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Wednesday, February 2, 2011

Fremont, Hayward Move To Shore Up Housing Dollars

HAYWARD APPROVES AGREEMENT FOR $40 MILLION; FREMONT LOOKS AT ITS OPTIONS
By Steven Tavares

When it comes to wading through the massive uncertainty surrounding Gov. Jerry Brown’s proposal to put the kibosh on the state’s redevelopment agencies, Fremont continues to be one of the most creative and proactive of the bunch.

Within two weeks of the governor’s surprise announcement Fremont had read the tea leaves and set in motion a $140 million bond to shore up various redevelopment projects, highlighted by the construction of two BART stations at Irvington and Warm Springs. Fremont’s move caught the attention of observers in Sacramento who worried local municipalities would use the occasion to push through a myriad of projects before the plan comes in effect July 1. Some in Fremont believe its decision to move quickly on redevelopment caught the attention of the state’s controller who included the city in his list of agencies to be audited. “Every action has its consequences,” said Fremont Vice Mayor Suzanne Lee Chan last week as she speculated on the controller’s motive for auditing the city’s redevelopment agency. Brown’s proposal must still be approved by the Legislature.

Critics of the grab for redevelopment dollars before the “disestablishment” of redevelopment have openly worried the move has passed over an important aspect of the agency’s main function—affordable housing. By law, 20 percent of redevelopment funds must be allocated to building and maintaining affordable housing. Fremont began discussions Jan. 25 on ways to secure up to $50 million in funding for various housing proposals. Hayward’s City Council last week, also quietly approved a cooperation with its redevelopment agency to protect $40 million in affordable housing dollars along with $30 million in redevelopment dollars with over a quarter of the amount going towards sprucing up the area around the South Hayward BART station.

Nearly every city is approaching the Brown proposal without many clear answers. Some in the East Bay like San Leandro have laid low, while others like Fremont have been highly proactive. “We’re shooting in the dark so maybe we should be bold” is how Fremont Mayor Bob Wasserman characterized his city’s reaction to the governor’s actions.

The trick among city councils and agencies is to secure funding while maintaining a legal leg to stand on without knowing exactly what the eventual proposal will entail. Under the plan, the state would reconcile the agency’s debt for the coming fiscal year before redistributing its tax increment back to the local level in the future.

Elise Tierney, the head of Fremont’s redevelopment agency offered its city council five possible strategies to legally secure funding for affordable housing. Included is proposals described as limited in scope such as entering loan agreements with selected developers, swapping housing funds for other funding sources to larger plans such as buying private and city properties and issuing taxable housing bonds—a deal similar to the $140 million bonds approved earlier in the year. Option agreements were also briefly discussed, but Jack Nagle, the special counsel for the city, said such deals would not likely be recognized by the state, since the city could ultimately walk away without incurring penalties.

Going forward is the potential for local cities to take control of its own housing authority. Brown’s plan contains a briefly mention of affordable housing dollars being funneled to the county housing authority. Tierney has not met with the county but says she believes they are exploring ways to lock assets to local areas in the future. “I think we know our needs better than anyone,” said Fremont Councilman Bill Harrison. Worries that dollars for affordable housing generated in Fremont would not return to the city under the plan, but instead, be routed to other parts of the county, primarily in Oakland, were discussed earlier in January.

While Fremont’s leader have had much to say about their plan of action going forward, Hayward approved loan agreements with its redevelopment agency and housing authority to secure a total of $70 million of projects without much fanfare. The council was silent on the two plans which they approved Jan. 25, but were highly critical of the governor’s timing. Hayward City Manager Fran David said the plan “balances the budget on the back of local municipal government” and shows Brown “does not value the decision-making process at the local level.” Hayward Councilwoman Barbara Halliday said the proposal was done “capriciously and without proper planning."

The bulk of the city’s $40 million in affordable housing is allotted to the construction of 237 units surrounding Highway 238, costing $15.6 million, South Hayward BART senior and family housing costing $7.7 million and $5.5 million in funding for its first-time homebuyer program. A majority of the approved $30 million in redevelopment funding follows the city’s priority to breathe life into South Hayward.

Capital improvements for the Mission Boulevard/South Hayward BART site call for $12.7 million in funding along with $5.5 million for property acquisition on Mission. Redevelopment dollars for the City Center Campus total $4.5 million.

Despite the quick reaction from local governments and without any specificity of Brown’s plan, some of the work done could be upended in the coming weeks and months while furthering stoking the already palpable anger towards Sacramento from across the state.

POLITICS HOMEGROWN eastbaycitizen.com

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