RDA 06-02
RESOLUTION NO. 06-02
A RESOLUTION OF THE CITY OF CUPERTINO REDEVELOPMENT
AGENCY APPROVING THE 2006-2010 IMPLEMENTATION PLAN
WHEREAS, the Cupertino City Council approved and adopted the
Vallco Redevelopment Plan on August 21, 2000 for the Vallco Redevelopment Project
Area (the "Project Area"); and
WHEREAS, in compliance with Health and Safety Code Section
33490, Redevelopment Agencies must conduct a public hearing on and
adopt an implementation plan every five years identifying goals and
objectives of the Agency.
WHEREAS, staffhas presented to the Agency Board a proposed
Implementation Plan, a copy of which is on file with the Agency
Secretary; and
WHEREAS, on the date of this resolution, the Agency has conducted and
concluded a duly noticed public hearing on the Implementation Plan in
accordance with Health and Safety Code Section 33490; and
WHEREAS, the Agency finds that the Implementation Plan, with any
modifications as considered and approved in connection with the public
hearing, constitutes a statement of the Agency's goals and objectives
for the Project Area, a summary of the specific programs and proposed
expenditures proposed to be made by the Agency during the next five
years, and an explanation of how the goals and objectives, projects, and
expenditures will eliminate blight within the Project Area and implement
the affordable housing regulations of the Community Redevelopment Law;
and
WHEREAS, pursuant to Health and safety Code Section 33490, approval of the
Implementation Plan does not constitute a project for purposes of
the California Environmental Quality Act (CEQA), and therefore no
environmental documentation is required pursuant to CEQA.
NOW, THEREFORE, BE IT RESOLVED, that the City of Cupertino
Redevelopment Agency Board hereby approves and adopts the Implementation
Plan for the Cupertino Vallco Redevelopment Project 2006-2010.
BE IT FURTHER RESOLVED, that this resolution shall take
immediate effect from and after its passage.
Resolution No. 06-02
PASSED AND ADOPTED at a regular meeting of the Cupertino Redevelopment Agency
this 6th day of December 2006, by the following vote:
Vote
Members of the Redevelopment Agencv
AYES:
NOES:
ABSENT:
ABSTAIN:
Wang, Kwok, Lowenthal, Mahoney, Sandoval
None
None
None
APPROVED:
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ATTEST:
.;.r:~nzki5~~kii
Secretary i
2
CUPERTINO VALLCO REDEVELOPMENT PROJECT
FIVE YEAR IMPLEMENTATION PLAN
2006-2010
Val/co Fashion Park at Wolfe Road, prior to new construction and upon completion of the AMC Theater
Adopted December 6
, 2006
Prepared by
City of Cupertino Redevelopment Agency
TABLE OF CONTENTS
Paae
A. Introduction 1
1. Interpretation 1
2. Project Area Description 2
3. Project Area Accomplishments 2
4. Five-year Goals and Objectives 4
B. Specific Programs, Potential Projects and Estimated Expenditures - 6
for the Next Five Years
1. Expenditures 7
2. How the Projects, Programs and Expenditures will Eliminate Blight 8
C. Housing Activities
1. Overview of Legal Requirements 9
2. Statutory Requirements for Housing 10
3. Targeting Housing Funds According to Need 11
4. Duration of Affordability 12
5. Replacement Housing Requirement 13
6. Ten Year Housing Production Plan 13
7. Affordable Housing Production Requirement 14
8. Housing Production Through Affordability Covenants 14
9. Housing Fund Reserves - 14
10. Housing Programs 14
11. On-Going Monitoring of Residential Development and Housing 15
Fund Expenditures
Table 1
Tables and Figures
Table 2
Table 3
Table 4
Table 5
Table 6
Table 7
Table 8
Table 9
Figure 1
Summary of Vallco Cupertino Redevelopment Plan Timeline
and Fiscal Limits
Project Area Goals and- Objectives and Related Programs
Projected Tax Increment
Estimated Agency Expenditures 2006 through 2010
Blight Conditions
ABAG Regional Fair Share Allocations 1999-2006
Housing Fund Expenditure Requirements Non-Age
Restricted Housing
CRL Affordable Housing Cost Definitions
Projected Housing Development, Cupertino Vallco
Redevelopment Project Area
Project Area
2
5
6
8
8
11
12
12
14
3
A. INTRODUCTION
Vallco Fashion Park Shopping Center opened in September 1976 and was considered
one of the South Bay's premier shopping centers and one of the largest. By May of
2000, the number of shops had declined from 170 to 118. What had produced almost
25% of the City's total sales tax now produces only ~bout 11 %. The extent of tenant
vacancies, the physical deterioration of the property, the outdated site plan and the
significant decline in tax revenue resulted in physical and economic blight that was
adversely affecting the image of Cupertino and its economic future. On August 21,
2000 the City of Cupertino Redevelopment Agency Board adopted the Cupertino Vallco
Redevelopment Plan with its primary goal of facilitating the redevelopment,
revitalization and rehabilitation of the Vallco Fashion Park Shopping Center back into a
vibrant regional destination retail center through private development and public
assistance with infrastructure and parking facilities.
Section 33490 of California Community Redevelopment Law ("CRL") requires that
redevelopment agencies prepare an implementation plan every five years detailing the
goals and objectives of the Agency detailing how it intends to implement its
Redevelopment Plan during the five-year period. The implementation plan must contain
the following information:
. Specific goals and objectives for the five-year period including potential capital
projects and estimated expenditures planned during the period.
. An explanation of how the goals, objectives, programs, and expenditures will
eliminate blight.
. A plan describing how to implement the use of Low and Moderate Income Housing
Funds (the "Housing Fund") required to be set-aside under redevelopment law for
use to create, rehabilitate, or preserve low and moderate income housing and meet
the Agency's affordable housing production requirements.
In short, the Plan sets the direction the agency will take over a five-year period. It shall
serve as a useful document and blueprint for the public in terms of understanding the
programs the Agency intends to pursue. This document .constitutes the five-year plan
for the period of 2006 through 2010.
1. Interpretation
The Cupertino Vallco Redevelopment Agency Implementation Plan (the
"Implementation Plan") is intended to prOVide general guidance for the implementation
of the Agency's programs and activities. The Agency expects that particular constraints
and opportunities, not fully predictable at this time, will arise in the course of
undertaking the programs and activities described in this Implementation Plan over the
next five years. Therefore, this Plan is intended to serVe as a flexible guide for the
Agency and the community with the understanding that the implementation of the
programs and strategies outlined in this document may vary over the next five years in
their precise timing, scope, cost and expenditure depending on the circumstances and
available resources for implementing this Plan.
2.
Project Area Description
The Project Area encompasses Vallco Fashion Park Shopping Center ("Vallco") and the
adjacent Rose Bowl site, which is situated at Vallco Parkway and Wolfe Road (Figure
1). The Project Area is contained within a three block area bound by 1-280 to the north,
Stevens Creek Boulevard to the south and is intersected by Wolfe Road (the "Project
Area"). Vallco is the largest shopping mall in the City with 1.13 million square feet of
retail space. Anchor stores include JC Penney, Sears and Macy's.
Table 1
Summary of Vallco Cupertino Redevelopment Plan
Time and Fiscal limits
Total Acres 64'
Date of Adoption Auqust 21, 2000
Time Limits
Incurrinq Debt Auqust 21, 2020
Plan Effectiveness (Project August 21, 2030
Activities)
TI Collection/Repayment of August21,2045
Debt
Eminent Domain Auqust 21, 2012
Financial Limits
Tax Increment Cap None
Bond Limit $42610,000
3. Project Area Accomplishments
Under the 2000 Implementation Plan, the Agency contemplated issuing Tax Allocation
Bonds to help finance infrastructure improvements including parking facilities. Due in
part to the technology "dot com" bust, Silicon Valley experienced an economic
recession, and commercial property values plummeted. Office vacancy rates were as
high as 20% and vacancy at the Vallco Shopping Center was at 31 %. As a result,
during that period there was little to no tax increment revenue generated within the
Project Area to support debt service for bonded indebtedness or any kind of meaningful
redevelopment projects or programs. During that period the City worked with the
owners of the Vallco Center to amend the 1991 Development Agreement between the
City and the Vallco Shopping Center owners that resulted in the following:
a. Issued entitlements and building permit for the construction of a 16-
screen cinema and new parking facilities scheduled to open by the
end of 2006.
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b. Executed an amendment to the 1991 Development Agreement
between the City of Cupertino and Vallco Intemational Shopping
Center, LLC on October 4, 2004 to allow 138,760 square feet of new
retail space, 204 residential units and a new parking structure (see
rendering below of Wolfe RoadNallco Parkway intersection).
c. Executed an amendment to the 1991 Development Agreement
between the City of Cupertino and Vallco International Shopping
Center, LLC on October 18, 2005 to provide for a minimum 100-room
hotel on the northeast portion of the Project Area.
d. Authorized the creation of a new position in the Community
Development Department to be hired in 2006 to manage
redevelopment and economic development activities.
4. Five Year Goals and Objectives
The programs and projects proposed in this Implementation Plan are intended to
facilitate the achievement of the Agency's goals and objectives as stated in the
Redevelopment Plan. The Agency's projects and programs fall under three main
categories: infrastructure improvements, economic development programs and the
facilitation of affordable housing in the community. The relationship between the goals
and objectives and the proposed projects and programs within the Project Area are
provided in Table 2.
4
Table 2
PROJECT AREA GOALS AND OBJECTIVES AND RELATED PROGRAMS
CUPERTINO VALLCO REDEVELOPMENT PROJECT
REDEVELOPMENT PROJECT REDEVELOPMENT
GOALS & OBJECTIVE PROJECTS AND PROGRAMS
(2006-2010)
(As identified in the
Redevelopment Plan)
INFRASTRUCTURE ECONOMIC LOW AND MODERATE
IMPROVEMENTS DEVELOPMENT INCOME I-lOUSING
PROGRAMS I
(Parking structure, <treet (Mall expansion,
improvements, other infi1lstllJcture rehahilitation and tenant
& public improvements) attraction)
Establish a planning and implementation
framework to ensure proper X X
redevelopment
Eliminate and prevent the spread of
blight and deterioration in accordance X X
with the City's General Plan, specific
plans and local codes
Plan, redesign. and redevelop
underdeveloped or poorly developed X X
areas that are undermilized or improperly
utilized
Strengthen the economic base by the
redevelopment and rehabilitation of X X
strucmres and the installation of needed
site improvements .-
Promote new private sector investment
to facilitate the revitalizatiun of an X
imDurtnnl commercial center
Eliminate certain environmental
deficiencies such as insufficient parking, X
public impruvemenls, facilitates and
utilities adversely affecting the Project
~_ Area
Create and .develop local job
opportunities and preserve the existing X
employment base
Provide improved housing for
individuals/families of low-and X
moderate-income within City limits
Provide assistance to building owners in
financing necessary renovations to meet X
current codes and standards
I Y1ay include a Business Attraction and Rctcntion Program, a Sturefront Rehabilitation Program and a Favade El)hancement Program.
5
B. SPECIFIC PROGRAMS, POTENTIAL PROJECTS AND ESTIMATED
EXPENDITURES FOR THE NEXT FIVE YEARS
The Implementation Plan must provide specific programs, including potential projects
and estimated expenditures for the next five years. Table 3 illustrates estimated
revenues available during this Plan period. Based on projected revenues from new
development within the Project Area, the Agency anticipates revenues being strong
enough to issue approximately $10,000,000 in Tax Allocation Bonds (TABs) in 2008/09.
At that time, the City and the Agency will evaluate the impacts of annual debt service
payments on both the Agency and the City before committing to any long term debt
obligations. For purposes of this Plan, it is assumed bond proceeds will be available for
programs and projects. Listed in Table 4 are the programs planned by the Agency for
the next five years, as well as the estimated expenditures and timing of the actions. The
programs correspond specifically to the goals and objectives listed in Table 2. These
projects are dependent on the assumptions in this Plan and market demand.
Therefore, these programs and expenditures should be viewed as a guide to the
direction of the Agency that may require some mid-course corrections. As required
, under redevelopment law, the Agency will review, and possibly amend the Plan within
two to three years based on any changed conditions or economic circumstances.
Table 3
Projected Tax Increment 2006 -2010
FY 2005106 FY 2006/07 .FY 2007/08 FY 2008/09 FY2009110
Funds from Non-Housina Cash Balance 0 19.651 (47.426) 89,991 130,415
Tax Increment from Existina Assessed Value 185,677 212.002 216.242 627.385 1.968.085
Tax Increment from New Develooment 0 0 410,000 1,327,550 350,000
Less: Countv Admin Fee 849 969 3244 9411 29,521
Net Tax Increment to Aaencv 184,828 230,684 575,572 2,035,516 2,418,979
Less: Pass Throunh Pavments 46,207 53,001 156,560 488,733 579 521
Less: ERAF 6,286
Less: 25% Housino Set-Aside 46,419 53,001 156,560 488 733 579,521
Non-Housino Increment to Aoencv 85,916 124683 262,452 1,058,050 1,259.937
Citv Debt Reoaid 250.000
Less: Debt Service (Non-Housino Fund) 750,000 750,000
Less: Anencv Admin INon-Housina Fund) 66.265 167,438 172,461 177 635 182 964
Tax Increment Balance 19,651 /42,756\ 89,991 130,415 76,973
Assumptions
1, 2% inflation factor for tax Increment revenues
2. Accounts for new RedevelopmenVEconomic Development Position beginning in 06107
3, New development in 07108 is from new cineplex and parking structures
4. New development in 08109 is from 204 residential units and 138.760 sqft of retail
5. New development in 09110 from 137 from four-story hotel
6
1. Expenditures
Expenditures for the five-year period are estimated at $14,940,105 as set forth in Table
4. Of the total, approximately $9,000,000 is expected to be used for public infrastructure
including parking facilities, road improvements, and utility improvements. Approximately
$1,500,000 will be expended in debt service payments on the TABs. The Agency will
set aside approximately $1,336,671 in its Housing Fund for facilitating affordable
housing in the community and approximately $1,000,000 will be spent on economic
development programs. The Agency is obligated to pass through to the tax entities
who share in the property tax in the Project Area, such as school districts and public
utilities, 25% of the Agency's net tax increment totaling approximately $1,336,671. And
approximately $753,864 will be spent on Agency administrative costs primarily
supporting a full-time staff person who will manage the Redevelopment Agency
activities as well as economic development duties.
a. Infrastructure Improvements
In order to accommodate the additional retail traffic as a result of the
proposed expansion and revitalization of the. Vallco Mall, certain
infrastructure improvements will be necessary. The Agency proposes the
construction of parking facilities and roadway improvements within the
next five years within the Project Area. The construction of parking
facilities would serve both new as well as existing commercial uses within
the Project Area. Roadway projects will include, but are not limited to,
reconstruction of streets, expansion of utility infrastructure capacity, and
streetscape improvements.
b. Economic Development Program
As part of on-going efforts to attract and retain businesses and jobs, and
revitalize the commercial businesses within the Project Area, the Agency
intends to implement an economic development program including a
commercial facade enhancement program, a business attraction and
recruitment program and a storefront rehabilitation program.
c. Low and Moderate Income Housing Programs
The Agency will implement several programs d~signed to ensure the
utilization of the required 25% tax increment set-aside for the construction,
rehabilitation and preservation of low-and moderate-income housing both
within the Project Area and in Cupertino neighborhoods outside the
Project Area. Specific programs may include the development of an
affordable housing strategy, establishment of a first time homebuyer's
program, and establishment of a home rehabilitation loan program.
7
Table 4
Estimated Agency Expenditures
2006 through 2010
Projects/Programs 2006 2007 2008 2009 2010 5 year Total
2008
Identified Public Projects $0 $0 $0 $4,500,000 $4,500,000 $9,000,000
Discretionary $0 $0 $0 $500,000 $500,000 $1,000,000
Projects/Programs
----
Affordable Housing $46,419 $53,001 $156,560 $488,733 $627,833 $1,336,671
Programs
Public Agency $46,419 $53,001 $156,560 $488,733 $627,833 $1,336,671
Pass thru Payments
T A Bond Debt Service $0 $0 $0 $750,000 $750,000 $1,500,000
Administration $66,265 $167,438 $172,461 $177,635 $182,964 $766,763
Total Expenditures $91,886 $261 ,463 $451,427 $6,803,459 $7,049,779 $14,940,105
2. How the Projects, Programs and Expenditures will eliminate blight
The goals, objectives, and programs established as part of the Redevelopment Plan
are designed to alleviate blighting conditions in the Project Area. The elimination of
blighting conditions will occur through the eliminatfon of deficiencies in the
infrastructure, the development of parking facilities, the facilitation of new development,
and the rehabilitation of existing properties in the Project Area. The linkages between
the programs and the blighting characteristics found are illustrated below in Table 5.
Table 5
Blight Conditions
REDEVELOPMENT
BLIGHTING PROJECTS AND PROGRAMS
CONDITIONS l2006.20101
INFRASTRUCTURE I ECONOMIC
IMPROVEMENTS DEVELOPMENT
PROGRAMS
Factors that effect the economic
viability of buildings or lots (including X X
substandard design, inadequate size
and lack of oarkinq)
Parcels of irregular form, shape and X
size under Multiple ownership
Depreciated or stagnant property X X
values
Low lease rates and high business X X
turnover/vacancies
8
C. HOUSING ACTIVITIES
This section describes the Housing Component of the Implementation Plan for the
Vallco Cupertino Project Area and summarizes the Agency's housing obligations
pursuant to the legal requirements under California Redevelopment Law (CRL). These
sections also provide an overall framework for the Agency's housing goals, policies,
and programs. Under the Redevelopment Plan and the initial 2000 Five Year
Implementation Plan period, no housing was contemplated in the Project Area. That
situation has changed as approximately 204 housing units have been approved under
amendments to the 1991 development agreement with the owners of the Vallco
Shopping Center. Therefore, the Redevelopment Agency will have housing production
requirements under CRL.
In addition to the CRL requirements, the Redevelopment Agency must satisfy terms of
a settlement agreement with the Cupertino Citizens For Affordable Housing in
resolution of a lawsuit brought about in connection with the adoption of the
Redevelopment Plan in 2000. These requirements go beyond what CRL requires and
this Implementation Plan is in compliance with the provisions of that settlement
agreement. The settlement terms are as follows:
. The Agency must deposit 25% of its annual tax increment into the housing
fund (rather than 20% as required under CRL).
. The Agency must spend 20% of the amount deposited into the Housing
Fund (5% of total tax increment collected) to provide housing affordable to
extremely low-income persons, who are persons with household incomes
not exceeding 30% of area median income. (CRL does not have a
requirement for extremely low-income households).
. The Agency must provide five affordable housing units (at specified
affordability levels) for each 100,000 square feet of non-residential area
added within the Project Area if financial assistance from the Agency has
been provided (there is no comparable requirement in CRL).
. The Agency must satisfy specified requirements for leveraging the use of
Housing Fund monies, providing affordable housing monitoring reports to
the legal representative for the "Cupertino Citizens For Affordable
Housing" group, and including certain provisions in agreements for the
provision of affordable rental units.
1. Overview of Legal Requirements
The housing portion of the Implementation Plan is required to set forth specific goals
and objectives for the five year planning period, outline specifiC programs and
expenditures planned for the five years, and explain how the stated goals, objectives,
programs, and expenditures will produce affordable housing units to meet these
obligations. The CRL requires that an implementation plan include the following
components:
9
. An explanation of how the goals, objectives, programs, and expenditures
set forth in Implementation Plan will implement the housing requirements
of the CRL, including a housing program for each of the five years of the
Implementation Plan.
. The total number of housing units projected to be developed,
rehabilitated, price-restricted, assisted, or destroyed for three time
periods: (1) on an annual basis for the next five years, (2) in aggregate
over a ten-year period, and (3) in aggregate for the remaining life of the
redevelopment plan.
. Identification of proposed locations for replacement housing, which the
Agency would be required to produce if a planned project would result in
the destruction of existing affordable housing.
. Estimates of deposits into the Housing Fund during the next five years
and the Agency's plans for utilizing those funds for affordable housing.
. A Housing Production Plan, per AB 315, and a determination as to
whether housing production will meet the affordable inclusionary
requirement.
2. Statutory Requirements for Housing
This section summarizes the major statutory requirements for affordable housing
imposed on redevelopment agencies by the CRL and provides background information
and analysis regarding affordable housing needs and conditions in the Project Area and
overall community.
a. Housing Production Requirement - Specified minimum percentages
of new or substantially rehabilitated housing units in a project area are to
be made available at a specified affordable housing cost. This
requirement applies to redevelopment plans which were either adopted,
or which added territory by amendment, after 1976 (Section 33413).
b. Housing Fund Requirement - Redevelopment agencies are required
to expend specified percentages of tax increment revenue for provision
of affordable housing (Section 33334.2).
c. Replacement Housing Requirement - Agencies must replace, within
four years, housing units removed from the housing stock as a result of
redevelopment activities (Section 33413).
Under California Community Redevelopment Law, 15% of all the housing units
constructed or substantially rehabilitated within a Redevelopment Project Area (the
"Project Area") must be made affordable to low and moderate-income persons. Of the
15% requirement, at least 6% must be for very low-income persons (up to 50% of
county median income) with the balance for moderate-income persons (up to 120% of
county median income). This requirement must be met every 10 years, and a
Redevelopment Agency must adopt an Affordable Housing Production Plan every ten
years that indicates how the requirement will be met for the next decade and how it will
be met over the life of the Redevelopment Plan. CRL requires a Redevelopment
Agency to set aside at least 20% of its tax increment collected for the purposes of
increasing, improving, and preserving the community's supply of low and moderate
income housing. The Cupertino Redevelopment Agency has a greater responsibility to
10
set -aside no less than 25% of its tax increment for affordable housing under the terms
of the Settlement Agreement. Of that 25% set-aside, the Agency must earmark 5% for
creating or preserving extremely low housing (housing for persons earning 30% of the
County median income).
3. Targeting Housing Funds According to Need
Through requirements that became effective in January 2002, the Agency must target
its Housing Fund expenditures to produce units affordable to very low, low, and
moderate income households in at least the same proportion to the community's unmet
need, using the regional fair share allocation as a benchmark to satisfy this
requirement. This benchmark establishes ten-year "targeting compliance period" used
to allocate Housing Fund expenditures distinct from the ten-year "production
compliance period" in the AS 315 Plan used to guide the production of affordable
housing. However, CRL legislation encourages agencies to synchronize these two ten-
year compliance periods. Because the Cupertino Redevelopment Agency is under the
further obligation of earmarking at least 20% of its housing set-aside funds for
extremely low income persons, that percentage will be taken out of the funds available
for moderate-income persons. Based on ABAG's "Fair Share" Regional Housing Needs
Determination for the City of Cupertino, the table below indicates that at a minimum, the
Agency must target at least 33% of its Housing Fund moneys to the production of very-
low income units and at least 16% to low-income units. Additionally, under the terms of
the Settlement Agreement, the Agency must earmark 20% of its Housing Fund monies
for extremely low-income units. Combined, the Agency must provide 69% of its Housing
Fund monies for extremely low, very low and low-income units.
Table 6
ABAG Regional Fair Share Allocations 1999-2006
City of Cupertino
Tar
uirements b Income Level
Total Housing Percentage
Units Needed
412
198
644
1254
20%
33%
16%
31%
100%
Recent law now requires that redevelopment agencies assist housing for persons
regardless of age in at ieast the same proportion that the community's population under
age 65 bears to the total population of the community. The table below describes the
City of Cupertino's population as of the Census 2000:
11
Table 7
Housing Fund Expenditure Requirements
. Non-Age Restricted Housing
5,560 11 %
50,546 100%
The table indicates that the Housing Fund money invested in senior housing should not
exceed 11 % of the total Housing Fund expenditures during the targeting compliance
period. The law establishes a maximum allocation of funds according to a population's
age distribution but does not, however, establish a minimum allocation of funds in this
manner.
Housing assisted by Housing Fund moneys must be available to low and moderate -
income families at an affordable housing cost in accordance with the CRL. For housing
assisted by Housing Funds, the following affordable housing cost definitions apply:
Table 8
CRL Affordable Housing Cost Definitions
Rental Housina OwnershiJ: Housina
Income Level % Income % of Area % Income % of Area
Spent on Median Spent on Median
HousinCl Income Housina Income
Extremely 30% 30% 30% 30%
Low
Very Low 30% 50% .30% 50%
Low 30% 60% 30% 70%
Moderate 30% 110% 35% 110%
4. Duration of Affordability
The CRL requires that affordability covenants be recorded with respect to Housing
Fund-assisted new and substantially rehabilitated housing units, replacement housing
units, and project area production housing units. These affordability covenants must
remain in effect for a minimum duration of 55 years for rental units and 45 years for
owner-occupied units.
12
5. Replacement Housing Requirement
The Replacement Housing Requirement applies to project areas established by
redevelopment plans (or areas added by amendments) adopted on or after January 1,
1976, and merged project areas regardless of the date of establishment of the
individual project areas subsequently merged.
When residential units sheltering households earning ~t or below 120 percent of
median income are destroyed or removed, or are no longer affordable due to agency
action, an agency must replace within four years those units with an equal number of
replacement units which have an equal or greater number of bedrooms. Since there are
no residential dwelling units in the Project Area, there is no replacement housing
requirement contemplated.
6. Ten Year Housing Production Plan
In satisfying the requirements of the AB 315 plan, this section will demonstrate how the
City of Cupertino Redevelopment Agency will meet its housing production obligations
established over the following time periods: (1) the historical life of the redevelopment
plan, (2) the 10-year "2000-2010" production compliance period, and (3) production
over the life of the redevelopment plan.
As required by the CRL, this document includes estimates of the number of new
residential units within the Project Area and the number of affordable housing units,
which will be developed in order to meet the requirements of the CRL. It is assumed
that all of the housing units produced will be developed by entities other than the
Agency.
The new affordable housing units created within the Redevelopment Project Area will
create decent, safe and sanitary housing units for very low, low and moderate-income
persons. All such units will be price restricted for the longest possible period, however,
in no case less than the period of the land use restrictions of the Redevelopment Plan
or the minimum periods required for use of Housing Fund monies as applicable. It is
projected that there will be 204 units constructed in the Project Area during the 2006 to
2010 Implementation Plan period, during the ten year housing production period of
2000 to 2010, and over the life of the redevelopment project. Because the Project Area
is predominantly a commercial district, it is not anticipated that any more residential.
units will be constructed in the Project Area over the life of the redevelopment project.
Therefore, Table 9 illustrates the number of affordable housing units required over the
life of the Project Area.
13
Table 9
Projected Housing Development
Cupertino Vall co Redevelopment Project Area
Affordable Production
Projected Total Very Low Very Low,
Project Completion Date Units Low, & Mod
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Rose Bowl Spring 2008 204 13 18
7. Affordable Housing Production Requirement
Given the number of residential units projected within the redevelopment project area
during the 2000 to 2010 housing production compliance period, the Agency has an
obligation to ensure that 31 units are made affordable and at least 13 of those units are
made affordable to very low-income households.
8. Housing Production through Affordability Covenants
Agencies may satisfy their inclusionary housing production obligation by purchasing or
acquiring long-term affordability covenants on existing multifamily units that are
presently affordable to low and moderate-income households or on currently affordable
multifamily units that are not expected to remain affordable. This method cannot be
used to satisfy more than 50% of units required to be affordable and not less than 50%
must be affordable to very low-income households.
9. Housing Fund Revenues
Pursuant to CRL, the Agency is required to include in its Implementation Plan a report
on the amount available in the Housing Fund and estimates of deposits in the Housing
Fund during the next five-year period. At fiscal year end .FY2004/05, there was a
balance of $39,425. It is projected that the Agency will deposit approximately
$1,336,671 (as illustrated in Table 4) into the Housing Fund during the period of 2005 to
2010 from tax increment revenues. These funds can be used both within and outside
the Redevelopment Project Area.
10. Housing Programs
Policy 3-6 of the Housing Element of the General Plan identifies the Agency's Housing
Fund as a source of revenue to be used to assist the City in creating affordable
housing. Implementation Program #16 of the Housing Element requires that the
Agency establish policies and objectives directing the expenditure of the housing funds
for extremely low, very low, low and moderate-income housing. Over the next five
years the Agency will work with the City to efficiently and effectively expend its Housing
Fund revenues to create affordable housing consistent with the City's Housing Element.
The Agency will consider the following housing programs in furtherance of those goals
and objectives:
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a. First Time Homebuyer Program
The Agency will consider establishing a First Time Homebuyer
Program to help low and moderate income households achieve home
ownership in Cupertino. This could be in the form of down payment
assistance or second and third mortgages.
b. Home Rehabilitation Program
This is a program that offers low interest loans to low income and
senior homeowners who cannot afford necessary health and safety
repairs to their homes.
c. Affordable Housing Incentive Program
This is a program that could provide financial incentives to residential
developers to provide a higher percentage of inclusionary housing
than required by assisting with closing the afford ability gap.
d. land Acquisition
The Agency will evaluate the opportunities to partner with non-profit
housing developers to acquire land and/or write down development
costs to create affordable housing. '
11. On-Going Monitoring of Residential Development and Housing Fund
Expenditures
An important element for the Agency will be the ongoing monitoring of construction
within the Project Area. This will be necessary to keep track of the new housing units
produced and compare this to the number of units estimated, thus determining the
number of affordable units required.
The ongoing monitoring is a relatively simple procedure for the Agency. This is a result
of the small size of the Project Area, the limited amount of residential development; and
the limited amount of new development taking place. More important will be the
monitoring and tracking of housing fund expenditures. While the Agency may have
limited responsibility in housing production due to the limited residential development
within the Project Area, the Agency will be required to track housing fund expenditures
to ensure it is satisfying both its CRL requirements as well as its obligations under the
Settlement Agreement while assisting the City in meeting its housing production
requirements over the life of the Redevelopment Agency.
G:planning/vallcoNallco Redevelopment Plan REVISED 11-14-06
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