WRITTEN PUBLIC
COMMENTS RECEIVED
Gary N. Jacobs
September 8, 2025
Re: Proposed Bond Issue
Hon. Sharona R. Nazarian
Mayor, City of Beverly Hills
455 N Rexford Drive
Beverly Hills, CA 90210
Dear Mayor Nazarian:
My wife Robin and I have lived in Beverly Hills for almost 50 years (and she in fact grew up here and attended Beverly Hills public schools).
We attended the City Council hearing on August 19, 2025 concerning, among other agenda items, the proposed Mello-Roos bond issuance in support of One Beverly Hills, a private luxury development (the “Bond Issuance”).
We are very opposed to the Bond Issuance, which could be as high as $590 million and is in support of an immense private project geared to very wealthy people.
We do not think it is appropriate for the City to be undertaking this massive Bond Issuance in furtherance of overwhelmingly private gain. There are lots of reasons to oppose it, but I will not restate them here, as others in opposition to issuance of the Bonds have already done so.
I have read the various materials and advertisements, pro and con. My principal takeaway from the ‘pro’ literature are the assertion that the Bond Issuance by the City won’t impact its credit, cost the City anything, or expose it to any financial or legal risk. These -2-
assertions are strongly and persuasively contested by the opponents, and I will not repeat their arguments here.
If I understand the City’s position, it claims that issuing the bonds will be ‘cost free’ to the City, as the hotels, retail and residents occupying the site will be totally responsible for servicing the debt, with no exposure to the City. This may or may not be accurate - the opponents disagree.
I do note that even the City acknowledges that the One Beverly Hills project will go forward whether or not the Bond Issuance takes place.
I am writing this letter to question the underlying accuracy of the City’s base assertion that the Bond Issuance will be ‘cost free’ to the City (quite apart from the disputed claims of there being no financial or liability risk). Contrary to the City’s assertions, if the Bond Issuance does take place, there will be a direct and significant cost to the City and the Beverly Hills United School District (‘BHUSD”) amounting to millions of dollars in reduced property tax collections compared to what the City and the BHUSD would receive if the One Beverly Hills project was completed without the Bond Issuance. I have not previously seen this reduction in property tax collections discussed (maybe I missed it). It seems to me, for reasons I will explain below, that the City and, particularly the BHUSD, will directly suffer a significant diminution of property tax revenue if the Bonds are issued.
Here is why (and I will use hypothetical numbers to make my point):
- The allocation of property tax revenue is approximately 53% to schools, 20% to special districts; 14% to counties; 12% to cities.
- The Mello-Roos tax assessments are not subject to these allocations but are dedicated to servicing the Bonds.
- In general, the higher the property tax on a property, the lower will be what a buyer is prepared to pay for that property.
- For simplicity, assume the City issues $500 million of Bonds at an annual interest rate of 6% (which might be at a higher or lower rate) and that the Bonds have a 30 year maturity.
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- To service these hypothetical bonds, the annual debt service would be about $30 million per year. I am assuming (perhaps not accurately), that the annual MelloRoos property tax bills would remain relatively constant, as principal amortization would roughly offset reduced interest payments over the life of the Bonds. - Assume that the $30 million is split evenly between the residential and commercial components of the project. I am not dealing in this letter with the impact of the debt service on property tax collections from the commercial elements (although I believe those would also be reduced as a result of the assumed $15 million of annual Mello-Roos debt service.)
- I believe that approximately 200 residential units are planned for the project, and using my hypothetical numbers, these units would have to absorb the $15 million Mello-Roos property tax hypothetically allocable to the residential component. If this burden is apportioned equally among the units, that would equal an annual Mello-Roos tax burden per unit of $75,000 per year in addition to ordinary property tax. ALL OF THIS TAX WOULD GO TO SERVICE THE BONDS; NONE WOULD GO TO THE CITY, SPECIAL DISTRICTS, THE COUNTY OR THE CITY. - If there were no Mello-Roos Bonds, and the developer had to come up with the $500 million from commercial sources, the price the developer would need to command would necessarily be higher than if there were Mello-Roos Bonds, as that would have to be built into the sales price.
o For example, assume no Mello-Roos Bonds, a $10 million sales price per unit, and a $125,000+ annual property tax bill per unit. o As a consequence of issuing the Mello-Roos bonds, each residential unit would have an additional Mello-Roos property tax burden of approximately $75,000 per year.
o Unless buyers are irrational, they necessarily would take this extra tax payment into account in pricing what they would be prepared to pay for their unit.
o If the realized price per unit is reduced from $10 million to $9 million, the normal annual property tax would be reduced to approximately $112,500 +. -4-
o Without Mello-Roos, the split on the property tax (at a $10 million per unit price) would be per annum:
▪ (a) BHUSD - 53% x 125,000 = $66,250
▪ (b) special districts - 20% x125,000 = $25,000
▪ (c) County - 14% x 125,000 $17,500
▪ (d) City - 12% x 125,000 = $15,000
o With the Mello-Roos Bonds, the annual split on the ordinary property tax per unit (assuming a $9 million sales price per unit) would be per annum:
▪ (a) BHUSD - 53% x 112,500 = $59,492
▪ (b) special districts - 20% x 112,500 = $22,500
▪ (c) County - 14% x 112500 = $15,750
▪ (d) City - 12% x 112,500 = $13,500
o The difference is that all the Mello-Roos tax would go to the Bonds, and none of that would go to the BHUSB, special districts, the County or the City .
- What this hypothetical exercise means is that Mello-Roos bonds would over a 30 year term, would cost in lost property tax revenue per unit:
▪ (a) BHUSD - 6,758 x 30 = $202,740
▪ (b) special districts -2,500 x 30 = $75,000
▪ (c) County - $1750x30 = $52,500
▪ (d) City - $1,500 x 30 = $45,000
▪ (t) total impairment - $375,240
o Assuming 200 residential units, this would work out to a loss of property tax revenue over the life of the Bonds in excess of $75,000,000, more than half of which would be borne by the BHUSD. THIS IS REAL MONEY. o Obviously, if the units sold for more than a 10% discount due to the tax impact of the Bonds, the fiscal impact on BHUSD, special districts, county and city would be even greater, as would be the case if the term of the Bonds was greater than 30 years.
- The numbers will of course move around based on the specific facts of the Bond Issuance and sales results, but the conclusion seems to be inescapable that the proposed transaction, viewed as a whole, represents a very substantial financial transfer from various governmental entities (and especially BHUSD) to -5-
the Developer because of the benefits the Developer would realize, and is not at all ‘cost free’ to the City and certainly not ‘cost free’ when the interests of the BHUSD are taken into account.
- The City may wish to argue that this erosion of the tax base is not significant. If it wishes to make that argument, it should do so, but a $75,000,000+ giveaway is hardly insignificant.
- If the City wishes to make the further argument that the financial detriments to the City and the other governmental agencies are outweighed by the ‘benefits’ the City will supposedly be receiving from the developer, it should make that argument as well. But we already know from the points made by other opponents of the Bonds, that the so-called ‘benefits’ are significantly overstated (to the extent those ‘benefits’ are not illusory), and the other detriments and potential liabilities are understated. Additionally, the City concedes that the One Beverly Hills project will go forward with or without the Bond Issuance.
I am not opposed to the One Beverly Hills project, particularly since construction is in process and we obviously need it to be completed; the alternative is a giant construction hole.
But before the City commits to a massive financial accommodation to the developer (which I assume the developer wants to shore up its financing and reduce its interest expense), the City needs to be more thoughtful, candid and clear eyed in its analysis and fully and accurately into account the actual costs and risks, as well as the wishes of the City’s residents.
If what the City is proposing is such a good idea, why is the City seeking the ‘vote’ of only the handful of people who live in the so-called Special District, and put it up for the up or down vote of the citizens of Beverly Hills? The City’s residents should have a say in how this $75,000,000 plus ‘sausage’ is being put together. And as noted earlier, the impact of the property tax losses attributable to the commercial element will likely make the costs of the Bond Issuance even higher.
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Kindly include this letter in the formal administrative record of the deliberations on the Bond Issuance
Thank you for consideration.
Gary N. Jacobs
Cc: John A, Mirisch, Vice Mayor
Lester Friedman, Member City Council
Craig A. Corman, Member City Council
Mary N. Wells, Member City Council
Darian Bojeaux
Editor, Beverly Hills Weekly
Editor, Beverly Hills Courier
Editor, Beverly Press
Resolution (sample attached) and take any other
necessary steps to enable property owners to
access the government provided Commercial
Property Assessed Clean Energy (C-PACE)
financing for mandatory Soft Story earthquake
retrofit projects.
As you know, the State of California has
recognized the urgent need for seismic resilience
in our communities. Many cities, including Los
Angeles, San Francisco, Berkeley and many
others, have embraced PACE programs to help
property owners finance critical improvements that
increase safety, reduce long-term risk, and protect
tenants. Unfortunately, without access to this tool,
many property owners in Beverly Hills face
significant financial barriers that delay compliance
and put residents at risk.
C-PACE financing offers unique benefits:
100% upfront funding for retrofit construction
costs.
No impact on municipal budgets or credit,
as financing is provided through private capital
markets.
Long repayment terms (up to 20–30 years),
making retrofits financially feasible while
keeping properties stable and occupied.
Lien-based repayment through property tax
bills, ensuring reliable collection without city
administrative burden.
By enabling property owners to access C-PACE
financing, the City of Beverly Hills would:
1. Improve community safety by accelerating
seismic retrofits.
2. Support housing stability by helping owners
meet retrofit mandates without resorting to
excessive rent increases or property sales.
3. Demonstrate fiscal responsibility, since
participation requires no city funds and
minimal staff time once the program is
authorized.
I urge you to prioritize this initiative and place it on the City Council’s agenda for review and adoption.
I would be happy to provide additional information,
connect you with program administrators from the
California Statewide Communities Development
Authority (CSCDA), or participate in stakeholder
discussions.
Thank you for your leadership in ensuring the
resilience and safety of our community. I look
forward to your support in enabling C-PACE
financing for Soft Story earthquake retrofits in the
City of Beverly Hills.
Respectfully,
Gary Weiss
https://cscda.org/property-assessed-clean-energyprograms/ Overview
CSCDA’s Open PACE program is a turnkey
resource for residential and commercial property
owners to finance energy efficiency, renewable
energy, water conservation and seismic
improvements.
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