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From $680K homes to blight in 5 years?
RDA may soon cover 11 more neighborhoods
There were 322 new foreclosures in Manteca during March as reported by RealtyTrac - photo by Bulletin file photo
Should the turn-of-the21st-century neighborhoods southeast of the Airport Way and Highway 120 Bypass interchange where homes once sold for as much as $680,000 just five years ago be targeted for redevelopment due to a high rate of foreclosures?

It is a question among others that the Manteca City Council acting as the Redevelopment Agency on Tuesday may ask the Manteca Planning Commission to answer.

Manteca is looking at 11 specific areas in Manteca where a high rate of foreclosures sent property values plummeting 22 percent in 2009. Conversely, the rest of Manteca’s property values dropped 14.9 percent.

Even though new home sales in 2009 topped 300 - almost three times better than in nearby Stockton and existing home sales recorded 1,211 closed escrows - foreclosures are still high in Manteca. RealtyTrac reported 322 Manteca homes going into foreclosure in March.

So far roughly 11 percent of Manteca’s 23,000 housing units have fallen into foreclosure over the past four years.

Manteca is at the forefront of a number of cities that are studying whether it makes sense to add hard-hit neighborhoods to their respective RDAs as a way to stop the theft of local money by the state while at the same time generating revenue to help provide economic development within the impacted areas. State law allows the formation or expansion of redevelopment agencies to fight blight.

When all is said and done, Manteca typically gets only 10 cents of every dollar in property tax collected on property not included in an RDA project and 80 cents on the dollar from those that are within the boundaries of an RDA area. That 80 cents includes both RDA tax increment and general fund revenue.

Manteca, depending upon when various homes and other improvements were made, only gets between 6 and 11 percent of every property tax dollar that is collected in a non-RDA area.

Based on preliminary projections, if all 11 neighborhoods are shifted to be included in the RDA boundaries the general fund will be shorted $50,000 by the fifth year and $100,000 annually by the 10th year.

By comparison the RDA after five years would capture $500,000 in property taxes annually from the 11 areas being considered for inclusion in the project area. By the 10th year the annual flow into the RDA coffers would reach $1 million.

It would end up keeping $900,000 more tax dollars in Manteca and not going to Sacramento each year.

The $100,000 annual general fund loss is about five-sixths of the annual salary and benefits for an average Manteca police officer. Redevelopment agency funds can’t be used to hire police officers as they provide as citywide service.

City Manager Steve Pinkerton noted a month ago that the reason it can’t happen is that if a police officer was hired with RDA funds they could only patrol such areas. It would be problematic to manage and would create impossible situations such as when non-RDA funded officers needed back-up elsewhere in the city such a response would be an illegal use of RDA funds. However, the city could theoretically hire personnel in the parks and street divisions to address problems only within neighborhoods included in the RDA territory. That means the city would also have resources for street improvements and such in older neighborhoods that the state can’t touch. Right now, the state routinely raids funds put in place so local jurisdictions can maintain roads.

The RDA as a whole is currently capturing $16 million a year in property tax increments compared to $4.5 million that the general fund receives.

The city so far has maximized the legal use of RDA money when they can to cover general fund costs. Typically it is work specifically tied to economic development when it comes to staff costs. It can also be used the work the general fund would normally do as when RDA money was used on Lincoln Park upgrades several years ago. The only requirement is that the RDA money must be spent within in the project boundary. The only exception is the state mandated 20 percent set aside of every dollar in RDA taxes collected to go toward affordable housing. Affordable housing can go anywhere within the city.

The areas being
studied for possible
inclusion in RDA

Redevelopment agencies are allowed under state law established in the 1950s to fight blight and spur economic development.

The general definitions of the areas being studied are as follows:
•The neighborhoods southeast of the Highway 120 Bypass and Airport Way interchange.
•The Heritage Ranch neighborhood to the east and south of Joshua Cowell School where Manteca’s biggest tract homes – the 4,400-square-foot McMansions – were built.
•Most of the Union Road corridor between the Highway 120 Bypass and Marion Street.
•The neighborhood southeast of the Union Road and Union Pacific Railroad crossing where the Cherry Lane condos as well as patio homes are located.
•Neighborhoods bounded on the west by the railroad tracks, on the south by Alameda Street, on the north of Louise Avenue, and the east of Main Street including Mayors Park as well as portions of the neighborhoods immediately north of Louise Avenue between the railroad tracks and Main Street.
•The neighborhood bounded on the west by the Tidewater Bikeway, on the north by Lathrop Road, the east by Main Street, and the south by Joseph Road.
•Springtime Estates northwest of Louise Avenue and Highway 99,
•The neighborhood bounded by Main Street, Yosemite Avenue, Lincoln School, and Moffat Boulevard.
•The neighborhood behind Doctors Hospital bounded by Cottage Avenue, Highway 99, and North Street.
•The area northeast of the Highway 120 Bypass and Highway 99 interchange that is within the Manteca city limits and consists primarily of homes that were once small rural parcels that have experienced a high number of foreclosures.

There are other neighborhoods with extensive foreclosures but they are already within the established RDA project area boundaries.

The City Council meets at 7 p.m. Tuesday at the Civic Center, 1001 W. Center St.