New Signal Hill Oversight Board begins its process of dissolving redevelopment

<strong>Construction site of the Signal Hill Police Station in February 2012. The police station is one of many projects that the City’s redevelopment agency had managed before the state dissolved redevelopment earlier this year.</strong>

Construction site of the Signal Hill Police Station in February 2012. The police station is one of many projects that the City’s redevelopment agency had managed before the state dissolved redevelopment earlier this year.

CJ Dablo
Staff Writer

The Oversight Board for Signal Hill kicked off its first meeting Wednesday by initially approving a key payment schedule that outlines more than $30 million in financial obligations from the Signal Hill Redevelopment Agency (SHRDA) from January to June 2012.
Now that the State of California has dissolved redevelopment as of Feb. 1, Signal Hill has begun the process of winding down the agency that was formerly responsible for affordable housing and eliminating blight.
City Attorney David Aleshire acknowledged that the process is new to everyone involved with redevelopredevelopment, including the attorneys.
“It’s totally new for the practitioners in the area,” Aleshire told the Oversight Board Wednesday night. “We’re all trying to learn together.”
A few bureaucratic layers were established over the past few months to oversee the process of redevelopment’s shutdown, which includes a responsibility to sell the former redevelopment property and handle numerous financial obligations that were left behind by the agency. The Signal Hill City Council acts as the Successor Agency to manage the former agency’s administrative matters. The Successor Agency’s actions are subject to the approval of a newly created Oversight Board, and the Oversight Board’s actions are subject to the California Department of Finance’s approval. The Oversight Board, a seven-member group, is composed of representatives from Signal Hill, Long Beach City College, the Los Angeles County Office of Education, the Signal Hill Employees Association, and appointments by Los Angeles County Supervisor Don Knabe. There were earlier delays for the Oversight Board to start their meetings earlier this year.


The members are Douglas Haubert, Tim Williamson, Ann-Marie Gabel, Alex Cherniss, Michael Noll and Pearl Yu. Albert Warot, who is also on the board, was not present for Wednesday night’s meeting.
Four members of the Oversight Board passed a draft of the payment schedule of the SHRDA’s financial obligations from the first half of the year, while both Board Members Gabel and Cherniss abstained.
“I don’t completely understand the structure yet,” Cherniss said, as he explained his abstaining vote. “So I’ll be asking staff some questions between now and the next meeting. But I’m not comfortable approving this yet.”
The estimated amount of obligations for the first half of 2012 includes over $8.7 million in bond payments and debt obligations for a number of redevelopment projects, including construction of the new library and the new police station. Before the Board made its decision, however, Board Chair Haubert spent a significant amount of time attempting to address one major item on the list– a debt to CarMax, who had paid $6 million for property. According to the city attorney, CarMax had forged an agreement with the SHRDA and purchased property in Signal Hill with the intention of eventually building a car dealership. However, at this time, the company has not yet decided to move forward with the development project and in the meantime has asked for the $6 million back. Aleshire acknowledged that there may potential legal issues involved.
According to the payment schedule, CarMax’s debt obligation was scheduled to be paid in June. At the suggestion of Haubert, the Board kept the obligation on the schedule but removed the item from being paid in June.
At the beginning of the meeting and well in advance of the board’s decision, a few members from the community spoke out against voting to approve the payment schedule. Carol Churchill, a Signal Hill resident and former councilmember, asked for more documentation, including copies of financial reports and contracts. She requested that the Oversight Board obtain independent resources for a number of services, including auditing and legal counseling. She recommended that the Board not use the city attorney, indicating that Aleshire faces a conflict of interest since he represents the City. She listed a number of documents that the Board needs before it should approve the payment schedule and argued for the need for a third party to audit the financial activities.
“As you can see,” Churchill said, “the Board will also require an independent auditing firm to review financial reports and ensure the accuracy of the ROPS [the recognized obligation payment schedule] since the ROPS [was] prepared with the intention of maximizing the transfer of tax increment to the City and away from individuals and entities that the Board represents.”
Before the Board voted on the payment schedule, Aleshire acknowledged there is a learning curve for the Oversight Board to understand the complexity of the numerous obligations involving several properties.
“Really, the number of items is a lot to be grasped,” Aleshire said, “so I think from staff’s standpoint, we have no problem coming back as many times as you want to talk this over. We have no problem with adopting, amending, doing whatever we need to do to… get it in a state where you’re comfortable with it.”
The Oversight Board has put on the next agenda to deal with payment schedule again in May. At that time, they will be also discussing the priority list of the SHRDA’s properties. Board Member Gabel also requested that the Board review the pros and cons of obtaining its own legal counsel and to look at administrative costs issues. She also requested a budget from the staff to determine the amount currently in the redevelopment fund.
The Oversight Board agreed that it will usually meet on the fourth Wednesday of the month in the Council Chambers. The next meeting is scheduled for May 23.

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