SECTION V: IMPLEMENTATION
Chapter 14: Fiscal Impact Assessment and Implementation Strategies July 2009
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D. Infrastructure Financing Strategy
1. Backbone Infrastructure Costs
Backbone infrastructure costs for the Specific Plan area at horizon year 2030 are estimated to total $232.3 million (2008 $) on a preliminary basis. This figure includes the following cost items:
Backbone Infrastructure Item Co st Estimate (2008 $, millions) Streets and roads $53.8
Wet and dry utilities $148.1
Streetscape improvements $30.4
Total $232.3
Development of the Specific Plan area will require additional infrastructure that has not been considered in the Specific Plan fiscal impact a n a l y s i s . T h e s e r e q u i r e m e n t s i n c l u d e : l o c a l infrastructure (roads and utilities) developed by p r i v a t e p r o p e r t y o w n e r s , S p e c i f i c P l a n a r e a share of regional road improvements, and public facilities required by other jurisdictions such as school districts.
The detailed analysis of backbone infrastructure costs is presented in the KMA report “Fiscal Impact Assessment and Preliminary Infrastructure Financing Strategy, North City Specific Plan,” April 23, 2009, listed in Appendix B and provided under separate cover.
2. Measures of Infrastructure Cost Burden
(a) Comparison with Land Values
The magnitude of the estimated total backbone infrastructure cost can be evaluated relative to measures of economic value and the financing mechanisms potentially available to the City, property owners, and developers. It is helpful to consider the estimated total infrastructure cost relative to total developable land area (approximately $3.42 per SF of net land area). This cost burden is not excessive relative to the probable increase in land values associated with improving large-acreage raw land with backbone infrastructure. The value of land increases greatly as public infrastructure is provided and large properties are subdivided into smaller, useable parcels. For example, in recent years, the median price for large-acreage raw land in the Coachella Valley was less than $1 per SF. By contrast, small development parcels, typically located in infill settings with significant public infrastructure in place, sold for median prices of $17 per SF for non-residential land and $19 per SF for residential land. These figures indicate a significant increase in value associated with entitlement, infrastructure, and subdivision. The anticipated backbone infrastructure cost burden of $3.42 per SF of net land area for the Specific Plan is relatively minor in comparison to this value increase.