Property values in 11 areas hit-hard by housing foreclosures that city leaders are exploring as possible additions to the Manteca Redevelopment Agency plummeted 22 percent in 2009.
That compares to a 14.7 percent decline for the entire city.
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.
The Manteca City Council sitting as the RDA commission Tuesday night authorized spending upwards of $205,000 to have Urban Futures do the due diligence work needed to see whether adding the 11 neighborhoods meets state mandated criteria for inclusion in the project area to benefit from retention of tax increment to fight blight and boost economic development.
Councilman John Harris expressed concern that once property values start coming up that the losses to the general fund could be a serious problem. RDA starts shifting money away from the general fund and other taxing districts in the base year that it is formed. Once the 22 percent in value is regained, the property taxes it generates will go to the RDA and not the general fund. Manteca Unified under state law would be made whole by the state.
City Manager Steve Pinkerton shared preliminary data that showed by the fifth year the 11 neighborhoods are in RDA boundaries, the general fund would be shorted by $50,000. That amount would increase to $100,000 annually by the 10th year.
Conversely, 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.
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.
That means the general fund would ultimately take a $110,000 hit if the 11 areas all went in RDA project area.
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.
Pinkerton noted in excess of $150 million worth of RDA investments have been made in Manteca ranging from infrastructure to base work for economic development. It also includes low-interest loans to existing employers over the year such as Mountain Valley Express to Tubb’s Electric for expansion or remodeling. It has also helped fund the creation of low-income senior housing as well as provided outright grants to make health and safety repairs to hundreds of senior homeowners over the years.
In addition, the city 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 for 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 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.
studied for possible
inclusion in RDA
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.