EIFD AND OLD TOWN STREETSCAPE
MASTER PLAN
City Council Study Session
May 6, 2025
City of Placentia
1 Presentation Overview
•Overview of the Old Town Placentia Revitalization Plan •Old Town Streetscape Master Plan
•Fundamentals of an Enhanced Infrastructure Financing District •Overview of Placentia’s EIFD
•Infrastructure Financing Plan/Debt Issuance Structure
•Additional Considerations
•Recommendation
2 Overview of
Old Town Placentia Revitalization Plan
Jeannette Ortega
Deputy Director of Administrative Services
33 Old Town Placentia Revitalization Plan
•In 2015, the City began working on the Old Town
Revitalization Plan to enhance and preserve the historic significance of Old Town Placentia. The City created
specific building standards and zoning requirements for this area. In addition, the Streetscape Master Plan was developed to enhance street improvements, pedestrian
connectivity, and landscape and lighting upgrades
•In 2017, the Old Town Revitalization Plan and Streetscape Master Plan was adopted by the City Council
•Immediately after the adoption of the Plans, staff
researched funding mechanisms that can facilitate the
construction of the public infrastructure improvements in this area as described in the Streetscape Master Plan
4 Old Town Placentia Zoning District
5 Old Town Streetscape Master Plan
Gabriel Guerrero Gabany
Deputy Director of Public Works
Old Town Streetscape Master Plan
The Purpose of the adopted Old Town Streetscape Master Plan:
•Revitalization of the City’s historic core
•Aims to create an active Old Town which will function as a central gathering space •Improve Mobility
•Infrastructure
•Streetscapes
•Special Events
•Attract visitors, increase revenues and enhance safety 7 Scope of Streetscape Master Plan
Landscaping
Lighting
Mobility
Bench
8 Street/Pedestrian Enhancements
Lighting
Lighting
9 Bollards
Pavers
Cost Estimate for Streetscape Master Plan
•Placentia EIFD provides $10M in funding for the Old Town Streetscape Master •Preliminary cost estimate is $13.5 million
•Potential cost saving measures
•Replacing concrete areas with asphalt
•Replacing pavers with asphalt
•Removing streets not directly along the main corridor
•Bid Package will include Alternative Bid schedules, which will allow us to remove or include certain aspects of the proposed improvements to ensure that the construction cost does not exceed $10M
10 Fundamentals of an
Enhanced Infrastructure
Financing District (EIFD)
Joe Dieguez
Kosmont Companies
Enhanced Infrastructure Financing District
An Enhanced Infrastructure Financing District (EIFD) is a special financing mechanism used by cities in California to fund infrastructure projects and community improvements without raising taxes. EIFDs were established under California law (SB 628, enacted in 2014) as a replacement for redevelopment agencies, which were dissolved in 2012
Purpose:
•EIFDs are designed to support a wide range of infrastructure projects, including transportation, streets and roads, affordable housing, parks, water systems, environmental improvements, and more
•They can also be used for economic development initiatives, such as revitalizing underutilized areas
12 Enhanced Infrastructure Financing District
•EIFDs rely on Tax Increment Financing (TIF). Tax increment revenue is generated from incremental growth of assessed property values within a defined boundary as new development occurs or as underutilized properties are rehabilitated
•When an EIFD is established, the “baseline property value” for all properties within the District is set, or frozen, at that year’s assessed value •A pre-designated percentage (Placentia’s is 50%) of this revenue establishes the fund that is administered by the Public Financing Authority (PFA) to be used for public infrastructure
•As public investments improve the area and catalyze private sector investment, property values rise. The increase in property tax revenue (the "tax increment") from this growth is captured by the EIFD
13 Enhanced Infrastructure Financing District
Placentia’s
EIFD Base
Year
(2022)
Placentia’s
Termination
Date is
40 Years
(2062)
50% of Tax
Increment
Collected from the
County & City goes
into the EIFD
14 Overview of Placentia’s EIFD
Overview of Placentia’s EIFD
•In 2019, the City of Placentia (City) and County of Orange (County), working with a grant provided by Southern California Association of Government (SCAG), established the Placentia Enhanced Infrastructure Financing District (EIFD) to fund infrastructure improvements within the City’s Old Town
o Building public improvements over multiple years/phases will not likely entice private sector investment sufficiently to fulfill original economic development goals and will delay increase to assessed valuation
o Goal: Install all aspects of the Old Town Streetscape Master Plan at one time (instead of in phases), which will better induce private investment to fulfil Tax Increment (“TI”) and economic benefit projections (fulfill Assessed Value A/V goals) o Accelerate timetable to meet regional housing needs, including affordable housing and save on construction costs
16 Placentia EIFD Boundaries for TI
Old Town
TOD Packing House
17 Amendment to the Placentia EIFD
•An emerging EIFD bond market, the COVID pandemic, inflation, and related economic conditions contributed to delayed EIFD implementation and cost increases
o Original Streetscape Project cost estimate of ~$8M increased to ~$10.05M, an increase of 25.6% o Interest rates have risen, increasing cost of debt service (particularly to “first-time” debt issuer) o Impact: Multiple debt issuances over 7-8 years would be needed to fund key projects •Original financing structure would not have facilitated private investment and would have fallen short of expected rate of tax increment growth
•Recalibrated duration (term) of tax increment allocation to reflect full payment of contributions o Increased City maximum term from 20 to 40 years
o Increased County maximum term from 20 to 25 years, with option to extend to 30 only if needed o Provides adequate time for County to contribute its share of tax increment (50%) (i.e., $3.547 million) o Additional 5 years only triggered if tax increment receipt levels perform worse than suboptimal projections •March 5, 2024 – City Council approved the Amended Infrastructure Financing Plan (IFP) •March 12, 2024 – County Board of Supervisors Approved the Amended IFP •May 14, 2024 – The EIFD Public Financing Authority (PFA) approved the Amended IFP 18 Estimated Economic Benefits
•1,600+ housing units
•5,364 construction jobs and 258 permanent jobs
•$423 million in construction-related wages and $16 million in annual, ongoing wages
•$826 million in economic output from construction and $38 million in annual ongoing economic output
•$59M in positive net fiscal impact to City general fund over 50 years •$50M in positive net fiscal impact to County general fund over 50 years •Greenhouse gas reduction/vehicle miles traveled reduction; improved and convenient transit to local universities and other destinations 19 Infrastructure Financing Plan (IFP)
Debt Issuance Structure
Dan Massiello
Kosmont Financial Services
Debt Issuance Structure
•City to issue its own 30-year lease revenue bonds (“LRBs”) (in lieu of EIFD) o EIFD bond market is new, and the Placentia EIFD specifically has no credit history as a new issuer
o City LRBs will benefit from City's excellent credit rating (AA), producing lower interest rates and no need for a cash-funded debt service reserve fund o Loan provided to EIFD would accrue interest to City General Fund at City’s LAIF rate
•EIFD to terminate upon extinguishment of all EIFD debt, even if repaid early 21 EIFD Tax Increment Projections vs. Actuals
•Below is a summary of projected tax increment versus actual tax increment received:
Fiscal Year Projected TI Actual TI Difference
2020 2021 $0 $0 $0
2021 2022 $7,849 $13,408 $5,559
2022 2023 $101,476 $51,291 ($50,185)
2023 2024 $222,844 $212,187 ($10,657)
2024 2025 $235,150 TBD (May)TBD
TOTAL TI RECEIVED $276,886
22 Debt Issuance Structure Scenario
Additional Considerations
Jennifer Lampman
Deputy City Administrator/Director of Finance
Additional Considerations
•City's Budget Challenges
•Continuing economic challenges caused by persistently high inflation and interest rates, unease over impacts of tariffs
•Reserve level dropped from 25% to 19% this Fiscal Year •$6M for the Public Safety Building
•City added $10M in debt for the Public Safety Building to be paid over 30 years •City issued $53M in lease revenue bonds in 2020 to pay pension debt •City has significant unfunded capital needs
•Federal Earmark request for the Old Town Streetscape Master Plan in the amount of $1M was not approved last year. City resubmitted again this year. •Design Costs
•The design process is approximately 90% complete. A change order is required to ensure adequate fire truck turn radius at specific intersections and streets in Old Town. The change order has an estimated cost of $150,000 25 Additional Considerations
•Interest Rate Volatility
•Future interest rates remain uncertain
•Tariffs naturally contribute to inflation, and ongoing tariff negotiations have created significant market volatility
•Rising Construction Costs
•Construction costs have steadily increased over time. As time progresses, this project is likely to become more expensive due to rising costs of materials and labor •Professional Services Costs
•The City has been working with Kosmont on the formation and amendments of the Placentia EIFD and the initial stages of bond financing. These costs are usually folded into the bond financing.
•Indirect Considerations
26 Options to Consider
Option #1
1.Allocate $150,000 to complete the Streetscape Master Plan
2.Go out to bid for the construction of the Streetscape Master Plan•Consider Alternative Bids to ensure construction is within $10M
3.Authorize a $1M loan from the General Fund to supplement the bond financing
4.Proceed with the bond financing to fund the construction 28 Option #2
1.Allocate $150,000 in existing TI received to complete the Streetscape Master Plan
2.Delay the bond financing until sufficient TI is accumulated to fulfill the $1M upfront needed to issue bonds
3.Go out to bid for the construction of the Streetscape Master Plan with Alternative Bids to ensure construction is within $10M
4.Receive approval from the City Council for the construction costs and bond financing structure Option #2 is Staff’s recommendation
29 Questions & Comments