Anaheim in ‘Serious Bind’ on Redevelopment Funds

City officials and planners, meeting publicly for the first time since the demise of the Katella redevelopment project, Tuesday were unable to come up with a long-term solution to pay for the city’s future improvements.

The council’s failure to resolve the long-term funding problem left the commission, as one member put it, “in a serious bind” when considering further development.

City officials had counted on $36 million generated by the redevelopment project to pay for improvements in the Anaheim Stadium Business Center development area, which is scheduled for substantial increases in commercial, industrial and office space in the next 20 years.

The City Council and planning commission met in emergency session Tuesday to consider new funding methods, but the council could not agree on any one alternative put before it.

Instead the council told the planning commission to require that the next two developments scheduled for the area provide adequate off-site improvements.

“The lack of a definite solution puts us in a serious bind,” commission member Frank Feldhaus said. “We can only try to make the best decisions we can knowing there’s no funding available to support these projects.”

The Hanover-Katella Office Park, a 1.2-million-square-foot project, is scheduled to come before the planning commission Monday, while the Stadium Business Park, a 1.8-million-square-foot project, is to be considered in the next two months, following an environmental impact report.

The commission’s recent approval of a 13-story 238,000-square-foot office tower has strained services in the area to the limit, planning commission member Lou Herbst said.

“We have reached the saturation point with the last building approved,” Herbst said. “If we approve another building we have to fund new improvements.”

The business center project includes about 68 acres surrounding Anaheim Stadium and would add about 2.9 million square feet of commercial, 16.3 million square feet of office and 2.8 million square feet of industrial space.

City officials have determined that the area requires such considerable improvements as new sewer and storm drain systems and major street widening and realignment projects to support the planned development.

City planners project about $38 million of the estimated $110 million price tag for improvements will come from development fees, which were set at $4.12 per square foot. But another major chunk--$36 million--was to have been generated by the Katella redevelopment project.

The Katella project was defeated last month after fierce opposition from homeowners who feared losing their homes through the city’s power of eminent domain.

Katella was a 35-year $2.7-billion project aimed at raising money for city service improvements and rehabilitating housing through increases in tax revenue brought about by development.

But at least one city council member on Tuesday said redevelopment may not be dead. And at least one homeowner who had been outspokenly opposed to the project agreed that some form of redevelopment might be feasible.

Mayor Ben Bay said the city should not pass up “a golden opportunity for the proper use of redevelopment” and suggested the majority of city residents would not oppose a redevelopment project.

“To rule out the possibility of redevelopment in that area is ridiculous,” Bay said. “The council has been hasty in thinking the noise we heard about redevelopment is coming from a majority of people in this city.”

Later in the meeting Lou Herz, a member of Anaheim HOME, the homeowners group that opposed the Katella project, said “radical elements in the opposition” did not represent all homeowners.

“I think we understand a lot more about the redevelopment process than we did before,” Herz said. “What we have to look at is what is a reasonable level of development. I hope the totally negative aspects of against redevelopment will die down.”

But planning commission member Feldhaus said that redevelopment is still a “dirty word” in the city and that officials must look to other methods of paying for improvements.

Planning studies have identified several ways of making up the $36 million shortfall, including increasing development fees to $7.67 per square foot; having the city pay for the shortfall; beginning a land-use strategy plan for the Convention Center-Disneyland area to raise development fees, part of which would be used to fund area-wide improvements, and limiting development projects or an outright moratorium.