City Council Chambers
29844 Haun Road
Menifee, CA 92586
RIcky Estrada, Mayor
Bob Karwin, District 1
Ben Diederich, District 2
Dan Temple, District 3
Dean Deines, District 4
AGENDA
Menifee City Council
Special Meeting Agenda
Wednesday, December 17, 2025
3:30 PM Special Meeting
Armando G. Villa, City Manager
Jeffrey T. Melching, City Attorney
Stephanie Roseen, City Clerk
SPECIAL MEETING (3:30 PM)
1. CALL TO ORDER
2. ROLL CALL
3. PLEDGE OF ALLEGIANCE
4. DISCUSSION ITEMS
4.1 Overview of the City of Menifee Land Use Financial Analysis RECOMMENDED ACTION
1. Review and discuss the Land Use Financial Analysis presentation provided by Urban3, LLC.
5. ADJOURN
Decorum Policy Notes
The Council anticipates and encourages public participation at its Council meeting on agenda items.
Please turn your cell phones off, refrain from talking in the audience or outbursts that may be disruptive.
We encourage participation and ask for a mutual respect for the proceedings.
Staff Reports
Materials related to an item on this agenda, including those submitted to the City Council after distribution of the agenda packet, are available for public inspection by contacting the City Clerk Department at City Hall located at 29844 Haun Road or by calling (951) 6726777 during normal business hours.
Compliance with the Americans with Disabilities Act
If you need special assistance to participate in this meeting, you should contact the City Clerk Department at (951) 6726777. Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting.
Affidavit of the Posting
I, Stephanie Roseen, do hereby certify, under penalty of perjury, that the December 17, 2025 City Council special meeting agenda was posted at least 24 hours prior to the meeting in the following locations per Cal. Gov. Code, § 54956, subds. (a) and (c): Menifee City Hall, 29844 Haun Road, Kay Ceniceros Community Center, 29995 Evans Road, and the City of Menifee website.
Menifee Mayor and City Council
December 17, 2025
Page
1 of 22
CITY OF MENIFEE
SUBJECT: Overview of the City of Menifee Land Use Financial Analysis MEETING DATE: December 17, 2025
TO: Mayor and City Council
PREPARED BY: Kayla Charters, Economic Development Manager REVIEWED BY: Bryan Jones, Assistant City Manager
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------
RECOMMENDED ACTION
1. Review and discuss the Land Use Financial Analysis presentation provided by Urban3, LLC.
DISCUSSION
On November 6, 2024, the City of Menifee entered into an agreement with Urban3, LLC to perform a Land Use Analysis on the City of Menifee. This effort was guided by the City of Menifee’s Strategic Plan and the strategic priority “Thriving Economy.” A core value detailed within this strategic priority is the commitment to “encourage smart growth.” Although “smart growth” is often cited, the City currently lacks data and analysis on the fiscal impacts of the City’s growth pattern that would empower City leadership to guide smart growth.
Menifee continues to attract national attention for its rapid growth, driven largely by significant residential development throughout the community. As housing growth accelerates, it is increasingly important for the City to understand and plan for the long-term fiscal impacts of this growth. Single-family residential development, while an important component of the community, often does not generate sufficient property tax revenue to cover the cost of the municipal services it requires, particularly in areas such as public safety, infrastructure, and long-term maintenance.
As a result, it is critical that the City explores revenue generation avenues that maximize return on investment and balance the residential growth that the City of Menifee has experienced. This analysis will discuss opportunities to balance existing residential development with diverse housing types and commercial development to achieve a more sustainable model.
The City’s opportunities to generate long-term revenue are limited by the amount of commercially zoned land available, much of which is concentrated along specific corridors. These areas represent some of the last remaining opportunities to maximize return on investment and support long-term fiscal sustainability. Understanding the productivity of these lands, and the City’s overall development pattern, is essential to planning for a balanced and resilient future. As the City Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 1
Menifee Mayor and City Council
December 17, 2025
Page
2 of 22
City of Menifee Staff Report
Land Use Analysis
December 17, 2025
3 0
9 7
advances the Menifee Innovation District, the Economic Development Corridors, and a future downtown vision, the models presented will serve as important tools to guide and reinforce smart- growth decision making.
In order to promote a balanced pattern of smart growth, the City, in partnership with the consultant Urban3, LLC, have evaluated existing land use productivity and the fiscal impact of current development patterns. This work establishes a baseline condition that allows the City to understand how different land uses contribute to (or draw on) the City’s revenue structure. With this data, the City can evaluate fiscal impacts of existing development and model return-on- investment scenarios for future projects, providing City leadership with the tools needed to guide smart growth decisions.
Urban3, LLC is a consulting firm specializing in land value economics, property tax analysis, and community design. Their methodology analyzes fiscal implications at the parcel level, while also assessing trends across the entire community. The analysis incorporates property tax assessments, sales tax, income levels, and other key economic metrics. The results are translated into clear, data-rich visualizations illustrating value per acre, property tax productivity, and sales tax productivity across the City. These visual tools will help City staff and leadership better communicate and understand Menifee’s economic and spatial dynamics and will support future policy discussions around fiscal sustainability and smart growth.
STRATEGIC PLAN OBJECTIVE
Thriving Economy
The results of this analysis would empower staff and leadership to guide smart growth within the City of Menifee, ultimately supporting a thriving economy.
FISCAL IMPACT
There is no fiscal impact associated with the recommended action.
ATTACHMENTS
1. Fiscal Analysis Report
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 2
Menifee Mayor and City Council
December 17, 2025
Page
3 of 22
Economics of
Community Development
2025
Menifee, California
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 3
Menifee Mayor and City Council
December 17, 2025
Page
4 of 22
ii Economics of Community Development: Menifee, CA
Glossary
Assessed Value
The valuation of a real estate asset that determines
the amount of property tax applicable to it.
Community Facility District (CFD)
A workaround tool in CA. Boundary is drawn around
a city creating a pocket city which pays for their in - frastructure.
Infill Development
The process of developing vacant or under-utilized
parcels within existing urban areas that are already
largely developed.1
Land Uses
Regulating the use of land to achieve urban and re -
gional planning goals; land uses include commercial,
residential, industrial, agricultural, open space, rec - reational, etc.
Lifecycle Cost
The whole range of maintenance, operations, and
capital replacement that may happen multiple times
over the full lifespan of a capital asset. These costs
occur at different times but are eventual certainties..
Medium Density Residential
Multi-unit housing that is consistent in scale and form to the single family detached building typology, but
has fewer people per geographic area than high
density residential.
Missing Middle Housing
A range of house scale buildings with multiple units
- compatible in scale and form with detached sin -
gle-family homes - located in a walkable neighbor -
hood.2
Mixed Use Development
1 Source: mrsc.org
2 Source: missingmiddlehousing.com
3 Source: parking.net
A development that combines two or more land uses
on one site. A classic mixed-use development type is
a building with ground-floor retail spaces and apart-
ments above.
Multifamily Housing
A development that consists of multiple, separate
dwelling units within the same single building struc -
ture.
Parcel
Area of land that is owned (i.e. lot, plot).
Parking Minimums
Also known as Minimum Parking Requirements (MPR),
parking minimums are laws requiring new buildings
to include a fixed number of off-street parking spac-
es based on an assumed demand for parking gener-
ated by the building’s use.3
Prop 13
An amendment of the Constitution of California en -
acted in 1978 that established base year values, a re-
stricted rate of increase on assessments of no greater
than 2% each year, and a limit of a 1% property tax
rate of the assessed values.
Return on Investment (ROI)
A measurment of financial performace that deter -
mines profitabilty by comparing an investments rev -
enue with it’s cost.
Single Family Housing
A residential development intended to house only
one family at a time..
Value Per Acre (VPA)
A metric used to evaluate the effectiveness of land
use policy; property value divided by acres utilized.
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 4
Menifee Mayor and City Council
December 17, 2025
Page
5 of 22
iii
Table of Contents
Glossary � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � ii History of Urban3 & the Rebirth of Asheville � � � � � � � � � � � � � � � � � � � iv About the Author � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � v Introduction to Menifee � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 6 Understanding Local Finances � � � � � � � � � � � � � � � � � � � � � � � � � � � 7 Budget: General Fund Overview � � � � � � � � � � � � � � � � � � � � � � � � � 8 Measuring Taxable Value � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 9 Productivity Ratio � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 11 Taxable vs Exempt � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 12 Main Street � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 13 Lasting Value � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 14 Base Tax Year: Prop 13 � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 14 Sales Tax � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 14 Regional � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 16 Comparison � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 16 Key Takeaways � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 17 Look for Examples of Productive Places and Replicate Them � � � � � � � � � � 17 Small Buildings Generate Incredible Productivity - and Sense of “Place” � � � � 17 Know the Costs of Your Development Patterns � � � � � � � � � � � � � � � � � 17 Urban Form Influences Sales Tax Potency � � � � � � � � � � � � � � � � � � � � 18 Thicken Up! Use Your Land Wisely and Consider the Long Term � � � � � � � � 18 Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 5
Menifee Mayor and City Council
December 17, 2025
Page
6 of 22
iv Economics of Community Development: Menifee, CA
History of Urban3 & the Rebirth of Asheville
Before Urban3 helped communities understand the true value of good design, there was Julian Price (Figure 1).
Julian moved to Asheville and saw the dilapidated state of the downtown against the backdrop of the stunning Blue Ridge Mountains and began to dream. In the early 1990s, Downtown Asheville, like many downtowns, faced an uncertain future after years of neglect and disinvestment. Its vacant storefronts and empty streets repelled visitors and locals alike, despite the beautiful scenery. The city had lost its soul.
Julian had inherited a family fortune and decided to invest his money into the people and places that, with a little help, could reinvigorate downtown. Despite cries of “that’s impossible” and “that’ll never work here,” Julian created the devel- opment company Public Interest Projects in 1990 and tapped Pat Whalen to take the lead. Mr. Whalen focused 75% of the $15 million portfolio on fixing buildings, and the remaining 25% was invested in entrepreneurs as a revolving fund. The investments focused on catalytic projects with a focus on making downtown more liveable as a neighborhood. Julian wasn’t afraid to get down in the weeds—he picked up trash and fixed park benches, but he also had a crystal clear, big-picture vision. He knew that invest- ing in restaurants, local media outlets, mixed-use buildings, and a self-help credit union would gradually create a self-sustaining ecosystem that would attract downtown residents, invite tourists, and help small businesses thrive. Together, these ingredients brought Downtown Asheville back to life (Figure 2).
Urban3 was created at Public Interest Projects to share the lessons of community revitalization and explain the importance of municipal economics to communities across the country.
Figure 1. Julian Price
Figure 2. A building in downtown Asheville before (left) and after (right) revitalization Source: urbanthree.com
Before After
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 6
Menifee Mayor and City Council
December 17, 2025
Page
7 of 22
v
We are a consulting firm specializing in land value economics, property tax analysis, and community design. Our approach bridges the gap between economic analysis, public policy, and urban design. Our work will empower your community with the ability to promote development patterns that both secure its fis- cal condition and create a strong sense of place.
We provide communities with an in-depth understanding of their financial health and built environment by measuring data and visualizing the results (Figure 3).
About the Author
Figure 3. A per acre 3D visualization of Auckland, New Zealand; highest value parcels are in purple, lowest appear in green Source: Urban3
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 7
Menifee Mayor and City Council
December 17, 2025
Page
8 of 22
6 Economics of Community Development: Menifee, CA
Introduction to Menifee
Menifee is one of Southern California’s youngest and fastest-growing cities—just 17 years young and making bold moves to form its own identity. While many communities in the Inland Empire remain shaped by de - cades-old plans, Menifee is embracing innovation, reinvention, and purposeful growth to meet the needs of its current and future residents.
Strategically located along the I-215 corridor in the heart of Southwest Riverside County, Menifee, and the re - gion, faces a critical juncture of how to evolve. Currently, the city is a vibrant patchwork of previously indepen- dent developments, such as Sun City, Quail Valley, and Romoland, which were built well before Menifee was an incorporated city. Over the last couple decades many gated and walled subdivisions have been constructed with single family home residences. The task going forward is how Menifee will plan to cohesively meld these parts together while developing new regions of town.
With an eye toward smart growth, Menifee is planning for connected, thoughtfully designed districts, walkable trails, and dynamic people-oriented spaces. The city is investing in itself today—diversifying its revenue base, strengthening infrastructure, and cultivating the “third places” that bring people together. These efforts have not only safeguarded the physical culture of Menifee’s past but have also contributed to tourism, educational opportunities, and sustainable urban development. However, housing pressures and economic development remain key challenges to manage going forward.
The purpose of this report is to assist Menifee in analyzing and visualizing various aspects of the city’s economic systems as it relates to real estate. The analysis conducted for this project strategically defined the study area as the western portion of Riverside County. Focusing on this condensed area enabled more geographically rele - vant comparisons within the broader county-wide analysis (Figure 4).This report includes evaluations of revenue streams - particularly property, sales tax and service fees - using both 2D and 3D graphics to show the relative economic potency of different land uses. Through this comprehensive analysis, Menifee will gain insights into development patterns and their financial impacts, leading to better decision-making.
Figure 4.
Source: Riverside County CA, FY 22-23
Total Taxable Value of Riverside County, CA
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 8
Menifee Mayor and City Council
December 17, 2025
Page
9 of 22
7 Understanding Local Finances
To understand the fiscal health of a community, we must first understand the underlying tax structure of the area to uncover the relationship between land use decisions and revenue production. When public revenues vary geographically, we can draw comparisons to other spatially relevant facts, such as patterns of development, demographics, and public investment. Put simply, land use directly affects a parcel’s tax productivity. As such, analyzing both the source of government revenues and the patterns from which they originate is critical to plan- ning a strong financial future.
In the United States, tax systems vary by state and municipality. The state of California collects a substantial amount in personal income tax that is then distributed to counties. Urban3’s 3D public revenue models only include sales, property taxes, and user fees because they compose 90% of the city’s general fund and are geo- spatially relevant.
Like all cities in California, dealing with the budget limitations imposed by Proposition 13, enacted in 1978, underscores the need to both maximize existing property tax revenues and explore new sources—topics that will be addressed in the following sections. Figure 6 illustrates how Proposition 13 limits the annual increase in a homeowner’s property tax bill (shown by the light blue bars), even as the property’s market value rises each year (represented by the dark blue
bars). The greater the annual
increase in market value, the
larger the effective tax dis -
count the homeowner enjoys.
However, once the property is
sold, its taxable value is reset
to reflect the current market
value, and the cycle begins
again.
How California’s Tax System Works
Figure 5.
Source: Riverside County, CA
Figure 6.
Source: Riverside County, CA
Prop 13’s Impact on Home Value
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 9
Menifee Mayor and City Council
December 17, 2025
Page
10 of 22
8 Economics of Community Development: Menifee, CA
Budget: General Fund Overview
The overall breakdown and flow of FY 2024 monies
through various revenue sources into the General
Fund and their subsequent allocation across different
expense categories is illustrated in Figures 7 and 8.
The total revenues generated amounted to $99.9 mil-
lion, which was distributed across several categories.
Sales Tax constitutes the most significant source of
revenue, accounting for 35% ($35 million). And yet,
according to city staff, the City has $2.2 billion in un - met demand and sales tax leakage (an estimated $15-
18k per person or $56k per household). This is equiv-
alent to millions of dollars supporting other cities and not captures within Menifee to provide services to its
residents. Property tax contributes 24% ($24 million),
while Licenses, Permits, and Fees made up 31% ($31
million) of the overall revenue. The remaining 10%
($10 million) consisted of all other sources of revenue.
So while people often say, “I pay my property tax -
es...” their property taxes alone do not pay for Police ($30 million per year) and Fire ($20 million per year), Public Works ($10 million per year), Parks ($6 million
per year). New homes in Menifee do not fully support
the services they receive, and that is why capturing
other revenue sources like Transient Occupancy Tax
and sales tax is so critical, along with shopping local.
The total expenditures amounted to $100.6 million.
Public Safety (Police & Fire) received the largest allo - cation of 56% ($56 million), followed by General Gov-
ernment Expenditures at 19% ($19 million). Commu -
nity and Economic Development was allocated 10%
($10 million), Public Works was allocated 9% ($9 mil -
lion), New Capital Projects received 1% ($1 million),
and the remaining 6% (approximately $6 million) goes
to the rest of the departments.
Menifee’s use of community facilities districts (CFDs,
represented in Licenses, Permits, and Fees revenue)
shows a smart offsetting of additional budget costs
that arise from new development. This type of bud -
getary revenue-cost analysis will benefit the city as
new developments come online, but still does not ful-
ly support the services provided to its residents.
Figure 7.
Source: Menifee, CA
Revenue and Expenditures
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 10
Menifee Mayor and City Council
December 17, 2025
Page
11 of 22
9 Figure 8.
Source: Riverside County, CA
Flow of Funds: General Fund
Measuring Taxable Value
Measuring the financial efficiency of land has two major op - tions. Using the total taxable value of a parcel is one way to analyze the overall value of a city’s land (i.e. top sales tax gen- erators), but when it comes to understanding economic pro - ductivity, it is not always the most useful. Instead, Urban3’s analysis focuses on the value “per acre” metric as a unit of productivity. After all, cities and counties are, at their simplest, finite areas of land. How that land is used, developed, and de- signed has a direct effect on municipal budgets. The per acre metric normalizes total revenues and tax values, creating di - rect “apples-to-apples’’ comparisons utilizing land consumed as a unit of productivity.
Using Value Per Acre (VPA) to compare properties is like us - ing miles per gallon (MPG) to compare cars. When comparing cars, the miles a car can go per tank isn’t typically referenced because it only reflects the size of the tank, not how efficient the engine is. We apply the same principle to measure the financial productivity of various development types across a community. This normalization provides a balanced lens to compare the value productivity of different land use patterns and building typologies.
Total Assessed Value
Assessed Value Per Acre
Figure 9.
Source: Riverside County, CA
Figure 10.
Source: Riverside County, CA
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 11
Menifee Mayor and City Council
December 17, 2025
Page
12 of 22
10 Economics of Community Development: Menifee, CA
The 2D maps in Figure 9 and 10 illustrate the differ -
ence between total taxable value and taxable Val -
ue Per Acre of parcels in Menifee. The larger purple
spikes in the 3D taxable Value Per Acre model (Figure
11), make clear which properties yield high property
tax value relative to parcel size. This relationship is im- portant because, again, cities only have a finite amount of land and Menifee is land-locked by its surrounding
cities and communities.
Only examining a development’s total tax production
overlooks the amount of land and other public resourc-
es consumed in order to produce revenue. Expansive
developments with larger footprints such as a sprawl -
ing subdivision are typically more expensive to service with public utilities (streets, water, sewer) than denser development patterns. By a function of being more spread out, sprawling development requires longer stretches of infrastructure to service each unit.
Menifee’s Value Per Acre model in Figure 11 shows that the most productive area of the city is the Artesa Town Center Apartments—valued at $12 million per acre—while much of the city has similar, lower values per acre.
This finding is consistent with our work in cities across the county.
Typically, higher values exist in areas with a wide variety of higher-density commercial, residential, and mixed uses. As seen in Temecula and Riverside (Figure 14), downtown values are pronounced, while other land use types are spread across the county, where light and dark greens mostly indicate single family housing and big box commercial stores.
These themes can be categorized in order to draw conclusions about specific land use decisions. In the Value Per Acre by Building Type chart in Figure 13, we can compare the performances of “low density”, “medium density”, and “high density” residential, commercial, and mixed-use properties. This reveals a clear correlation between higher density developments and economic potency. It is worth noting that Riverside County has a wide variety of highly potent multifamily residential buildings and mixed use developments which contribute significantly to its tax base.
3D Value Per Acre for Menifee
Figure 11.
Source: Riverside County, CA
Figure 12.
Source: Riverside County CA, Google Maps
Figure 13.
Source: Riverside County CA, Google Maps
Building Type Comparison Rollup for Riverside County, CA Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 12
Menifee Mayor and City Council
December 17, 2025
Page
13 of 22
11 Productivity Ratio
How efficiently is Menifee utilizing its land? One met- ric Urban3 utilizes to express the economic potency
of land is the “productivity ratio.” This figure is calcu- lated by comparing the land area as it relates to to -
tal taxable land value between Riverside County and
Menifee. As Figure 15 shows, Menifee’s productivity
ratio is 1 to 1.6. Simply stated: Menifee’s taxable value is 1.6 times greater than the amount of County area
it takes up. Essentially, Menifee’s economic potency
is 60% higher than the county’s. Granted, Riverside
County is quite large, with much of its land remaining
undeveloped, so from this perspective, a potency ra -
tio of 1.6 is insufficient.
Figure 14.
Source: Riverside County CA
Figure 15.
Source: Riverside County CA
Productivity Ratio of Menifee, CA
Productivity Ratio Projection Comparison Using this same metric of measurement, consider Menifee’s premier commercial corridor: Countryside
Market. In comparison to Menifee as a whole, Coun -
tryside Market is 3.5 times as productive as the city
area it takes up. Urban3 recommends aiming for a
downtown—or in this case a commercial corridor—
that is at least 6-10 times as productive as the city to maintain a healthy downtown that effectively supports
the rest of the community. In this context, Countryside Market is underperforming in terms of economically
maximizing land use. As a thought experiment, Figure
16 gives a rough estimate of the total value improve-
ment if Countryside Market grew to a 1:6 productivity
ratio.
Figure 16.
Source: Riverside County CA
3D Assessed Value Per Acre
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 13
Menifee Mayor and City Council
December 17, 2025
Page
14 of 22
12 Economics of Community Development: Menifee, CA
Figure 19.
Source: Riverside County CA, FY 22-23, 2022, Redfin
Big Box and Main Street Comparison
Riverside County, CA Exempt Land
Figure 17.
Source: Riverside County CA
Menifee, CA Exempt Land
Figure 18.
Source: Riverside County CA
Examining the tax land -
scape reveals that 55% of
the land in Riverside Coun -
ty falls under taxable cate -
gories, while the remaining
45% is exempt from taxa -
tion (Figure 17). While if we
zoom in, we can see that
84% of the land in Menifee
is taxable, with only 16% of
it’s remaining land being
exempt (Figure 18). These
maps provide key insights
for future development by
highlighting areas with high
potential for increasing
tax revenue through new
development. They also
guide strategic planning for
development that can have
the most impact economi -
cally.
Taxable
vs
Exempt
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 14
Menifee Mayor and City Council
December 17, 2025
Page
15 of 22
13 Main Street
A critical piece of a city’s ecosystem is the main street. Development along these corridors have a human scale and orientation, producing pleasant urban environments attractive to residents and tourists alike. This land use and street design is missing in Menifee at the mo -
ment and creates challenges as its often serves as the
heartbeat of economic vitality and prosperity for oth-
er cities that support services and expenses in subdi-
visions that underperform revenue wise.
In addition to creating a sense of “place,” these
commercial centers also tend to be economic power
houses. Figure 20 shows that Main Street commer -
cial buildings in Riverside County average $5.6 mil -
lion per acre, significantly higher than other types of commercial properties, which generally fall below $2
million per acre. For a more granular analysis, Figure
19 compares commercial developments in Jurupa
Valley by evaluating both property value per acre and
the productivity of sales tax on these building types.
The analysis reveals that the main street style furni - ture store earned 3 times more sales taxes as big box
store.
Understanding all the tools at Menifee’s disposal is
important in helping both public and private sector
partners to develop fiscally sustainable and fiscally
responsible communities. A crucial step in cultivat -
ing a vibrant main street is right-sizing development
standards of building height, setbacks, parking mini -
mums, and design standards in targeted commercial
zones. As evidenced by Figure 21, these changes
yield substantial dividends.
Average VPA for Commercial Properties
Figure 20.
Source: Riverside County CA, Google Maps
Value Per Acre: Regional Commercial
Figure 21.
Source: Riverside County CA, Google Maps, Menifee Zoning Code, CarlsJr.com
Historic Buildings VPA: Then vs Now
Figure 22.
Source: Riverside County CA, Google Maps, temecula.gov
Figure 23.
Source: Riverside County CA, Google Maps
Historic Building VPA
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 15
Menifee Mayor and City Council
December 17, 2025
Page
16 of 22
14 Economics of Community Development: Menifee, CA
Sales Tax
While property taxes are an important source of revenue for Menifee, sales tax plays an outsized role in the municipal revenue, given the structure of the California tax system. However, similar to property tax productivity patterns, sales tax productivity is also dependent on how land is used. By understanding how different prop - erty development patterns influence sales tax productivity, Menifee decision-makers can make knowledgeable choices about what development patterns to encourage. Our analysis revealed that the greatest sources of sales tax revenue, unsurprisingly, were the commercial properties along Newport Rd.
Figure 24.
Source: Riverside County CA, Google Maps
Figure 25.
Source: Riverside County CA, Google Maps
VPA Single Family Residential
VPA Commercial Buildings
One of the most significant factors
influencing city budgets across Cal -
ifornia is Proposition 13. As shown in
Figures 24 and 25, the year a prop -
erty was last assessed for taxes is
often a predominant indicator of its
economic productivity, even in sce -
narios where only minor differences
between properties exist. While this
is a statewide issue that extends far
beyond Menifee, there are still local
strategies that can help. Expanding
opportunities for property owners
to improve their properties—such
as adding accessory dwelling units
(ADUs) or supporting developer-led
infill projects—can lead to more ef -
ficient land use. More importantly, in
many cases, these improvements can
also trigger a reassessment of the
property’s base tax year, increasing
local revenue.
Base Tax Year:
Prop 13
The high productivity of Downtown areas in the county can be attributed, in part, to the significant number of historic buildings which have been integral to the area’s economic vitality for many years. These older struc - tures follow a 100 year old style of construction—developed before the widespread use of automobiles—that position buildings at the front of the lot and foster a pedestrian-friendly, accessible streetscape. Figure 22 and 23 showcase particularly poignant examples of historic properties that still command high value in their down- towns. An important consideration for high productivity buildings from a past century: they are never lower den- sity properties, as is often the case for development in Menifee. To ensure lasting value, allow local examples of long term success guide your decisions.
Lasting Value
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 16
Menifee Mayor and City Council
December 17, 2025
Page
17 of 22
15 CFDs (or Community Facility Districts)
also play an important role in the
delicate balance of new develop -
ments offsetting their new munici -
pal costs. To get a better sense of
how these revenue streams fiscally
interact with land use patterns, Ur -
ban3 combined property (oranges)
tax revenues, sales (blues) tax reve-
nues, and CFD fees (greens) in the
stacked model in Figure 26. These
stacked values were aggregated
to produce a total tax revenue per
acre map, as seen in Figure 27,
based on the three revenue sourc-
es. The highest earner of this met -
ric is Menifee Towncenter which
earned $55,000 per acre in 2024.
While this figure is significant on its
own, comparing it to our previous
work in Redding, CA provides valu-
able context. Although Redding is
a different city in many respects, the
comparison remains relevant, as it
operates under the same Califor -
nia tax system as Menifee. In Red -
ding, our analysis showed that the
Redding Shopping Center—a de-
velopment comparable to Menifee
Town Center—generated $99,000
per acre in combined property and
sales tax revenue during FY 2022.
In contrast, Redding’s downtown
produced $288,000 per acre in
the same period—nearly 3 times
the value of the shopping center.
We had to use Redding as an ex -
ample as Menifee does not yet
have a downtown to evaluate, but
this pattern of shopping center vs.
downtown productivity of revenue
exists in most cities. Similar pat -
terns in sales tax productivity have
emerged in our broader work—
previously noted in Jurupa Valley,
CA—and are further illustrated in
Figure 28 from our analysis in Du -
rango, CO.
Tax Revenue Per Acre Breakdown
Figure 26.
Source: Riverside County CA
Tax Revenue Per Acre
Comparing Financial Productivity
Figure 27.
Source: Riverside County CA
Figure 28.
Source: Durango, CO 2015
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 17
Menifee Mayor and City Council
December 17, 2025
Page
18 of 22
16 Economics of Community Development: Menifee, CA
Although no peer city will provide a direct “apples to apples” comparison, engaging in this kind of quantitative analysis can provide valuable insight into both Menifee’s strengths and potential areas of improvement.
Temecula, CA serves as the most direct point of comparison. Although both cities have similar populations, their geographic footprints differ significantly. Temecula encompasses approximately 13,000 taxable acres, whereas Menifee has around 22,000. Despite its smaller size, Temecula’s total taxable value surpasses Menifee’s by $6 billion—a difference largely attributable to the presence of a defined downtown area.
As illustrated in Figures 30 and 31, Temecula’s “purple mountain,” representing its downtown, generates about $7.2 million per acre. In contrast, Menifee’s Countryside Marketplace yields approximately $2.8 million per acre.
Notably, Temecula’s downtown also includes the Truax Building, the county’s highest revenue-generating par- cel, producing $51 million per acre (Figure 32).
The value produced by dense downtowns is not geographically limited, however. Thriving downtowns maintain a symbiotic relationship with the broader city. As illustrated in the 3D value-per-acre models in Figure 30, prop- erty values across Temecula are, on average, about $1 million higher per acre than those in Menifee. This is par- ticularly evident in the red peaks found throughout Temecula’s residential neighborhoods. The close proximity to a vibrant, desirable downtown contributes significantly to this increased value—demonstrating that econom- ic productivity tends to generate further economic productivity in surrounding subdivisions and neighborhoods as a downtown is a key amenity and ingredient for economic vitality and success.
Urban Mirror
Figure 29.
Source: Riverside County CA, Google Maps
Regional Comparison: Menifee vs Temecula
Figure 30.
Source: Riverside County, CA
Figure 31.
Source: Riverside County, CA
Regional
Comparison
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 18
Menifee Mayor and City Council
December 17, 2025
Page
19 of 22
17 Value Per Acre: Peak Parcel
Figure 32.
Source: Riverside County CA, Google Maps
Look for Examples of Productive Places and Replicate Them Inspecting the Value Per Acre (VPA) model allows communities to link fiscally productive areas with their asso - ciated land use types. Riverside County has several examples of small but highly potent building types which contribute significantly to the community’s fiscal health. Using such moderate to high productivity sample de - velopments, such as smaller commercial stores, mixed use commercial or Missing Middle Housing types, as an example for how to build in the future can guide community conversation, vision, processes, and future regu - lations.
Small Buildings Generate Incredible Productivity - and Sense of “Place” Preserving lasting value in a community is crucial for the city’s overall financial well-being and vitality. In River - side County, historic properties are outperforming a lot of new developments. This demonstrates that older, smaller-scale buildings still in use contribute immensely to the city’s fiscal and cultural fabric. Building places in Menifee like those built in Riverside County 100 years ago not only supports the local economy by enhancing property values, but also enriches the community’s character, unique identity, placemaking, and tourism attrac- tion.
Know the Costs of Your Development Patterns
Urban3 has seen that funding for infrastructure systems (roads, sewer, water, stormwater) is insufficient in cov - ering the lifecycle expenses for these systems, which are often referred to as unfunded liability or deferred maintenance in many older cities. This compounds significantly every decade. Certain users of these systems may not be paying for the true cost of what it takes to serve them (meaning other users are subsidizing them).
Adjust fees, with geography in mind, to adequately cover the costs of operation and maintenance or encour - age infill development rather than servicing new areas. To fully understand how and where revenues can offset costs, work with us again to conduct a full return on investment analysis, and also understand how street sizing, design, and parking standards impact prosperity from a revenue vs. expense perspective.
Key Takeaways
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 19
Menifee Mayor and City Council
December 17, 2025
Page
20 of 22
18 Economics of Community Development: Menifee, CA
Urban Form Influences Sales Tax Potency
The development of auto-oriented commercial properties often requires large amounts of land to satisfy park- ing and lot size minimums, using shared parking agreements, or vertically integrated parking, which requires more city investment in infrastructure to service those districts. On the other hand, cities can reduce the amount they need to invest in a commercial property by eliminating parking minimums, allowing for smaller commercial parcels. Most importantly, because these developments would consume less land, they would produce more sales and property tax per acre. By minimizing infrastructure expenses and maximizing potential tax revenue, Menifee can improve their return on investment, which will allow the city to experience greater fiscal sustain - ability and financial responsibility decades into the future. Cities need to be cognizant that they will be here in perpetuity.
Thicken Up! Use Your Land Wisely and Consider the Long Term As Menifee moves forward with future development, Urban3’s analysis helps to ensure there can be a better un- derstanding of the impact that different development types will likely have on the city’s finances. The significant role that property tax, sale tax, and service fees play in the city’s revenue generation has an important impact on land development considerations. Similarly, the dramatic differences in the cost of service delivery, primarily related to the key infrastructure systems that Menifee maintains, should also be a key consideration informing development decisions. Therefore, it is important for the city to utilize the land it has efficiently in terms of tax production and service delivery, while also planning for future infrastructure replacement costs.
KEY AREAS OF FOCUS FOR MENIFEE, CA
• Create a balance of diverse housing choices.
• Address parking standards for large, non-revenue producing parking lots.
• Land Uses are not generating enough revenue to maintain the ‘size’ of your roadways, streets and intersections, which are going to create long-term liability if you don’t change your level of service policy or land use mix/ density.
• Lower infrastructure costs by recalibrating existing roadways to create mobility choices beyond driving.
• Density is the concentration of people as a result of the thoughtful design of places. A higher concentration of
people means increased revenues per acre will be able to reduce expense liabilities. Density is critical for economic development and business attraction.
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 20
Menifee Mayor and City Council
December 17, 2025
Page
21 of 22
Data-driven storytelling
Principal Joe Minicozzi, AICP
Porject Lead Jonathan Anzollitto Graphic Specialist Steven Hancher Program Manager Adam Carr, AICP
All maps are created with ESRI software, and all data used in this analysis and report (unless otherwise noted) was provided by the Riverside County.
urbanthree.com
Item Title: 4.1
Overview of the City of Menifee Land Use Financial Analysis Item Page Number: 21
Menifee Mayor and City Council
December 17, 2025
Page
22 of 22