Prepared by:
Kosmont Companies
Enhanced Infrastructure Financing District
Analysis Summary
June 15, 2026
Background
• Pasadena is evaluating the use of a special purpose financing district such as an Enhanced Infrastructure Financing District (EIFD) to capture value from potential new development to fund critical infrastructure and community investment priorities
• EIFD tax increment financing (TIF) capacity is estimated to range up to ~$230M on a present-value basis • While a City-only financing district strategy would likely achieve a favorable “return on investment” for the City, a broader partnership including the County of Los Angeles would further improve financial feasibility; initial County feedback has been positive
• In addition to the EIFD funding capacity, the EIFD would elevate the City’s ability to attract other public funding, particularly state and federal grants
• Immediate next steps include City Council consideration of a non- binding Resolution of Intention 2 $0M
$100M
$200M
$300M
$400M
$500M
$600M
0 5 10 15 20 25 30 35 40 45 50 55
Years from District Formation
Note: Illustrative.
What is Tax Increment Financing (TIF) – Not a New Tax
Baseline Property Value at District Formation
All Property Tax Stays with General Fund
New Property Value from
New Development / Rehabilitation
Some Portion of Property Tax Available to TIF District, Remainder Stays with General Fund
Assessed
Property Value
within District
New Total
Value After
TIF District
All Property
Tax Goes to
General Fund
3 EIFD Fundamentals
45 years from first bond issuance; can be formed in 12-18 months Long Term
Districts
Public Financing Authority (PFA) implements Infrastructure Financing Plan (IFP)
Governance
Mandatory public hearings for formation with protest opportunity; no public vote
Approvals
EIFD project areas do not have to be contiguous
Non
-
contiguous
Areas
Any property with useful life of 15+ years & of communitywide significance; purchase, construction, expansion, improvement, seismic retrofit, rehabilitation, and maintenance
Eligible
Projects
4 Types of Projects EIFD Can Fund
Partial List
Roadway / Parking / Transit
Brownfield Remediation
Storm / Flood / Public Facilities Parks / Open Space / Recreation Libraries & Childcare Facilities
Affordable Housing
Broadband Small Business /
Nonprofit Facilities
Wildfire Prevention / Other
Climate Change Response
5 Why are Public Agencies Authorizing Financing Districts? Communicating in a Digital World
1. Return on Investment: Private sector investment induced by district commitment accelerates growth of net fiscal revenues, job creation, housing production, essential infrastructure improvements
2. Ability to attract additional funds / other public money (“OPM”) – tax increment from other entities (county, special districts), federal / state grants / loans (e.g., for transit-oriented development, water, housing, parks, remediation)
6 Proposed EIFD Boundary
• 710 Vision Plan area plus surrounding parcels,
and Specific Plan areas Lincoln Avenue, Fair
Oaks / Orange Grove, and North Lake Avenue
Approx. 551 acres (~3.7% of City)
• $1.31 billion in existing assessed value (~3.2%
of Citywide value)
Source: Los Angeles County Auditor-Controller (2026)
Other Opportunity Site EIFD Parcels
7 • Mobility and utility infrastructure
• Multimodal improvements
• Sustainable water features
• Clean energy / renewables
• Affordable housing
• Public and open space
Example Projects for Funding in Pasadena
8 Development Assumptions within EIFD Study Area
Note: AV at buildout values in current 2026 dollars
Sources: CoStar (2026)
Area # SF or Units Estimated
AV Factor
Estimated
Total AV at Buildout
Residential – Market Rate 2,819 units $475-875K per unit $1.59 billion Residential – Affordable 690 units property tax exempt $0 Commercial / Retail 54,850 SF $450 PSF $25 million
Office 759,000 SF $600 PSF $455 million
Hotel 185 rooms $425K per room $79 million
Total New Development Assumed within EIFD Study Area $2.14 billion 9 City
21.0%
County
28.0%
Other / School
Entities (not eligible)
51.0%
• Primary non-school recipients and possible contributors of property tax are the City and County
• City share varies by area and averages ~17% to 21%
each of every $1 collected in property taxes within the study area, not including the City’s voter-approved
retirement allocation
– City additionally receives equivalent of ~6% of property tax in lieu of motor vehicle license fees (MVLF), also available to EIFD
• County General Fund share averages ~28% to 35%
– County additionally receives property tax in lieu of MVLF, also available to EIFD, but not incorporated into this
analysis to be conservative
• State law prohibits school-related entities from pledging their share
As counties tend to rely more heavily on property tax revenue sources generated by new development within incorporated jurisdictions, it is Kosmont’s experience that it is not reasonable to assume allocation of property tax in lieu of MVLF by the County. As cities benefit from additional non-property tax revenue sources (e.g., sales tax, transient occupancy tax) from new development, it is Kosmont’s experience that it is reasonable for cities to consider contributing property tax in lieu of MVLF.
Post-ERAF (Education Revenue Augmentation Fund) distribution.
Source: Los Angeles County Auditor Controller (2026)
Property Tax Revenues Available to EIFD
Property Tax Distribution
Tax Rate Area (TRA) 07454
+ City MVLF of 6% = 27%
10 Los Angeles County EIFD Participation Policy
Property Tax Increment:
• City share contributed ≥ County share contributed
• County contributes less than 100% of its share
Fiscal Analysis: Positive net impact to County General Fund Board Priorities: Supports affordable housing, homeless prevention, workforce development, or sustainability
Regional and Community Significance: As related to Board priorities above, job creation, blight removal, or improvements to regional transportation
Affordable Housing: 20% of units or tax increment will be set aside for affordable housing uses “But for…” Test: Contribution of County property tax increment is necessary precondition for targeted projects
11 City allocation includes allocation from both AB8 + MVLF in-lieu. County allocation does not include MVLF in-lieu. * Bonding capacity assumes Year 5 is first bond issuance for EIFD. “Year 5 means fifth year of revenue following district formation. Net proceeds shown. Bondable revenue assumes $25,000 admin charge, 150% debt service coverage. 6.0% interest rate; 30-year term. Proceeds net of 2% underwriter's discount, estimated reserve fund (maximum annual debt service), costs of issuance estimated at $350,000.Source: Kosmont Financial Services (KFS), registered municipal advisor.
EIFD Revenue and Bonding Capacity Scenarios
EIFD Revenue
Allocation Scenario
Year 5
Accumulated
Revenue +
Bonding
Capacity*
Year 10
Accumulated
Revenue +
Bonding
Capacity*
50-Year
Present-Value
@ 3%
Discount Rate
50-Year
Nominal
Total
A) City 25% $5,375,000 $14,697,000 $57,616,000 $144,262,000 B) City 50% $11,413,000 $30,057,000 $115,232,000 $288,523,000 C) City 25% + County $ Match
(24% of County share) $11,413,000 $30,057,000 $115,232,000 $288,523,000 D) City 50% + County $ Match
(48% of County share)
$23,488,000 $60,775,000 $230,463,000 $577,046,000
12 Potential Cash Flow / Debt Issuance Approaches
• Kosmont Financial Services is in active discussions with public finance underwriters regarding TIF debt issuances in other jurisdictions
• There are several approaches for the leverage of tax increment for accelerated debt issuance (e.g., 2-3 years from district formation), for example:
a) Tax increment only
b) Overlapping TIF and CFD (CFD Backstop) – landowners / developers must be willing to pay CFD special taxes in the short term (e.g., 5-10 years) until tax increment reaches a level to cover debt service
c) Tax increment with City or County general fund backstop • There are advantages and disadvantages with each approach (e.g., upfront proceeds available, public agency risk, cost of capital)
• Additional alternatives are available if private sector partners (e.g., landowners / developers are willing to advance infrastructure funding in exchange for reimbursement from TIF proceeds) 13 Public Agency and Community Return on Investment
• Housing: 3.5K+ units, including significant number of affordable units • Economic revitalization, climate resilience, addressing critical infrastructure needs • Job creation, wages:
27.8K+ temporary construction-related jobs*, ~$1.9B related new wage income 3.4K+ permanent jobs, related ~$186M in new annual wage income • Acceleration of development and related fiscal revenues for taxing entities:
$30M in present value fiscal benefit for CITY general fund over 50 years, net of tax increment contribution to district and estimated expenditures (40% City allocation scenario) $175M in present value fiscal benefit for COUNTY general fund over 50 years, net of tax increment contribution to district and estimated expenditures (25% County allocation scenario) $79M in present value new sales tax funding for COUNTY transportation and homelessness services (separate from County general fund)
• Attract other funding not otherwise available for projects within the community * Construction job-years, where one job-year is defined as one year of employment for one individual 14 Proposed Financing District Formation Schedule
Tax increment allocation begins fiscal year following district formation Debt issuance, if desired, would occur after a stabilized level of tax increment has been established (may be 3-5 years) Target Date Task
Nov 2025 – May 2026
a) Conduct outreach/discussion among City staff and Council, County staff and Board of Supervisors, other relevant stakeholders
b) Final determination of EIFD boundaries, eligible projects, governing Public Financing Authority (PFA) Board June / July 2026 c) Participating taxing agencies adopt Resolution(s) of Intention (ROI) and formally establish PFA July 2026 d) PFA directs the drafting of the Infrastructure Financing Plan (IFP) August 2026 e) Distribute draft IFP to property owners, affected taxing entities, City Council, County Board of Supervisors September 2026 f) PFA holds an initial public meeting to present the draft IFP to the public and property owners October 2026 g) City Council/legislative bodies of other affected taxing entity contributing increment adopt resolution(s) approving IFP November 2026 h) PFA holds first public hearing to hear additional comments and take action to modify or reject IFP (at least 30 days after “f”)
December 2026 i) PFA holds second public hearing to consider oral and written protests and take action to terminate proceedings or adopt IFP and form the district by resolution (at least 30 days after “h”) 15 Proposed Next Steps
• Address questions, receive and incorporate feedback from City staff, City Council • Outreach to the County to confirm potential EIFD partnership • Based on City/County feedback, next action would be City Council consideration of a non-binding Resolution of Intention to form the EIFD
16 Disclaimer
The high-level analyses, projections, assumptions, rates of return, and any examples presented herein are for illustrative purposes and are not a guarantee of actual and/or future results. Project pro forma and tax analyses are projections only. Actual results may differ from those expressed in this analysis.
Discussions or descriptions of potential financial tools that may be available to the Client and public agencies are included for informational purposes only and are not intended to be to be “advice” within the context of this Analysis.
Municipal Advisory activities are conducted through Kosmont Companies’ affiliate, Kosmont Financial Services, which is Registered as a Municipal Advisor with the SEC and MSRB. 17