Carson Implementation Plan Midterm Review 2000-2004

PROJECT AREA NO. 1

EPA Brownfield Pilot Assessment Grant - $200,000

This $200,000 assessment grant was awarded to the city in 2000. The purpose of the grant is to assist with the targeting of brownfield properties and overcoming barriers to development with public assistance for assessment of contamination issues. The grant funds have been used to develop an inventory of all environmentally compromised properties in the city, prioritize sites, and prepare phase I environmental assessments for sites prioritized.

The process to select sites involved extensive database research and careful development of selection criteria and ranking to match the grant requirements while also ensuring good development potential and economic benefit to the city. Staff first developed an inventory of sites that would be considered Brownfields sites. This inventory included over 100 brownfield sites. Brownfields sites were defined as abandoned, idled, or underused industrial and commercial facilities, where expansion or redevelopment is complicated by real or a perceived contamination. The Agency then evaluated these sites based on several criteria including the site's location, known or suspected contamination, development and title issues, and whether the site was in a redevelopment area. The economic development potential of the final selected sites within the 93 acre 110/405 Mixed Use Project site, with their prime visibility from two freeways, is exceptional. The redeveloped brownfield sites will create new jobs, new tax revenues, and new onsite and offsite improvements while serving the important purpose of eliminating significant health and safety hazards and the associated negative image. For more information on the 110/405 Mixed Use project see the Project Area No. 1 section below.

The Agency hired the firm of ESE/Harding Lawson to complete the environmental assessments. The funds have been primarily targeted for the 110/405 Mixed Use Project site. Phase I hazardous substance assessments are complete for the entire 93 acres. The Agency's environmental attorney and environmental peer review consultant have carefully reviewed these Phase I's. Work Plans for limited Phase II assessments have been prepared and finalized. The required remediation Sampling Analysis Plans and the Quality Assurance Plans have also been prepared. These plans have been submitted to EPA and the other regulatory agencies for their approval. The strategy also includes proceeding with a Polanco Act resolution so that any costs of the Phase II work completed by the Agency could be recovered from the responsible parties and/or existing owners. The Polanco Act laws will be strategically used to facilitate brownfield cleanup and redevelopment efforts on all projects. The Polanco Act is a law that provides special authority and processes for redevelopment agencies to pursue brownfield property cleanup and acquisitions with reduced liability and establishes more certain processes for cost recovery actions.

Based on the Phase I environmental analyses, the selected sites have environmental issues stemming from former landfills, petroleum pipelines, and above and underground storage tanks; many of the specific environmental contamination problems that the Brownfields program was set up to address.

The selected brownfield sites will also be the target of other EPA and HUD funds that have been applied for and awarded as listed below. The funds are absolutely necessary to even begin to overcome the extensive remediation, legal, administration, and due diligence costs associated with any development of the sites

In December 2002, The Agency submitted an application to the EPA for supplemental assessment grant funds of $700,000.

EPA Brownfield Cleanup Revolving Loan Fund (BCRLF) - $500,000

The Agency anticipates applying these funds towards remediation efforts of the 110/405 Mixed Use Project site. These funds can only be spent on remediation activities. The City as grant recipient may loan the Agency the funds. Staff has been taking steps necessary to position the Agency to expend funds in federal fiscal year 2002/2003. The ability to do so is contingent on the completion of phase II environmental assessments and remediation action plans.

It should be noted that the grant application prepared by staff is being distributed by EPA as the national model for other cities to use as a reference in preparation of their own grant applications.

HUD Section 108 Loan Fund - $5,500,000 & HUD Brownfield Economic Development Initiative (BEDI) Grant - $770,000

The Section 108 Loan Fund is a loan from HUD that was granted for the redevelopment of the 93 acre 110/405 Mixed Use Project site (see additional information on the 110/405 Mixed Use Project in the Project Area No. 1 section below). These funds can be used for acquisition, relocation, or remediation. The loan will be repaid from tax increment funds. These funds cannot be drawn down until CEQA and NEPA clearances have been secured.

The BEDI Grant fund is to be used to pay interest owed on the Section 108 loan for two years. Funds will not be expended until the loan has been drawn down. These funds cannot be separated from the Section 108 Loan. HUD typically allows the funds to be used to pay for interest while the project is under construction. It is anticipated that upon completion of the project the property tax increment will be used to continue payments on the Section 108 loan. The funds are tied to the 93 acre site at the intersection of the 110/405 freeway.

Urban Land Institute (ULI) Advisory Services Panel Study & Report for the 110/405 Area

The city contracted with the ULI to provide a comprehensive look at development problems for a 400 acre area encompassing four major project sites within Project Area No. 1. The four sites are the projects listed below that include the 110/405 Mixed Use Project 93 acre site, the Watson Land Company owned 78 acre site, the Cal Compact 157 acre site, and the South Bay Pavilion Mall 71 acre site. This program assembled a team of highly qualified professionals with a wide range of expertise including real estate development, brokerage, urban planning and design, construction, finance, architecture, law, transportation planning, and brownfields redevelopment. The panel assignment entailed an intensive five days of tours, briefings, interviews and recommendation formulating sessions. The ULI study involved extensive interviews of key community members, experts in various fields, and city officials. The report will act as a guide to implement and coordinate development in the study area. [The full ULI report is attached.]

The report recommendations provided critical policy and development strategy direction to the staff and the Agency/Council. The report includes analysis and recommendations in the areas of the market potential, planning and design issues, development strategies, and implementation. The ULI recommended implementation policies were presented before the public and formally adopted by the City Council and the Redevelopment Agency. The report confirmed strong demand potential for major retail and entertainment development. The panel recommendations addressed many planning and development implementation issues regarding brownfield environmental remediation issues, timing and phasing prioritization, public financial assistance policies, transportation improvements, open space and greenway systems, and land use/tenant mixes.

The Urban Land Institute is an international non-profit research and education organization that promotes responsible leadership in the use of land in order to enhance the total environment.

110/405 Mixed Use Project

This site is approximately 93 acres located north of Torrance Boulevard between Figueroa Street and Main Street. The northern pinnacle of the site is the intersection of the 110/405 freeways.

An extensive RFP process was conducted by staff that resulted in three strong development proposals. The project is proposed for a high quality regional destination with a mix of retail, entertainment, office/showroom, hotel, and light industrial uses. The existing property uses include closed land fills, non-conforming apartments, a waste transfer facility, an auto auction, landscape nursery, and miscellaneous vacant and underutilized retail and manufacturing properties.

The Agency has entered into a 180 day Exclusive Negotiating Agreement (ENA) with Watson Land Company to develop this project site as well as 78 acres adjacent on the east side of Main Street (see the next project section). The ENA is to allow the Agency to fully evaluate the development proposal and financing and to allow the developer and the Agency to negotiate business terms and draft a Development and Disposition Agreement (DDA). The DDA terms will include development financing and level of public assistance, environmental issues, timing, acquisition and relocation, property disposition terms, design scope, public improvements, tenant mix, various assurances and conditions, etc.

This project will be a primary focus of the three federal Brownfield programs the City has been awarded: the E.P.A. Assessment Grant, the E.P.A. Brownfield Cleanup Revolving Loan funds, and the H.U.D. Brownfield Economic Development Initiative grant with Section 108 loan. (see further details below under "Brownfields.")

The Agency has obtained approval of a U.S. Economic Development Administration (EDA) grant to assist in improving the right of way along Main Street, Del Amo Boulevard, Figueroa Street, and Torrance Boulevard. The right of way improvements will provide the necessary linkage between the Del Amo Bridge construction and the surrounding major development projects. the Carson Town Center industrial development project. The Carson Town Center, also referred to as the former Golden Eagle Refinery, is an example of a successful brownfield redevelopment project. The improvements will include street resurfacing, center medians, curb and gutter, landscaping, signs, and pedestrian improvements such as sidewalks and lighting. These right of way improvements will also be of benefit to the 110/405 Mixed Use Project site redevelopment directly across from the Carson Town Center. The grant is for $1,210,000 with an equal match of redevelopment funds.

Phase I assessments have been completed for all parcels. A requests for proposals for the Phase II work is being circulated. Appraisals have been completed for all properties along with a relocation plan. These reports will be used to determine the financial feasibility of the project.

Watson Land Company Gateway Site at 110/405

This site is approximately 78 acres located north of Del Amo Boulevard between Main Street and the 405 freeway. Watson Land Company has combined this site with the 93 acres of the 110/405 Mixed Use Project site for the development of a regional destination commercial center that will include retail, entertainment, office/showroom, hotel, and light industrial uses. The existing property uses include a land fill with a small golf course and driving range and nonconforming apartments.

The Agency has entered into an exclusive negotiation agreement with Watson Land Company to develop this project site as well as 93 acres adjacent on the west side of Main Street, known as the 110/405 Mixed Use Project (see section above).

Cal Compact Site

This site is approximately 157 acres located adjacent to the 405 Freeway south of Del Amo Blvd. The site is the former Cal Compact landfill. This is a brownfield site that has had extensive review by the state Dept. of Toxic Substances Control.

The Agency has approved a 180 day Exclusive Negotiating Agreement (ENA) with Cherokee GMS Realty I, LLC for the development of a major retail project. The ENA is to allow the Agency to fully evaluate the development proposal and financing and to negotiate business terms for a Development and Disposition Agreement (DDA). The DDA terms will include development financing and level of public assistance, environmental issues, timing, acquisition and relocation, property disposition terms, design scope, public improvements, tenant mix, various assurances and conditions, etc.

The ULI Advisory Panel Report includes this site and recommends giving this site high priority because of immediate development potential due to the "readiness" of the environmental evaluations and remediation plan.

South Bay Pavilion Mall

The South Bay Pavilion Mall is an existing regional mall with retail anchors that include Ikea, JC Penny, and Sears.

This site was included in the ULI Advisory Panel Report which recommended redevelopment of the site as a mixed use project with retail, restaurants, housing, open space, and other community oriented retail or civic uses.

The Agency is in discussion with a prospective purchaser of the mall, Hopkins Development, and is encouraging a major redevelopment improvement of the mall and the tenant structure. New development plans envision demolition of some existing shop space, replacing it with a new 140,000 square foot retailer, athletic club, and 20,000 square feet of new shop space. An increase and repositioning of restaurant pads is also contemplated.

The Magic Johnson Theater proposed assistance has been withdrawn and funds reallocated to other projects.

The Agency, in conjunction with the Restaurant Task Force, has been assisting with attracting restaurants for the available exterior pads.

Shell Oil Site

This site encompasses over 300 acres east of the South Bay Pavilion Mall. Some operations have phased out with tank farms remaining. The site is considered a brownfield and requires extensive environmental remediation. The environmental investigations have not been completed. Any remediation effort is expected to take many years.

The ULI Advisory Panel Report recommends future planning of this area with uses to complement the redevelopment of the South Bay Pavilion Mall.

Carson Town Center

The Carson Town Center, also referred to as the former Golden Eagle Refinery, is an example of a successful brownfield redevelopment project.

This project is a master planned retail, service and business center on 76 acres with 14 state-of-the-art buildings totaling over 900,000 square feet. It's located at the southeast corner of Figueroa Street and Torrance Boulevard. This project has a Super K Mart store that opened in August 1996 and the current phase of 700,000 square feet of light industrial buildings construction was completed in September 2002. The last phase of 200,000 square feet of primarily office space is not yet under construction. Some of the new tenants include import/export companies, construction companies, etc.

The Agency has an existing owner participation agreement that included financial assistance for the completion of some of the required traffic mitigation related public improvements, primarily for adjacent intersection improvements. These improvements were completed when the Super K Mart was completed in 1996.

The Agency has obtained approval of a U.S. EDA public infrastructure grant for $1,210,000 that will directly benefit access to this project. The public improvements will provide valuable infrastructure, inclusive of street widening, curb, gutter, sidewalk, and intersection enhancements on streets leading from the nearby Del Amo/405 overpass, currently under construction and scheduled to open in early 2003. The right of way improvements will provide the necessary linkage between the Del Amo Bridge construction and the surrounding major development projects. The Redevelopment Agency is providing matching funds in the amount of $1,210,000.

Carson Street (between I-110 and I-405) - Master Plan and Acquisitions

A Conceptual Visualization Plan (CVP) was completed by Studio One Eleven (a division of Perkowitz and Ruth, Architects) as the initial phase of a Master Plan to show development, streetscape, and design possibilities for a pedestrian friendly mixed use "downtown" or "mainstreet" environment on Carson Street. The CVP provided renderings of prototype development options for Carson Street to show possible development types, architectural options, pedestrian connections and amenities, and streetscape and parking options. The prototypes focused on five subdistricts with primary nodes of development at Avalon Boulevard and at Main Street. The districts delineate areas of activity or design emphasis, i.e. gateways at the east and west edges, "Downtown Retail" at the Avalon intersection, "Community Shopping" at the Main Street intersection, and residential mixed use between the Avalon Bl. and Main St. nodes and between the Main Street and East Gateway districts.

The Master Plan will be developed with additional public involvement. Components of the Master Plan will include design guidelines, public improvements plan, traffic/transportation analysis, economic feasibility analysis, way-finding sign graphics designs, and public art program recommendations.

Several blighted properties have been acquired, cleaned up, and land banked to assist with land assembly and implementation of the Master Plan. These acquisitions were all voluntary sales by the property owners that listed their properties for sale. The assemblage of parcels is necessary to create overall improved development opportunities. Many of the parcels are too small individually or have inadequate widths, depths, or configurations to allow modern, beneficial or mixed use type development. Furthermore, these properties were strategically acquired to remove the development pressure on the potential development of uses not supporting the vision desired for Carson Street.

A new Redevelopment Project Area known as Project Area No. 4 was adopted in 2002 to provide significantly improved redevelopment capabilities along this area of Carson Street between the 110 and 405 freeways. Less than one quarter of the parcels along Carson Street are in Redevelopment Project Area No. 1, so assemblage of parcels to facilitate quality development through redevelopment efforts was very difficult. Project Area No. 4 now includes all the remaining parcels along Carson Street. This provides more tools, resources, and options for the successful improvement of Carson Street. A 15 member Project Area Committee (PAC) has been formed for Project Area No. 4 to provide overview and direction to the Agency for housing related issues. The PAC consists of representatives from residential owners and renters, businesses, and community organizations. The PAC was integrally involved in developing the Project Area No. 4 Redevelopment Plan.

Goodness Development Company - Goldilocks Restaurant

On 12/3/2002, the Agency approved a 180 day Exclusive Negotiating Agreement (ENA) with Goodness Development Company to negotiate a DDA for a proposed 7,000 sq.ft. Goldilocks restaurant and bakery with a 43,000 sq.ft. commercial development on north side of Carson St. near Avalon. Goldilocks is a well known Asian food restaurant and bakery originating from the Philippines. Goldilocks has several successful restaurants throughout California. Their newest site is in Cerritos on South Street.

The ENA is to allow the Agency to fully evaluate the development proposal and financial assistance request. It also allows the developer and the Agency to negotiate business terms and draft a Development and Disposition Agreement (DDA).

91 Freeway Corridor Area:

The area adjacent to the 91 Freeway has several vacant, underutilized, and blighted properties. The 91 Freeway Corridor presents positive opportunities for development due to the good freeway visibility and access. The development of the Home Depot National Training Center/Galaxy Soccer Stadium (HDNTC) at the California State University at Dominguez Hills to be completed in June 2003 also provides new market potential and high visibility near the Avalon/91Freeway ramps. The Avalon/91 freeway will be the closest and easiest access point to the HDNTC.

Extended Stay America Site

Through the Agency's participation at the ICSC conferences and offer of financial assistance, a quality national hotel tenant was attracted to a location in Carson. This site is on the south side of the 91 Freeway at the Main Street exit ramp and west of the former Albertoni Hotel site. The project includes a 107 room Extended Stay America hotel, a gas station with a mini-mart, a fast food restaurant, and a pad for a sit down restaurant.

Extended Stay America, Inc., a publicly traded hotel chain was prepared to develop a hotel in Carson prior to September 11, 2001. Due to the significant drop in hotel room rates nationwide after September 11, 2001, the project experienced a financial feasibility gap that would preclude the hotel from being built if the gap were not closed through City assistance. The projected return on the City assistance through Tax Increment and Transient Occupancy Tax (TOT) taxes will be substantial, and validates the request. To facilitate the transaction, a cooperative agreement between the City and the Agency would be created whereby the City would provide the $400,000 in requested funds for the off-site work from the general fund and be reimbursed by the Agency from tax increment funds upon completion of the work.

Former Ideal Auto Junkyard Site - Acquisition, Demolition, and Redevelopment

This 28,314 square foot site is located at 17505 S. Main Street. In 2001, the Agency acquired this dilapidated junkyard business. The former building was made from sheet metal and old auto parts and caused visual blight from the 91 Freeway. At some points in time the site stored live horses along with the auto parts. After acquisition of the site, a demolition contractor was hired to clear the site. The cleanup of the site eliminated a major negative visual blight from the Freeway and the adjacent Carson Plaza Hotel. The site will be used to facilitate an improved overall development and access to the adjacent vacant properties.

Albertoni Hotel Site - Acquisition, Demolition, and Redevelopment

The Albertoni Hotel was a 135,000 square foot, four story vacant hotel at the northwest corner of Albertoni and Avalon. The hotel was never completed nor occupied since construction was halted in 1989. The construction was approximately 70% complete. The site being in an unfinished and abandoned state for such a long period of time has resulted in it being a significant eyesore and a safety liability.

Code enforcement actions were processed, resulting in legal action. The site was acquired through a negotiated settlement of the code enforcement actions. A demolition contractor was attained by the Agency and the hotel has been demolished and cleared. It is anticipated that the development viability of the site will be increased due to the clearance of the site and the completion of the nearby Home Depot National Training Center. The next step will be to conduct a highest and best use study that will be used to market the site to determine the best development and economic benefit to the city. (See discussion of Home Depot National Training Center and related economic spin off benefit potential below.)

Home Depot National Training Center and Galaxy Soccer Stadium (HDNTC) Freeway Signs

The HDNTC is a $130 million development of a world class multi-sport complex located on the California State University Dominguez Hills campus. The project will include a 27,000 seat stadium for the Los Angeles Galaxy national soccer league team, a 13,000 seat stadium for tennis tournaments in conjunction with the Pete Sampras Tennis Academy, and a national training facility. The HDNTC will include major facilities for soccer, tennis, track and field, cycling, volleyball, basketball, in-line hockey, football, and other sports that will play host to both amateur and professional events. The HDNTC is under construction and is on schedule to open in June 2003.

A Disposition and Development Agreement and a Cooperative Agreement has been approved for assistance with site acquisition for the sign locations as necessary and permit approvals for two freeway signs for the HDNTC development. No agency funds have been requested. The signs are to be located at I-405/Carson Street and I-91 between Avalon Bl. And Main St. The signs have been approved by the Planning Commission and City Council.

The HDNTC will economically benefit the City of Carson through direct and indirect activities. The HDNTC will increase local and regional demand for hotels, restaurants and other retail and commercial services and will create many other local and regional "spin off" or "multiplier" economic effects from new jobs, consumer spending, business to business transactions, and support services. The HDNTC will have year round events and training programs. Some of the events will include major professional, collegiate, and amateur tournaments for soccer, tennis, and track and field that will attract athletes and visitors from all over the world to the City of Carson.

Auto Dealerships Retention and Expansions (Don Kott dealerships area)

The Agency is assisting with evaluation of vacant and underutilized sites for expansion and modernization of auto dealer related uses near the Don Kott dealerships. The Don Kott facility has many different auto brand dealerships. Agency efforts will assist in improving the capacity and modernization of these dealerships or new dealerships. The Don Kott sales dealerships were recently purchased by Sonic Automotive, Inc., a large national auto dealer corporation, from the original owners Mr. & Mrs. Don Kott.

Altman's RV Center - Expansion and Remodel

Altman's RV is a major Recreational Vehicle sales, rental, and service center located at a very visible location along the 405 Freeway near Carson Street. This area along the 405 Freeway is commonly known as the "South Bay curve," which adds to the prominence of the location of any businesses in this area. The Agency provided a loan for $1,685,000 for expansion and remodel of the site facilitating a major expansion of the sales and service capacity as well as improving the visual image of a major business icon in the City of Carson. The Agency contracted with an architect to assist with design peer review of the project resulting in an enhanced physical appearance from the 405 Freeway. Construction was completed in 2002.

Go Kart World - Expansion and Remodel

Go Kart World is an entertainment destination in Carson located next to Altman's RV Center along the 405 Freeway near Carson Street. Go Kart World is a motorized go-kart race track facility that also has capacity for company and group teambuilding training sessions. The Agency provided a low interest loan of $250,000 to the owners of Go Kart World and facilitated the approval of a loan for $275,000 through the Grow America Fund to assist the owner with completion of a major expansion and remodel. To facilitate the loan approval of the Grow America Fund, the Agency provided $68,750 as seed funding directly to the Grow America Fund (see separate section above discussing Agency participation in the Grow America Fund). The owner encountered significant financial difficulty as a result of the Carson Street drain improvements which created access issues. In addition, unforeseen construction issues during the expansion increased costs. Agency assistance was necessary to keep the business from closing. Construction is nearly complete.

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MERGED AND AMENDED PROJECT AREA

223rd Street - Auto Row

The City, working in conjunction with the Agency, has recently designated a part of 223rd Street between Lucerne Street on the west and Alameda Street on the east in the Merged and Amended Project Area, as an Auto Row. 223rd Street is a key east-west arterial in the city and runs parallel to the 405 Freeway at this area. The city adopted specific design guidelines through a new Commercial Auto zoning change in support of future development of related uses in this area. This area is fast becoming a key growth area for the City, and City staff members project that a fully built-out Auto Row would produce a contiguous 40+ acre site with five brand new or newly redeveloped state-of-the-art auto dealerships. These dealerships will provide a large and consistent source of sales and property taxes for the City. The location of the Auto Row is key with new and current dealerships enjoying improved visibility from both the heavily-traveled I-405 (San Diego) Freeway and from a major arterial (223rd Street). The Agency is considering moving all power and utility lines near Auto Row from above to underground locations, and in addition to the new design guidelines, the Agency has planned numerous streetscape and landscape improvements for Auto Row. Further, a 10-acre property currently controlled by the Agency will act as additional offsite vehicle storage for Auto Row dealers, thereby increasing each dealer's sales potential. The result of all of these improvement activities will be a unique, updated, and expanded identity for the City of Carson resulting in significantly bolstered property and sales tax revenue streams.

The Auto Row redevelopment efforts have been ongoing for many years. The Agency has acquired a number of parcels on 223rd Street to facilitate the retention and attraction of auto dealers and related uses. Some additional acquisition efforts are ongoing as needed. The auto dealers provide significant sales tax to the city General Fund.

The Agency has provided critical environmental remediation efforts for various agency-owned and non-agency owned sites in the Auto Row area. The Agency and consultants have had significant interaction with the environmental regulatory agencies to establish fair and efficient review procedures and to obtain necessary approvals of action plans and clearance letters. Environmental remediation activities include ongoing groundwater monitoring as well.

The Agency initiated an urban design process for the Auto Row area by hiring a design consultant to develop a concept plan and facilitate the community review process. The Agency then contracted with an architectural firm and an auto dealer construction/engineering firm to assist the Planning Division with developing design guidelines to be used in a zoning code amendment. This process included extensive input from the dealer and business stakeholders in the area.

Public improvements for the street are in process - see the accompanying Capital Improvement Projects summary. See specific dealer project descriptions below.

Cormier Dealership - Rehab/Expansion

Cormier Chevrolet is an existing dealership and acts as an anchor to one end of Auto Row. Cormier Chevrolet specializes in the sale of Corvettes. Partnering with the Agency was key to Cormier's recently completed expansion and rehabilitation of an older facility into a modern showroom and service facility. To assure that this project could move forward, the Agency provided Cormier with an innovative rehabilitation loan package. The new improvements conform to the vision developed for the Auto Row by enhancing Cormier's visual image from 223rd street and the 405 freeway. Construction of phase 1 was completed in 2002. These improvements have already resulted in additional sales and property tax revenues for the Agency. Assistance for phase 2 is being discussed and is needed to modernize the entire facility. Completion of phase 2 will significantly improve the image of the auto row from both 223rd Street and the 405 freeway.

Nissan - New Dealership

In support of attracting a new Nissan dealership point to Carson, the Agency has developed a financial assistance package that provides Nissan with several benefits. The Agency assistance package includes a favorable lease and development agreement. Carson is also home to Nissan's regional corporate offices. It is the intent of Nissan corporate to grow its sales in Carson and develop a signature dealership to compliment the regional offices.

The Agency approved a ground lease (with a purchase option) for a new Nissan dealership on a 4.5 acre parcel that the Agency owned. The dealer was required to construct a new state of the art sales and service facility. The Nissan dealer is currently operating in temporary facilities during construction. Westrux, the previous business at the site, was relocated one block to the east on 223rd Street during the year 2000. Superior Nissan has taken over the lease and has exercised the purchase option. Superior Nissan has completed site acquisition from the Agency and will continue to operate a temporary sales office until construction of their new approximately 90,000 square foot facility is complete.

Honda - New Dealership

Sonic Automotive Inc., a nationally respected developer/owner of both Honda and other auto dealerships, has entered into a disposition and development agreement with the Agency to relocate the Harbor City Honda dealership from a nearby location in the City of Los Angeles to a superior Carson Auto Row location. Sonic Automotive is currently finalizing its plans to build a 40,000 square foot sales, parts, and service facility on a 4-acre parcel located on the Carson Auto Row. This project will create a brand new dealership and Honda intends to avail itself of the additional offsite storage now being provided by the City. Honda has consistently had a strong market share position in California and the Carson Honda dealership, with its key freeway-adjacent location, is expected to flourish and provide the City with new and strong sales and property tax revenues. In addition to the Honda dealership, Sonic Automotive has increased its presence in Carson with its recent purchase of the Don Kott Auto Center operations, a long-time successful dealership located in Carson. The Honda dealership will be located between the Toyota and Nissan Dealerships completing the redevelopment of one entire block of the 223rd Street Auto Row area.

The Agency has approved a Disposition and Development Agreement (DDA) with Sonic Automotive for the construction of a new Honda dealership. The Agency is subdividing the land to create a 4 acre parcel to sell to Sonic Automotive and facilitate the development. Since this dealer is relocating from a nearby location in Harbor City, we have entered into a sales tax sharing agreement per state law requirements where 50% of the yearly sales tax from the existing dealer location must be paid back to Los Angeles for 10 years. The Dealer is currently in escrow for property disposition and plan review entitlements per the DDA.

Toyota - Expansion and Construction of New Building for Existing Dealership

The Agency is in negotiation to facilitate a major expansion and new building construction for the existing Carson Toyota business at 1333 E. 223rd Street. The expansion is proposed to add 3 acres to the existing 6 acres. The Agency owns the 3 acre portion of land for the expansion. The remainder of the land Carson Toyota leases from Watson Land Company.

The project will entail demolition of the existing buildings and new construction of an approximately 80,000 square foot new and used car sales and service facility. The new facilities will include a vehicle showroom, customer lounge, business offices, and service and parts department for all products of Toyota.

Mitsubishi - New Dealership

The Agency is currently in negotiation with Mitsubishi corporate to locate a site and a preferred dealer to operate a dealership on Carson Auto Row. Mitsubishi recognizes the power of this prime location and is committed to identifying the proper dealer for operations in Carson.

Off-Site Auto Dealer Inventory Storage Facilities - Acquisition and Construction

In 2001, the Agency subleased a 10 acre parcel (2254 E. 223rd Street) across from Cormier to facilitate dealer inventory capacity needs. The Agency has contracted with a firm for design engineering of the parking improvements. The improvements will include grading, paving, lighting, landscaping, driveways, and decorative secure fencing that will be financed and constructed by the Agency. The Agency's up-front costs will be passed on to the users of the site.

The site will be subleased by the Agency to certain dealers per negotiated agreements. This use of an off-site storage area will help to facilitate more dealership locations and better development on the north side of 223rd Street which has the more desirable and visible sites along the 405 freeway.

BP/Arco Office Headquarters

BP has been in discussions with the Agency for options for the development of a new headquarters office. BP/Arco has some underutilized property on 223rd Street that is being considered but may have some access and other feasibility concerns to address. Options will continue to be explored. Location of the development on 223rd Street could provide economic and aesthetic benefits to the city and the auto row developments. Preliminary indications are that the development will entail a four story 100,000 square foot building.

Air Products - Sewer Improvements

Air Products and Chemicals, Inc. (Air Products) constructed an $80 million hydrogen plant at 23300 S. Alameda Street in 1999 and started full operation in February 2000. The Carson plant is supplying Equilon Enterprises LLC—a joint venture of Texaco Refining and Marketing Inc. and Shell Oil Products Company—and ARCO Products Company with high-purity hydrogen which is critical for converting heavy crude oils into California's cleaner burning gasoline and low sulfur diesel. The plant is also connected to Air Products' existing Los Angeles Basin pipeline network to supply product to other local refineries.

Air Products proposed to construct a 12 inch diameter sewer line connection to a trunk line that is 2400 feet from their property. The 12 inch line, which is larger than the 6 inch line that would be required, provides sewer line access and capacity for undeveloped adjacent parcels. This larger line helps accommodate other users and routing it along the eastern side of Alameda Street, where underdeveloped properties are located that will need sewer access in the future.

The Agency has approved the preliminary business terms to draft an agreement. The terms include an incremental property tax and municipal surcharge rebate of the actual costs for the design, engineering, and construction of the sewer line, up to a cap of $900,000. The rebate would be equal to 20% of the sum of actual incremental property tax and natural gas surcharge generated by the plant per year up to a maximum rebate of $300,000 in any given year. The specific language of the agreement has not been completed.

Fletcher Oil Site - Reuse

The Fletcher Oil site is a closed down petroleum refinery at the northwest corner of Main Street and Lomita Blvd encompassing over 26 acres.

The property has been acquired by the LA County Sanitation District. It is anticipated that the cleanup and reuse will be handled without Agency financial assistance. The Sanitation District has started the demolition and environmental remediation. The Sanitation District has indicated it plans to remediate the site and use it to accommodate expansion of their sewage treatment facilities as future demand may increase. This also allows them to provide office facilities expansion within their existing properties. They intend to accommodate improved buffer areas to reduce odor impacts.

Carson Depot - Home Depot DDA Site

Construction was completed in 2002 on this major retail project that includes a Home Depot, an Albertson's, a Staples office supply store, a Starbucks, and a McDonald's as credit anchor tenants. The site is 22 acres with 237,000 square feet of leasable space located at the south east corner of Sepulveda Boulevard and Main Street. Several quality restaurant/food tenants have located in the center. The Carson Depot project is very successful. The architectural design is very attractive and is an aesthetic asset to the area and is almost fully leased.

The Agency provided $2.4 million in financial assistance through an Owner Participation Agreement that provides lease subsidy funds and public improvements subsidies. This assistance increased the financial feasibility of the project. The Agency assistance helped overcome the variety of barriers such as the soil remediation costs, lease negotiations with the County, and market perceptions for retail in this area. The site is located between an industrial area, residential areas, and sewage treatment facilities, and it is not visible from the 110 freeway to the west. The Los Angeles County Sanitation District owns the property and leases it to the developer. The property was a closed down canning company that was considered a brownfield site due to soil contamination issues.

Friendship Children's Center

The Friendship Children's Center (FCC) is a child care facility that was relocated from the Try-it Discount shopping center site on Avalon Blvd. and 231st Street that was vacated and sold by the property owner for a residential development. The Agency assisted in the temporary relocation of the facility. The new permanent site developed by FCC on their own is on Avalon Blvd. south of Carson street and no Agency financial assistance was provided.

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HOUSING

The Agency initiated a Comprehensive Affordable Housing Strategy (CAHS) to use as a policy decision resource to more appropriately and efficiently utilize redevelopment housing set aside funds amidst many competing demands and needs. The CAHS provides extensive data and analysis of housing needs and opportunities, evaluated some site feasibility, and proposed some priorities for funding.

The top seven priorities developed from the CAHS and supported by the City Council and the Redevelopment Agency include:

1. Continue the first time homebuyer silent second loans

program;

2. Continue the single family rehabilitation loans program;

3. Develop an inclusionary housing program;

4. Continue assistance of new construction with increased rental unit emphasis due to the low percentage of rental units citywide and to increase leverage of funds;

5. Scottsdale revitalization;

6. Trailer park redevelopment;

7. Main Street and Carson Street revitalization.

New legislation, AB 637, created significant changes to housing within the California Redevelopment Law. The new laws are effective as of January 1, 2002 and will require that the Agency monitor and address the new requirements. The implementation time frame for compliance for the new affordable housing requirements of AB 637 is a 10 year cycle. Many of the AB 637 requirements will likely cause higher per unit costs for affordable housing development and therefore possibly fewer total units being produced over the life of a redevelopment plan. For example, the longer affordability covenants can significantly add to costs.

A summary of the key changes created by AB 637 are as follows:

1. AFFORDABILITY LEVELS - Low to Moderate Income Housing (LMIH) set-aside funds must be used in at least the same proportion as needs for each income group, i.e., very low, low, and moderate. The proportional needs are determined by the Housing Element of the city's General Plan in accordance with the Regional Housing Needs Allocations by the Southern California Association of Governments (SCAG). Carson's Housing Element shows these proportions as 32.2% for very low, 28.8% for low, and 39% for moderate income.

2. AGE RESTRICTED UNITS - LMIH funds can only be expended in proportion to the age of the population for the city as determined by the U.S. Census, particularly for seniors defined as 65 and over. Carson's 65 and over population is 10.7% per the 2000 census, therefore affordable housing project expenditures for senior/age restricted units cannot exceed 10.7% of the total set-aside funds.

3. PUBLIC IMPROVEMENTS - LMIH financial assistance towards on- or off-site public improvements can only be used in directly benefiting the affordable housing units in a project and only in proportionate share to the percentage of the affordable units in the project.

4. SUBSTITUTION OF HOUSING FUNDS FOR OTHER AVAILABLE MONEYS - If LMIH funds are used for 50% or more of the cost of a project then all reasonable means of private financing must be utilized. This is to maximize leverage of public funds and to minimize unnecessary public subsidies.

5. REPLACEMENT HOUSING - 100% (versus 75%) of replacement units must be affordable to persons at the same or lower income level category as the displaced persons.

6. HOUSING PRODUCTION OBLIGATIONS - Only agency assisted new or rehabilitated units may satisfy production requirements. Housing production requirements can be satisfied by constructing units outside a project area on a 1 to 2 credit basis; AB 637 made this a permanent provision that previously had a sunset date.

7. AFFORDABILITY COVENANTS - Any Agency assisted housing or replacement housing must have affordability covenants for 55 (versus 15) years for rental units and 45 (versus 10) years for owner occupied units.

8. PRIORITY OCCUPANCY FOR DISPLACED PERSONS - Persons and families displaced by redevelopment activities must be given priority for any agency assisted or required replacement units.

First Time Homebuyers Program

The FTHB program has been developed to provide first time homebuyers with the financial assistance necessary to purchase a home. The assistance provided from the Agency is in the form of a deferred/amortized second mortgage with a dollar amount up to $25,850 per household. The FTHB is designed to provide opportunities for low/moderate income families to own there own home by providing down payment, closing cost assistance. The program was originated in Fiscal Year 1999/00 with an initial budget of $2.5 million in Redevelopment Housing funds. The program had a slow start due to programmatic challenges. Staff has enhanced the guidelines to create a program that is user friendly and in compliance with state and local requirements.

The FTHB program was initiated in 1999 and has completed the following production:·

· Year 1 (FY 7-1-1999 / 6-30-2000) , 2 loans closed, $40,000 spent

· Year 2 (FY 7-1-2000 / 6-30-2001) , 15 loans closed, $322,500 spent

· Year 3 (FY 7-1-2001 / 6-30-2002), 27 loans closed, $589,102 spent

· Year 4(FY 7-1-2002 / 6-30-2003), 11 loans closed, $284,350 spent (Year 4 is the current program year - 15 additional loans are pending and expect to be closed before the end of the fiscal year)

Residential Rehab Program

The housing rehabilitation program is targeted to the low and moderate homeowner. The program provides financial and technical assistance to repair code violations and basic housing repairs. All applicants for the housing rehabilitation programs must meet minimum eligibility requirements.·

· The housing rehabilitation program has assisted between 96 to 199 residential units per year with both loans and grants as follows:

§ FY 00/01: 96 units assisted with $287,288 in redevelopment funds;

§ FY 01/02: 187 units assisted with $466,348 in redevelopment funds;

§ FY 02/03: 199 units assisted with $865,000 in redevelopment funds.

Housing Rental Development Project Activity

The Redevelopment Agency has provided subsidy assistance to four separate developments since 1999. Each Agency financed development project provides housing to low or moderate-income residents in the City. The Agency provides a tenant based rental assistance to two of the development projects, in addition the housing division provides annual regulatory compliance and monitoring with regard to the various development agreements. Currently, direct rent subsidies, per development agreements, are being paid to two projects, i.e., Avalon Courtyard and Carson Terraces. During the reporting period the following activity took place related to rental assistance activity:

· The Redevelopment Agency has provided and continues to provide rental assistance to 172 low and moderate-income tenants in the city annually.

· Of the 172 residents serviced, senior citizens occupy 97 of the units and 75 of the units are occupied by families.

· The Agency provides a total of $216,000 in subsidy payments annually.

New Construction Assistance:

Carson Terrace Senior Housing Carson

Terrace is a 62 unit senior citizen affordable housing project at 632 E. 219th Street. The Agency provided financial assistance for construction and permanent financing as well as rent subsidies. Construction was completed and has a waiting list for tenants. The loan financing from the Agency totals $2,250,000. The Agency also provides rent subsidies of $73,320 per year to allow more units to be available to lower income tenants.

Carson Grace - Villagio Mixed Use

This is a mixed use project with 143 affordable rental housing units and 15,300 square feet of commercial space on the ground floor located at 519-559 E. Carson Street in Project Area No. 1. The Agency provided $9.1 million in loans. The construction was completed in 2001. The residential is fully rented and the commercial space is partially leased with a personnel services office, a Quiznos sandwich shop, a beauty salon, and the owner has signed a lease with a popular Hawiian restaurant, "Back Home in La Haina," to locate in the space previously occupied by Cafe Villagio. The Villagio is the first commercial mixed use project on Carson Street and has presented some challenges in getting strong ongoing retailer interest in the commercial space.

Try-It Discount Mall and Adjacent Vacant Land (Avalon Blvd at 228th Street)

The Agency worked with two separate property owners to assist in the development of a request for proposal in an attempt to facilitate the development of both parcels as one project. The two properties combined totaled approximately 15 acres which created a more feasible and continuous area for a better overall project. The properties were sold by the two separate property owners to one developer resulting in the construction of 141 single family homes. The development is a planned unit development that includes common areas for recreation and community facilities. The homes are all large family style with 3 and 4 bedrooms offering from 1,322 to 1,828 square feet of well thought-out living space. The overall design and construction appears to be of good quality, for example all houses include concrete tile roofs and custom color schemes and numerous options for amenities.

Shearer Gardner Site

This site is under continuing environmental evaluation for possible development for open space and/or housing. The site is comprised of three parcels totaling 16,710 square feet in the Keystone neighborhood area at the corner of Shearer Ave. and Gardner Street.

Scottsdale Residential Rehabilitation

Scottsdale is a 600 unit condominium development that was built in 1962. The property is very deteriorated and has problems with the homeowner association functions.

Revitalization strategies are being evaluated.

Carson Street Mixed Use Projects

Since Carson Street between the 405 and the 110 freeways is the focus of a Master Plan for mixed use pedestrian friendly development, many residential/commercial mixed use projects will be considered for properties as available on Carson Street. Carson Street contains a mix of Project Area No. 1 and Project Area No. 4. with more of the area in Project Area No. 4. Any projects however, on Carson Street will benefit both project areas due to improving the overall attractiveness and synergy along the whole corridor.

One current example is the Avalon Carson Mobilehome Park (Wong Property) in conjunction with the Ralph's shopping center at the southwest corner of Avalon Boulevard and Carson Street. The site is in Project Area No. 4, but directly across the street on the north side of the street is all Project Area. No. 1. The Wong property is an 8.98 acre mobile home park that is closing down. The Agency has entered into a 180 day Exclusive Negotiating Agreement (ENA) with Newmark Merrill to consider redevelopment options to expand the existing Ralph's shopping center to a 5.13 portion of the 8.98 acre site. The Olson Company is proposing to develop a 74 unit townhouse project for sale at market rates.

CAPITAL IMPROVEMENT PROJECTS

A complete list of public capital improvement projects is provided in Table 6 below. Numerous public improvement capital projects have been completed, designed, or are under construction or in planning stages within or benefiting the project areas.

Public Improvement Projects benefiting both Redevelopment Project Areas

Several public improvement capital projects within, funded, or benefit both Project Area No. 1 and the Merged and Amended Project Area. The projects completed or in progress for the combined funded projects includes total redevelopment funded improvements of over $2 million and the planned project improvements total over $21 million.

Some of the key CIP projects that will benefit both project areas include the 405/Wilmington/223rd Street traffic studies and improvements, the Teen Center, and the Avalon/405 interchange improvements.

Public Improvement Projects In Project Area No. 1

The projects completed or in progress for Project Area No. 1 includes total redevelopment funded improvements of over $18 million and planned improvements of over $18 million.

Some highlights of these CIP projects include the Del Amo/405 Freeway overpass, the Community Center expansion and refurbishment, and numerous street and storm drainage improvements.

Public Improvement Projects In The Merged and Amended Project Area

The projects completed or in progress for this project area includes total redevelopment funded improvements of over $7 million and planned improvements for over $7 million.

Some highlights of these CIP projects in the Merged and Amended Project Area include the Veterans Park Skateboard park and other park improvements, the 223rd Street/Auto Row public improvements, and numerous street and traffic improvements.

ADDITIONAL INFORMATION SOURCES

§ Implementation Plan 2000-2004 - web link: http://ci.carson.ca.us/redevelopment/Implement_Plans/PA1_MAPA/PA1_MAPA_IMPLEMENT_PLAN.htm

§ ULI Report for 110/405 Area - web link: http://ci.carson.ca.us/redevelopment/uli_final_report.pdf

§ Carson Street Conceptual Visualization Plan - web link: http://ci.carson.ca.us/redevelopment/carson_street_concept.pdf

§ Map of Redevelopment Project Areas - web link: http://ci.carson.ca.us/redevelopment/map_proj_areas.pdf

§ California Redevelopment Law (Health and Safety Code Sections 33000 et. seq.) - web link: www.leginfo.ca.us

CARSON REDEVELOPMENT AGENCY