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RDA 06-05-07C O P E RT I N O APPROVED MINUTES CUPERTINO REDEVELOPMENT AGENCY Regular Meeting Tuesday, June 5, 2007 ROLL CALL At 10:56 p.m. Chairwoman Kris Wang called the meeting to order in the Council Chambers, 10350 Torre Avenue, Cupertino. Present: Chairwoman Kris Wang, Vice-Chair Patrick Kwok, and Board Members Richard Lowenthal, Orrin Mahoney and Dolly Sandoval. Absent: none. NEW BUSINESS A. Approve the minutes from the December 5 and 6, 2006 meetings. Kwok/Sandoval moved and seconded to approve the minutes as presented. The motion carried unanimously. B. Review the Cupertino Redevelopment Agency Operating Budget for 2007-08. (No documentation in packet). Administrative Services Director Carol Atwood stated that there was an estimated $360,000 tax increment for the 2006-07 year. She further commented on the build-out for the Redevelopment Agency for the next five years as well as staffing costs. It was projected that the loans made from the General Fund to the Redevelopment Agency would be paid back in the 2007-08 year. It was also noted that once any money was put back into the property in the redevelopment area, the Agency had to implement the housing requirement obligation. This 25% of the tax increment was for low income housing anywhere in the city, not just in the redevelopment area. C. Consider allocating 50% of discretionar~nds from the Redevelopment Agency (RDA) future tax increment to be earmarked for a parking structure. Administrative Services Director Carol Atwood stated that the developers of Cupertino Square were asking for 50% of discretionary funds from the Redevelopment Agency future tax increment to be earmarked for infrastructure improvements. She noted that the description on the agenda was incorrect and should have said "infrastructure" improvements, not "parking structure" improvements, although the infrastructure June 5, 2007 Cupertino Redevelopment Agency Page 2 improvements could include a parking structure. Earlier the developers had asked for 25% to be earmarked for the parking structure but since the tax increment had not yet materialized, the agency had been unable to participate. Staff now believed that the agency could provide up to $13 million (50% of its projected tax increment) or they could choose to issue a bond. If bonded, the Redevelopment Agency would be extended from 30 to 45 years. Ms. Atwood also noted that there were three areas in which the agency could spend money: infrastructure improvements, and economic development programs and housing. Staff believed that this 50% request was a reasonable one. Mike Rohde, representing Cupertino Square asked that their request be expanded to include both infrastructure improvements and tenant improvements. He noted that the money would still be the agency's and all expenditures would be approved by the Board. He also noted that leasing meetings were going very well and several offers had been made. Emily Chen, property owner of Vallco International LLC, commented that it was unique in Cupertino that the Redevelopment Agency had only one project. In other larger cities there are many projects and thus more money. She noted that potential tenants wanted to know what commitment had been made by the Redevelopment Agency for this project. Tom Hugunin noted that the Redevelopment Agency Meetings were held late in the evening and it concerned him that these issues were discussed late at night. It also concerned him that if a bond were put in place the Redevelopment Agency would be extended from 30 to 45 years. He supported infrastructure improvements but not tenant improvements. Ned Britt questioned whether these funds could be used for other purposes that were discussed during the budget discussions, such as traffic safety. Keith Murphy expressed confusion regarding the Redevelopment Agency. He asked infrastructure improvements, whether there was a master plan, if there were city-wide benefits, how the money would be spent, and where the affordable housing be located. Patty Chi stated her support of infrastructure improvements but believed they needed to be defined. She also questioned whether any of the Redevelopment Agency money could go to the school district. City Attorney Chuck Kilian explained that a Redevelopment Agency formed a Redevelopment Area, which in this case was Cupertino Square. It started with a base tax amount that is set prior to the construction of any new improvements. The Redevelopment Agency allowed money to be used to develop this area. A tax increment was developed, which meant that because buildings were constructed in that area one could get a higher property tax. This money went to the Redevelopment Agency rather than to the County, and it must all be used in the Redevelopment Area. However, 25% must be used for low and moderate income housing which can be placed anywhere in the June 5, 2007 Cupertino Redevelopment Agency Page 3 city. As the result of a lawsuit filed by the Legal Aid Society when the Redevelopment Agency was established, the Agency agreed to increase the required 20% for housing to 25 % and to state that some of this would be for extremely low-income housing. City Manager Dave Knapp noted that creating the Redevelopment Agency encouraged investment, which increased the value, which provided a flow of funds, which could then further improve the area and thereby produce more tax revenue. Lowenthal/Sandoval moved and seconded to adopt Resolution No. 07-O1 of the Cupertino Redevelopment Agency stating the intention of the Board to allocate 50% of the discretionary funds to be earmarked for infrastructure and tenant improvements in the Cupertino Square Project Area. The motion carried unanimously. ADJOURNMENT At 11:50 p.m. the meeting was adjourned. ~~v~-u- Kimberly Smith, S cretary Staff reports, backup materials, and items distributed at the meeting are available for review at the City Clerk's Office, 777-3223, and also on the Internet at www.cupertino.org. Click on Agendas & Minutes/ Redevelopment/ Packets. Most Council meetings are shown live on Cable Channel 26, and are available at your convenience on the web site: Visit www.cupertino.org and click on View Meetings Online. Videotapes are available at the Cupertino Library, or may be purchased from the Cupertino City Channel, 777-2364.