,” Susman said.
Grant funding possible
To get a redevelopment agency up and running requires determining a specific plan and completing an environmental impact report, which could cost as much as $80,000, Williams said. It is possible, however, to apply for grant monies to offset that cost, he added.
Susman also questioned how establishing a redevelopment agency would impact the special districts.
Town Manager Steve Wright said the Truckee-Donner Recreation and Park, Truckee Sanitary and Truckee Fire Protection districts would be impacted most.
“We are providing copies to each district so they can see the impacts with and without redevelopment on the low-growth profile and on the downtown planning profile,” he said.
Town Attorney J. Dennis Crabb said, “(Special districts) are getting all the revenues as before plus more. It is not a question of loss of revenue but how fast revenue grows.”
The agenda item was a presentation and did not require council action. Wright said, however, several workshops would be scheduled in the future and the topic would most likely reappear during the budget hearings, which began Wednesday.
“People shouldn’t walk away thinking, ‘Wow, we are going to be paving the streets with gold,'” Wright said. “This is a long-term plan. There is a payoff but it doesn’t happen immediately.”
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