Plan May Cut Oxnard Housing Debt

Money spent by Oxnard’s Redevelopment Agency two years ago to purchase and tear down a crime-plagued hotel may be credited toward a $3.5-million debt owed a fund set up to house the poor, city officials said Tuesday.

Under a plan being crafted by city staff members and opposed by affordable housing advocates, $2.1 million used to raze the Lemon Tree Hotel in downtown Oxnard and relocate its residents could help reduce the city’s growing housing-fund deficit.

As it has every year since 1986, the Oxnard City Council, sitting as the Redevelopment Agency, agreed Tuesday to withhold money paid into the housing fund.

But while agreeing 4 to 1 to continue that practice, with Councilman Andres Herrera dissenting, council members ordered city staff members to fashion a plan detailing how the fund will be repaid.

“What we need is a game plan to see how exactly it is that we are going to meet these obligations,” Mayor Manuel Lopez said.

Added Councilman Michael Pliksy: “I do not feel we should continue doing the same things over and over again. Sooner or later the day of reckoning is going to come.”

State law requires redevelopment agencies to set aside 20% of their tax increment--tax paid on property within a redevelopment area as its value increases--toward the creation of affordable housing.

A provision of the law, however, allows agencies to defer the set-aside funds to finance projects or pay debt already existing when the housing requirement was established in 1986.

Since that time, officials have withheld nearly $4 million generated in two downtown Oxnard redevelopment areas.

Redevelopment officials already are drawing up a plan to cut the deficit in half.

The Redevelopment Agency spent about $2.1 million to knock down the Lemon Tree Hotel and relocate residents of the complex, once described by police as a den of drugs and prostitution.

The money went to purchase the hotel and surrounding property, at Meta and 7th streets, and relocate residents, demolish the building and pay related legal costs.

“It was the cesspool of the city,” Dennis Matthews, redevelopment agency administrator, said. “That money could be counted as eligible set-aside money already spent.”

The plan, set to go before the council in coming months, is part of a deficit-reduction program being created by staff members that could start repaying the housing debt as early as next year.

While still in the preliminary stages, the plan drew fire Tuesday from affordable housing advocates who labeled it an inappropriate expenditure of housing funds and argued that the move might violate state law.

Eileen McCarthy, a legal aid attorney with California Rural Legal Assistance, also argued that the city should quit its practice of withholding the set-aside money and immediately start to pay into the housing fund.

“I think the expectation of (the council) is that they know what they are doing,” she told council members. “I don’t think you have enough information before you today to make an informed decision.”

Added homeless advocate Jim Gilmer: “I really don’t agree with the position of leveraging your cash flow off the backs of the poor.”

Herrera said he could not support further deferral of the housing set-aside funds.

“I will not accept any less than what the agency is required to do,” he said. “I have to cast my nay vote in support of the spirit of what we have to do.”