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Home My WebLink About8AReportPart1Report to Council Petaluma Plan Amendments and Fiscal Merger Prepared for: Petaluma Community Development Commission 11 English Street Petaluma, CA 94952-2610 June 2006 Seifel CONSUL[ING INC. 221 Main Street Suite 420 San Francisco CA 94105 415.618.0700 fax 415.618.0707 www.seifel.com Table of Contents Report to Council Petaluma Plan Amendment and Fiscal Merger Executive Summary of the Report to Council.....................................................I I. Introduction.............................................................................................I-1 A. Report Organization............................................................................................................................................I-2 B. Description of the Project Areas.........................................................................................................................I-3 C. Description of the Redevelopment Plan Amendments....................................................................................... I-6 D. Reasons for Amending the Redevelopment Plans.............................................................................................. I-9 E. Redevelopment Plan Goals and Objectives........................................................................................................ I-9 F. Conformity with the General Plan and Central Petaluma Specific Plan ................... ..... - ..... .......................... I-12 G. How the Report to Council Satisfies the CRL Requirements ...... ............. ....................................................... I-13 H. Overview of the Redevelopment Plan Amendment Process............................................................. ......... ...... I-17 II. Existing Conditions................................................................................II-1 A. Introduction......................................................................................................................................................... II-1 B. Blighting Factors Affecting the Project Areas.................................................................................................. II-8 C. Central Business District Project Area (Original and Added Areas) ......................... .......... .............. ......... ....II-1 S D. Petaluma Community Development Project Area .............. ............................................................................ II-42 E. Overall Conclusions for Blighting Conditions................................................................................................ II-6C III. Redevelopment Program Description ..................................................III-1 A. Introduction .... .................................................................................................................... ..... ........................... III- I B. Redevelopment Plan Goals and Objectives ................................. ..................................................................... III-2 C. Relationship Between the Redevelopment Program and Alleviation of Blighting Conditions.. ..... ........ 111-2 D. Description of PCDC's Non -Housing Redevelopment Program .................................. .............................. ..... III-5 E. Description of PCDC's Affordable Housing Redevelopment Program..........................................................I11-9 Petaluma Community Development Commission i Report to Council Petaluma Plan Amendment and Merger June 2006 Table of Contents Report to Council Petaluma Plan Amendment and Fiscal Merger (cunt.) IV. Proposed Methods of Financing and Feasibility..................................IV-1 A. Introduction....................................................................................................................................................... IV-1 B. Stimulation of Private Investment.................................................................................................................... IV-2 C. Estimated Funding Requirements.................................................................................................................... IV-3 D. Potential Sources Other than Tax Increment Financing.................................................................................. IV4 E. Tax Increment Financing as the Primary Source of Funding......................................................................... IV-9 F. Assumptions Used in Tax Increment Projections......................................................................................... IV-14 G. Tax Increment Projections.............................................................................................................................. IV-20 H. Financial Feasibility of the Redevelopment Program................................................................................... IV-20 I. Necessity of Tax Increment Financing and Fiscal Merger........................................................................... IV-23 V. Five Year Implementation Plan.............................................................V-1 A. Statutory Requirements......................................................................................................................................V-1 B. Analysis...............................................................................................................................................................V-2 VI. Method or Plan for Relocation of Families, Persons or Businesses Who May Be Displaced......................................................................... VI-1 A. Statutory Requirements.................................................................................................................................... VI -I B. Analysis............................................................................................................................................................. VI-1 VII. Analysis of the Preliminary Plan.........................................................VII-1 A. Statutory Requirements ...................................................................................................................................VII-1 B. Analvsis............................................................................................................................................................ VII-I VIII. Planning Commission Report and Recommendations .....................VIR-1 A. Statutory Requirements ...... ............................................................................................................................ VIII-1 B. Analysis ................................................. .......................................................................................................... VIII-I Petaluma Community Development Commission ii Report to Council Petaluma Plan Amendment and Merger June 2006 Table of Contents Report to Council Petaluma Plan Amendment and Fiscal Merger (cont.) IX. Summary of Public Review of the Plan Amendments .........................IX-1 A. Statutory Requirements.................................................................................................................................... IX-1 ra IX-2 X. Environmental Review............................................................................X-1 A. Statutory Requirements......................................................................................................................................X-1 B. Analysis...............................................................................................................................................................X-1 XI. Report of County Fiscal Officer........................................................... XI-1 A. Statutory Requirements.................................................................................................................................... XI-1 B. Analysis............................................................................................................................................................. XI -I XH. Summary of Consultations with Taxing Entities................................XII-1 A. Statutory Requirements................................................................................................................................... X11-1 B. Agency Contacts with Affected Taxing Entities............................................................................................ XI1-1 C. Responses to Written Objections or Concerns of the Affected Taxing Entities ........................................... XII-3 XIH. Neighborhood Impact Report............................................................ XIH-1 A. Statutory Requirements..................................................................................................................................X111-1 B. Analysis...........................................................................................................................................................XIII-2 Petaluma Community Development Commission iii Report to Council Petaluma Plan Amendment and Merger June 2006 Table of Contents Report to Council Petaluma Plan Amendment and Fiscal Merger (cont.) Lists of Tables, Figures and Graphs Tables Table I-1 Summary of Existing Time and Fiscal Limits................................................................................................... I-7 Table 1-2 Summary of Proposed Time and Fiscal Limits................................................................................................. I-8 Table II-1 Completed and Ongoing Redevelopment Projects and Activities in the CBD............................................ 1I-20 Table I1-2 LUFT Sites within the CBD and Citywide...................................................................................................I1-26 Table 11-3 Leaking Underground Fuel Tanks (LUFTs) in the CBD................................. ............................................. 11-27 Table TI-4 Spills, Leaks, Investigations and Cleanups (SLIC) Sites in the CBD..........................................................II-28 Table IT-5 Prototypical Purchase & Rehabilitation Project, Retail and Office Use ...................................................... 1I-35 Table 11-6 Completed and Ongoing Redevelopment Projects and Activities in the PCD............................................ 1144 Table II-7 Spills, Leaks, Investigations and Cleanups (SLIC) Sites in the PCD.................................... ...................... II-48 Table II-8 Leaking Underground Fuel Tanks (LUFTs) in the PCD...................................................... ........... ............. 1I-49 Table III-1 How the Redevelopment Program Will Alleviate Blighting Conditions ....................................................III-4 Table III-2 Redevelopment Program Non -Housing and Housing Projects and Activities ... ......... ................................ III-6 Table III-3 Estimated Net Cost to Agency of Redevelopment Program..................................................................... 1I1-10 Table IV-1 Estimated Net Cost to PCDC of Redevelopment Program......................................................................... IV-3 Table IV-2 Base Year Assessed Value and Time Limits Under Plan Amendments and Merger .............................. IV-I1 Table IV-3 Pass Through Payment Obligations Under the Plan Amendments And Fiscal Merger .......................... IV-17 Table IV-4 Summary of Projected Tax Increments.........._......................................................................................... IV-21 Table IV-5 Comparison of Estimated Tax Increment Revenues and Agency Funding Requirements ...................... IV-23 Figures Figure1 PCD and CBD Project Areas..................................................................................................................................4 FigureI-1 CBD Boundaries...............................................................................................................................................1-4 Figure1-2 PCD Boundaries................................................................................................................................................ I-5 Figure 1-3 Central Petaluma Specific Plan Boundaries ................................... ................................................................ 1-14 Figure II-1 CBD Photograph Location Map.....................................................................................................................I1-6 Figure 11-2 PCD Photograph Location Map ................... .................................................................................................. II-7 Figure 11-3 Earthquake Faults and Probabilities, San Francisco Bay Region................................................................. lI-9 Figure II-4 Earthquake Shaking Scenario: Rodgers Creek Fault, Magnitude 7.0......................................................... I1-11 Figure 11-5 Liquefaction Susceptibility ........................................................................................................................... II-12 Figure II-6 Unreinforced Masonry Buildings................................................................................................................. 1I-14 Figure II-7 100 Year Floodplain Boundary ....................................................................................................................11-16 Figure 11-8 Leaking Underground Fuel Tanks and Spills, Leaks, Investigations and Cleanups Sites inthe CBD.............................................. ......................................................................................... ..II-29 Figure 11-9 Substandard Lots and Incompatible Use in the CBD.................................................................................. 1I-32 Figure 11-10 Vacant and Underutilized Parcels in the CBD...................................... .................................................... 11-37 Figure II -II Leaking Underground Fuel Tanks and Spills, Leaks, Investigations and Cleanups Sites inthe PCD................... ....................................................................................................................... 11-51 Figure 1I-12 Substandard Lots and Incompatible Use in the PCD................................................................................ 11-54 Figure II-13 Vacant and Underutilized Land in the PCD........................................................ ...................................... 11-56 Figure IV-1 Distribution of Projected Tax Increment Through Remaining Life of the Redevelopment Plans......... IV-22 Petaluma Community Development Commission iv Report to Council Petaluma Plan Amendment and Merger June 2006 Table of Contents Report to Council Petaluma Plan Amendment and Fiscal Merger (cost.) Lists of Tables, Figures and Graphs Graphs Graph II-1 Age of Building in the CBD.........................................................................................................................II-23 GraphII-2 Age of Building in the PCD..........................................................................................................................II-47 Appendices Appendix A. Sources Appendix B. Photographic Documentation of Existing Conditions Appendix C. Potential Funding Sources Appendix D. Tax Increment Projections Appendix E. Implementation Plan Appendix F. Documentation of Consultation with Taxing Entities Petaluma Community Development Commission v Report to Council Petaluma Plan Amendment and Merger June 2006 Executive Summary of the Report to Council Petaluma Plan Amendments and Fiscal Merger The Petaluma Community Development Commission (PCDC) is proposing amendments to the Redevelopment Plans for the PCDC's two Redevelopment Project Areas, the Central Business District (CBD) and Petaluma Community Development (PCD). As such, the PCDC has prepared the Plan Amendments and Fiscal Merger for consideration by the City Council. The Executive Summary provides a synopsis of the Report to Council, a companion document to the proposed Plan Amendments and Fiscal Merger that describes the rationale behind the changes and provides other documentation required by California Community Redevelopment Law. Redevelopment is a process created to assist local governments in revitalizing designated urban areas (project areas), and has been used by the City of Petaluma since 1975.' Under California Community Redevelopment Law, every project area must have a redevelopment plan that provides a legal framework for undertaking and funding revitalization activities. The City Council and PCDC have been considering amendments to the CBD and PCD Redevelopment Plans for the past couple of years. If adopted by the City Council, the amendments will accomplish the following: • Fiscally merge the Central Business District (CBD) and Petaluma Community Development (PCD) Project Areas. Figure ES-1 contains the location of the CBD and PCD Project Areas. • Combine the limit on outstanding bonded indebtedness in the two Project Areas and increase this combined limit to S250 million. • Repeal the time limit for incurring debt in the CBD Original and PCD Project Areas. • Extend by two years the time limit for plan effectiveness and tax increment receipt for the CBD Original Project Area.' The purpose of the Plan Amendments and Fiscal Merger is to achieve the goals of the Redevelopment Plans, implement the existing Redevelopment Programs and, in doing so, more effectively alleviate the adverse physical and economic conditions that continue to exist in the Project Areas. The proposed amendments will allow for more flexible allocation of tax increment revenue and greater bonding capacity and flexibility within the fiscally merged Project Areas. They will also reduce the cost of issuing debt and help offset the PCDC's contributions to California's Educational Revenue Augmentation Fund (ERAF).' The amendments do not alter the existing redevelopment program or planned activities for the redevelopment projects, as each Project Area would continue to be governed by its own Redevelopment Plan. Currently, the PCD is Petaluma's larger and more financially robust Project Area. Under the Fiscal Merger, its revenues could be used to augment the resources of the CBD to be used for projects in downtown Petaluma that would otherwise be financially infeasible. Moreover, debt could be issued and used for the CBD, something that is currently difficult because the CBD lacks the financial strength and stability typically required by the bond community. The PCDC was activated on December 1, 1975. It adopted the CBD in 1976 (CBD Original Area) and the PCD in 1998, and added territory to the CBD in 2001 (CBD Added Area). Although it is not technically part of the Plan Amendments and Fiscal Merger, the City anticipates adopting an ordinance authorizing this extension and adopting the Plan Amendments and Fiscal Merger more or less concurrently. ' Senate Bill 1096 authorized the PCDC to extend the time limits for project activities and tax increment collection by hvo years in the CBD Original Project Area as it contributed to ERAF in FY 2004/05 and FY 2005/06 and meets the other requirements of the legislation. See Chapter 1, Section B.2 for further explanation. Petaluma Community Development Commissu Petaluma Plan Amendments and Fiscal Merger Report to Council June2006 The activities enabled by revenue sharing and debt issuance, in turn, would increase the financial strength of the CBD and the fiscally merged redevelopment projects as a whole. Without the Plan Amendments and Fiscal Merger, it is unlikely that significant revitalization could occur in the CBD in the future, to the detriment of not only the CBD, but also the Project Areas and City of Petaluma as a whole. The California Community Redevelopment Law (CRL) lays out the specific components to be included in the report that accompanies redevelopment plan amendments. To meet these requirements, the Report to Council summarizes the reasons for the Plan Amendments and Fiscal Merger, describes remaining adverse conditions in the Project Areas, and presents the Redevelopment Program and its financial feasibility. It also documents the PCDC's adherence to all of the legal requirements for the Plan Amendments and Fiscal Merger. Physical and Economic Conditions in the Project Areas Many of the adverse physical and economic conditions identified in the CBD and PCD Project Areas at the time of their adoption persist today. These conditions, which must be addressed if the Project Areas are to attain full economic potential, include: • Deficient or deteriorated buildings in which it is unsafe or unhealthy for persons to live or work; • Factors that prevent or substantially hinder the economically viable use or capacity of buildings or lots, such as hazardous material contamination; • Adjacent or nearby uses that are incompatible with each other; • Substandard lots in multiple ownership; • Depreciated values, impaired investments and distressed properties; and • Deficient public improvements, public facilities and utilities. Redevelopment Program and Alleviation of Adverse Conditions The Redevelopment Program set out in the Redevelopment Plan for each of the Project Areas will not be modified as a result of the Plan Amendments and Fiscal Merger. The Redevelopment Programs were designed to alleviate adverse conditions in each of the Project Areas, and the Agency will continue to implement them. For ease of administration and to facilitate implementation, the PCDC plans to synthesize the Redevelopment Program projects and activities planned for the individual Project Areas into one Redevelopment Program. Projects and activities fall into six broad categories: • Circulation, Landscaping and Parking Improvements • Public Facilities and Infrastructure • Economic Development • Building Rehabilitation Site Preparation and Development • Affordable Housing Affordable Housine and Housine Set Aside Funds The CRL requires that 20 percent of all tax increment revenues generated by a redevelopment project be used for increasing, improving and/or preserving a community's supply of affordable housing. The Housing Set Aside Fund will continue to be a significant funding source for affordable housing in the Project Areas. Petaluma Community Development Commission 2 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 Financial Feasibility The Report to Council describes the public and private financing aspects of the Redevelopment Program. It presents estimated total funding requirements, identifies potential resources and methods of financing available to the Agency, projects tax increment revenues, and assesses the general financial feasibility of the Plan Amendments and Fiscal Merger. The following are key financial findings: • The Project Areas are projected to generate $243.1 million in constant 2006 dollars over the remaining life of the Redevelopment Plans. With the Fiscal Merger, these funds will be able to be used in either Project Area. • The Plan Amendments will not modify the PCDC's existing contractual and statutory pass through obligations to affected taxing entities. However, with the amendments, additional statutory pass through obligations will be incurred by the PCD Project Area payable to those taxing entities that do not currently receive contractual pass through payments from the PCD. These payments will begin in FY 2009/10 ' • The resources of the public and private sectors alone without redevelopment continue to be insufficient to eliminate adverse conditions in the existing Project Areas. • The Redevelopment Program is financially feasible under the Plan Amendments and Fiscal Merger. Overview The Plan Amendments and Fiscal Merger will allow needed revitalization activities to be undertaken in an efficient and effective manner in both of the PCDC's Redevelopment Project Areas. They will not modify existing Redevelopment Programs or goals, rather they will expedite the PCDC's strategic use of redevelopment resources realize the community's goals and objectives for the Project Areas. J These statutory pass through payments from the PCD would begin for taxing entities without contractual agreements in the fiscal year following the fiscal year in which the time limit for incurring debt would have been reached (FY 2009/10). Petaluma Community Development Commission 3 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 No Text I. Introduction The City of Petaluma (City) and the Petaluma Community Development Commission (PCDC) are considering Amendments to the existing Redevelopment Plans (Plan Amendments). The (PCDC) contains two redevelopment project areas, the Central Business District (CBD) and the Petaluma Community Development (PCD) Project Areas. The CBD Redevelopment Plan was adopted in 1976 (CBD Original Area), and territory was added to it in 2001 (CBD Added Area).' The PCD was adopted in 1988, and its territory has not been modified. The proposed Plan Amendments will fiscally merge the CBD and PCD Project Areas. The Plan Amendments will also combine and increase the current individual outstanding indebtedness limits of the existing two Project Areas but will not alter existing limits on total tax increment revenues to the Agency. The Plan Amendments will also repeal the time limit for debt incurrence in the PCD and CBD Original Area.'' As described in Sections 33485 through 33489 of the California Community Redevelopment Law (CRL), part of the California Health and Safety Code, a fiscal merger enables an agency to pool the tax increment revenue of separate project areas in order to focus on the needs of a particular project area.' An agency can adjust the focus over time so that a community's overall redevelopment needs can be addressed in a more efficient and effective manner. The Plan Amendments and Fiscal Merger will allow the PCDC to combine financial resources and facilitate its efforts to better implement its Redevelopment Program, which is eliminating adverse conditions in the two Project Areas. Nevertheless, each Project Area will continue to be governed by its own Redevelopment Plan with its respective set of redevelopment goals and time limits. The Redevelopment Program for each existing Project Area will not be modified.' The PCDC is preparing the Plan Amendments and Fiscal Merger for consideration by the City Council. This document serves as the Report to Council (RTC) for these amendments, as required by CRL Section 33352. The RTC is a public document designed to provide comprehensive information to the City Council, Planning Commission and taxing entities affected by the Plan Amendments and Fiscal Merger. It summarizes the reasons for amending and fiscally merging the Redevelopment Plans, remaining adverse conditions in the Project Areas, and presents the Redevelopment Program and its financial feasibility. It also documents that the PCDC has adhered to the legal requirements for the Plan Amendments and Fiscal Merger. If adopted by the City Council, the Plan Amendments and Fiscal Merger will accomplish the following: 1. Fiscally merge the CBD and PCD Project Areas. 2. Combine the limit on outstanding bonded indebtedness in the two Project Areas and increase this limit to $250 million. 3. Eliminate (or repeal) the time limit for incurring debt in the CBD Original Area and PCD. ' The CBD Redevelopment Plan was adopted in 1976, and this area is referred to as the 1976 Original Area or simply Original Area. Territory added to CBD in the 2001 Plan Amendment Process is referred to as the 2001 Added Area or Added Area. SB 211 authorizes the removal of debt incurrence deadlines in redevelopment project areas adopted prior to 1994. The City proposes to remove this deadline by adopting an'SB 21 l" ordinance concurrent with the Plan Amendments and Fiscal Merger. a The California CRL is contained in Part 1 of Division 24, Community Development and Housing, of the Health and Safety Code beginning at Section 33000. All further statutory references are to the Health and Safety Code unless otherwise noted. 4 For ease of administration and to facilitate implementation, the projects and activities for the individual Project Areas have been synthesized into one Redevelopment Program. Petaluma Community Development Commission 1-I Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 A. Report Organization The Report to Council is organized as follows: Chapter I presents a general overview and background for the Plan Amendments and Fiscal Merger, presents the reasons for amending and fiscally merging the Redevelopment Plans, outlines the CRL requirements, describes the goals of the Plan Amendments and Fiscal Merger, and summarizes the amendment process. Chapter II documents the existing conditions in the Project Areas. It describes the remaining blighting factors affecting the Project Areas, and redevelopment efforts to date. Chapter III presents the Redevelopment Program for the Project Areas, describes how it will alleviate the identified remaining blighting conditions, and summarizes its anticipated costs. The Redevelopment Program goals, projects and activities for each individual Redevelopment Project will not be modified as a result of the Plan Amendments and Fiscal Merger. Chapter III synthesizes the Redevelopment Program projects and activities planned for the individual Project Areas into one Redevelopment Program for ease of administration and to facilitate implementation. Chapter IV analyzes the financial feasibility of the Plan Amendments and Fiscal Merger. It details the alternative funding resources available to the Agency to accomplish the Redevelopment Program and shows why the Plan Amendments and Fiscal Merger are necessary to accomplish the Redevelopment Program. It describes tax increment financing and presents projections of bow much tax increment revenue will be generated with the Plan Amendments. Chapter V summarizes the Implementation Plan requirements and explains why the current PCDC Implementation Plan meets those requirements. Chapter VI describes the requirement for a plan for relocation of persons or businesses that may be displaced due to redevelopment activities, explains that the Plan Amendments and Fiscal Merger will not in any way extend or broaden the Agency's limited eminent domain authority, and states that the Plan Amendments do not contemplate the displacement of any households or persons. Chapter VII explains why a Preliminary Plan is not required for the Plan Amendments and Fiscal Merger. Chapter VIE explains the requirement for a report and recommendations from the Planning Commission as to the conformity of the Plan Amendments and Fiscal Merger to the General Plan and states when that report and recommendations are likely to be available. Chapter IX addresses the obligations and actions taken by the City Council pertaining to the public review of the Plan Amendments and Fiscal Merger. Chapter X addresses the Agency's environmental review obligations. Chapter XI explains that a County Fiscal Officer's Report is not required for the Plan Amendments and Fiscal Merger. Chapter XII summarizes consultations with affected taxing agencies. Petaluma Community Development Commission 1-2 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 Chapter XIII discusses the requirement for a Neighborhood Impact Report (NIR) and explains why a NIR is not needed for the Plan Amendments and Fiscal Merger. The appendices include supporting documentation and background information. Appendix A provides a list of sources used to prepare the Report to Council. Appendix B contains photographic documentation of the remaining physical and economic blighting conditions in the two Project Areas. Appendix C includes a matrix of potential funding sources, and Appendix D includes supporting tables for the tax increment revenue projections. Appendix E contains the current Five Year Implementation Plan, and Appendix F includes documentation related to the PCDC's consultations with affected taxing entities. This report has been prepared pursuant to the requirements of the CRL. B. Description of the Project Areas 1. Central Business District Project Area (Original and Added Areas) The CBD Redevelopment Plan was adopted on September 27, 1976 and territory was added to the CBD on June 18, 2001.' The Project Area consists of approximately 225 acres (98 acres in the 1976 Original Area and 127 acres in the 2001 Added Area). Figure I-1 shows the boundaries of the CBD. The 1976 Original Area encompasses the majority of the historic downtown core of the City from D Street to Washington Street and from Lakeville Street to Liberty and 51h Streets. The 2001 Added Area consists of commercial, industrial and residential land uses located to the west and east of the 1976 Original Area. The western portion of the 2001 Added Area is generally bounded by Union Street, Western Avenue, Howard Street and Liberty Street, and the eastern portion is generally bounded by D Street, McNear Avenue, the Northwest Pacific Railroad, and Petaluma Boulevard. The 2001 Added Area does not include the McNear Peninsula or McNear Channel. Unless noted otherwise, the CBD refers to both the 1976 Original Area and the 2001 Added Area. 2. Petaluma Community Development Project Area The PCD Redevelopment Plan was adopted in July 1988, and amended in 1994 and 2000. The PCD includes approximately 2,740 acres generally along both sides of U.S. Highway 101 from Old Redwood Highway to Washington Street, the Southwest side of U.S. Highway 101 from Washington Street to Lakeville Street, and both sides of U.S. Highway 101 from Lakeville Street to Petaluma Boulevard South and East of U.S. Highway 101 to the "Haystack Landing" area. The Project Area also includes approximately five miles of the Petaluma River and Willow Brook Creek of which a majority parallels U.S. Highway 101. Portions of major traffic arteries including Petaluma Boulevard North and South, North McDowell, Old Redwood Highway, East Washington Street, Lakeville Street and Lakeville Highway are also situated in the PCD.' The PCD includes several major business parks and industrial uses as well as major retail centers and many public and institutional uses. Figure I-2 shows the boundaries of the CBD. 5 The Redevelopment Plan was also amended on November 21, 1994 and July 21, 1999, but these amendments did not add area 6 Petaluma Community Development Commission, Mid -Term Review OFThe PCD Five -Year Implementation Plan (FY 2001-02 through FY 2006-07), April 19, 2004. Petaluma Community Development Commission 1-3 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 l r m 6 40 e R Ly .� V U a a R Ly .� V U a a FOR mmj• �l 0 _ L I • B fl yw wY: O u � r (5 C. Description of the Redevelopment Plan Amendments The Plan Amendments described in this Report to Council will result in the Fiscal Merger of the CBD and the PCD Redevelopment Project Areas. They will also repeal the time limit for debt incurrence in the CBD (1976 Original Area) and PCD, and combine and increase the limits on outstanding bonded indebtedness for the two Redevelopment Projects. Under the Plan Amendments and Fiscal Merger, each of the two existing Project Areas will continue to be governed by its own Redevelopment Plan with associated goals and time limits. However, the CBD and the PCD will have a single combined dollar limit on the amount of outstanding bonded indebtedness, and the Fiscal Merger will enable the use of increment from one Project Area to benefit the other Project Area, as necessary, to accomplish the goals of the Redevelopment Program. Because redevelopment agencies were required to make payments to the Education Revenue Augmentation Fund (ERAF) to help balance the state budget in FY 2003/04, Senate Bill 1045 (Chapter 260, Statutes of 2003) authorized cities and counties to adopt ordinances that would extend certain time limits in their redevelopment plans by one year. At its meeting held on June 7, 2004, the City Council extended the time limits by one year for the effectiveness of each of the Redevelopment Plans and the receipt of tax increment to repay indebtedness by adopting Ordinances No. 2183 N.C.S. and No. 2184 N.C.S. under SB 1045. 1. Existing Time and Fiscal Limits The existing time and fiscal limits for the CBD (1976 Original Area and 2001 Added Area) and the PCD are shown in Table I-1. These limits reflect the adoption of Ordinances No. 2183 N.C.S. and No. 2184 N.C.S. under SB 1045. Petaluma Community Development Commission 1-6 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 Table I-1 Summary of Existing Time and Fiscal Limits Item PCD CBD Original Area Added Area MR Acres 2,740 98 127 Date Adopted July 18, 1988 September 27, 1976 June 18, 2001 Plan Effectiveness Date August 17, 1988 October 27, 1976 July 18, 2001 Base Year FY 1987/88 FY 1976177 FY 2000/01 Base Year Assessed Value S331,539,332 $18,832,170 $49,701,865 Time Limits Incurring Debt July 18, 2008 September 27, 2011 June 18, 2021 Eminent Domain Expired June 18, 2013 June 18, 2013 Project Activities' July 18, 2029 September 27, 2017 June 18, 2032 Tax Increment Recei to July 18, 2039 September 27, 2027 June 18, 2047 .... Fiscal Limits Tax Increment Cap S800,000,000 $900,000,000 Outstanding Indebtedness Limit $80,000,000 $50,000,000 a. In Jane of 2004, PCDC adopted Plan Amendments enabled by SB 1045 to extend the time limits for project activities and tax increment receipt by one year for plans that contributed to ERAF in FY 2003/04. The one year extension applies to both the PCD and CBD (both 1976 Original Area and 2001 Added Area). Source: Petaluma Community Development Commission. 2. Senate Bill 1096 Amendment Recently enacted legislation contained in SB 1096 provides for the extension of time limits for redevelopment projects that contributed to ERAF during FY 2004/05 and FY 2005/06 and have redevelopment plans with a time limit for plan effectiveness that is less than twenty years from the Agency's contribution to ERAF. The time limit for plan effectiveness is also referred to as the time limit for project activities, as this is the time limit during which the agency can undertake activities in the Project Area. Similar to its predecessor legislation, SB 1045, SB 1096 provides a financial offset for redevelopment agencies that were mandated by the state to contribute to ERAF. However, in contrast to SB 1045, SB 1096 does not allow legislative bodies to extend all redevelopment plans, and it requires that the City Council bold a public hearing and make certain findings in order to take advantage of the plan extension. In order to be eligible for the SB 1096 time extension for FY 2004/05, the time limit for project activities must be no later than the end of FY 2024/25 (June 30, 2025). In order to be eligible for the SB 1096 time extension for FY 2005/06, the time limit for project activities must be no later than the end of FY 2025/26 (June 30, 2026). The CBD 1976 Original Area's current time limit for project activities is September 27, 2017 and it is the only the project area eligible for extension. The City Council cannot extend time limits in the other two Project Areas as their current time limits are outside of the SB 1096 eligibility period. Petaluma Community Development Commission 1-7 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 Because the City Council has not yet extended the time limit for project activities and tax increment collection by one year in the CBD 1976 Original Area for FY 2004/05, the City Council will be able to extend the time limits by two years 3. Proposed Time and Fiscal Limits The proposed limits resulting from the Plan Amendments and Fiscal Merger, shown in Table I-2, include the cumulative effects resulting from the Plan Amendments and Fiscal Merger, along with the City's adoption of the ordinance authorized by Senate Bill 1096, as described in Section B.2 above. All tax increment revenues projected in this Report to Council reflect the cumulative effect of the Plan Amendments and Fiscal Merger along with the extensions authorized by SB 1045 and SB 1096. Table I-2 Summary of Proposed Time and Fiscal Limits with Plan Amendments and Fiscal Merger b. In June of 2004, PCDC adopted Plan Amendments enabled by SB 1045 to extend the time limits for project activities and tax increment receipt by one year for plans that contributed to ERAF in FY 2003/04. The one year extension applies to both the PCD and CBD (both 1976 Original and 2001 Added Areas). c. This table assumes the PCDC will extend the time limits of project activities and lax increment receipts in the CBD Original Area by two years, as authorized by the SB 1096 ordinance. Source: Petaluma Community Development Commission. 7 The City anticipates adopting the ordinance authorized by SB 1096 concurrent with the Plan Amendments and Fiscal Merger. Petaluma Community Development Commission 1-9 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 D. Reasons for Amending the Redevelopment Plans Although significant progress has been made in alleviating blight and revitalizing the CBD and PCD, both Project Areas continue to exhibit blighting conditions that burden the community. The primary reasons for the Plan Amendments and Fiscal Merger are to: 1. Achieve the goals of the Redevelopment Plans. 2. Implement the existing Redevelopment Program. 3. Alleviate the physical and economic blighting conditions that continue to exist in the Project Areas. 4. Provide flexibility to combine and focus revenues from different Project Areas on the needs of a particular Project Area. 5. Adjust the focus over time so that the community's overall redevelopment needs can be addressed in a more efficient and effective manner. Many of the blighting conditions identified in each of the Redevelopment Project Areas at the time of their adoption persist today. In both Project Areas, these include: • Deficient or deteriorated buildings that are unsafe or unhealthy; • Factors inhibiting proper use of buildings or lots, such as hazardous material contamination; • Incompatible adjacent uses; • Substandard lots in multiple ownership; • Depreciated values, impaired investments and distressed property; and • Deficient public improvements, public facilities and utilities. E. Redevelopment Plan Goals and Objectives The Plan Amendments and Fiscal Merger will achieve the purposes of the CRL, the City's General Plan and the Central Petaluma Specific Plan. The following goals and objectives, intended to eliminate physical and economic blighting conditions, were established with the adoption and/or amendments of the CBD and PCD Redevelopment Plans, and will not be modified by these amendments. In addition, the PCDC will be guided by the goals and objectives of the 2000 City of Petaluma Bicycle Plan and 1996 City of Petaluma River Access and Enhancement Plan. Together with zoning regulations, these objectives will continue to guide the direction of all future development within the Project Areas. 1. Central Business District (CBD) The following major goals and objectives will continue to be pursued by the Agency, as set forth in the 1976 CBD Redevelopment Plan and the 2001 Amended and Restated CBD Redevelopment Plan: • Revitalize the economic and physical condition of Downtown Petaluma while preserving and enhancing the inherent qualities of the community. • Eliminate and prevent the spread of conditions of blight and deterioration in the Project Area by the following: — Develop a marketing strategy with appropriate economic programs whereby Downtown Petaluma is able to capture a greater share of the market for retail sales and services. — Develop a land use pattern that reinforces the viability of Downtown Petaluma. Petaluma Community Development Commission 1-9 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 — Develop a circulation pattern that will allow ease of access to, through and around the downtown area. — Develop an adequate system for parking vehicles on and off the circulation routes. — Develop a pleasant pedestrian environment in the downtown area with a wide variety of amenities including urban furniture (benches, bus shelters, lights, etc.) and a comfortable circulation pattern. — Develop architectural and landscape architectural design programs that will enhance the overall character of the downtown area and preserve the historical and unique buildings and structures. • Eliminate adverse physical and economic conditions in the Original and Added Areas. • Provide an environment conducive to social and economic growth. • Implement the Central Petaluma Specific Plan. • Promote economic vitality in Petaluma's Central Business District by attracting new jobs that will employ Petalumans, encouraging new development and mixed uses, and enhancing the downtown. • Encourage development, public access and recreational opportunities along the river, and help to integrate river orientation by rehabilitating older shopping centers. • Provide for a mixture of industrial, office, retail and compatible residential development. • Provide sufficient parking to serve new businesses and residents while supporting the use of alternative modes of transportation. • Construct and repair public infrastructure, including streets, sidewalks, curbs and gutters. • Reinforce the role of the Central Business District as a center for transit and non -vehicular modes of travel. • Provide a street system in undeveloped areas that strengthens the existing roadway network, serves new development, and balances the need for through movement with livability and pedestrianibicycle orientation. • Enhance streetscape improvements, including street trees, landscaping, sidewalks and strengthen linkages to and along the river through a system of urban open spaces. • Ensure a choice of housing types and locations to all persons regardless of income, sex, cultural origin, age, marital status, or physical disabilities. 2. Petaluma Community Development (PCD) The following major goals and objectives will continue to be pursued by the Agency, as set forth in the 1988 PCD Redevelopment Plan and Ordinance No. 1725 N.C.S.: • Eliminate the conditions of blight existing in the Project Area. • Ensure to the greatest possible extent that the causes ofbligbting conditions in the Project Area will be either eliminated or protected against. • Provide participation opportunities for owners and business tenants in the Project Area subject to the overall redevelopment objectives of the Redevelopment Plan. • Encourage and ensure the redevelopment of the Project Area. • Encourage and foster the economic revitalization of the Project Area. • Finance and construct the public improvements described in Section IV(F)(2) of the 1988 Redevelopment Plan. Petaluma Community Development Commission I-10 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 • Stimulate and provide new private investment opportunities by revitalizing property characterized by deterioration, blight or functional obsolescence and to encourage continued investment in the Project Area where growth is planned. • Improve the visual image of the City and, specifically, the Project Area by reinforcing existing assets and by expanding the potentials of the Project Area. • Improve employment opportunities, economic stability and productivity and increase public revenues within the Project Area. • Eliminate environmental deficiencies by achieving a coordinated pattern of residential, commercial, industrial and public land uses in the Project Area with adequate public improvements including, but not limited to, streets, utilities and flood control improvements. • Foster the development of a sense of community identity within the Project Area. • Preserve and enhance conditions in residential neighborhoods. • Ensure a variety of commercial, office and/or industrial land uses which will physically and economically complement development within the Project Area. • Encourage the development of commercial uses along major thoroughfares in accordance with applicable land use policies and zoning regulations. • Encourage the use of local resources such as the local labor force, services and materials in the development of the Project Area whenever economically feasible. • Promote development in accordance with General Plan goals and policies. 3. Bicycle Plan The following major goals have been and will continue to be pursued by the Agency, as set forth in the 2000 City of Petaluma Bicycle Plan: • Create and maintain a safe, comprehensive and integrated bicycle and pedestrian system throughout the City. • Develop facilities, policies and standards by which Petaluma and the surrounding Planning Area can reduce auto dependency, acknowledging that to do so will improve the livability of Petaluma and its environs. • Ensure that the Bicycle Plan is implemented in a timely fashion. • Incorporate bicycle and pedestrian access as part of the initial planning and design process for all development proposals and capital improvement projects. 4. River Access and Enhancement Plan In addition, the following major goals have been and will continue to be pursued by the Agency, as set forth in the 1996 City of Petaluma River Access and Enhancement Plan: • Maintain the navigability of the Petaluma River. • Improve flood control. • Promote balanced use of the River Corridor. • Restore, create and protect natural habitats and enhance native vegetation along the River Corridor. • Expand public access to and awareness of the river. • Assure permanent maintenance and promote public safety along the river. Petaluma Community Development Commission I-1 1 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 Create guidelines to integrate development into the River Corridor. Preserve the economic viability of property within the River Corridor. • Identify sources and strategies for funding and implementing the Petaluma River Access and Enhancement Plan. F. Conformity with the General Plan and Central Petaluma Specific Plan The Plan Amendments and Fiscal Merger and the Redevelopment Program projects and activities enabled by them have been designed to coordinate with and directly support the implementation of the City's General Plan and the Central Petaluma Specific Plan. The existing General Plan, which has guided development in the City and its surroundings since 1987. While many of the existing General Plan policies are still relevant, its context and setting have changed. The City is now updating the General Plan to reflect changed conditions and establish the community's vision for the future. The updated Draft General Plan and accompanying Environmental Impact Report (EIR) are anticipated to be completed and available for public review and comment in 2006. The updated General Plan will guide Petaluma's physical development with a strong focus on sustainability. The City Council identified the main priorities of the General Plan as management of water resources, transportation systems and economic health. Specific objectives identified by the Council for the General Plan update include: • Linking land use and transportation decisions so that infrastructure improvements support urban development. • Ensuring infrastructure is provided and maintained in a manner that improves and maintains the local quality of life. • Guiding development in a manner that minimizes impacts to the natural environment. • Managing water resources in a way that ensures a reliable water supply, improves water quality and minimizes flood hazards. • Improving connectivity and accessibility and working to reduce automobile dependence. • Providing and maintaining a diverse range of recreational facilities throughout the City. • Facilitating construction of a diversity of housing types, including affordable housing. • Enhancing community safety. Petaluma Community Development Commission 1-12 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 The Central Petaluma Specific Plan, adopted June 2, 2003, amended the existing General Plan with specific goals and objectives to guide future development in the central portion of the City. As shown in Figure I-3, the Specific Plan boundaries encompass the majority of the CBD and a small portion of the PCD. The Plan Amendments and Fiscal Merger will enable redevelopment projects and activities that will help implement the Specific Plan. The projects and activities of the Redevelopment Program are consistent with the General Plan and Central Petaluma Specific Plan. The Project Areas will continue to be subject to the basic land use designations and standards for development as set forth in the General Plan, the City Zoning Ordinance, and other City land use and building ordinances and regulations. Residential densities, building intensifies, and building standards under the Plan Amendments and Fiscal Merger will remain consistent with City land use and building ordinances and regulations. G. How the Report to Council Satisfies the CRL Requirements As defined by the CRL, the Plan Amendments and Fiscal Merger for the CBD and PCD Project Areas require an amendment process that parallels the adoption of a new redevelopment plan (CRL Section 33354.6).A This process includes the preparation of the report to the legislative body (the Report to Council) as required by CRL Section 33352. CRL Section 33485 through Section 33489 set forth the procedures and requirements for fiscally merging project areas to allow the pooling of tax increment revenue from separate project areas. CRL Section 33457.1 further clarifies the Section 33352 requirement under a redevelopment plan amendment by providing that the reports and information required by Section 33352 be prepared to the extent warranted by the amendment. This Report to Council is designed to comply with the CRL. Pursuant to the CRL, the report must demonstrate how the Plan Amendments meet several requirements. These legal requirements and a description of how this Report to Council is organized to meet these requirements follow. Excerpts from the CRL are referenced and italicized. 1. Reasons for the Plan Amendments The reasons for the selection of the project area. Section 33352(a) The reasons for amending and fiscally merging the Redevelopment Plans are described in Section C above, and in Chapter U. " For amendments of redevelopment plans that use tax increment financing and add new territory to the project area, increase the limit of dollars to be allocated to the Agency, lengthen the time limit to incur debt or plan effectiveness, fiscally merge project areas and/or udd significant additional capital improvement projects, CRL Section 33354.6(a) requires an agency to follow the same procedures as those required for a new plan adoption. Petaluma Community Development Commission I-13 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 No Text 2. Physical and Economic Conditions in the Project Area A description of the physical and economic conditions existing in the project area. The description shall include a list of the conditions described in Section 33031 that exist within the project area and a map showing where in the project the conditions exist. Section 33352(b) This report includes a description of the blighting conditions in the Project Areas at the time of original adoption and amendment, a summary of redevelopment activities to date, and description of the remaining blight in the Project Areas. This information is provided in Chapter II. The blighting conditions summarized in various exhibits throughout Chapter II and Appendix C together constitute the blighting conditions description and map, as required by CRL Section 33352(b). 3. Proposed Projects and Blight Alleviation ... a description of the specific project o- projects then proposed by the agency, a description of law these projects will improve or alleviate the conditions described in subdivision (b). Section 33352(a) Chapter III of this Report to Council provides descriptions and preliminary cost estimates of the Redevelopment Program projects and activities to be undertaken by the PCDC as a means to alleviate adverse conditions within the Project Areas if the Plan Amendments and Fiscal Merger are adopted. As described earlier, the Redevelopment Program for the Project Areas will not be modified by the Amendments. For ease of administration and to facilitate implementation, the projects and activities for the individual Project Areas have been synthesized into one Redevelopment Program. Chapter III demonstrates bow the redevelopment activities will help alleviate adverse conditions in the Project Areas by linking specific Redevelopment Program components with identified adverse conditions. 4. Proposed Method of Financing and Feasibility An explanation of wiry the elimination of blight and the redevelopment of the project area cannot reasonably be expected to be accomplished by private enterprise acting alone or by the legislative body's use offnnancing alternatives other than tax increment financing. Section 33352(d) The proposed method offrnancing the redevelopment of the project area, in sufficient detail so that the legislative body may determine the economic feasibility of the plan, Section 33352(e) Chapter IV of this report describes the proposed methods of financing for the projects and activities in the Project Areas if the Plan Amendments and Fiscal Merger are adopted. It demonstrates the financial feasibility of the Redevelopment Program by comparing available funding sources for the Project Areas with projected costs of the Redevelopment Program. Chapter IV also includes the reasons why the Plan Amendments and Fiscal Merger are necessary to eliminate blight and accomplish the goals and objectives of the Redevelopment Projects. 5. Implementation Plan An implementation plan that describes specific goals and objectives of the agency, specific projects then proposed by the agency, including a program of actions and expenditures proposed to be made within the first five years of the plan, and a description of haw these projects will improve or alleviate the conditions described in Section 33031. Section. 33352(c) Petaluma Community Development Commission I-15 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 Chapter V summarizes the Implementation Plan requirements and refers to Appendix E, which contains the current Five Year Implementation Plan. The non -housing and housing program priorities and expenditures for the five year implementation period are included in the Implementation Plan. 6. Method or Plan for Relocation A method or plan for the relocation offamilies and persons to be temporarily or permanently displaced from housing facilities in the project area, which method or plan shall include the provision required by Section 33411.1 that no persons or fanilies of low and moderate income shall be displaced unless and until there is a suitable housing units available and ready for occupancy by the displaced person or family at rents comparable to those at the time of their displacement Section 33351(0 Chapter VI explains that the Plan Amendments and Fiscal Merger will not in any way change the Agency's eminent domain authority and discusses the PCDC's existing relocation policy. 7. Analysis of the Preliminary Plan An analysis of the preliminary plait. Section 33352(g) Chapter VII of this report explains why a Preliminary Plan is not required for the Plan Amendments and Fiscal Merger. 8. Planning Commission Actions The report and recommendations of the planing connnission. Section 33352(h) The repot required by Section 65402 of the Government Code. Section 333526) Chapter VIII of this report discusses the Planning Commission requirements and actions. The PCDC Board transmitted the Plan Amendments to the Planning Commission after authorizing that action in April 2006. In June 2006, the Planning Commission is anticipated to make a finding that the Plan Amendments are in conformity with the General Plan and Specific Plan, as described in Section F above. 9. Summary of Public Review of the Proposed Redevelopment Plan The sunnmay referred to in Section 33387. Section 33352(i) Chapter IX includes a summary of the public meetings and other actions taken by the City Council and PCDC pertaining to the public review of the Plan Amendments and Fiscal Merger. 10. Environmental Review The report required by Section 21151 of the Public Resources Code. Section 33352(6) Chapter X of this report discusses the environmental review requirements that apply to the Plan Amendments and Fiscal Merger. Petaluma Community Development Commission I-16 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 11. Report of the County Fiscal Officer and Analysis of the Report The report of the countyfiscal officer as required by Section 33328. Section 333520) An analysis by the agency of the report submitted by the county as required by Section 33328,... Section 33352(n) Chapter XI explains that a County Fiscal Officer's Report is not required for the Plan Amendments and Fiscal Merger. 12. Summary of Consultations with Tatung Entities ... a summay of the consultation of the agency, or attempts to consult by the agency, with each of the affected taxing entities as required by Section 33328. If any of the affected taxing entities have erpressed written objections or concerns with the proposed project area as part of these consultations, the agency shall include a response to these concerns, additional information if any, and, at the discretion of the agent); proposed or adopted mitigation measures. Section 33352(n) A summary of consultations with affected taxing entities is contained in Chapter XII of this report. Appendix F includes copies of correspondence the Agency has had with the taxing entities concerning the Plan Amendments and Fiscal Merger. 13. Neighborhood Impact Report If the project area contains low or moderate income housing, a neighborhood impact report which describes in detail the impact of the project upon the residents of the project area and the surrounding areas, in terns of relocation, traffic circulation, environmental quality, availability of community facilities and services, effect on school population and quality of education, property assessments and taxes, and other natters affecting the physical and social quality of the neighborhood. Section 33352(m) Chapter XIII of this report discusses the requirement for the Neighborhood Impact Report, which is not warranted by the Plan Amendments and Fiscal Merger. H. Overview of the Redevelopment Plan Amendment Process Amending a redevelopment plan involves a complex statutorily -mandated process designed to provide a community's legislative body with the necessary analysis and input to make informed decisions about the purpose, scope and content of a plan amendment and, ultimately, about whether to adopt it. The procedures and documentation required in a redevelopment plan amendment are similar to the adoption of an initial redevelopment plan. The following briefly describes the reports and steps in the Plan Amendment and Fiscal Merger process: Petaluma Community Development Commission t-t t Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 1. Project Area Committee Formation The CRL requires that a Project Area Committee (PAC) be formed when the area proposed for redevelopment contains a substantial number of low or moderate income households, and the Redevelopment Plan (or Plan Amendment) will contain authority for the agency to acquire, by eminent domain, property on which these persons reside. A PAC is also required if the Redevelopment Plan (or Plan Amendment) contains one or more public projects that will displace a substantial number of low or moderate income persons, or both. A PAC is not required because the Plan Amendments and Fiscal Merger will not extend eminent domain authority over properties on which persons reside, and the Agency is not proposing to undertake projects that would displace a substantial number of low and moderate income residents. 2. Preliminary Report The Preliminary Report describes the purpose and impact of the Plan Amendments and Fiscal Merger. It is the first major background document in the process to the approval of the Plan Amendments and Fiscal Merger. The Preliminary Report is designed to provide members of the City Council, other governmental bodies, affected taxing entities, community leaders, and interested citizens with an early statement of comprehensive background information on the Plan Amendments and Fiscal Merger. 3. Environmental Review General Requirement The Plan Amendments and Fiscal Merger are within the scope of other previous environmental reviews, including the reviews for the Petaluma General Plan Environmental hnpact Report (EIR), the program level EIR for the Central Petaluma Specific Plan, the PCD Project EIR and the CBD Plan Amendment EIR. No new effects will occur in the Project Areas, and no new mitigation measures will be required because the Plan Amendments and Fiscal Merger will not alter the implementation of the Redevelopment Plans, do not propose any land use changes to those already analyzed in the current General Plan, and do not modify the existing Redevelopment Programs. Therefore, additional environmental review was not required. While the proposed Plan Amendments and Fiscal Merger are considered exempt from CEQA, all specific projects proposed for development pursuant to the Redevelopment Plans require environmental review in accordance with CEQA, and those that may have potentially significant environmental impacts require a project level EIR. 4. Redevelopment Plan Amendments The Plan Amendments are the legal documents setting forth the basic goals, powers and limitations with which the Agency must conduct its activities over the life of the Redevelopment Projects. Toward the conclusion of the consultation with taxing entities, the environmental review and the community participation process, the Agency must submit the Plan Amendments to the Planning Commission for conformance with the General Plan and to the City Council in preparation for the public hearing and consideration of the Plan Amendments and Fiscal Merger. 5. Taxing Entity Consultation Agency staff consults with affected taxing entities. 6. Report to Council The Report to Council is a report to the City Council that describes the Plan Amendments and Fiscal Merger and presents updated information from the Preliminary Report and additional chapters addressing specific requirements of the CRL. 7. Petaluma Community Development Commission and City Council Hearing The Petaluma Community Development Commission Board (PCDC Board) and City Council consent to holding the joint public hearing on the Plan Amendments and Fiscal Merger, and the PCDC publicly notices the hearing. Petaluma Community Development Commission 1-18 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 8. Petaluma Community Development Commission Approval and Transmittal PCDC Board approves the Report to Council and transmits the Plan Amendments to the Planning Commission for its report and recommendation and authorizes transmittal of the Plan Amendments and the Report to Council to the City Council. 9. General Plan Conformity The Planning Commission considers the Plan Amendments for their conformance with the General Plan and makes a recommendation on approval and adoption of the Plan Amendments. 10. Ordinance Adoption The City Council and the PCDC Board hold the joint public hearing on the Plan Amendments and Fiscal Merger and the City Council makes the required findings and adopts the ordinance amending the Redevelopment Plans. Petaluma Community Development Commission 1-19 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 II. Existing Conditions This chapter describes existing conditions in the Central Business District (CBD) and Petaluma Community Development (PCD) Project Areas. It presents information on conditions in the Project Areas (both CBD and PCD), including blighting conditions at the time of Redevelopment Plan adoption and amendment, redevelopment activities to date and a description of remaining blighting conditions within the boundaries of the Project Areas. The most prevalent remaining blighting conditions in the Project Areas include aged, deteriorated and dilapidated structures; factors inhibiting the proper use of buildings or lots; incompatible uses; irregularly shaped lots; impaired investments such as hazardous materials contamination; economic indicators of distressed buildings and lots; and inadequate public improvements and facilities, all of which cannot be remedied by private or governmental action without continued redevelopment assistance. Although the PCDC has made progress in mitigating these adverse conditions in the Project Areas, blighting conditions necessitate the Plan Amendments and Fiscal Merger described in this Report to Council. Supported by a review of available documents and data, maps, field reconnaissance surveys, surveys of real estate professionals active in the area and discussions with City staff, the description of adverse physical and economic blighting conditions contained in this chapter justify continued redevelopment action and provides substantial evidence for findings necessary for adoption of the Plan Amendments and Fiscal Merger. As described in Chapter I, the CBD Redevelopment Plan was adopted on September 27, 1976, and area was added to the Project on June 18, 2001.' The Project Area adopted in 1976 is referred to throughout the chapter as the 1976 Original Area or Original Area, and the area added to the CBD Redevelopment Project in 2001 is referred to as the 2001 Added Area or Added Area. The PCD has not been amended to add area since its adoption in 1988. The CBD 1976 Original Area and PCD were both adopted prior to 1994 modifications to the CRL blight definitions. As further described in this chapter, the remaining blighting conditions for the CBD 1976 Original Area and PCD are described according to the current CRL blight definitions, although the CRL only requires these blight descriptions based on the definitions at the time of Plan Adoption. The CBD 1976 Original Area and PCD blight findings are cross-referenced with the blight definitions at the time of Plan Adoption. The remaining blighting conditions for the CBD 1976 Original Area and 2001 Added Area are discussed in terms of the Project Area as a whole. A. Introduction 1. Organization This chapter is organized into the following sections: A. Introduction and summary of the current CRL requirements for the Report to Council related to urbanization and blight findings, as well as the methodology used to prepare this chapter. B. Blight factors affecting the Project Areas, including natural conditions that have contributed to adverse conditions in the areas. The Redevelopment Plan was also amended on November 21, 1994 and July 21, 1999, but these amendments did not add area. Petaluma Community Development Commission 11-1 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 C. CBD blight findings at the time of the Redevelopment Plan's adoption and amendment, synopsis of PCDC redevelopment projects and activities to date, and analysis of remaining blight. D. PCD blight findings at the time of the Redevelopment Plan's adoption and amendment, synopsis of PCDC redevelopment projects and activities to date, and analysis of remaining blight. E. Conclusions for blight findings. 2. Relevant Provisions of the CRL For plans that use tax increment financing, amendments that add new territory to the project area, increase the limit of dollars to be allocated to the Agency, lengthen the time limit to incur debt or plan effectiveness, merge project areas or add significant additional capital improvement projects, CRL Section 33354.6(a) requires an agency to follow the same procedures as those required for a new plan adoption. CRL Section 33485 through Section 33489 set forth the procedures and requirements for fiscally merging project areas for purposes of pooling the tax increment revenue from separate project areas. CRL Section 33457.1 further clarifies the Section 33352 requirement under a redevelopment plan amendment by requiring that the reports and information required by CRL Section 33352 be prepared to the extent warranted by the proposed amendment '- a. CRL Urbanization Requirement As of 1984, the CRL requires a determination that a proposed project area or area proposed to be added to an existing project area is predominantly urbanized. The current CRL requires that at least 80 percent of the area in a redevelopment project be predominantly urbanized.' The CBD was adopted in 1976, before the CRL required a determination that a project area or area added to an existing project area be predominately urbanized. At the time of the plan amendment process, the 2001 Added Area was found to be predominately urbanized, thus meeting the requirement that at least 80 percent of the area be urbanized. In addition, the PCD was found to be predominantly urbanized, with more than 80 percent of the land either developed for urban uses or an integral part of an area developed for urban uses at the time of plan adoption. The CRL requires no further urbanization finding for the Project Areas in connection with the Plan Amendments and Fiscal Merger. b. CRL Requirement for Description of Physical and Economic Conditions The City Council adopted the CBD 1976 Original Area and PCD prior to 1994 modifications to the CRL blight definitions. The CBD was amended to add territory in April 2001, under the current CRL requirements.' In this Report to Council, the review of adverse conditions in the Project Areas at the time of plan adoption is discussed in terms of the definitions in effect at the time of plan adoption. The documentation of remaining blight in the CBD is discussed in terms of current CRL blight definitions, and the 1976 Original Area is cross-referenced with the definitions in effect at the time of plan adoption. ' CRL Section 33354.6(b) states that plan amendments pursued for the purpose of increasing the limit on the number of dollars to be allocated to the redevelopment agency must identify the areas no longer blighted. Since this plan amendment and fiscal merger is not increasing the limit of tax increment allocated to the agency, this report is not required to identify areas that are no longer blighted. 3 The CRL, however, does not require an assessment of the extent of urbanization for a project area where no territory is being added. Therefore, this report is not required to include a detailed assessment of the extent of urbanization for the CBD or PCD, since the Plan Amendments and Fiscal Merger is not proposing to add territory to the Project Areas. J The PCD was amended in April 2000 to clarify the Redevelopment Plan's language to more effectively accomplish the PCDC's objectives. However, the Plan Amendment did not add territory. Petaluma Community Development Commission 11-2 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 The documentation of remaining blight in the CBD Original 1976 Original Area PCD is also discussed in terms of current CRL blight definitions and cross-referenced with the definitions in effect at the time of plan adoption. The Report to Council must include a description of the physical and economic conditions remaining in the CBD and PCD. The current CRL blight definitions are presented in this subsection, along with the CRL provision on inadequate public improvements.' Characteristics of a Blighted Area Section 33030 of the CRL describes the standards for and the characteristics of blighted areas: (a) It is found and declared that there exist in many communities blighted areas which constitute physical and economic liabilities, requiring redevelopment in the interest of the health, safety, and general welfare of the people of these communities and of the state. [33030(a)] (b) A blighted area is one that contains both of the following: (1) An area that is predominately urbanized, as that term is defined in Section 33320.1, and is an area in which the combination of conditions set forth in Section 33031 is so prevalent and so substantial that it causes a reduction of, or lack of, proper utilization of the area to such an extent that it constitutes a serious physical and economic burden on the community which cannot reasonably be expected to be reversed or alleviated by private enterprise or governmental action, or both, without redevelopment. [33030(b)(a)] (2) An area that is characterized by either of the following: (A) One or more conditions set forth in any paragraph of subdivision (a) of Section 33031 and one or more conditions set forth in any paragraph of subdivision (b) of Section 33031. [33030(b)(2)(A)] (B) The condition described in paragraph (4) ofsubdivision (a) of Section 33031. [33030(b)(2)(B)] (C) A blighted area also may be one that contains the conditions described in subdivision (b) and is, in addition, characterized by the existence of inadequate public improvements, parking facilities, or utilities. [33030(c)] Conditions that Can Be Used as Evidence of Blight CRL Section 33031 describes both physical and economic conditions that can be used as evidence of blight: Physical Conditions Deficient or Deteriorated Buildings Buildings in which it is unsafe or unhealthy for persons to live or work. These conditions can be caused by serious building code violations, dilapidation and deterioration, defective design or physical construction, faulty or inadequate utilities, or other similar factors. [33031(a)(1)] 5 The PCD blight findings will be cross referenced with the blight definitions in effect at the time of plan adoption in 1988. Petaluma Community Development Commission I1-3 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 • Factors that Inhibit Proper Use of Buildings or Lots Factors that prevent or substantially hinder the economically viable use or capacity of buildings or lots. This condition can be caused by a substandard design, inadequate size given present standards and market conditions, lack of pa king, or other similar factors. [33031(a) (2)] • Incompatible Uses Adjacent or nearby uses that are incompatible with each other and whicli prevent the economic development of those parcels or other portions of the project area. [33031(a)(3)] • Substandard Lots in Multiple Ownership The existence ofsubdivided lots of irregular form and shape and inadequate size for proper usefulness and development that are in nnultiple ownership. [33 03 1 (a) (4)] Economic Conditions • Depreciated Values/Impaired Investments Depreciated at, stagnant property values or impaired investments, including, bat not necessarily limited to, those properties containing hazardous wastes that require the rise ofagency authority as specified in Article 12.5 (commencing with Section 33459). [33031(1)(1)] • Economic Indicators of Distressed Buildings or Lots Abnormally high business vacancies, abnormally low lease rates, high turnover rates, abandoned buildings, or excessive vacant lots within an area developed for urban use and served by utilities. [33031(b)(2)] • Lack of Neighborhood Commercial Facilities A lack of necessay commercial facilities that are normally found in neighborhoods, including grocery stores, dnig stores, and banks and other lending institutions. [33031(b)(3)] • Residential Overcrowding or Problem Businesses Residential overcrowding or an excess of bars, liquor stores, or other businesses that cater exclusively to adults, that has led to problems ofpublic safety and welfare. [33031(b)(4)] • A High Crime Rate A high crime rate that constitutes a serious threat to the public safety and welfare. [33031(b)(5)] Inadequate Public Improvements Prior to 1994, inadequate public improvements was a factor of blight under the CRL, and the PCDC made findings that the CBD 1976 Original Area and PCD exhibited this blighting condition. This blighting condition continues to exist in these areas and is described as a blighting condition. Under current blight definitions in the CRL, the presence of inadequate public improvements cannot be the sole reason for establishment of a redevelopment project area. However, CRL Section 33030(c) permits consideration of inadequate public improvements when blighting conditions exist in a project area. Inadequate public improvements may be a contributing factor to blight, and an agency may undertake needed public improvements to alleviate blight. This applies to the CBD 2001 Added Area. To the extent they are present, inadequate public improvements typically reflect problems that exaggerate the effects of blight. A blighted area also may be one that contains the conditions described in subdivision (b) and is, in addition, characterized by the existence of inadequate public innprovennents, parking facilities, or utilities. [33030(c)] Petaluma Community Development Commission 114 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 3. Methodology The description of remaining physical and economic blighting conditions contained in this chapter is supported by: Field reconnaissance surveys of the Project Areas to identify adverse physical and economic conditions. • Review of available documents, including City reports, studies and plans. (Refer to Appendix A.) • Discussions with City and PCDC staff. • Analysis of economic and other data. Surveys of real estate professionals. • Examination of maps. • Photographic documentation. (Refer to Appendix B.) 4. Figures and Photographs of Blighting Conditions The figures throughout this chapter summarize and locate (or map) blighting conditions that are remaining in the Project Areas. The map of blighting conditions has been broken into these separate figures for ease of reading and reference. The individual figures, taken together, demonstrate that blighting conditions are prevalent throughout and affect properties in the Project Areas.' Over 200 photographs documenting adverse physical and economic conditions remaining in the Project Areas are presented in Appendix B. Figure H-I shows the location of the photographs documenting the CBD, and Figure II-2 shows the location of the photographs documenting the PCD. Not only do these photographs and related figures demonstrate that physical and economic blight is prevalent, they also show conditions and buildings that could benefit from redevelopment sponsored activities such as development of vacant or underutilized parcels, building rehabilitation, and public improvements. The photographs represent conditions in the CBD and PCD providing further evidence of the presence of physical and observed economic blighting conditions. G CRL Section 33352(b) requires that this Report to Council include a map showing where the blighting conditions exist. Petaluma Community Development Commission II-5 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 ,� C C a a. r 4 C ' + 4i 0 lJ _ O t C c c �4 it j t 0 o q c O � G V W 3 0 B. Blighting Factors Affecting the Project Areas Several factors contribute to the remaining blighting conditions in both the CBD and PCD, including factors that inhibit proper use of buildings or lots and historical influences on land uses and development. 1. Factors Inhibiting Proper Use of Buildings or Lots [33031(a)(2)] Factors that inhibit the proper use of buildings or lots in the Project Areas include earthquake hazards, poor soil conditions, and flood hazards. a. Earthquake Hazards and Poor Soil Conditions Significant earthquake hazards affect the Project Areas, including nearby earthquake faults, the high probability of future earthquakes, and soil conditions that tend to amplify shaking during a seismic event and have the potential for liquefaction. These conditions contribute to the blighting factor of unsafe and unhealthy buildings. As a result of these conditions, older buildings in the Project Areas do not always perform adequately and can be unsafe and unhealthy in the event of an earthquake. See below for further description of building conditions susceptible to damage in an earthquake. a.l Potentially Dangerous Earthquake Faults in Proximity The probability for one or more magnitude 6.7 or greater earthquakes in the San Francisco Bay Region from 2003 to 2032 is 62 percent. Two active faults can be expected to significantly affect the Project Areas. The San Andreas Fault, California's longest and most active fault, and the Healdsburg-Rodgers Creek Fault. The 1906 and 1989 earthquakes were produced by the San Andreas Fault, which has a 21 percent probability of generating a magnitude 6.7 or higher earthquake before 2032. The major fault zones of the San Andreas Fault have been the sources of most of the earthquakes recently felt in Petaluma and are expected to continue to be the sources of future felt earthquakes.7 The Healdsburg-Rodgers Creek Fault is the most hazardous system in the Bay Area, with a likelihood of 27 percent for a magnitude 6.7 or higher earthquake in the next thirty years. Major activity along this fault is likely to cause extensive structural damage in the region, including Petaluma." Figure 11-3 shows the known earthquake faults located near the Project Areas and the probability of future earthquakes on these faults. a.2 Adverse Soil Conditions The principal types of earthquake -induced hazards that may occur in the Project Areas are ground shaking and liquefaction. The severity of shaking is influenced by a number of factors, including the duration and intensity of the earthquake, the proximity of the site to the location of the earthquake, and the type of geologic materials underlying the site. r Petaluma General Plan 2025: Existing Conditions, Opportunities and Challenges Report, October 10, 2002, p. 13-21. s Earthquake Probabilities in the San Francisco Bay Region: 2002-2031, U.S. Geological Survey Open -File Report 03-214, Chapter 7, p. 4. Petaluma Community Development Commission I1-8 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 Figure IL-3 Location of Petaluma Project Areas Relative to Earthquake Faults and Probabilities San Francisco Bay Region Probability of magnitude 6.7 or greater earthquakes before 2032 on indicated fault. Source: U.S, Geological Survey, Working Group on California Earthquake Probabilities. 2003. Seifel i muimu ix N Petaluma Community Development Commission 11 9 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 The Project Areas are largely underlain by Holocene Bay mud and Holocene alluvium. These types of geologic materials may damage existing buildings, utilities and roads. Alluvium is a mixture of stiff clays, silts, gravel and sands, this type of clay -rich soil can shrink and swell may cause gradual cracking, settling and weakening of buildings. Bay mud provides very little load bearing strength and any small loading applied on this soil can cause a long-term ground settlement. Differential settlement can damage building foundations, disturb underground utilities and cause settlement in streets and roads. Differential settlement is of particular concern in areas that have not previously supported structures and where new structures would place heavier loads than existed in the past. Groundshakine Amplification Seismic groundshaking could cause deformation of the ground surface and major damage to existing and proposed structures, potentially injuring those nearby. Groundshaking could potentially expose people and property to seismic -related hazards, including localized liquefaction (see below for definition) and related ground failure. Earthquake shaking scenarios were mapped by the Association of Bay Area Governments (ABAG) Earthquake program in June 2004 based on the proximity of various faults and soil characteristics. As shown in Figure 11-3 on the previous page, the Rodgers Creek Fault has the highest probability of an earthquake of magnitude 6.7 or greater of all the major Bay Area faults. This fault line is located to the east of the Project Areas. A scenario with a magnitude 7.0 earthquake on the Rodgers Creek Fault would produce very strong to violent ground shaking in the CBD and very strong shaking throughout most of the PCD 9 Refer to Figure 1I-4 for a map of this ground shaking scenario in relationship to the two Project Areas. As shown, both Project Areas will be strongly affected by such an earthquake, as well as by an earthquake on the San Andreas Fault located to the west of the Project Areas. Liquefaction Soil liquefaction is a phenomenon in which saturated, cohesionless soils lose their strength, especially during shaking induced by earthquakes. In the process, the soil acquires mobility sufficient to permit both horizontal and vertical movements if not confined. The soil may become like quicksand and have little bearing strength. It may cause differential settlement, sliding along liquefied layers and/or cause buildings and structures to tilt, subside and move laterally. Soils most susceptible to liquefaction are Bay fills, Bay mud and unconsolidated alluvium. The potential for liquefaction increases when the groundwater is less than 50 feet. The regional groundwater table in Petaluma is generally 10 to 20 feet below the ground surface.10 Liquefaction susceptibility was also mapped by the ABAG Earthquake program in June 2004. The susceptibility levels in the CBD and PCD are high to very high for most of the Project Areas, as shown in Figure II-5. The liquefaction susceptibility is highest in central Petaluma along the Petaluma River, the Highway 101 Corridor and in the downtown. 0 ABAG Earthquake Program, Earthquake Shaking Scenario on the Rodgers Creek Fault, Magnitude 7.0, April 2004. 10 Petaluma General Plan 2025: Existing Conditions, Opportunities and Challenges Report, October 10, 2002, p. 13-27. Petaluma Community Development Commission I1-10 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 No Text Gi U O G O .• N U C O n O �L U N H G O y N � N �C � UU _N U .^� C O U N J C CJ U Q h G '� U G C .+ d U W ca r 5 � ww a.3 Potentially Hazardous Buildings Unreinforced masonry buildings (URMs) and buildings constructed in the early to mid-1900s would be expected to incur the greatest structural damage during an earthquake. URMs are typically constructed of brick, hollow tile, or concrete block. These buildings have proved to be particularly hazardous during an earthquake. California law now requires towns, cities, and counties to identify unreinforced masonry buildings and to take steps to ensure their reinforcement to a level that provides a reasonable level of safety during a seismic event. The City adopted the state retrofit standards in 1992 as part of Ordinance No. 1882 N.C.S. Even though retrofitting provides additional levels of safety, compliance with State retrofit standards does not necessarily prevent loss of life or injury or prevent earthquake damage to rehabilitated buildings.) � As of July 2005, the City had identified 44 URMs in the Project Areas. Of these buildings, 13 properties had been seismically retrofitted, 9 properties were considered "projects in progress," and 21 properties still bad not been retrofitted. Therefore, approximately 50 percent of the identified URMs in the Project Areas are not adequately retrofitted, and are likely unsafe in the event of a significant seismic event. Figure 11-6 shows the location of the URMs in the Project Areas that have not been retrofitted to date. Further, even though improvements have been made, the partially retrofitted URMs can still be hazardous during an earthquake. Recent earthquakes in California have demonstrated that other building types can also be unsafe and hazardous. Such buildings include aging wood frame structures with inadequate foundation connections, soft story buildings, older poured concrete buildings without adequate reinforcement, badly connected concrete tilt -up buildings, poorly engineered concrete parking structures, and informally constructed or poorly engineered buildings." Negative conditions found in these buildings include cripple walls, dry rot or termite damage, poor design, or substandard construction. These conditions, often found in older buildings, make the buildings more susceptible to earthquake damage. a.4 Cost of Reducing Impact of Earthquake Hazards on Project Areas The cost of addressing earthquake hazards and liquefaction conditions in many portions of the Project Areas is likely substantial. Settlements or instability can be mitigated by typical construction methods such as pre -loading, deep foundations and improvement of soil conditions. Furthermore, liquefaction potential is typically mitigated by grouting, vibro-floatation, stone columns, dynamic deep compaction, deep soil mixing, and removal and re -compaction of loose soil. These conditions represent significant cost implications for development projects located on the various soil types found within the Project Areas. They also contribute to the blighting condition of unsafe and unhealthy buildings in the Project Areas. tl Ordinance No. 1882 N.C.S.: An ordinance of the City of Petaluma adding Section 17.34 to the Petaluma Municipal Code pertaining to the seismic strengthening of Unreinforced Masonry Buildings, March 17, 1992. 12 According to the Earthquake Engineering Research Institute (EERI), soft story buildings are buildings with unusually weak stories, which can easily collapse in an earthquake. The ground floor is the most common location for a soft -story, which is usually due to tuck -under parking or large commercial spaces. Many soft -story buildings collapsed in the 1989 Loma Prieto and 1994 Northridge earthquakes. Petaluma Community Development Commission 11-13 Report to Council Petaluma Plan Amendments and Fiscal Merger June 2006 r u b. Flood Hazards Flooding in Petaluma has long been a problem for both residents and businesses. Historically, potential flooding is a factor that has hindered development in Central Petaluma, including the Project Areas.' Recent damaging floods have taken place in 1982, 1986, 1998, and 2005 and most of the flooding and resulting flood damage have taken place in the PCD and in low lying areas along the Petaluma River in the CBD. Typically such flooding occurs during periods of heavy rainfall when high tides on the river restrict drainage. Extreme damage to roads has occurred during nearly all of the major flooding events in the past 20 years.l" Repetitive losses (at least two filings in a ten year period for damages in excess of $1,000) have occurred in 20 properties from 1978 to 2001, all of which are located in the PCD. The flooding in 1982 resulted in damages of approximately $28 million, with an additional $1 million in damages in 1996 and $6 million in 1998.15 The most recent flood on December 31, 2005, which resulted in approximately $56 million in damages, caused the City to declare a state of emergency and close numerous flooded streets, as well as a portion of Highway 101. Numerous businesses suffered inventory and structural damage, including the Petaluma Auto Plaza, Petaluma Premium Factory Outlets, Petaluma North Shopping Center, and Petaluma Plaza in the PCD.16 Residences were also damaged, including homes in four mobile home parks in the PCD (Youngstown, Leisure Lake, Capri Villa, and Petaluma Estates). Flooding resulted in unsafe and unhealthy conditions, including mold growth, ruined insulation and other potentially toxic contamination. During clean up, many residents were observed disposing of and handling potentially toxic materials without taking proper safety precautions.' Appendix B, photographs 73-75 and 195-203 document some of the 2005 flood damage in the CBD and PCD. The Federal Emergency Management Agency designated a significant amount of land in Petaluma as part of the 100 year floodplain, where floods have a one percent chance of occurring in any year. Construction within the 100 year floodplain is required by the City to be elevated such that the first flood pad elevation is one foot above the 100 year flood level." See Figure II-7 for the 100 year floodplain map. Through the efforts of the City and the PCDC, the U.S. Army Corps of Engineers has undertaken a $40 million flood control project to reduce flooding within the Payran Reach area in the PCD where the land was subject to flooding at average 65 year flood event levels. The 65 year flood has a higher likelihood of occurring than the 100 year flood, or approximately a 1.5 percent chance of occurring each year. Approximate boundaries of the areas that will be improved adjacent to the Petaluma River extend from Jess Avenue to the north to the old mainline Railroad Bridge south of Lakeville Street. Flood control activities include widening 3,500 feet of the river, constructing steel sheet -pile floodwalls and a concrete weir, and upgrading bridges that restrict the river's flow. The Corps estimates that construction should be complete in late 2006 or early 2007.' The PCDC has significantly contributed to this effort. The Corps flood control project does not remediate all of the areas in Petaluma that are subject to flood risks, as evidenced by the damage from flooding during 2005. Many parts of the CBD and PDC will continue to be unprotected from the 100 year flood, unless properties are elevated by a range of 1-5 feet or more.20 13 Central Petaluma Specific Plan, City of Petaluma, June 2, 2003, p.74. 14 City of Petaluma Floodplain Management Plan, Schaff and Wheeler, October 2001, p.12. is Ibid., pp. 13, 14 and 22. 16 "City Mops up from Flood," Petaluma Argus-Courier, January 4, 2006. 17 "Seniors in Mobile Home Parks Urged to be Careful When Making Repairs," Petaluma Argus-Courier, February 15, 2006. 1" Central Petaluma Specific Plan, City of Petaluma, June 2, 2003, p. 74. 19 "Understanding How and Why The River Floods," Petaluma Argus-Courier, May 19, 2004 20 Central Petaluma Specific Plan, City of Petaluma, June 2, 2003, p, 17. 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