Updated 6/20/2007
These are questions often asked about redevelopment agencies and the redevelopment process. For further assistance, please call 530-745-3150.
What is redevelopment?
Redevelopment is a process created to help city and county government - and area residents and landowners - remove so-called "blight" from a designated area, and to replace it with economic development, and building reconstruction and rehabilitation. "Blight" may mean physical building deterioration, substandard public utility systems, land not used to its greatest potential, and/or general economic decline. A redevelopment project usually includes, but isn't limited to, efforts designed to improve residential, commercial, industrial, and retail properties with the redevelopment area.
What is a redevelopment agency?
In Placer County, the Board of Supervisors is the governing board for the Redevelopment Agency, however, the Board and the Agency are two separate, distinct legal entities. The Agency hire Board staff to carry out the day-to-day operations and agency redevelopment plans.
How does a redevelopment project area benefit residents and property owners?
Redevelopment is one of the most effective ways to breathe new life into areas plagued by negative social, physical, environmental or economic conditions. All these elements act as barriers to new investment by private businesses and investors. Through redevelopment, a project area will receive focused attention and financial investment to reverse the trend toward decay and decline. Redevelopment also helps create jobs, revitalizes the business climate, rehabilitates and adds to the housing stock, and gains active participation and investment by citizens. Without the financial support provided by the redevelopment process, these community renewal activities most likely wouldn't happen.
What is a redevelopment plan?
A redevelopment plan describes a process and a basic framework for specific projects, and usually spans 40 years. The plan gives the redevelopment agency powers to take certain actions within the plan area, like buying and selling land, improving dilapidated public facilities, and using tax increment funding and other financial incentives to encourage private investment in the area.
What is a project area?
The target (project) area is the area where actual redevelopment activities take place. The proposed project area would first be discussed in a public hearing before the redevelopment agency, to give landowners whose property would be included in the project area a chance to express their views. Then, if it agrees the proposed project area is appropriate, the redevelopment agency would adopt the project area and would become primarily responsible for future projects.
Why do we have redevelopment projects?
The basic reason for establishing redevelopment projects is to take advantage of existing methods to raise funds for specific redevelopment purposes. These funds can be used to attract commercial, industrial and residential development, to eliminate blight and improve an area.
How do redevelopment agencies secure funds?
California State Law allows redevelopment agencies a way to raise money called "tax increment financing". On the date the Redevelopment Agency Board approves a redevelopment plan, the property within the boundaries of the plan has a certain total property tax value, set by the tax assessor. If this total property value increases - common in redevelopment areas - most of the taxes that come from the increase go to the redevelopment agency, to fund approved redevelopment activities. These funds are called "tax increments". Usually, the amount of tax increment money the Agency receives will not be enough on its own to support the full scope of redevelopment activities and development projects. For that reason, agencies can also issue bonds. These bonds would not be a debt of the county. Instead, they would be repaid solely from tax increment revenues. Tax increment money can be used only in the same project area where it's raised, except when it's used for residential projects that benefit low- and moderate-income households in the city or county.
Will property taxes be raised?
It's important to note that higher taxes from the sale, development or rehabilitation of property in a redevelopment project area come from an increase in property value, and not from an increase in the tax rate. Until a property is improved or sold, assessed values and tax rates in a redevelopment area follows the same Proposition 13 limitations as property outside the redevelopment area.
If a redevelopment area property owner should decide to sell property to the agency, who determines the selling price?
The agency would hire an independent appraiser to establish the fair market value of a property. If the owner was not satisfied with the appraised value of the property, he could hire his own appraiser to re-evaluate the property. Then, both appraisals would be compared and a selling price negotiated. Fair market value is the value that a property would have if it were sold in today's market.
How would this affect the taxes raised by the city/county and other taxing agencies?
Other taxing agencies would continue to receive the base tax revenue for the redevelopment area property. They would lose part of the new property taxes generated by redevelopment. However, in blighted areas, the property values would not normally increase without redevelopment activities, so even though those agencies wouldn't receive the entire amount of new taxes, their overall tax revenue would likely increase because of the redevelopment activity. Other taxing agencies would receive other tax revenues - like sales and hotel room taxes - and property taxes on property outside the project area would likely increase, as a direct result of redevelopment activities.
Email the Redevelopment Agency