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City OKs $174 Million in Redevelopment Bonds : Long Beach: Money will refinance debt and fund housing and business incentives.

October 29, 1992|RICK HOLGUIN | TIMES STAFF WRITER

LONG BEACH — The City Council has authorized redevelopment officials to issue as much as $174 million in bonds to refinance debt at lower interest rates and to raise money to spur new development in downtown Long Beach.

The refinancing could save the Redevelopment Agency more than $100,000 a year, officials said. And about $27 million would be used to develop housing downtown and provide loans and other incentives to attract new business.

But Susan F. Shick, who heads the city's Redevelopment Agency, said the bonds will not be sold immediately because of recent increases in interest rates from 6.4% last week to about 6.65% on the bond market.

"We want to look at the market," Shick said. "Hopefully it moderates and goes down a bit."

Proponents of the issue said refinancing the debt will be a sound business decision if rates fall.

"If we were not taking advantage of the interest opportunities at this time . . . I believe we would be remiss," Councilman Douglas S. Drummond said.

Councilman Warren Harwood, who cast the lone dissenting vote, objected to the Redevelopment Agency taking on debt that will not be repaid until 2023, 13 years after the current debt is scheduled to be retired.

"We're headed down the road of mortgaging our future," Harwood said.

Under California law, redevelopment agencies are allowed to use property taxes to provide incentives for private development and pay for public improvements such as streets and sidewalks.

Most redevelopment agencies issue bonds to raise large sums of money and use their property tax income to pay off the bond debt.

Much of the bond money is used to entice private developers into a redevelopment zone.

A redevelopment agency may buy land and sell it to a developer at a lower price. Or the agency may pay for new sidewalks or other improvements for a private development.

Most of the money from the bonds authorized Tuesday--as much as $125 million--could be used in the downtown redevelopment area. The redevelopment zone includes 420 acres and most of the city's central business district.

But in all likelihood, the Redevelopment Agency will probably need to issue only about $94 million in bonds in the downtown zone, Shick said.

About $63 million of that would refinance existing bond debt at a lower interest rate--about 6.25% compared to the 8% the Redevelopment Agency now pays--saving the agency $100,000 or more a year, Shick said.

The Redevelopment Agency plans to use about half of the remaining proceeds to promote development of housing for moderate-income and high-income residents in an area dominated by modest homes and apartment buildings.

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