Montebello Voters Face Decision on Sales Tax Hike

October 19, 2017 by · 1 Comment 

Unregistered Montebello residents have until Oct. 23 to register for the city’s special election on Nov. 7, an election that could result in an increase in the city sales tax.

After first unanimously declaring a financial emergency, the Montebello City Council in May voted to hold the special election and ask voters to approve an increase the city’s sales tax rate as a way to bring new revenue to the cash-strapped city.

Under Proposition 218, passed by voters in 1996, city governments are prohibited from placing new tax measures on the ballot in General Election years unless councilmembers first unanimously declare a fiscal emergency — a statement that the issue can’t wait until the city’s next regularly scheduled election.WEb-Feature MTB sales tax

The city wanted to raise the sales tax by one percent but had to lower its ask to .75 percent to comply with the state’s 10.25 percent sales tax cap. County voters approved a quarter-cent sales tax hike in March to pay for services for the homeless that went into effect on Oct. 1, pushing Montebello’s proposed one percent hike over the state cap.

City officials had projected $9 million in annual new revenue if Measure S passes, but that forecast has now been lowered to $6.75 million, still a hefty sum for the financially flailing city, which despite instituting a hiring freeze, years of no pay raises for employees and other budget-tightening measures, still faces a $3.2 million deficit.

A 47-page staff report presented last November to the council puts the cost for Montebello’s long-term and immediate needs at $212 million, including $178 million in deferred maintenance costs.

Montebello’s projected revenues fall far short of the amount needed and the city has run out of one-time options such as selling off city-owned assets to shore up the impending financial crisis, according to the city council.

The selling-off of cell tower sites and other city land was used in the last two fiscal year budget cycles to balance city coffers, but not before raising public outrage. Other efforts to raise revenue have failed amid voter mistrust of how the council and city staff spend revenue and award city contracts.

While council members did show some reluctance to holding the special election and asking voters to raise the sales tax, they ultimately decided it was the best path to stave off a future financial crisis, which could worsen if the city waited until its next regularly scheduled election in November 2018 to ask voters to approve new revenue raising taxes.

The city says the added revenue will help pay for things like street repairs and filling pot holes, park programs and maintenance, senior services and public safety programs.

Montebello resident Sylvia Solis supports raising the sales tax as a way to increase the size of the city’s police department and improve response times, telling EGP it’s ridiculous how long residents have to wait for the police to provide assistance.

“I wait 40 minutes, sometimes an hour,” the 25-year resident of Montebello said. “I’ve called to report suspicious activity, what if it’s a real emergency,” she complained.

According to the staff report, more revenue is needed for the city’s police and fire departments. The police department needs $5.3 million to pay for 11 additional police officers and four part-time community service officers, and to make needed improvements to the police headquarters, while the fire department requires more than double that amount, according to the report.

The fire department is running $13.1 million short of what it needs to fully staff the department and adequately upgrade infrastructure, states the report, which cites the need to hire a deputy fire chief and deputy fire marshal, build a new fire station, and to purchase a new fire engine and aerial ladder truck.

The report also calls for more hiring and improvement of facilities in nearly every department in the city.

Lopez agrees there is a need for more revenue, but says she worries the added revenue will not be spent wisely.

Yvette Fimbres, a member of the watchdog group Montebello Activists To Clean House, or MATCH90640, also wants to see the city prosper, but opposes a sales tax increase as the way to get there. Like Lopez, she fears the council and city staff can’t be trusted to spend the revenue as intended.

The burden of fixing the council’s mismanagement of city revenue should not be placed on residents and visitors to Montebello, Fimbres told EGP.

She described the council’s spending as “fraudulent” and “questionable,” citing catered dinners at council meetings and travel to attend gatherings that do not benefit the city as unnecessary and wasteful.

Council members did not respond to EGP’s requests for comment, however, Councilman Jack Hadjinian defended the city’s effort to increase the sales tax to the Whittier Daily News, saying the staff report shows every department in the city is lacking in some area due to the city’s tight budget. He rejected another revenue raising option in the report, an increase in the utility user tax, as too much of a burden on residents and city businesses. On the other hand, the sales tax hike that would apply to residents as well as visitors to city, including at one of the city’s top sales tax generators, the Montebello Town Center.

Resident Linda Strong told EGP in an email that the council lacks integrity, pointing out the council’s vote to approve a settlement with developer Garfield Financial Corp. in January of this year.

Garfield Corp. had claimed that the city didn’t properly pay for street improvements for an affordable housing project contracted for through the city’s now defunct redevelopment agency.

Strong pointed out that city funds were used to defend Councilman Bill Molinari who was named along with the city in the developer’s claim, submitted multiple times over the years, but which the city said had no merit and the company never escalated to the level of a lawsuit.

“That vote was a gift of public funds,” contends Strong in her email. “It was a gift to a political supporter.”

Molinari, responding to this article, told EGP that just the opposite is true.

He said Garfield named him in their claim because he had repeatedly blocked their attempts to get money out of the city the developer was not owed. According to Molinari, Garfield Corp was hoping to force him to recuse himself from discussion of any potential settlement because he now had a conflict of interest.

“All the claims they made about me were unsubstantiated,” Molinari said, adding that credible, highly qualified legal experts investigated the developer’s allegations but found them without merit.

The company’s strategy did not work, he said, explaining he never recused himself.

Nonetheless, Fimbres says she does not believe the city is being transparent about the sales tax hike. She accused Montebello City Attorney Arnold Alvarez-Glasman of failing to provide an impartial analysis of the measure being pushed by the council and city staff. She also accused him of publishing misinformation on the projected tax increase and incoming revenues to the city.

“If this measure is passed, the city is in store for a lawsuit challenging the validity of this measure.” Fimbres said. “It’ll probably cost the city more money to defend themselves in court.”

“The city needs revenue, but we cannot trust the present council to do the right thing,” Fimbres said.

Alvarez-Glasman denies the ballot information is inaccurate, telling The Whittier Daily News that

“The law is crafted saying that (the increase) could be up to 1 percent.” Saying otherwise is “a fraud and incorrect,” he said.

Meanwhile, Montebello officials continue to defend the sales tax hike as necessary to meeting the city’s financial obligations and to providing public safety and other services in the city.

 

Updated 10/20/17 at 42 p.m.: Clarifies from earlier version that developer Garfield Corp. filed claims, not a lawsuit against Montebello and Councilman Bill Molinari.  Adds Molinari’s response to accusation that he had done something wrong and benefited from “a gift of public funds” to defend himself against those allegations;  adds response from city attorney to allegation that he is misleading the public about the sales tax hike.

 

Montebello Wants to Raise Water Rates, Again

November 10, 2016 by · Leave a Comment 

 Some Montebello residents could see their water bills go up after the city council voted to initiate the process needed to increase water rates for customers of the city-owned system.

Last week, the city council approved the 2016 Water Rate Study and will now begin to identify and provide notice to consumers whose water rates could go up 15 percent under the proposed hike. The goal is to reduce the utilities operating budget shortfall. Rates were increased 50 percent in 2013 and another 25 percent in 2014.

The city will hold a public hearing Jan. 11 to allow residents to weigh in on the increase. If a majority of the impacted customers oppose the hike, the increase cannot be imposed.

The Montebello Water system is one of five service providers in the city, with over 1,600 meters in city’s northern and southern regions.

According to a staff report, the city water utility fund has been operating at a deficit since 2007. The 2013 and 2014 rate increases cut the operating deficit, but the added revenue is not enough to cover costs of the system’s much-needed capital improvements. In addition, the cost to operate and maintain the system, along with the pumping and imported water costs, continue to increase, the report reads.

The recent statewide drought has also encouraged residents to reduce their water consumption, causing a loss in revenue.

City officials argue that leaving water rates as they are would increase the water system’s deficit. Staff has proposed increasing rates by initially by 50 percent, followed by a 5 percent increase every year for the next four years, which they say will allow the city to repay its general fund and provide funding for immediate capital improvement needs.

Three-thirds of the utility’s customers are residential, 16 percent are commercial users and the remainder include other industrial and public authorities.

The system’s largest users by volume include the city-owned Montebello Golf Course and the southern service area in the city of Commerce.

The water study was presented to the council at its Oct. 12 meeting and was unanimously approved by the council at its Nov. 2 meeting.

During the November meeting, Councilman Bill Molinari pointed out that the city is again accepting proposals for the purchase of the water system, however, back in June, voters rejected a ballot measure approving selling the utility to a previous successful bidder.

Critics of the sale said a new assessment should be done before before there are talks of selling off the asset.

“This is the last major asset we have,” remarked Molinari. “How can we sell it, if we don’t know exactly what we’re selling.”

If the rate is approved, Montebello residents will begin to see the 15 percent increase in July 2017.

Montebello Hills: En los Detalles

February 19, 2015 by · Leave a Comment 

El Concejal de Montebello William Molinari no está en contra de que se construyan casas en uno de los últimos espacios abiertos del Valle de San Gabriel, simplemente no esta de acuerdo con el tipo de vivienda propuesto por el desarrollador de Cook Hill Properties LLC para los 488 acres de propiedad privada del sitio Montebello Hills.

Montebello necesita viviendas más grandes en lotes más grandes, los cuales atraerán a los compradores más ricos y a familias grandes multi-generacionales que desean vivir bajo el mismo techo, dijo.

Según Molinari, el proyecto Montebello Hills Planned Community no cumple con ese objetivo.

Read this article in English: Montebello Hills Details Matter

Como se informó en la Parte 1 de esta historia, los residentes y el consejo se han dividido durante años en cuanto a los detalles del plan, que incluye la construcción de un máximo de 1.200 viviendas unifamiliares y adjuntas. Para los ambientalistas, la pérdida de espacio abierto, un campo petrolero activo, y un pajarito en peligro de extinción conocido como la perlita de California son razón suficiente para rechazar el proyecto, a pesar de que incluye planes para un parque, rutas de hiking y una reserva de hábitat, además de la vivienda y posiblemente espacio para comercio.

Ellos indican que la calidad del aire es otra preocupación, citando que el Distrito de Supervisión del Aire de la Costa Sur respondió en una carta al proyecto de Informe de Impacto Ambiental Recirculado reafirmando que las “preocupaciones [de la agencia] es que residentes y otros receptores sensitivos puedan estar expuestos a un nivel significante de riesgo de cáncer y emisiones significantes de NOx” y otras emisiones tóxicas de vehículos y del campo de petróleo activo, que opera 24 horas al día, siete días a la semana.

Ahora parece, que después de más de dos décadas de tardanza, el consejo de la ciudad podría votar en abril para avanzar el proyecto.

 

Compradores Potenciales

Byron de Arakal, director de comunicaciones de Cook Hills Properties dice que la disminución de la región de viviendas hace que el desarrollo sea muy atractivo para compradores potenciales, con estimados de mediana de ingresos de $181.000 al año, tres veces más que los $47.500 de ingreso de residentes reportados en el censo de EE.UU. del 2010. Si se vendieran hoy día, el precio estimado de la casas serían, $605.000 con algunas llegando hasta los $2.5 millones.

Mientras que los nuevos hogares están dirigidos a familias de ingresos más altos, De Arakal dijo que muchos dueños de viviendas en Montebello tienen suficiente capital en sus hogares para generar una suficiente cuota considerable y hacer su mudanza más económica. Hogares multi-generacionales podrían reunir ingresos para comprar las casas más grandes que necesitan.

Es una premisa que no tiene sentido para Molinari, quien dijo que las familias con más de una generación que viven bajo el mismo techo quieren casas más grandes que la mayoría de las que se ofrecen en el plan.

“Montebello no puede proporcionar vivienda a los residentes más ricos que tienen que mudarse fuera cuando quieren ascender” y la propuesta de Cook Hill no cambia eso, dijo. Él sugiere que en lugar de la propuesta de mezcla de casas, la ciudad se beneficiaría más de un menor número de casas grandes, personalizadas en lotes más grandes.

Muchos residentes con quienes él ha hablado y desean permanecer en Montebello pondrían un depósito hoy si ese fuera el caso, dijo.

Sin embargo, de acuerdo con Cook Hill, los tamaños de las casas serán “impulsados por el mercado” y en base a la demanda del consumidor. “Vamos a construir lo que el mercado quiere”, dijo De Arakal.

Aunque la página de Internet del desarrollador muestra los planes para los hogares que van desde 1.800 pies cuadrados a 5.000 pies cuadrados de tamaño, De Arakal dijo que es posible que más compradores querrán las casas más grandes, personalizadas. Pero “si  predeterminamos [el tamaño y diseño], no tenemos capacidad para adaptarnos al mercado”, dijo.

El Alcalde Hadjinian dice que tiene un “muy buen pulso” en el mercado inmobiliario y que no está preocupado por la venta de las casas.

“Cualquier desarrollo en Montebello se vendería porque hay una escasez de inventario”, dijo.

 

¿Que Pasa con el Comercio?

Dos de las alternativas del plan incluyen elementos minoristas. Las alternativas 7 y 8, ambas incluyen 87,000 pies cuadrados de elemento minorista y 1.200 o 1.088 de unidades residenciales respectivamente.

Atraer a más empresas generadoras de ingresos ha sido durante mucho tiempo una prioridad para el ayuntamiento. “Vea cualquier centro comercial y ¿qué hay? Usted ve otros espacios comerciales que generan ingresos sustanciales”, dijo Molinari.

La residente Linda Nicklas cree que la nueva vivienda atraerá a minoristas de grandes nombres, como lo hizo durante el último desarrollo mayor, Racquet Mountain.

Hadjinian está de acuerdo. Él dijo que los residentes de mayores ingresos podrán atraer a los minoristas más conocidos de Montebello, pero agregó que él sólo favorece agregar comercio al por menor si este tiene sentido.

Cook Hill prefiere uno de los planes que no incluyen comercio al por menor, pero no es un problema, De Arakal le dijo a EGP, agregando que insistirán en poder convertir el espacio comercial para uso residencial si no está totalmente alquilado al cabo en tres años.

“Lo que realmente necesita Montebello es más contribuyentes de impuestos de ventas y no un recaudador de impuestos de ventas”, dijo.

“Esta comunidad necesita nueva actividad comercial de las cadenas nacionales”, pero la manera de hacerlo es atrayendo la clase de “clientes que los atraerá a ellos”.

Molinari llama la contingencia “construida en el fracaso”. Al igual que su diseño para el espacio comercial, que aboga por una pequeña farmacia o tienda de comestibles adyacente a la colina no visible para la mayoría de los residentes, dijo.

 

Cuestionando el Ingreso

De acuerdo a Cook Hill, el desarrollo será una gran ayuda financiera para la ciudad y la región, elevando los valores de propiedad y atrayendo a familias de ingresos más altos a la ciudad.

Cook Hill estima que el proyecto generará $8.65 en impuestos brutos a la propiedad, con la mayoría dirigiéndose a las escuelas y diferentes entidades gubernamentales.

Cuando esté totalmente construido, el proyecto generará medio millón de dólares por año para la ciudad, junto con $20 millones en cuotas de permisos sobre 7 años, y alrededor de $750.000 para equipo y personal para los departamentos de policía y bomberos de la ciudad.

Molinari no está convencido de que Montebello realmente consiga el dinero, ya que el estado mantiene los ingresos brutos de impuestos de propiedad.

Un análisis financiero del 2009 del proyecto mostró una pérdida de $440 después de gastos de ingresos para la ciudad, pero un segundo análisis en 2013 muestra un desplazamiento de millones de dólares en ingresos y un superávit, y una disminución en el costo de la seguridad pública, dijo Molinari.

“No entiendo cómo el costo de los servicios bajó”, dijo.

“¿Cómo proyectas el valor de la propiedad dentro de ocho años”, cuando los valores de propiedad cambian cada cinco o siete años?

Molinari dice que es justo mirar los números en una burbuja en lugar del efecto de filtración.

Montebello Hills es uno de los últimos espacios abiertos en la región. (Cortesía de Cook Hill Properties)

Montebello Hills es uno de los últimos espacios abiertos en la región. (Cortesía de Cook Hill Properties)

“El hecho de que tienen que llegar a todos estos otros números para un pequeño superávit”, sugiere que el desarrollador está “estirándose demasiado”, especuló.

¿Cuanto dinero para las Escuelas?

Bajo la ley estatal, el Distrito Escolar Unificado de Montebello tiene derecho a recibir honorarios de una sola vez por cada unidad de vivienda construida para ayudar a sufragar el costo del Distrito ante la toma de más estudiantes en las escuelas de MUSD.

Como mínimo, MUSD debe recibir $7,5 millones, según el informe fiscal. Los fondos se pagarán en un periodo de 7 años, cuando las casas estén ocupadas.

De Arakal dijo que están trabajando con MUSD en un acuerdo que probablemente aumentaría lo que el desarrollador paga. Él dijo que tienen un “gran deseo” de “un distrito escolar fuerte” en la zona.

El Subdirector de MUSD Art Revueltas le dijo a EGP que el Distrito espera recibir $8.9 millones en honorarios en un solo pago y está negociando otras necesidades del distrito con el desarrollador.

El desarrollo podría aumentar la matrícula a 350 estudiantes que van del preescolar al 12 grado, dijo Revueltas. Los nuevos ingresos pagarían por mejoras de las instalaciones y la contratación de más profesores y personal de apoyo. El Distrito también vería un aumento en la  Asistencia Diaria Estimada (ADA), los fondos de asistencia diaria, que se basan en las cifras de asistencia.

El acuerdo no se finalizará hasta que el proyecto tenga la luz verde por parte de la ciudad.

 

Siguientes Pasos

De ser aprobada, la construcción podría comenzar este año y completarse en 2022.

“Es ridículo cuánto tiempo ha tomado esta [decisión]”, Nicklas le dijo a EGP. Ella dijo que el Ayuntamiento debe tomar una decisión.

Hadjinian dijo que el consejo en el pasado carecía del liderazgo para sentarse con el desarrollador y resolver las cosas.

Pero algunas personas todavía cuestionan si los nuevos ingresos valen la pena ante la pérdida del espacio abierto o potencial riesgo para la salud a quienes compran casas en un campo petrolero activo.

Tila Gregorian vive cerca de las colinas y está preocupada de que la perspectiva de atraer más dinero se haya vuelto más valiosa que la vida de las personas. “Estaríamos abriendo una caja de Pandora”, dijo.

A Gregorian le gustaría ver algunos estudios de salud realizados antes de seguir adelante con el proyecto.

“Hay muchas personas que no quieren el desarrollo de las colinas pero no tenemos el dinero que Cook Hills tiene para hablar con las personas sobre el riesgo para la salud viviendo en un campo de petróleo”, dijo.

Margot Eiser del Sierra Club espera que las colinas se queden sin desarrollar. Ella está de acuerdo con uno de sus compañeros que dijeron que de aprobarse el desarrollo, la ciudad ya no debe ser nombrada Montebello, que se traduce como hermosas colinas.

“No quiero que este desarrollador haga más ganancias sobre las espaldas de nuestro pueblo”, dijo.

“Eso es lo que en última instancia, haría el dinero, no nuestra gente”.

Lea la Primera Parte: Montebello Hills: Décadas en Espera

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Twitter @nancyreporting

nmartinez@egpnews.com

Montebello Hills: Details Matter

February 12, 2015 by · 7 Comments 

Montebello Councilman William Molinari is not against homes being built on one of the last large open spaces in the San Gabriel Valley, he just doesn’t like the type of housing being proposed by developer Cook Hill Properties LLC for the 488-acre privately owned Montebello Hills site.

Montebello needs larger homes on larger lots, the kind that attract more affluent buyers and large multi-generational families that want to live under the same roof, he said.

According to Molinari, the Montebello Hills Planned Community project does not meet that goal.

As reported in Part 1 of this story, residents and the council have been divided for years over the specifics of the plan, which includes building a many as 1,200 single-family detached and attached homes. For environmentalists, loss of open space, an active oil field and the endangered California gnatcatcher are reason enough to reject the project, even though it includes plans for a park, hiking trails and a habitat reserve in addition to housing and possibly retail space.

The Montebello Hills are one of the last large open spaces in the region. (EGP photo by Nancy Martinez)

The Montebello Hills are one of the last large open spaces in the region. (EGP photo by Nancy Martinez)

They point to air quality as another concern, noting that the South Coast Air Quality Management District in a letter responding to the Recirculated Draft Environmental Impact Report reaffirmed the agency’s “concerns that residents and other sensitive receptors …would be exposed to borderline significant levels of cancer risk and significant NOx emissions” and other toxic emissions from vehicles and the active oil field, which operates 24 hours a day, seven days a week.

It now appears that after more than two decades of delays, the city council could vote in April to move the project forward.

Prospective Homebuyers

Cook Hills Properties Director of Communication Byron De Arakal says the region’s housing shortage makes the development very attractive to prospective homebuyers whose median family income they estimate will be around $181,000 a year, more than triple the $47,500 income reported for the city in 2010 U.S. Census data. If sold today, the average home price would be $605,000, with some homes selling for as much as $2.5 million.

While the new homes are targeted at higher income families, De Arakal said many longtime Montebello homeowners have enough equity in their homes to generate a sizable enough down payment to make the move affordable. Multi-generational households could pool incomes to buy the larger homes they need, he speculated.

It’s a premise that makes no sense to Molinari. He said families with more than one generation living under the same roof want homes larger than most of those offered in the plan.

“Montebello can’t provide housing for more affluent residents who have to move out when they want to move up” and Cook Hill’s proposal does not change that, he said. He suggests that instead of the mixture of homes being proposed the city would benefit more from fewer larger, custom homes on larger lots.

Many residents he’s spoken to who want to stay in Montebello would put a deposit down today if that were the case, he said.

However, according to Cook Hill, home sizes will be “market driven” and based on consumer demand. “We will build what the market wants,” said De Arakal.

Though the developer’s website shows plans for homes ranging from 1,800 square feet to 5,000 square feet in size, De Arakal said it’s possible more buyers will want the larger, custom homes. But “if we pre-determine [size and design], we have no ability to adapt to the market,” he said.

Mayor Hadjinian says he has a “really good pulse” on the real estate market and he’s not worried about whether the homes will sell.

“Any development in Montebello would sell because there is a shortage in inventory,” he said.

He’s more concerned about who moves in, and if they will be “civically engaged.”

What About Retail?

Two of the plan alternatives include retail elements. Alternatives 7 and 8 both include 87,000 sq. ft. of retail and 1,200 or 1,088 residential units respectively.

Attracting more revenue generating businesses has long been a top priority for the council. “Look at any shopping center and what do you see? You see other retail spaces that generate substantial revenue,” Molinari said.

Montebello’s Chevrolet dealer alone generates $1 million in annual sales tax revenue, he said.

Resident Linda Nicklas believes the new housing will attract big-name retailers, as it did during the  city’s last major development, Racquet Mountain.

Hadjinian agrees. He said higher income residents will lure better known retailers to Montebello, but added he only favors adding retail to the site if it makes sense.

Cook Hill prefers one of the no retail plans, but it’s not a deal killer, De Arakal told EGP, adding they would insist on being able to convert the retail space to residential use if it is not fully leased out in three years.

“What Montebello really needs is more sales tax payers not a sales tax collector,” he said.

“This community needs new retail activity from national chains,” but the way to do it is by bringing in the type of “customers that will attract them.”

Molinari calls the contingency “built in failure.” So is their design for the retail space, which calls for a small drug or grocery store on the side of the hill not visible to most residents, he said.

Questioning the Revenue

According to Cook Hill, the development will be a financial boon for the city and the region, raising property values and drawing higher income families to the city.

Cook Hill estimates the project will generate $8.65 in gross property taxes, with most going to schools and assorted government entities.

When fully built, the project will generate a half million dollars a year for the city, along with $20 million in permit fees over 7 years, and about $750,000 for equipment and staffing for the city’s police and fire departments.

Molinari’s not convinced Montebello will actually get the money, since the state keeps the bulk of property tax revenue.

A 2009 financial analysis of the project showed a $440 after expense revenue loss to the city, but a second analysis in 2013 shows a million dollar shift in revenue and a surplus, and a decrease in the cost of public safety, said Molinari.

“I don’t understand how the cost of services went down,” he said.

“How do you project property value eight years from now” when property values shift every five to seven years?

Molinari says it’s fair to look at the numbers in a bubble instead of the trickle down effect.

“The fact that they have to come up with all these others numbers for a little surplus” suggests the developer is “stretching itself too thin,” he speculated.

How Much Money for Schools?

Under state law, the Montebello Unified School District is entitled to receive one-time fees for every housing unit built to help defray the District’s cost for taking in more students at MUSD schools.

At a minimum, MUSD should receive $7.5 million, according to fiscal report. Funds would be paid out over 7 years as the homes are occupied.

De Arakal said they are working with MUSD on an agreement that would likely increase what the developer pays. He said they have a “strong desire” for “a strong school district” in the area. The quality of local schools is an important consideration for many homebuyers.

MUSD Deputy Director Art Revueltas told EGP that the District expects to receive $8.9 million in one-time fees and is negotiating other district needs with the developer.

The development could increase preschool through twelfth grade enrollment by 350 students, Revueltas said. The new revenue would pay for facility upgrades and hiring more teachers and support staff. The District would also see an increase in ADA, Average Daily Attendance funds, which are based on attendance numbers.

The agreement will not be finalized until the project is green lighted by the city.

Next Steps

If approved, building could start this year and be completed by 2022.

“It’s ridiculous how long this [decision] has taken,” Nicklas told EGP. She said the City Council needs to step up and make a decision.

Hadjinian said the council in the past lacked the leadership to sit down with the developer and work things out.

But some people still question whether the new revenue is worth the loss in open space or potential health risk to those who buy homes on an active oil field.

Tila Gregorian lives near the hills and is worried that the prospect of more money has become more valuable than peoples’ lives. “We would be opening Pandora’s box,” she said.

Gregorian would like to see some health studies conducted before moving forward with the project.

“There’s a lot of people who don’t want the hills developed but we don’t have the money that Cook Hills has to talk to people about the health risk of living on an oil field, ” she said.

Margot Eiser of the Sierra Club sponsored Save the Montebello Hills organization hopes the hills will stay undeveloped. She agrees with one of her fellow members who said if the development is approved the city should no longer be named Montebello, which translates to beautiful hills.

“I don’t want this developer to make any more profits on the backs of our people,” she said,

“That’s who would ultimately make the money, not our people.”

To read Part 1, Montebello Hills: Decades in the Waiting, go to http://egpnews.com/2015/02/montebello-hills-decades-in-the-waiting/

Montebello Hills: Decades In the Waiting

February 5, 2015 by · 7 Comments 

Oil crickets dot the brush-covered hills where the California gnatcatcher, a tiny bird on the U.S. threatened species list makes its home. Metal fencing keeps outsiders away. But a controversial project to develop a large swath of the 488-acres of open, privately owned hillside in the City of Montebello could be closer to resolution after decades of delays, plan changes and opposition from open space and environmental advocates.

Located near the cities of Rosemead and Monterey Park to the north, the Whittier Narrows Flood Plain to the east and bounded by Montebello and San Gabriel Boulevards and Lincoln Avenue, the Montebello Hills Planned Community would be built in one of the few remaining large undeveloped areas in the San Gabriel Valley.

City managers, department heads and city council members have come and gone since the project was first proposed, but as the city ends its review of the most recent development options outlined in a Draft Environmental Impact Report (DEIR), recirculated for review and comment last fall, it appears a decision on the project’s future could come this spring.

For 20 plus years the debate has mostly boiled down to one question: Is the money the city stands to make on the project worth the cost to the environment or the health consequences to people living “atop an active oil field?

Environmental activists say no.

Montebello’s longest sitting councilman says the developer has overstated the economic benefits to the city. Councilman Bill Molinari thinks the developer can afford to be more “generous” and the city should get more revenue and amenities from the project.

On the other hand, Mayor Jack Hadjinian says he is comfortable with the developer’s numbers and calls them “realistic.”

The motivation should be to develop the hills, it shouldn’t just be the net gain, Hadjinian told EGP.

Years in the Making

In 1991, then property owner Chevron proposed building nearly 2,100 homes on 80 percent of the land, drawing criticism from residents and the environmental community.

But in 1993 the California gnatcatcher, a tiny bird that makes its home in the Montebello Hills, was added to the U.S. Fish and Wildlife Service’s list of threatened species — placing much of the project area off-limits to development — and the project was reduced in the mid 1990s to 1,600 homes on approximately 65% of the land.

Working with state and federal regulators, the developer has set aside land for restoration of the coastal sage vegetation habitat and a Habitat Reserve, which under the current proposal would amount to 260 of the 314 acres to remain as open space in perpetuity.

As for the housing component, Cook Hill Properties LLC, which is overseeing the project for property owner Montebello Land Company, prefers the alternative known as the Montebello Specific Plan that would build 1,200 homes on approximately 36% of the land. It is one of several alternatives in the draft EIR that range from 600 to approximately 1,200 residential units, with or without 87 to 92,000 square feet of commercial space, and public amenities such as parks, scenic hiking trails and the approximately 260-acre habitat reserve.

Homes would be built in phases over 7 years and completed by 2022, potentially adding 3,900 new residents in the city.

A public hearing is scheduled to take place in March or early April to certify the environmental impact report recirculated last year. The city council is expected to make a decision on the project by mid April.

Molinari acknowledges the project has been under consideration for longer than any other project in the city. “Shame on us for not making a decision, but it is now time,” he told EGP, but not before saying he still has issues with the development’s design and purported benefits to Montebello.

The developer is nonetheless hopeful.

“It’s the light at the end of the tunnel,” Cook Hill Properties Director of Communication Byron de Arakal said. “When you make significant investments like we have you don’t want to walk away.”

How Much Would Montebello Receive?

A Fiscal Impact Analysis prepared for Cook Hill by Stanley R. Hoffman Associates, Inc. and released in December, crunched the numbers for four of the alternatives: the Specific Plan and Alternative 6, housing and no retail; and Alternatives 7 and 8, which each include 87 to 92,000 sq ft. of retail space as well as housing.

When fully built out, the development will generate $8.65 million in gross property revenue (based on $725 million property valuation), most of which will go to schools and other government entities.

According to the fiscal report, Montebello would financially benefit through:

—$2.65 million more in property tax revenue, vehicle registrations and other fees;

—$20 million over 7 years paid in construction related fees and permits;

—$27 million more in retail sales;

—$200,000 more in local sales tax revenue if development includes retail component.

However, $2.1 million of the $2.65 million Montebello is estimated to receive will go toward costs rising directly from the project, leaving the city $550,000 a year to use in other areas.

The numbers could vary somewhat depending on the alternative ultimately selected.

The development is self-supporting, emphasized Arakal. “The city won’t be spending any money,” he said.

Arakal said property taxes generated would also benefit the city’s retirement fund, returning funds voters in 1946 earmarked for the city’s pension fund. The state has been holding on to some of those funds since disbanding redevelopment agencies across California.

Cities across the state, including Montebello, are backing legislation to stop the state from withholding such funds. If they succeed— which Arakal is confident they will — Montebello would collect an additional $1.4 million through the PERS property tax override due to the city’s higher tax base. That would “make a dent” in Montebello’s $34 million in unfunded pension liabilities, Arakal said.

Not everyone agrees with Cook Hill’s assessment, however.

Molinari has been on the council for eight terms and has watched the project change over the years. “This proposal is a lot of what we don’t need and very little of what we do need,” said Molinari, whose background is in real estate, construction and development.

“It has to be mutually beneficial,” he said. Considering it’s a prime site, it doesn’t meet the needs in our community, Molinari said.

Resident Linda Nicklas disagrees, she think the development is a win for the city. “The city has a lot of bond [debt], so the city will need this money,” she said.

“Right now [the hills are] just a weedy area, anything would be an improvement over that.”

It’s not a viewpoint shared by Margot Eiser of the Sierra Club sponsored Save the Montebello Hills organization. She says the added revenue is not worth destroying the region’s last large open space.

“I don’t think it’s enough,” Eiser said about the projected revenue to the city. “It’s not worth the liability of building on an active oil field.”

Eiser calls Cook Hill’ numbers “real estate speculation” with “many discrepancies.”

Arakal counters that it’s “money [Montebello] doesn’t have now.”

The numbers are conservative and do not consider the “spill over affects” of new jobs or new spending by new residents, he said.

To Hadjinian, that’s an important point. If the project attracts its target buyers, which the mayor believes it will, it could lure better shops and restaurants to Montebello.

A change in the city’s demographics means higher-income customers, which attracts businesses that cater to them, said Hadjinian.

 

Next week, Part 2 will look at revenues that could be generated for the Montebello Unified School District and questions about the development’s design and fiscal impact.

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