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State troubles prompt city to make RDA changes

POSTED March 8, 2011 10:50 p.m.

On the same day area mayors gathered in Modesto to lobby Gov. Jerry Brown to forego his planned elimination of all redevelopment agencies statewide, the City of Turlock took steps to ensure its own redevelopment money is committed before the state potentially seizes uncommitted RDA funds across the state.

The Turlock City Council unanimously voted to alter the agreement to fund the construction of the Carnegie Arts Center so RDA funds will be used first, and committed an extra $1 million to a reworked affordable housing project planned for 500 West Linwood Ave.

“It seemed like a good idea at the time to have the last money come out of the RDA fund,” City Manager Roy Wasden said of the Carnegie funding change. “Now, we’ll expend RDA funds first.”

The agreement will see the first $3 million paid out of RDA funds, the next $1.5 come out of RDA tax-increment, and insurance settlement money, capital facility fees, and donations from the Carnegie Arts Center Foundation fill out the funding. The city does not expect it will have to spend any of the donated funds at this time, leaving money for the facility’s operation.

Mayor John Lazar recused himself from the Carnegie discussion, as his wife sits on the Carnegie Board of Directors.

The Linwood Avenue affordable housing development, known as Bella Avena, was approved by council in April 2010 as a 141 unit development, funded in part by a $4 million loan from the Turlock RDA’s low-moderate income housing set-aside.  Much of the remainder of the project was projected to be funded with state low-income housing tax credit programs, but recent changes driven by the number of projects being introduced and the collapse of the real estate market have pushed minimum requirements to obtain state funding through the roof.

On Tuesday, in hopes of securing state funding and getting the project built, the council agreed to loan an additional $1 million to the project from its redevelopment agency, and modify the project into two phases. The first phase, which would be funded with the $5 million, would build 80 units and the majority of infrastructure for the 141 unit development.  But building that second phase would rely on the state not eliminating RDA funding in the future, said Turlock Housing Program Manager Maryn Pitt.

 “I know we had talked in Sacramento if we could even build Bella Avena,” said Turlock City Councilwoman Mary Jackson. “I’m pleased we could even build 80 units.”

The City of Turlock had actually been working on the change to Bella Avena funding since before Brown introduced his budget. But, following the budget introduction, Pitt said the best course of action now was to contractually obligate the funds.

There is yet a chance that the final state budget will retroactively eliminate redevelopment agencies, possibly voiding all contracts through the start of the year. That move would eliminate the city’s planned Public Safety Facility, but would not necessarily quash the Bella Avena project. Turlock could still apply for state funding with the $4 million, 141 unit project from a year ago, as that contract was in place in 2010.

To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.

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