14-F
TO: Honorable Mayor and Members of the City Council
ATTENTION: Ryan Smoot, City Manager
FROM: Jim DellaLonga, Director of Economic Development
SUBJECT: Consideration and possible action to receive and file the Eligibility/Feasibility Analysis – Proposed Downtown Bellflower Enhanced Infrastructure Financing District.
DATE: May 13, 2024
EXECUTIVE SUMMARY
In response to a number of consultant inquiries and L.A. Metro encouragement to form an Enhanced Infrastructure Financing District (EIFD) around the proposed future light rail station on Bellflower Boulevard, staff hired a consultant to assess the eligibility and feasibility of a potential EIFD.
In February 2024, an eligibility and feasibility analysis for a potential Enhanced Infrastructure Financing District (EIFD) was completed by Harris & Associates to determine its viability as a financing mechanism for sewer improvements for Downtown Bellflower and the area within approximately ½ mile of the proposed Southeast Gateway Line light rail station on Bellflower Boulevard. EIFDs are limited tax increment financing (TIF) districts created as a potential local government economic development tool after the dissolution of redevelopment. Due to the limited nature of these districts, locating an EIFD in high potential property tax growth areas along with the voluntary participation of the largest non-education taxing entity, the County, is key to the successful formation and implementation of an EIFD.
To be eligible and feasible, Los Angeles County would have to waive its policy of minimum requirements of participation in EIFDs and would have to participate with a tax increment property tax share of more than double that of the City’s 6.67% of the 1% tax rate.
RECOMMENDATION TO CITY COUNCIL
1) Receive and file the Eligibility/Feasibility Analysis – Proposed Downtown Bellflower Enhanced Infrastructure Financing District; or
2) Alternatively, discuss and take other action related to this item.
Staff Report – North Downtown Bellflower Parking
May 13, 2024
FISCAL IMPACT
None.
DISCUSSION
In 2022, a number of consultants and L.A. Metro contacted the City to establish an EIFD around the area of the future light rail station on Bellflower Boulevard. claiming that such a district could help capture the potential increased property values that often occur around light rail station sites. As a result of these inquiries and claims, the City Manager directed staff to hire a consultant (Harris & Associates) to provide an independent assessment regarding the feasibility of such an EIFD.
In February 2024, Harris & Associates completed the attached Eligibility/Feasibility Analysis – Proposed Downtown Bellflower Enhanced Infrastructure Financing District.
The study examined a potential EIFD to finance sewer system improvements generally located within the ½ mile radius of the propose Southeast Gateway Line light rail station on Bellflower Boulevard. This location was chosen because of the tendency for areas near light rail stations to redevelop relatively quickly thereby increasing property tax.
Sewer system improvements in the area would increase sewer capacity to accommodate the potential anticipated increase in housing units built in the area around the light rail station.
EIFDs are limited tax increment financing (TIF) districts created as a potential local government economic development tool after the dissolution of redevelopment. They can only be used to finance infrastructure improvements and housing activities, and property taxing entities are not required to participate." The County of Los Angeles is the largest property taxing entity at 48.34% of the 1% property tax rate and has an EIFD Policy Manual that outlines the minimum requirements of County participation in EIFDs.
Education based property taxing entities, such as school districts, are not eligible to participate in EIFDs.
Pursuant to the County’s EIFD Policy Manual, in order for it to consider participation in an EIFD, a City must have a property tax share of at least 15% of the 1% tax rate. The City’s property tax share is 6.67%. The Policy Manual also states that the County will only potentially contribute tax increment up to the amount that the City would contribute.
Not only is the City’s property tax share already below the County’s minimum threshold for participation, but it would need a significantly higher contribution of tax increment by the County to make the financing of the sewer infrastructure improvements feasible.
The analysis concludes that although the proposed EIFD can meet a number of the County’s minimum requirements for consideration, it does not meet the following key requirements rendering it ineligible and infeasible:
1. The City of Bellflower does not meet the County’s minimum property tax share requirement of 15% of the 1% for the County to consider participating in the proposed EIFD;
Staff Report – North Downtown Bellflower Parking
May 13, 2024
DISCUSSION – Continued
2. Even if the County were to waive the 15% requirement described above, its Policy Manual states that it will only potentially contribute a tax increment percentage up to the amount that the City would generate/contribute. At the City’s property tax share of 6.67% of the 1% tax rate, this would not generate enough tax increment to finance the proposed improvements. For the proposed project to be financially feasible, the County would need to contribute approximately 14% of its property tax share.
ATTACHMENT
Eligibility/Feasibility Analysis – Proposed Downtown Bellflower Enhanced Infrastructure Financing District ............................................................................................................. 3
Eligibility/Feasibility Analysis –
Proposed Downtown Bellflower
Enhanced Infrastructure Financing
District
CITY OF BELLFLOWER
February 16, 2024
Prepared for:
CITY OF BELLFLOWER
Prepared by:
101 Progress, Suite 250
Irvine, California 92618
(949) 655-3900
1 Table of Contents
Section 1 Introduction .......................................................................................................... 2
1.1 Executive Summary ................................................................................................. 2
1.2 Background ............................................................................................................. 3
1.3 EIFD Area ............................................................................................................... 4
1.3.1 Boundary .................................................................................................... 4 Section 2 County Participation Requirements .................................................................... 6
2.1 Minimum Requirements ........................................................................................... 6
2.1.1 County Benefit Fiscal Analysis .................................................................... 7 Section 3 Tax Increment Projection Analysis ..................................................................... 9
3.1 Assumptions ............................................................................................................ 9
3.1.1 Base Assumptions (Non-RDA EIFD Area and RDA EIFD Area) ................. 9
3.1.2 RDA EIFD Area Assumptions (EIFD Area Within RDA Only) ................. 13
3.2 Tax Increment Projection Methodology ................................................................. 15
3.2.1 Non-RDA EIFD Area – Before Successor Agency Dissolution .................. 16
3.2.2 RDA EIFD Area Pre-Successor Agency Dissolution .................................. 17
3.2.3 Total EIFD Area Post-Successor Agency Dissolution ................................ 18
3.2.4 Tax Increment Projection Summary ........................................................... 20
3.3 Infrastructure Cost Analysis ................................................................................... 20
3.4 Additional Potential Costs to the City ..................................................................... 22 Section 4 Conclusion .......................................................................................................... 24 Appendix A – Bellflower EIFD 45-Year Tax Increment Projection ....................................... 25
2 Section 1 Introduction
1.1 Executive Summary
Harris & Associates (“Harris”) was retained by the city of Bellflower (“City” or “Bellflower”) to analyze the eligibility and feasibility of an enhanced infrastructure financing district (“EIFD”) in the Downtown Bellflower Transit Oriented Development Specific Plan (“TODSP”) area and some other surrounding areas. The proposed EIFD area revolves around the expected development of a station for the new Metro light rail that will run between southeast Los Angeles County and downtown Los Angeles. A map of the proposed EIFD area can be found in Figure 1: EIFD Area on page 5 of this study. The City wishes to evaluate the potential EIFD to fund sewer improvements to allow for projected development around the proposed station.
Harris has analyzed both the financial feasibility and the eligibility of the proposed EIFD pursuant to:
• The County of Los Angeles (“County”) Board of Supervisors (“Board”) EIFD Policy Manual (“Policy Manual”), which outlines the minimum requirements of County participation in EIFDs. • California Government Code (“GC”) Sections 53398.5 through 53398.58, which outline all requirements for the formation of EIFDs.
The primary findings of the analysis include the following:
• An EIFD in the City does not meet the County’s minimum requirements for the City’s share of the 1% property tax rate (a 15% minimum is required). The City’s 1% tax rate in the EIFD area is 6.67%.
• The County's participation is critical to the feasibility of an EIFD due to the much higher share of the 1% property tax at 48.34%. However, the County requirements state that it will only potentially contribute tax increment up to the amount that the City would generate, significantly limiting the potential tax increment generated. The projected cost of the needed sewer improvements is $17.4 million in 2023 dollars. The proposed EIFD is projected to generate just $113,592,337 over a 45-year period.
• The proposed sewer improvements will be challenging as the County owns the infrastructure.
3 1.2 Background
EIFDs are limited tax increment financing (“TIF”) districts created after the dissolution of redevelopment agencies in 2011. TIF for EIFDs freezes the property tax revenues for participating taxing entities that flow from a designated area to a city, county, or other taxing entities at a base level for the current year.
Any additional, incremental tax revenue to participating taxing entities in future years is diverted into a separate pool of funds that can pay for improvements to an EIFD area or pay back bonds issued against anticipated TIF revenue1. It is important to note that only the local jurisdiction can collect tax increment from EIFDs unless other, non-education taxing entities, like a county, opt in.
Senate Bill (“SB”) 628, enacted into law on September 29, 2014, modified existing Infrastructure Financing Districts into EIFDs to help cities and counties fund economic development projects.
However, several legislative measures have been passed since SB 628 adjusting EIFD requirements and uses including but not limited to: Assembly Bill 733 (2017) allows EIFDs to fund climate change adaptation projects including projects that address conditions that impact public health and extreme weather events; Senate Bill 1145 (2018) allows EIFDs to fund infrastructure maintenance costs; Assembly Bill 116 (2019) allows for EIFDs to issue bonds without a public vote while increasing public engagement requirements2; Assembly Bill 464 (2021) expands the types of facilities and projects EIFDs can fund to include small business structures impacted by the COVID-19 pandemic and nonprofit community organizations’ facilities. Throughout these modifications, a county’s participation in these districts has always been voluntary.
Once established, an EIFD can have a term of up to 45 years after the first bond is issued and can accomplish, but is not limited to, the following:
• Infrastructure maintenance,
• Transportation infrastructure,
• Sewage treatment,
• Housing development,
• Economic development,
• Climate adaptation projects,
• COVID-19 impacted small business structure improvements, and • Nonprofit community organization facility improvements.
1 Enhanced Infrastructure Financing District (EIFD). Southern California Association of Governments (“SCAG”). (2021, January 11). https://scag.ca.gov/post/enhanced-infrastructure-financing-district-eifd 2 SCAG, Enhanced Infrastructure Financing District (EIFD).
4 For the purposes of this study, a 45-year projection has been prepared.
1.3 EIFD Area
1.3.1 Boundary
The proposed Downtown Bellflower EIFD area (“EIFD Area”), which corresponds to the City’s TODSP area with slight modifications, is comprised of approximately 550 acres and is located along Bellflower Boulevard between Interstate 91 and Jefferson Street. Figure 1: EIFD Area provides a detailed map of the proposed EIFD Area.
The figure also details the portion of the City’s former Redevelopment Area #1 (“RDA”) that is included in the EIFD Area. The RDA area is important to point out as the City’s share of tax increment for properties in those areas is calculated differently than the properties outside the RDA for the duration of the RDA’s remaining enforceable obligations. This creates two different areas that comprise the EIFD Area which will be referred to throughout this study:
• The area within the EIFD Area but outside of the former RDA (“Non-RDA EIFD Area”) • The area within the EIFD Area and the former RDA (“RDA EIFD Area”) This issue is discussed in greater detail in Section 3, Tax Increment Projection Analysis.
5 Figure 1: EIFD Area
6 Section 2 County Participation Requirements
2.1 Minimum Requirements
In many cases, including for Bellflower, the goal(s) of an EIFD district will only be financially feasible with the County’s involvement. Pursuant to the Policy Manual, the EIFD Area must meet all the following minimum requirements for the County to consider participating in an EIFD:
1. The City's share of property tax increment must equal a minimum of 15 cents ($0.15) for every dollar ($1.00) captured in the EIFD Area.
2. The City's contribution of property tax increment must be at least equal to that contributed by the County general fund and its special districts. Examples of County special districts include the Fire District, Flood Control District, and Library Fund.
3. The County must not be required to contribute 100% of its property tax increment.
4. A fiscal analysis conducted by the County Chief Executive Office (“CEO”) must demonstrate a positive net impact to the County general fund as a result of the tax revenue generated from the EIFD Area.
5. In addition to supporting economic development, the proposed EIFD project must align with established Board priorities in one or more of the following areas: 1) affordable housing; 2) homelessness prevention; 3) workforce development; or 4) sustainability.
6. Any rental housing proposed for the EIFD must allocate a minimum of 20% of all units for affordable housing. In certain circumstances, this requirement may be satisfied through payment of an in-lieu fee, or through provision of an equivalent number of affordable housing units at a separate location in proximity to the economic development site.
7. The EIFD proposal must be consistent with Division 2 of Title 5 of the California GC (Section 53398.5 - 53398.58), which authorizes the formation of EIFDs.
Table 1: County Minimum Requirements analyzes how the EIFD Area and the proposed EIFD would meet the minimum requirements in the Policy Manual. The requirements in red are considered limiting factors for the County’s involvement in the EIFD while the green signifies requirements that the Downtown Bellflower EIFD meets.
7 Table 1: County Minimum Requirements
As shown in Table 1: County Minimum Requirements the proposed Downtown Bellflower EIFD meets just four of the seven minimum requirements set forth by the County for their participation in EIFDs.
County participation is crucial to the feasibility of EIFDs. While certain requirements such as requirements number (“No.”) 4 and 6 could possibly be met by City action and cooperation, requirement No. 1 is the most limiting as the City cannot change its tax rate. As a reminder, the Policy Manual states that the County will consider participating only if an EIFD meets all the minimum requirements.
2.1.1 County Benefit Fiscal Analysis
The County requires that each request for EIFD participation include a fiscal analysis that estimates the expected financial impact to the County’s general fund and any special districts that may contribute a portion of their tax increment share. The tax increment scenario detailed in Section 3.2 Tax Increment Methodology includes participation from the City and County only. No special districts are projected to participate in the EIFD in this scenario.
The County benefit fiscal analysis must include the following pursuant to the Policy Manual:
1. Anticipated growth in assessed value absent any new development;
2. Expected new development in terms of retail square footage, business park square footage, office space, apartment units, condominium units, housing units, hotel units, and parking spaces; Analysis
1.The City's share of property tax increment must equal a minimum of 15 cents ($0.15) for every dollar ($1.00) captured in the EIFD Project Area.
The average City tax share is 6.67% of the 1% property tax in TRAs that make up the EIFD Area. This is less than the 15% required to be considered for County participation in the EIFD.
2.The City's contribution of property tax increment must be at least equal to that contributed by the County General Fund and it's special districts. Examples of County special districts include the Fire District, Flood Control District, and Library Fund.
The average 1% City tax share in TRAs that make up the EIFD Area is
6.67% with the County General Fund share alone is 25.06%. The TIP scenario assumes that the County will match what the City is contributing which means the City's contribution will be equal to that of the County.
3.The County must not be required to contribute 100% of its property tax increment.
In the TIP scenario, the County is matching the City's contribution which would be 14% of the County's property tax increment.
4.The Fiscal Analysis conducted by the CEO must demonstrate a positive net impact to the County General Fund as a result of the tax revenue generated from the Project area.
A Fiscal Analysis will still need to be conducted by the County on the proposed Downtown Bellflower EIFD. The City will most likely have to pay for this County-led analysis.
5.In addition to supporting economic development, the proposed EIFD Project must align with established Board priorities in one or more of the following areas: 1) affordable housing; 2) homelessness prevention; 3) workforce development; or 4) sustainability.
In an effort to meet this requirement, a 25% affordable housing set aside is being proposed in our TIP.
6.Any rental housing proposed for the EIFD must allocate a minimum of 20% of all units for affordable housing. In certain circumstances, this requirement may be satisfied through payment of an in-lieu fee, or through provision of an equivalent number of affordable housing units at a separate location in proximity to the economic development site.
To meet this requirement, the City must establish an inclusionary housing requirement or fee for all rental housing developed within the EIFD Area.
7.The EIFD proposal must be consistent with Division 2 of Title 5 of the California Government Code (Section 53398.5 - 53398.58), which authorizes the formation of EIFDs.
Harris assumes that State Law will be adhered to throughout the formation of the EIFD.
Source: Lost Angeles County Board of Supervisors Policy Manual EIFD Minimum Requirements Minimum Requirements
8 3. Tax increment generated as a result of each new development opportunity associated with the EIFD;
4. Tax increment contributions from each participating agency;
5. Scenario analysis based on differing contributions from each County taxing entity;
6. Property tax revenue resulting to each taxing entity based on new development and growth in assessed value;
7. Sales and transient occupancy tax revenues resulting to the City and County; and
8. Sensitivity analysis evaluating the risk associated with tax forecasts based on various economic scenarios that might impact the amount of actual development realized in the EIFD.
It should be noted that most of the points to be included in the fiscal analysis (numbered points 1-6) are included in the feasibility analysis completed for the preparation of this report.
The Policy Manual states that, “Where appropriate, the County may require reimbursement from the proposing entity for the cost of conducting the fiscal analysis.” Harris estimates that this analysis would cost approximately $20,000 to complete with a 2-month timeframe for completion. This estimate is provided with the understanding that most of the required analysis that is already completed in this report will likely need to be updated with the most current data and assessed values. This estimate also includes the caveat that the fiscal analysis is to be conducted by the CEO, not the City or any City-appointed consultants. The cost and duration of the analysis will ultimately be determined by the CEO.
9 Section 3 Tax Increment Projection Analysis
3.1 Assumptions
TIF freezes the property tax revenues for participating taxing entities that flow from a designated area to a city, county, and other taxing entities at a base level for the year the EIFD is adopted. Any additional, incremental tax revenue to participating taxing entities in future years is diverted into a separate pool of funds that can pay for improvements to an EIFD area or pay back bonds issued against anticipated TIF revenue. In the case of the proposed Downtown Bellflower EIFD, the goal is to raise funds for infrastructure costs relating to development that will take place within the EIFD Area due to the proposed Metro line station.
As mentioned previously and shown in Figure 1: EIFD Area on page 5, portions of the EIFD Area are located within the City’s former RDA. This is the only former redevelopment area in the City. GC Section 53398.75 states that “where any district boundaries overlap with the boundaries of any former redevelopment project area, any debt or obligation of a district shall be subordinate to any and all enforceable obligations of the former redevelopment agency, as approved by the Oversight Board and the Department of Finance.”
Harris prepared the Downtown Bellflower EIFD tax increment projections (“TIPs”) analysis using the assumptions described in Sections 3.1.1 and 3.1.2.
3.1.1 Base Assumptions (Non-RDA EIFD Area and RDA EIFD Area) The assumptions outlined in this section apply to the entire EIFD Area. • EIFD Assessed Value: The assessed valuation of the parcels found within the EIFD Area was provided by the City on July 14, 2023, and is based on the County Assessor’s equalized assessment roll.
• Growth Rate: Harris assumes that assessed values will increase by 2% each year through Fiscal Year (“FY”) 2052-53 for a period of 45 years, starting in FY 2023-24. This is consistent with the provisions of Proposition 13.
• Tax Rates: Harris used FY 2022-23 Tax Rate Area (“TRA”) data from the County for the TRAs found within the EIFD Area. The TRAs within the EIFD Area are as follows:
o 02254
o 02263
o 02267
o 02273
o 02277
o 02335
10 o 02336
o 02375
o 11274
• A 1% tax rate is assessed on all property taxes as established by Proposition 13 (1978). This 1% is divided between the City, County, special districts, and school districts - the individual shares of each taxing entity can vary by TRA. Table 2: 1% Tax Shares Breakdown displays the average share that goes to each taxing entity (City, County, special districts, and school districts) in the TRAs that make up the EIFD Area.
Table 2: 1% Tax Shares Breakdown
As shown in Table 2: 1% Tax Shares Breakdown, the average City and County 1% tax share within the EIFD Area are 0.06666% and 0.48341%, respectively. • Added Value (new development): The TIPs include a calculation of additional assessed value from anticipated new commercial and residential development in the EIFD Area due to the planned Metro line station, including sites identified in the City’s 6th Cycle Housing Element Update (“HEU”).
Taxing Entity
Groups Taxing Entities
City-Bellflower TD#1 0.06662%
City-Bellflower Vehicle PD#1 0.00004%
County Sanitation District No 2 Op 0.01341%
Consolidated Fire Project District of LA Co 0.17639%
Greater LA Co Vector Control 0.00038%
LAC Fire-FFW 0.00735%
LA County Library 0.02354%
LA County Accum Cap Outlay 0.00011%
LA Co Flood Control Direct Impact District Maintenance 0.00175% LA Co Flood Control Maint 0.00991%
Los Angeles County General 0.25058%
Bellflower Unified School District 0.20932%
Cerritos Community College District 0.02551%
Children's Instil Tuition Fund 0.00282%
County School Service Fund - Bellflower 0.00754%
County School Services 0.00142%
Educational Augmentation Fund Impound 0.13434%
Educational Rev Augmentation Fund 0.06880%
Little Lake Cemetery District 0.000002%
Water Replenishment District of SoCal 0.00018%
Total 1.00000%1.00000%
Source: Los Angeles County Auditor-Controller
City
County
School
Special
District
Average 1% Tax Share
(From EIFD Area TRAs)
0.06666%
0.48341%
0.44975%
0.00018%
11 The HEU identifies opportunity areas or groups of parcels that the City deems as potential locations for future housing development (“Opportunity Areas”) and assigns a number of units projected to be built on those areas during the next planning period (2021-2029). More specifically, the HEU plans for the development of 2,786 units on seven Opportunity Areas within the EIFD Area. Table 3: EIFD Area Projected Units details the Opportunity Areas within the EIFD Area and the number of units expected to be developed at those locations. The table also breaks down the number of units projected to be developed within the Non-RDA EIFD Area and the RDA EIFD Area. The methodology behind these projections is shown in Table 5: RDA EIFD Area Projected Units on page 14 of this study. It should be noted that the HEU did not identify existing entitled or proposed projects for any Opportunity Areas within the EIFD Area.
All the units in Table 3: EIFD Area Projected Units are associated with HEU Opportunity Areas.
Table 3: EIFD Area Projected Units
The TIPs assume that 50% of the 2,786 units will be developed over ten years with the development beginning in FY 2025-26 due to the impending Metro line station. This translates to approximately 139 units built per year over the ten-year period. This conservative assumption is due to the current high interest rates that are impacting residential and commercial development.
Assumptions for commercial development within the EIFD Area were made as well. Table 4:
EIFD Area Commercial Projections displays the assumptions for commercial development within the Non-RDA EIFD Area, the RDA EIFD Area, and the total EIFD Area. The methodology behind these projections is shown in Table 6: RDA EIFD Area Commercial Projection on page 14 of this study.
Non-RDA
EIFD Area
RDA EIFD
Area Total
Area 2 42 0 42
Area 3 31 0 31
Area 5 724 576 1,300
Area 6 0 729 729
Area 7 30 271 301
Area 11 112 199 311
Area 12 72 0 72
Total 1,011 1,775 2,786
50%505 888 1,393
Units developed
per year over 10
years
51 89 139
Source: City of Bellflower 6 th Cycle Housing Element Update EIFD Area
Opportunity
Areas
# of Units Projected
12 Table 4: EIFD Area Commercial Projections
An assumption of 200,000 square feet (“sq. ft.”) of additional commercial development due to the Metro line station was made based on expected development within the EIFD Area using the City’s TODSP. This 200,000 sq. ft. is projected to be developed over 15 years beginning in FY 2028-29 which will hopefully coincide with the completion of the Metro line station. The assumption of 200,000 sq. ft. of commercial development over 15 years yields 13,333 sq. ft. of added commercial space per year over that period.
Harris then utilized CoStar, a market data tool, to complete market research on the value of similar developments around Bellflower. More specifically, CoStar was used to identify sales over the last 3 years3 within a ten-mile radius of Bellflower:
• Commercial sales (excluding the city of Long Beach)
• Multifamily sales (excluding the cities of Long Beach and Whittier) for properties built in 2020 or later with ten units or more.
The average price per residential unit and sq. ft. of commercial development were calculated utilizing the comparable sales. The results of these analyses yield a residential per unit value of $581,425 and a commercial per sq. ft. value of $2,066 in 2023 dollars.
An annual inflation factor of 4% was applied to the per unit value for residential development as a conservative assumption based on the growth of median home values in the City over the last five years. According to Zillow, an online real estate data source, the average annual percent change in home value over the last five years is 7.36%, but a more conservative 4% inflation factor was used due to the recent downward trend of home value growth due to high interest rates.
The increase in median home values in the City between September 2022 to September 2023 was just 0.76%.
For commercial development, CoStar was, again, utilized to calculate average market pricing trends over the last seven years yielding an average growth of 3.79% since 2017.
The added assessed value estimates for the EIFD Area are as follows in 2023 dollars:
3 As of August 2023.
Non RDA EIFD Area RDA EIFD Area Total
Total 109,585 90,415 200,000
Sq. ft. per year
over 15 years 7,306 6,028 13,333
Source: Downtown Bellflower Transit Oriented Development Specific Plan Sq. Ft. of Commercial Development Projected
13 o Residential – 1,393 units (50% of the 2,786 units identified in the HEU within the EIFD Area) at $581,425 per unit with a 4% inflation factor (Zillow). The development is projected to begin in FY 2025-26 and be developed over ten years. o Commercial – 200,000 sq. ft. of development at $2,066 per sq. ft. (CoStar) with a 3.79% inflation factor (CoStar). The development is projected to begin in FY 2028-29 and be developed over 15 years.
3.1.2 RDA EIFD Area Assumptions (EIFD Area Within RDA Only) Assumptions for the area within the RDA EIFD Area are described in this section. These assumptions only apply to this area until FY 2033-34 when the RDA’s enforceable obligations end according to the City’s last and final Recognized Obligation Payment Schedule (“ROPS”). It is important to note that property taxes are treated differently in the RDA area due to redevelopment dissolution requirements.
The tax increment generated in the RDA must first be applied to enforceable obligations before it can flow for a potential EIFD. Therefore, the tax increment in the RDA EIFD Area is calculated using modified assumptions until FY 2033-34.
• RDA EIFD Area Value: The assessed valuation of the parcels within the EIFD Area was provided by the City on July 14, 2023, based on the County Assessor’s equalized assessment roll. The RDA EIFD Area’s value is a portion of the EIFD Area's total valuation. • Redevelopment Property Tax Trust Fund (“RPTTF”) Distributions: RPTTF distribution projections are based upon actual calendar year 20234 distributions for administration, negotiated pass-through payments, and statutory pass-through payments, as shown on the RPTTF reports prepared by the County Auditor-Controller’s office. The ratio of the actual calendar year 2023 distributions as compared to gross RPTTF was calculated and applied to the annual TIPs. • Enforceable Obligations: All future enforceable obligations are projected per the City’s last and final ROPS, which shows obligations ending in FY 2033-34. • RDA EIFD Area Added Value (new development): A portion of residential and commercial added value is expected to take place within the RDA EIFD Area and should be applied to the TIPs as such.
Of the seven HEU Opportunity Areas projected to be developed within the EIFD Area, four are at least partially within the RDA EIFD Area. For the RDA EIFD Area TIPs, the percentage of the Opportunity Areas’ acreage within the RDA EIFD Area applied to the total number of projected units on each Opportunity Area yields the number of units projected for the RDA EIFD Area. The Opportunity Areas in question and the unit projection methodology are described as follows in Table 5: RDA EIFD Area Projected Units.
4 Calendar year 2023 includes ROPS periods 22 -23B and 23-24A.
14 Table 5: RDA EIFD Area Projected Units
It is important to note that the 1,775 units projected by the HEU to be developed within the RDA EIFD Area are a portion of the 2,786 units projected for the entire EIFD Area. See Table 3: EIFD Area Projected Units on page 11 for a breakdown of the projected units across the EIFD Area.
The RDA EIFD Area TIPs assume that 50% of the HEU units, or 888 units, will be developed over ten years beginning in FY 2025-26 due to the impending Metro line station. This equates to 89 units developed per year over that period within the RDA EIFD Area. The separate calculation for the RDA EIFD Area in the TIPs ends in FY 2033-34 when the enforceable obligations of the RDA cease.
The precise location of commercial development within the TODSP is not identified in the specific plan document, but it is assumed to be surrounding the Metro line station area as a part of mixed-use, transit-oriented development. Therefore, the ratio of commercially zoned acres found in the RDA EIFD Area to the commercially zoned acres within the entire EIFD Area is used to project the amount of projected commercial development taking place within the RDA EIFD Area. More specifically, 39 of the 87 acres of total commercially zoned acres in the EIFD Area are within the RDA EIFD Area, or 45% of the total acres. When applying this percentage to the total 200,000 sq. ft. of projected commercial development, 90,415 sq. ft. is estimated to be developed within the RDA EIFD Area. The methodology breakdown and RDA EIFD Area commercial development projections are detailed in Table 6: RDA EIFD Area Commercial Projection.
Table 6: RDA EIFD Area Commercial Projection
HEU Opportunity
Area
# of
Units
Total
Acerage
Acrage within
RDA TRAs
% Area within
RDA EIFD Area
RDA EIFD
Area Units
5 1,300 18.10 8.02 44.32%576
6 729 4.04 4.04 100.00%729
7 301 12.49 11.24 90.06%271
11 311 7.21 4.61 63.95%199
Total 1,775
50%888
Units developed
per year over 10
years
89 EIFD Area
Total
Commercially
Zoned Acres
RDA EIFD
Area
Commercially
Zoned Acres
% of EIFD Area
Commercially Zoned
Acres within RDA
EIFD Area
Total Sq. Ft. of
Commercial
Development
Projected
Sq. Ft. of Commercial
Development
Projected within RDA
EIFD Area
86.79 39.24 45.21%200,000 90,415
Sq. ft. per year
over 15 years 6,028
15 The TIPS for the RDA EIFD Area assumes 90,415 sq. ft. of commercial development will be built over 15 years beginning in FY 2028-29, which translates to 6,028 sq. ft. of added commercial development per year. See Table 4: EIFD Area Commercial Projections on page 12 for a breakdown of the commercial projections across the EIFD Area.
To summarize, the assessed value estimates within the RDA EIFD Area are as follows in 2023 dollars. These added values are a portion of the EIFD Area projected added value estimates as seen in Section 3.1.1, but will be applied to the TIPs differently during the periods where the RDA still has enforceable obligations:
o Residential – 888 units (50% of the 1,775 units identified in the HEU within the RDA EIFD Area) at $581,425 per unit with a 4% inflation factor (Zillow). The development is projected to begin in FY 2025-26 and be developed over ten years. o Commercial – 90,415 sq. ft. of development at $2,066 per sq. ft. (CoStar) with a 3.79% inflation factor (CoStar). The development is projected to begin in FY 2028-29 and be developed over 15 years.
Note that with the RDA dissolving in FY 2033-34, one year of the projected residential development and nine years of the projected commercial development will take place outside of the separate RDA EIFD Area TIPs. However, the per unit, sq. ft., and inflation assump tions will stay the same as the entire EIFD area will be projected as one area for the remainder of the 45 - year TIPs.
3.2 Tax Increment Projection Methodology
The TIPs for the EIFD Area, prepared using the assumptions detailed in the previous sections, show the City contributing 100% of its tax increment towards the EIFD. However, the TIPs include the County only matching the City’s contribution pursuant to the following County minimum requirements for EIFD participation outlined in Policy Manual requirements No. 1 and 2:
1. The City's contribution of property tax increment must be at least equal to that contributed by the County general fund and its special districts. Examples of County special districts include the Fire District, Flood Control District, and Library Fund.
2. The County must not be required to contribute 100% of its property tax increment.
County participation is crucial to the viability of the EIFD. A housing set aside was also added to the projections to put a good faith effort towards meeting the County’s minimum requirement No. 5 as outlined in the Policy Manual.
The TIPs discussion is contained in the following sections:
16 • Section 3.2.1 describes the TIPs for the Non-RDA EIFD Area from FY 2024-25 to FY 2033-34 before the enforceable obligations are retired and the successor agency is formally dissolved. • Section 3.2.2 describes the TIPs for the RDA EIFD Area from FY 2024-25 to FY 2033-34 when enforceable obligations are retired and the successor agency dissolves. • Section 3.2.3 describes the TIPs for the total EIFD Area from FY 2034-35 to FY 2068-69, after the successor agency dissolution for the remainder of the 45-year projection.
The complete 45-year TIPs are provided in Appendix A.
3.2.1 Non-RDA EIFD Area – Before Successor Agency Dissolution Table 7: Non-RDA EIFD Area Pre-Successor Agency Dissolution TIPs shows the projection of EIFD revenue generated within the EIFD Area that is outside of the RDA EIFD Area through FY 2033-34 when the successor agency will formally dissolve. This section utilizes the base assumptions found in Section 3.1.1 for the Non-RDA EIFD Area as displayed in Table 3: EIFD Area Projected Units and Table 4: EIFD Area Commercial Projections which are both on page 12. Once the obligations are fully paid, the tax increment for the entire EIFD Area (without separating the RDA EIFD Area from the Non- RDA EIFD Area) will be calculated in a consistent manner, as shown in Table 10: Total EIFD Area Post-Successor Agency Dissolution TIPs on page 19.
Table 7: Non-RDA EIFD Area Pre-Successor Agency Dissolution TIPs
Fiscal
Year
Total Assessed
EIFD Value not
within RDA
EIFD Area
Added Value Incremental
Value City
County
(Matching
per Policy
Manual)
Total County
Revenue
County
share if
matching
City
Housing
Set Aside
25%
Total
100%Matching
23-24 712,159,635 - - -
24-25 726,402,828 - - - - - 0.00% - - 25-26 740,930,884 31,784,963 28,771,249 19,180 19,180 139,084 13.79% 9,590 28,770 26-27 787,534,465 33,056,361 75,374,830 50,247 50,247 364,372 13.79% 25,123 75,370 27-28 836,341,515 34,378,616 124,181,880 82,783 82,783 600,312 13.79% 41,392 124,175 28-29 887,446,961 53,936,449 175,287,326 116,851 116,851 847,362 13.79% 58,426 175,277 29-30 959,132,349 56,055,863 246,972,714 164,639 164,639 1,193,899 13.79% 82,319 246,958 30-31 1,034,370,859 58,258,611 322,211,224 214,795 214,795 1,557,612 13.79% 107,397 322,192 31-32 1,113,316,887 60,547,973 401,157,252 267,423 267,423 1,939,248 13.79% 133,711 401,134 32-33 1,196,131,197 62,927,355 483,971,562 322,629 322,629 2,339,583 13.79% 161,314 483,943 33-34 1,282,981,176 65,400,300 570,821,541 380,525 380,525 2,759,427 13.79% 190,263 570,788 Total:456,346,490 2,428,608
Non-RDA EIFD Area Pre-Successor Agency Dissolution
Total Assessed Value EIFD Revenue
17 Before the RDA’s enforceable obligations are fully paid, the EIFD Area outside the RDA EIFD Area is projected to generate $2,428,608 of revenue with $456,346,490 of value being added to the area on top of the base 2% growth rate.
3.2.2 RDA EIFD Area Pre-Successor Agency Dissolution
Because the RDA EIFD Area is a portion of the former RDA, the associated value is subject to the RPTTF tax increment distribution process per GC Section 53398.75. There are multiple potential methodologies possible to project the revenue from the RDA EIFD Area specifically. The total EIFD revenue to the City is ultimately determined by the County in its calculations at the formation of the EIFD. The County does have EIFDs that contain portions or entire former RDAs, however, their specific methodology is not publicly available. Harris did reach out to the County for an explanation of their methodology but has not heard back as of the preparation of this study.
The approach used to complete the TIPs for the RDA EIFD Area takes into consideration that the pass- through payments and enforceable obligations could grow to the point where RPTTF generated by the RDA EIFD Area increment and its added value is needed to fulfill those obligations5. This approach calculates the RDA EIFD Area’s City share to the EIFD by projecting the total gross RPTTF generated by the RDA with the projected added value, and projecting its distributions (including administration, negotiated pass-throughs, statutory pass-throughs, and enforceable obligations). Then, the percentage of total RDA value within the RDA EIFD Area is applied to the total excess revenue with the City’s tax share of that portion of excess revenue becoming the City’s share of EIFD revenue. Table 8: RDA EIFD Area Pre-Successor Agency Dissolution City Share Calculation calculates the City’s share of excess revenue for the EIFD as the percentage of the RDA EIFD Area’s projected value within the RDA.
Table 8: RDA EIFD Area Pre-Successor Agency Dissolution City Share Calculation
5 GC Section 53398.75 explains, “where any district boundaries overlap with the boundaries of any former redevelopment project area, any debt or obligation of a district shall be subordinate to any and all enforceable obligations of the former redevelopment agency, as a pproved by the Oversight Board and the Department of Finance.”
Fiscal
Year
Total RDA
Assessed Value
(Including
Added Value)
Total Incremental
Value from RDA
Base Year
Total Gross
RPTTF
Total
Admin
Negotiated
Pass-Through
Payments
Statutory Pass-
Through
Payments
Approved
Enforceable
Obligations
(via L&F)
Total Excess
Revenue
Percentage
of Value in
Overlap
Area
EIFD Area
Portion of Total
Excess Revenue
City Share
of Excess
Revenue
23-24 831,079,990 -
24-25 847,701,590 - - - - - - - 0%- - 25-26 864,655,622 665,157,351 6,651,574 (102,945) (168,749) (1,239,714) (2,254,797) 2,885,369 21% 594,538 39,634 26-27 937,765,264 738,266,993 7,382,670 (114,260) (187,296) (1,375,975) (2,345,397) 3,359,742 25% 851,053 56,734 27-28 1,014,569,760 815,071,489 8,150,715 (126,147) (206,781) (1,519,123) (2,438,817) 3,859,847 30% 1,142,636 76,171 28-29 1,095,232,314 895,734,043 8,957,340 (138,631) (227,245) (1,669,461) (2,537,666) 4,384,338 33% 1,468,031 97,863 29-30 1,194,924,814 995,426,543 9,954,265 (154,060) (252,537) (1,855,267) (2,640,897) 5,051,505 38% 1,910,159 127,336 30-31 1,299,691,289 1,100,193,018 11,001,930 (170,274) (279,116) (2,050,529) (2,748,308) 5,753,703 42% 2,398,313 159,878 31-32 1,409,755,235 1,210,256,964 12,102,570 (187,308) (307,039) (2,255,666) (1,293,548) 8,059,009 45% 3,639,502 242,619 32-33 1,525,349,450 1,325,851,179 13,258,512 (205,199) (336,365) (2,471,109) (1,110,962) 9,134,877 48% 4,412,404 294,143 33-34 1,646,716,419 1,447,218,148 14,472,181 (223,982) (367,155) (2,697,312) (73,650) 11,110,082 51% 5,683,396 378,871 Total 1,473,249
RPTTF Share of the EIFD Area Portion of Total Excess Revenue
18 This approach yields $1,473,249 of City share for the EIFD within the RDA EIFD Area during the periods the RDA still has enforceable obligations.
For the EIFD 45-year TIPs, with the County still matching the City’s EIFD contribution and the 25% housing set aside being factored in, this approach yields $2,209,874 of EIFD revenue from the RDA EIFD Area for the periods the RDA still has enforceable obligations. Table 9: RDA EIFD Area Pre- Successor Agency Dissolution TIPs breaks down this figure.
Table 9: RDA EIFD Area Pre-Successor Agency Dissolution TIPs
3.2.3 Total EIFD Area Post-Successor Agency Dissolution Table 10: Total EIFD Area Post-Successor Agency Dissolution TIPs includes the projections for FY 2034-35 to FY 2068-69 after the formal dissolution of the successor agency and that the tax increment for the entire EIFD is calculated in the same way due to retirement of enforceable obligations for the RDA area.
Fiscal
Year
Total Assessed
EIFD Value
within Former
RDA
Added Value Incremental
Value City Revenue County
Revenue
Housing
Set Aside
25%
Total
100%Matching
23-24 171,246,203 -
24-25 174,671,127 - - - - - - 25-26 178,164,550 55,816,530 6,918,347 39,634 39,634 19,817 59,450 26-27 237,544,371 58,049,191 66,298,168 56,734 56,734 28,367 85,100 27-28 300,344,449 60,371,159 129,098,246 76,171 76,171 38,086 114,257 28-29 366,722,497 77,787,853 195,476,294 97,863 97,863 48,932 146,795 29-30 451,844,800 80,867,979 280,598,597 127,336 127,336 63,668 191,005 30-31 541,749,675 84,070,120 370,503,472 159,878 159,878 79,939 239,817 31-32 636,654,788 87,399,111 465,408,585 242,619 242,619 121,310 363,929 32-33 736,786,995 90,859,980 565,540,792 294,143 294,143 147,072 441,215 33-34 842,382,715 94,457,954 671,136,512 378,871 378,871 189,435 568,306 Total:689,679,876 2,209,874
RDA EIFD Area Pre-Successor Agency Dissolution
Total Assessed Value EIFD Revenue
19 Table 10: Total EIFD Area Post-Successor Agency Dissolution TIPs
Fiscal
Year City County Total
100%Matching
34-35 962,826 962,826 1,444,239 35-36 1,104,634 1,104,634 1,656,950 36-37 1,167,208 1,167,208 1,750,811 37-38 1,232,121 1,232,121 1,848,182 38-39 1,299,462 1,299,462 1,949,193 39-40 1,369,322 1,369,322 2,053,983 40-41 1,441,796 1,441,796 2,162,694 41-42 1,516,982 1,516,982 2,275,473 42-43 1,594,982 1,594,982 2,392,473 43-44 1,675,902 1,675,902 2,513,854 44-45 1,721,199 1,721,199 2,581,798 45-46 1,767,401 1,767,401 2,651,101 46-47 1,814,527 1,814,527 2,721,790 47-48 1,862,595 1,862,595 2,793,893 48-49 1,911,625 1,911,625 2,867,438 49-50 1,961,636 1,961,636 2,942,454 50-51 2,012,647 2,012,647 3,018,970 51-52 2,064,678 2,064,678 3,097,016 52-53 2,117,749 2,117,749 3,176,624 53-54 2,171,882 2,171,882 3,257,823 54-55 2,227,098 2,227,098 3,340,647 55-56 2,283,418 2,283,418 3,425,127 56-57 2,340,864 2,340,864 3,511,296 57-58 2,399,460 2,399,460 3,599,189 58-59 2,459,227 2,459,227 3,688,840 59-60 2,520,189 2,520,189 3,780,284 60-61 2,582,371 2,582,371 3,873,557 61-62 2,645,797 2,645,797 3,968,695 62-63 2,710,491 2,710,491 4,065,736 63-64 2,776,479 2,776,479 4,164,718 64-65 2,843,786 2,843,786 4,265,679 65-66 2,912,440 2,912,440 4,368,660 66-67 2,982,467 2,982,467 4,473,700 67-68 3,053,894 3,053,894 4,580,842 68-69 3,126,750 3,126,750 4,690,125 108,953,855
Total EIFD Area Post Successor Agency Dissolution
EIFD Revenue
20 A total of $108,953,855 of EIFD revenue is projected to be generated by the entire EIFD Area after the RDA’s enforceable obligations are fully paid.
3.2.4 Tax Increment Projection Summary
Table 11: EIFD Revenue Summary breaks down the revenue that is projected to be collected by the EIFD over the 45-year TIPs.
Table 11: EIFD Revenue Summary
The total EIFD projected revenue including all three projection sections is as follows:
• Grand Total EIFD Revenue over 45 years - $113,592,337 (the complete 45-year TIPs can be found in Appendix A at the end of this study)
o Non-RDA EIFD Area Pre-Successor Agency Dissolution - $2,428,608 o RDA EIFD Area Pre-Successor Agency Dissolution - $2,209,874 o Total EIFD Area Post Successor Agency Dissolution - $108,953,855 The projection also shows $1,705,989,581 of assessed value added to the EIFD Area due to growth from the Metro line station over the next 45 years. With the County matching the City’s contribution, it should be noted that this would be asking the County to contribute just 13.79% of its total tax increment collected from the EIFD Area. A housing set aside was also added to the projections to put a good faith effort towards meeting the County’s minimum requirement No. 5 as outlined in the Policy Manual.
The complete 45-year TIPs including all the projection sections are available in Appendix A at the end of this study.
3.3 Infrastructure Cost Analysis
Due to the limitations for tax increment revenue given the County’s minimum requirements for EIFD participation, only the cost for sewer improvements consistent with the projected development Non-RDA
EIFD Area
Revenue
RDA EIFD
Area
Revenue
EIFD Area
Revenue
GRAND
TOTAL
Pre-Successor Agency
Dissolution
(FY 2024-25 - FY 2033-34)
2,428,608 2,209,874 4,638,482
Post-Successor Agency
Dissolution
(FY 2035-36 - FY 2068-69)
108,953,855 108,953,855
TOTAL 113,592,337
21 assumptions has been estimated. These assumptions are shown previously in this study and summarized as follows:
• Residential – 1,393 multifamily apartment units total or 139 units per year over ten years. • Commercial – 200,000 sq. ft. of retail development total or 13,333 per year over 15 years.
Table 12: Infrastructure Cost Estimate details a cost estimate for sewer improvement within the EIFD Area prepared by a licensed civil engineer with Harris.
Table 12: Infrastructure Cost Estimate
The total estimated cost for sewer improvements in the EIFD Area total $17,367,000 in 2023 dollars.
The 2023 dollars note is significant as, like the value of the EIFD Area, the cost of the sewer improvements will be subject to inflationary forces throughout the TIPs period. While the TIPs project the EIFD to generate $113,592,337 of revenue over 45 years, the estimated improvement cost of $17,367,000 set at a year-over-year inflation rate of 4% (similar to the inflation rates of the added value) for the same 45-year period values the improvements at $101,443,698. This means that the estimated sewer improvement cost after 45 years will be nearly $12 million less than the sum of all EIFD revenue over the 45-year period after tax increment will start to be collected.
Item No.Item Description Unit Estimated
Quantity Unit Cost Item Cost
1 Mobilization and Demobilization LS 1 $497,000 $497,000 2 Traffic Control LS 1 $298,000 $298,000
3 SWPPP LS 1 $65,000 $65,000
4 Construction Survey LS 1 $75,000 $75,000
5 Trench Sheeting, Shoring and Bracing LS 1 $150,000 $150,000 $1,085,000
6 Remove and Replace Existing 8" SS with 12" SS by Open Trench and Restore Connections LF 8960 $550 $4,928,000 7 Remove and Replace Existing 12" SS with 18" SS by Open Trench and Restore Connections LF 4120 $725 $2,987,000 8 Remove and Replace Existing 15" SS with 24" SS by Open Trench and Restore Connections LF 1600 $900 $1,440,000 9 Remove and Replace Existing SSMH EA 6 $9,500 $57,000
10 Rehabilitate Existing SSMH EA 59 $3,500 $206,500
11 Rehabilitate Existing Connection to Trunk Sewer EA 3 $5,500 $16,500 $9,635,000
$2,144,000
$12,864,000
$1,929,600
$1,929,600
$643,200
$17,367,000
Construction Contingency (20%)
Construction Total
Planning, Environmental and Engineering (15%)
Inspection and Construction Management (15%)
Other Soft Cost (5%)
Project Total
*round up to the nearest thousand
DOWNTOWN BELLFLOWER
Area Specific Plan
ROUGH COST ESTIMATE (2023$)
for Sewer Improvements
Bid Item List
General
Subtotal: Miscellaneous
Sanitary Sewer Improvements
Subtotal: SS Improvements
22 It should be stated, however, that the sewer system that serves the EIFD Area is owned by the County.
The partnership between the City and County to do the improvements may justify a larger portion of County participation in the EIFD as the County-owned infrastructure will be upgraded by the EIFD.
3.4 Additional Potential Costs to the City
Coordination with the County to garner their participation in the EIFD as well as the formation procedures of the EIFD will add additional potential costs to the City.
As discussed in Section 2.1.1 County Benefit Fiscal Analysis, the County will conduct a fiscal analysis to determine the benefit of the EIFD to the County and other participating taxing entities. The Policy Manual states the following:
“Where appropriate, the County may require reimbursement from the proposing entity for the cost of conducting the fiscal analysis.”
Harris estimates the fiscal analysis cost at approximately $20,000 with a 2-month timeframe for the completion of the fiscal analysis. However, per the Policy Manual, the fiscal analysis is to be conducted by the CEO, not the City or any City-appointed consultants. The cost and duration of the analysis will ultimately be determined by the CEO.
The formation of the EIFD would also be a significant cost to the City if the EIFD moves forward.
Additional steps to form the EIFD include, but are not limited to, the following according to Senate Bill 628 and identified best practices6:
1. Conducting Outreach
a. Outreach should include elected officials, affected residents, and property owners.
Participating taxing entities should already be on board before formation steps are taken.
2. Establishing a Public Financing Authority
a. This includes drafting and adopting a resolution of intention to establish the proposed EIFD.
3. Preparing an Infrastructure Financing Plan (“IFP”) including:
a. A map and legal description of the proposed EIFD;
b. A description of the public facilities and other forms of development for financial assistance that is proposed within the EIFD; and
c. A financing section that:
6 How to create an EIFD. California Association for Local Economic Development (CALED). (2022, August 4). https://caled.org/how-to-create-an-eifd/
23 i. Specifies the maximum amount of incremental tax revenues each participating entity proposes to dedicate to the EIFD.
ii. Revenue projections.
iii. A plan for financing public facilities.
iv. A limit on the total revenues that may be allocated to the EIFD. v. A date on which the district will cease to exist and when tax allocations to the district will end, which can be up to 45 years from the approval data for issuing EIFD bonds of providing an EIFD loan.
vi. Fiscal analysis of potential impacts on the city of county and other taxing entities.
4. Public Hearings and Protest Proceedings
a. This includes the distribution of the IFP to all affected taxing entities and property owners and providing notices to of the public hearings and meetings.
5. Approval and Formation
Harris estimates that the formation process would be an additional cost to the City of $90,000 to $110,000 with the process taking 12 to 18 months to complete.
24 Section 4 Conclusion
The analysis of eligibility and feasibility of the potential Downtown Bellflower EIFD Area indicates the following:
• The proposed EIFD meets just four of the seven minimum requirements (Policy Manual requirements No. 2, 3, 5, and 7) for County participation.
o Policy Manual requirement No. 1 seems very unlikely for the City to remedy. o County participation is vital to the financial feasibility of the EIFD. Without County participation, the City would only receive its own share of tax increment revenue which would be equal to the City’s share without the EIFD in place. Additionally, the City’s share would be insufficient to fund the needed sewer improvements.
• The amount of tax revenue generated under the County’s Policy for EIFD participation would be insufficient to fund the sewer improvements needed to allow for additional development capacity. o Should the County be willing to veer from its policy requirements and be willing to contribute
13.79% of its tax increment, the EIFD would generate an estimated $113,592,337 in projected tax increment revenue over 45 years. The cost of needed sewer improvements is estimated at $17,367,000 in 2023 dollars. This amount with inflation applied over the same 45-year period grows to $101,443,698.
Given the results of the analysis, should the City wish to pursue an EIFD for the Transit Oriented Development area around the future Bellflower Light Rail Station, it is recommended that the City consider trying to meet with the County to discuss the possibility of a partnership for the sewer improvements (County owned sewer). This would require policy flexibility on a) the County’s minimum requirements on the City’s property tax rate (6.67% vs. at least 15%) and b) if, the County can agree to item a), the County’s willingness to match the City’s increment contribution which would lead to the County contributing 13.79% of its increment as opposed to the City’s 100% contribution.
25 Appendix A – Bellflower EIFD 45-Year Tax Increment Projection
23 Fiscal
Year
Total Assessed
EIFD Value not
within RDA
EIFD Area
Added Value Incremental
Value City
County
(Matching
per Policy
Manual)
Total County
Revenue
County
share if
matching
City
Housing
Set Aside
25%
Total
Total Assessed
EIFD Value
within Former
RDA
Added Value Incremental
Value County City Revenue County
Revenue
Housing
Set Aside
25%
Total
Total Assessed
EIFD Value not
within Former
RDA
Added Value Incremental Value City County Total County
share
County
share if
matching
City
Housing Set
Aside 25%Total
100%Matching 100%Matching 100%Matching
23-24 712,159,635 - - - 171,246,203 - - - - - - - 24-25 726,402,828 - - - - - 0.00% - - 174,671,127 - - - - - - - - - - - - - 0.00% - - - 25-26 740,930,884 31,784,963 28,771,249 19,180 19,180 139,084 13.79% 9,590 28,770 178,164,550 55,816,530 6,918,347 39,634 39,634 39,634 19,817 59,450 - - - - - - 0.00% - - 88,220 26-27 787,534,465 33,056,361 75,374,830 50,247 50,247 364,372 13.79% 25,123 75,370 237,544,371 58,049,191 66,298,168 56,734 56,734 56,734 28,367 85,100 - - - - - - 0.00% - - 160,471 27-28 836,341,515 34,378,616 124,181,880 82,783 82,783 600,312 13.79% 41,392 124,175 300,344,449 60,371,159 129,098,246 76,171 76,171 76,171 38,086 114,257 - - - - - - 0.00% - - 238,432 28-29 887,446,961 53,936,449 175,287,326 116,851 116,851 847,362 13.79% 58,426 175,277 366,722,497 77,787,853 195,476,294 97,863 97,863 97,863 48,932 146,795 - - - - - - 0.00% - - 322,072 29-30 959,132,349 56,055,863 246,972,714 164,639 164,639 1,193,899 13.79% 82,319 246,958 451,844,800 80,867,979 280,598,597 127,336 127,336 127,336 63,668 191,005 - - - - - - 0.00% - - 437,963 30-31 1,034,370,859 58,258,611 322,211,224 214,795 214,795 1,557,612 13.79% 107,397 322,192 541,749,675 84,070,120 370,503,472 159,878 159,878 159,878 79,939 239,817 - - - - - - 0.00% - - 562,010 31-32 1,113,316,887 60,547,973 401,157,252 267,423 267,423 1,939,248 13.79% 133,711 401,134 636,654,788 87,399,111 465,408,585 242,619 242,619 242,619 121,310 363,929 - - - - - - 0.00% - - 765,063 32-33 1,196,131,197 62,927,355 483,971,562 322,629 322,629 2,339,583 13.79% 161,314 483,943 736,786,995 90,859,980 565,540,792 294,143 294,143 294,143 147,072 441,215 - - - - - - 0.00% - - 925,158 33-34 1,282,981,176 65,400,300 570,821,541 380,525 380,525 2,759,427 13.79% 190,263 570,788 842,382,715 94,457,954 671,136,512 378,871 378,871 378,871 189,435 568,306 - - - - - - 0.00% - - 1,139,095 34-35 - - - - - - 0.00% - - - - - - - 0% - - 2,327,729,423 166,168,955 1,444,323,585 962,826 962,826 6,982,053 13.79% 481,413 1,444,239 1,444,239 35-36 - - - - - - 0.00% - - - - - - - 0% - - 2,540,452,966 43,057,305 1,657,047,128 1,104,634 1,104,634 8,010,387 13.79% 552,317 1,656,950 1,656,950 36-37 - - - - - - 0.00% - - - - - - - 0% - - 2,634,319,331 44,689,508 1,750,913,493 1,167,208 1,167,208 8,464,149 13.79% 583,604 1,750,811 1,750,811 37-38 - - - - - - 0.00% - - - - - - - 0% - - 2,731,695,225 46,383,583 1,848,289,387 1,232,121 1,232,121 8,934,877 13.79% 616,061 1,848,182 1,848,182 38-39 - - - - - - 0.00% - - - - - - - 0% - - 2,832,712,713 48,141,877 1,949,306,875 1,299,462 1,299,462 9,423,209 13.79% 649,731 1,949,193 1,949,193 39-40 - - - - - - 0.00% - - - - - - - 0% - - 2,937,508,845 49,966,824 2,054,103,007 1,369,322 1,369,322 9,929,808 13.79% 684,661 2,053,983 2,053,983 40-41 - - - - - - 0.00% - - - - - - - 0% - - 3,046,225,846 51,860,951 2,162,820,008 1,441,796 1,441,796 10,455,360 13.79% 720,898 2,162,694 2,162,694 41-42 - - - - - - 0.00% - - - - - - - 0% - - 3,159,011,314 53,826,879 2,275,605,476 1,516,982 1,516,982 11,000,580 13.79% 758,491 2,275,473 2,275,473 42-43 - - - - - - 0.00% - - - - - - - 0% - - 3,276,018,419 55,867,332 2,392,612,581 1,594,982 1,594,982 11,566,208 13.79% 797,491 2,392,473 2,392,473 43-44 - - - - - - 0.00% - - - - - - - 0% - - 3,397,406,119 - 2,514,000,281 1,675,902 1,675,902 12,153,012 13.79% 837,951 2,513,854 2,513,854 44-45 - - - - - - 0.00% - - - - - - - 0% - - 3,465,354,242 - 2,581,948,404 1,721,199 1,721,199 12,481,483 13.79% 860,599 2,581,798 2,581,798 45-46 - - - - - - 0.00% - - - - - - - 0% - - 3,534,661,327 - 2,651,255,489 1,767,401 1,767,401 12,816,522 13.79% 883,700 2,651,101 2,651,101 46-47 - - - - - - 0.00% - - - - - - - 0% - - 3,605,354,553 - 2,721,948,715 1,814,527 1,814,527 13,158,263 13.79% 907,263 2,721,790 2,721,790 47-48 - - - - - - 0.00% - - - - - - - 0% - - 3,677,461,644 - 2,794,055,806 1,862,595 1,862,595 13,506,838 13.79% 931,298 2,793,893 2,793,893 48-49 - - - - - - 0.00% - - - - - - - 0% - - 3,751,010,877 - 2,867,605,039 1,911,625 1,911,625 13,862,385 13.79% 955,813 2,867,438 2,867,438 49-50 - - - - - - 0.00% - - - - - - - 0% - - 3,826,031,095 - 2,942,625,257 1,961,636 1,961,636 14,225,042 13.79% 980,818 2,942,454 2,942,454 50-51 - - - - - - 0.00% - - - - - - - 0% - - 3,902,551,716 - 3,019,145,878 2,012,647 2,012,647 14,594,953 13.79% 1,006,323 3,018,970 3,018,970 51-52 - - - - - - 0.00% - - - - - - - 0% - - 3,980,602,751 - 3,097,196,913 2,064,678 2,064,678 14,972,262 13.79% 1,032,339 3,097,016 3,097,016 52-53 - - - - - - 0.00% - - - - - - - 0% - - 4,060,214,806 - 3,176,808,968 2,117,749 2,117,749 15,357,118 13.79% 1,058,875 3,176,624 3,176,624 53-54 - - - - - - 0.00% - - - - - - - 0% - - 4,141,419,102 - 3,258,013,264 2,171,882 2,171,882 15,749,670 13.79% 1,085,941 3,257,823 3,257,823 54-55 - - - - - - 0.00% - - - - - - - 0% - - 4,224,247,484 - 3,340,841,646 2,227,098 2,227,098 16,150,074 13.79% 1,113,549 3,340,647 3,340,647 55-56 - - - - - - 0.00% - - - - - - - 0% - - 4,308,732,434 - 3,425,326,596 2,283,418 2,283,418 16,558,485 13.79% 1,141,709 3,425,127 3,425,127 56-57 - - - - - - 0.00% - - - - - - - 0% - - 4,394,907,082 - 3,511,501,244 2,340,864 2,340,864 16,975,065 13.79% 1,170,432 3,511,296 3,511,296 57-58 - - - - - - 0.00% - - - - - - - 0% - - 4,482,805,224 - 3,599,399,386 2,399,460 2,399,460 17,399,976 13.79% 1,199,730 3,599,189 3,599,189 58-59 - - - - - - 0.00% - - - - - - - 0% - - 4,572,461,328 - 3,689,055,490 2,459,227 2,459,227 17,833,386 13.79% 1,229,613 3,688,840 3,688,840 59-60 - - - - - - 0.00% - - - - - - - 0% - - 4,663,910,555 - 3,780,504,717 2,520,189 2,520,189 18,275,463 13.79% 1,260,095 3,780,284 3,780,284 60-61 - - - - - - 0.00% - - - - - - - 0% - - 4,757,188,766 - 3,873,782,928 2,582,371 2,582,371 18,726,383 13.79% 1,291,186 3,873,557 3,873,557 61-62 - - - - - - 0.00% - - - - - - - 0% - - 4,852,332,541 - 3,968,926,703 2,645,797 2,645,797 19,186,320 13.79% 1,322,898 3,968,695 3,968,695 62-63 - - - - - - 0.00% - - - - - - - 0% - - 4,949,379,192 - 4,065,973,354 2,710,491 2,710,491 19,655,457 13.79% 1,355,245 4,065,736 4,065,736 63-64 - - - - - - 0.00% - - - - - - - 0% - - 5,048,366,776 - 4,164,960,938 2,776,479 2,776,479 20,133,976 13.79% 1,388,239 4,164,718 4,164,718 64-65 - - - - - - 0.00% - - - - - - - 0% - - 5,149,334,112 - 4,265,928,274 2,843,786 2,843,786 20,622,066 13.79% 1,421,893 4,265,679 4,265,679 65-66 - - - - - - 0.00% - - - - - - - 0% - - 5,252,320,794 - 4,368,914,956 2,912,440 2,912,440 21,119,917 13.79% 1,456,220 4,368,660 4,368,660 66-67 - - - - - - 0.00% - - - - - - - 0% - - 5,357,367,210 - 4,473,961,372 2,982,467 2,982,467 21,627,725 13.79% 1,491,233 4,473,700 4,473,700 67-68 - - - - - - 0.00% - - - - - - - 0%5,464,514,554 - 4,581,108,716 3,053,894 3,053,894 22,145,690 13.79% 1,526,947 4,580,842 4,580,842 68-69 - - - - - - 0.00% - - - - - - - 0% - - 5,573,804,845 - 4,690,399,007 3,126,750 3,126,750 22,674,014 13.79% 1,563,375 4,690,125 4,690,125 Total:456,346,490 2,428,608 Total:689,679,876 2,209,874 Total:559,963,215 108,953,855 113,592,337 Non-RDA EIFD Area Pre-Successor Agency Dissolution
Total Assessed Value EIFD Revenue
GRAND
TOTAL
Total EIFD Area Post Successor Agency Dissolution
Total Assessed Value EIFD Revenue
RDA EIFD Area Pre-Successor Agency Dissolution
Total Assessed Value EIFD Revenue