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    City Mgt. Releases Redevelopment Merger Alternatives For Council Consideration

    (February 21, 2003) -- LB city management today submitted 14 different alternatives the City Council could consider in response to an August 2002 Council request (sparked by 6th district Councilwoman Laura Richardson) to study a possible merger of existing redevelopment areas.

    According to a written release, the city staff report includes merger options, a survey and recommendation of areas of LB that could be included in Redevelopment Project Areas, a study of LB redevelopment, background on Project Area merger, involvement of organizations and the public in a Project Area merger process and other reference materials.

    The release says merger alternatives include options ranging from an "unrestricted" merger that would pool all cash available for redevelopment projects in all seven areas, merger areas using various ranking methods to decide which areas should be given priority for projects, and merging only some redevelopment areas.

    The release indicates other possibilities include reallocating only the tax money generated by the Port of LB, transferring tax money from one project area to another without merging, or keeping the status quo.

    The report "explores the pros and cons of each alternative, without specifically recommending any one of them," the release says.

    "Our goal in this report is to provide the Council members with some recent Long Beach history with regard to other merger suggestions, and to demonstrate that they have quite a few options to consider, all of which have some upsides and some downsides," said Community Development Director Melanie Fallon in the release.

    The release indicates some of the benefits of merger would be the ability to share resources in areas where they are most needed, an integrated approach to programs and services, greater financial strength especially in the issuance of bonds and an ability to start new projects more quickly.

    Some of the downsides include the amount of time and cost required to accomplish the merger; no guaranteed funding to any one area from year to year; individual areas unable to complete strategic plans; existing Project Area Committees (PACs) competing for pooled funds, and PACs with less influence on Redevelopment Agency decisions.

    The release summarizes the alternatives as follows [text from release]:

    Alternative 1: Maintain the status quo. Do not merge the redevelopment areas; keep current tax increment allocations in place.

    Alternative 2: Unrestricted merger. All redevelopment areas would merger into a single redevelopment area with no parameters or restrictions placed on how tax money would be used.

    Alternative 3: Merge all areas, but retain existing PACs. The Council could choose to retain the PACs as they are currently configured, eliminate some and combine others, or eliminate all PACs.

    Alternative 4: Merge all areas, and establish a ranking process to determine how funds will be allocated. The Council would set up a ranking system that sets an agreed-upon set of objectives for redevelopment projects and awards points for how well each proposed projects meets those objectives.

    Alternative 5: Merge all areas, with each of the seven original areas keeping a fixed percentage of its tax increment revenues. One example could be that each area keep 25% of its tax increment, while contributing the rest to the common "pool."

    Alternative 6: Merge all areas, but all the seven original areas to keep the proceeds they already have received through recent bond issues. The seven redevelopment areas would keep the funds they already have, but would "pool" any future funds.

    Alternative 7: Retain seven project areas, but establish a formula that would more fairly allocate funds to areas that need more redevelopment projects. Some have argued that the amount of tax increment some project areas receive has little to do with that area's need for redevelopment. The formula would address this concern.

    Alternative 8: Retain the seven project areas, but reallocate only the tax increment generated by the Port of Long Beach. Under this scenario, all existing areas would keep their tax increment, and only the tax increment generated by the Port of Long Beach would be reallocated to the other areas using several different formulas.

    Alternative 9: Merge all areas, but keep tax increment in each area intact. This scenario would allow the City a strong position if the Redevelopment Agency issued bonds for future projects. Bond purchasers would view a combined bond issue as less risky and would have a lower interest rate, because the bonds would be sold based on a pledge of tax increment from all the project areas as a single unit.

    Alternative 10: Merge all areas, but retain the West Long Beach Industrial Area's ability to collect payments on loans it earlier made to other project areas. This would allow the WLBI Project area, which has a long-demonstrated need for redevelopment, to maintain a source of funds for which it would not have to compete following a merger.

    Alternative 11: Merge only the North and Central Project Areas. This would allow for revenue sharing between these two project areas but would not fund downtown projects.

    Alternative 12: Transfer tax increment from North project area to the Central Project area without any mergers.

    Alternative 13: Retain the seven project areas, and accelerate the Downtown Redevelopment Project Area's repayment of housing set-aside loans, due in 2015. This scenario suggests that the Downtown Project Area would be gin paying $1.4 million a year more than it already is paying for housing set-aside loans, which would provide more funding sooner for affordable housing in other areas of the City.

    Alternative 14: Merge all areas, adopting the North Long Beach Project Area Committee's recommendations for parameters.

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