EXHIBIT 7-B

REDEVELOPMENT FAQs

What is Redevelopment?
Redevelopment is a process created to assist city and county government in eliminating blight from a designated area, and to achieve desired development, reconstruction and rehabilitation including but not limited to: residential, commercial, industrial, and retail.

What is a Redevelopment Agency?
In most cities, the city councilmembers are also the governing board for the redevelopment agency, however, the council and the agency are two separate, distinct legal entities. The agency members hire staff to carry out the day-to-day operations and its redevelopment plans. In most counties, the board of supervisors is the governing board.

Of what benefit to a citizen is being in a Redevelopment Project Area?
Redevelopment is one of the most effective ways to breathe new life into deteriorated areas plagued by social, physical, environmental or economic conditions which act as a barrier to new investment by private enterprise. Through redevelopment, a project area will receive focused attention and financial investment to reverse deteriorating trends, create jobs, revitalize the business climate, rehabilitate and add to the housing stock, and gain active participation and investment by citizens which would not otherwise occur.

What is a Redevelopment Plan?
A redevelopment plan represents a process and a basic framework within which specific projects will be undertaken. The plan provides the agency with powers to take certain actions such as to buy and sell land within the area covered by the plan (project area), installing public infrastructure, improving dilapidated facilities and to use tax increment financing.

What is a Project Area?
A project area is the area within which actual redevelopment will take place. The project area must first go to public hearing (giving citizens who will be included in the project area a chance to express their views) after which the redevelopment agency acts on the adoption of the project area and becomes primarily responsible for future projects.

Why do we have Redevelopment Projects?
The basic reason for establishing redevelopment projects is to secure funds that can be used to attract commercial, industrial, and residential development in order to eliminate blight and improve an area.

How do Redevelopment Agencies secure funds?
The state law makes available to redevelopment agencies a method of obtaining funds called "tax increment financing." On the date the city council approves a redevelopment plan, the property within the boundaries of the plan has a certain total property tax value. If this total assessed valuation increases, most of the taxes that are derived from the increase go to the redevelopment agency. These funds are called "tax increments." Usually, the flow of tax increment revenues to the agency will not be sufficient in itself to finance the full scope of redevelopment activities and development projects. Therefore, agencies issue bonds. These bonds are not a debt of the city or county and are repaid solely from tax increment revenue. Tax increments can be used only in the same project which generates them, except for residential projects which benefit low- and moderate- income households.

Do taxing entities serving the project area lose tax revenue?
No. Taxing entities such as the county, school districts, and special districts that serve the project area, continue to receive all the tax revenues they were receiving the year the redevelopment project was formed (the base year). In addition, taxing entities receive a portion of the incremental increase in property tax revenues from a redevelopment project area.

Over the long term, entities will benefit from the redevelopment project and the tax increment financing process because at the end of the redevelopment project life (typically 40 to 45 years), the taxing agencies receive property tax revenues based on the increased value in the redevelopment project area. The tax increment that was flowing to the redevelopment agency, to repay their debt, then flows to all of the taxing agencies. Ultimately, other taxing agencies reap the revenue benefits of the redeveloped and revitalized project area when the project is completed.

Why do redevelopment agencies have the ability to condemn and assemble private property?
Condemnation is sometimes necessary to revitalize a dilapidated area. At times, the public good must take precedence over private property rights, so long as property owners receive just compensation for their land.

A redevelopment agency only uses eminent domain when necessary to accomplish projects that would not be feasible for the private market or to accomplish public infrastructure or buildings. The public agency must hold public hearings, pay the owner fair market value, and provide relocation benefits and assistance.

What is relocation?
Relocation is the displacement of a business or family for the purpose of cleaning land and preparing it for its designated use. When a person or business meets the legal qualifications, the redevelopment agency pays for: assistance in finding a new location, payments to help cover moving costs, and payments for certain other costs as provided by law.

How much would I be paid if my property was acquired by eminent domain?
If a redevelopment agency must acquire property within the project area, the agency must pay fair market value for the land and improvements, as the law requires. Independent and neutral private appraisers determine fair market value or the prices your property would sell for if you were to sell your house or business. In addition to getting a fair price for the property, the agency must offer relocation assistance and allowances to defray certain costs and alleviate the inconvenience of the move. If the parties cannot agree on fair market value, a judge or jury looks at all of the evidence, including appraisals, and makes the final determination regarding the value of the property.

Many agencies go above and beyond statutory relocation provisions, to provide even more for the property owner with the goal of putting him or her in a better place than before the redevelopment was needed.

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