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Purchase Agreement for 2127 N. Main Street and { 2060 N. Bush Street February 20, 2001 Page 2 The acquisition of the property will benefit the City by providing control of the property for its long-term future use consistent with the goals of the Museum District. The property is situated at a key entry point to the City and the District. Prior to its ultimate development, the property may be landscaped and improved with an entry sign. At this time, however, no plans have been developed regarding the use of the property. Any future development of the property would be subject to CEQA Compliance. In 1993, with the adoption of the Budget Act, the State of California began requiring cities and redevelopment agencies to shift a portion of general fund property taxes and tax increment revenue respectively to the State for allocation to the Educational Revenue Augmentation Fund (ERAF). This ERAF fund was established by the State to help support its obligation to fund the facilities and operations of K-12 schools and community colleges. This re-direction of tax increment revenue from redevelopment agencies was discontinued after the 1994-95 fiscal year. However, the property tax shift from the City's general fund continues and constitutes a loss of approximately $5 million in current fiscal year. In order to offset the impact of this loss of traditional revenue and provide some budgetary relief to the cities, the State began providing a partial refund to ERAF monies in the 1999-00 fiscal year. This partial relief effort was also approved by the State for the current fiscal year and the proposed action will appropriate $108,000 of the approximately $1 million of these funds for this project. ENVIRONMENTAL IMPACT In accordance with Section 15004 (b) (2) (A) of the CEQA guidelines, the proposed request is not subject to CEQA review, based on the condition that any future use or activity on the property would be subject to CEQA compliance. FISCAL IMPACT With approval of the appropriation adjustment and the $30,000 currently funded in the CIP, a $135,000 down payment towards purchase of the property and $3,000 for escrow costs will be funded from the Capital Outlay Fund (account no. 51-271-6611). The remaining $315,000 will be financed through a loan from Caltrans over a four-year period. ~~ ~ :~ James G. Ross Executive Director Public Works Agency APPROVED AS TO FUNDS AND ACCOUNTS: od R. Coloma Executive Director Finance & Management Services 25. K. Page 64