MISSION VIEJO : Council May Ratify Redevelopment Pact

The county will receive $37.5 million in Mission Viejo redevelopment revenue over the next 40 years under an agreement that could be ratified by the City Council today.

The resolution over how to split the tax revenue could clear the way for the city to forge ahead with a $35-million redevelopment plan that would overhaul city streets and help renovate the Mission Viejo Mall.

“We have a lot invested in this (redevelopment plan) and we want to pursue it,” said Mission Viejo Mayor Sharon Cody. “We’re ready, and it feels wonderful to resolve this dispute.”

Redevelopment funding is a mechanism whereby the state allows cities to use property tax revenue to pay for special projects. Also included in Mission Viejo’s plan would be money for a rail commuter station and auto mall.

But county officials said their budget would lose $146 million over 30 years if the city went ahead with the redevelopment projects. County officials said the proposed street renovations would increase the value--and property taxes--of surrounding parcels, a portion of which the county maintains it is entitled to.

In July, County Administrative Officer Ernie Schneider had asked county legal experts to prepare a court challenge to Mission Viejo’s plans.

In order to receive the redevelopment funds, a city must show blight, such as dilapidated buildings, in the redevelopment area. But Mission Viejo is claiming that traffic congestion is causing blight, an interpretation of state law that Schneider had questioned.

However, an agreement was reached last week when the city offered a portion of its tax revenue in return for the county’s promise not to sue Mission Viejo, City Manager Fred Sorsabal said.

Schneider was on vacation Tuesday and could not be reached for comment. Members of his staff confirmed that a tentative agreement was in place but declined to provide specific details.

The city must also get the cooperation of the two school districts in Mission Viejo, but city officials said they were close to closing deals with both. With the Capistrano Unified School District, which has the most students living within the redevelopment boundaries, the price for consensus will be expensive--about $9 million for building a school in Mission Viejo.

But residents will get good value for their redevelopment dollars, Cody said.

“These projects will come at a critical time when the state is stealing money that would normally come to cities,” she said. “This is a way to get things done that we wouldn’t normally have had money for.”