Economic Development
Committee Memorandum
TO: ECONOMIC DEVELOPMENT COMMITTEE DATE: SEPTEMBER 17, 2026 FROM: COMMUNITY & ECONOMIC DEVELOPMENT WARDS: ALL SUBJECT: RESOLUTION ESTABLISHING A CAPITAL INVESTMENT INCENTIVE PROGRAM (CIIP) ISSUE:
Recommend that the City Council adopt a resolution establishing a Capital Investment Incentive Program (CIIP) pursuant to California Government Code Section 51298–51298.5, enabling the City to use this program as a future tool to attract and retain qualifying manufacturers.
RECOMMENDATIONS:
That the Economic Development Committee recommend that the City Council:
Adopt a resolution establishing a Capital Investment Incentive Program (CIIP), enabling the City of Riverside to offer capital investment incentive amounts for qualifying manufacturing companies consistent with state law; and Direct staff to submit required notifications to the Governor’s Office of Business and Economic Development (GO Biz) following Council adoption, as required under Government Code Section 51298(e).
BACKGROUND:
The State of California established the Capital Investment Incentive Program (CIIP) under Government Code Section 51298 et seq. to provide local governments with a tool to attract large scale manufacturers by offering partial property tax abatement for up to 15 years. The program supports significant capital investment in qualifying manufacturing facilities exceeding $150 million in assessed property values and is intended to enhance statewide business attraction efforts in advanced industry sectors. AB 2922, which became law in 2024, created a second category for manufacturing investments between $25 million and $150 million provided they meet specific job requirements.
To qualify, a project must fall within specified North American Industry Classification System (NAICS) manufacturing categories or related advanced industries, including high tech manufacturing, aerospace, biotechnology, environmental technologies, and clean transportation components, which are all industries the City of Riverside is focused on recruiting.
To establish a CIIP, a governing body must adopt a resolution electing to participate in the program. Companies seeking assistance must submit a written request outlining the proposed investment, job creation commitments, and other required information. If approved, the City and company enter into a Community Services Agreement (CSA) detailing specific terms, including community service payments, hiring targets, and recapture provisions should the company fail to meet program requirements.
Many jurisdictions with whom the City of Riverside competes for business attraction opportunities have adopted Capital Investment Incentive Programs (CIIPs) as part of their economic development strategies, including the agencies of Palmdale, Long Beach, Marina, Riverside County, Los Angeles County, and Monterey County. The State is required to issue a new biennial compilation of local CIIP programs beginning in October 2026. Establishing a CIIP would add another strategic tool to Riverside’s business attraction and financing toolkit, strengthening the City’s ability to compete for large-scale capital investments and improve its positioning during site selection.
The CIIP does not constitute a project under the California Environmental Quality Act (CEQA), as it merely establishes a funding mechanism and does not authorize or commit the City to any physical development. Any future project proposed under the CIIP would be required to comply with CEQA and all applicable environmental regulations.
DISCUSSION:
The CIIP provides local governments with a flexible incentive mechanism to support major manufacturing investments without incurring immediate fiscal obligations. Under the CIIP framework, the City of Riverside may offer a capital investment incentive amount, defined as the City’s share of ad valorem property taxes on the portion of a facility’s assessed value exceeding $25 million. The tax calculation generally operates by establishing a property tax base that must be met before incentives apply. The CIIP payment to the proponent is contingent on the proponent paying the community services fee. Property taxes generated above that base may be shared at a rate of 75 percent to the property owner and 25 percent of the annual CIIP amount, capped at $2 million per year, to the City through a community service payment over a 15-year period.
CIIP eligibility includes:
A qualifying manufacturer or qualifying business invests more than $25 million in assessed property value.
A Community Services Agreement (CSA) is approved by the City of Riverside and the manufacturing proponent outlining the specific requirements to be fulfilled by the company, including when the fee becomes delinquent and the interest rate on delinquent amounts.
All ongoing job creation, community service fee, and facility operation requirements are met as a condition of continued eligibility.
If a proponent fails to meet these requirements, the City of Riverside is entitled to repayment of any amounts paid. If a proponent is delinquent on any portion of the community services fee, they are ineligible to receive the CIIP payment.
At this time, the City is not approving any incentive for a specific project or manufacturing company. Establishing a CIIP does not obligate the City to approve or fund any future incentive. Rather, it creates an enabling mechanism that staff may apply, subject to City Council consideration, when evaluating future business attraction or retention opportunities specific to manufacturing companies. Staff will develop program guidelines and procedures to offer incentives to qualified businesses, subject to approval by the City Attorney’s Office, to be presented to the City Council at a later date for consideration. Any project specific incentive, CSA, or program participation decision would return to the City Council under separate action and required resolution.
For the City of Riverside, the CIIP represents a neutral yet strategic, broad-based economic development tool capable of supporting advanced manufacturing attraction across all Wards. Adoption of the program aligns with City goals of fostering innovation, creating high-quality jobs, and strengthening local and regional competitiveness.
FISCAL IMPACT:
There is no immediate fiscal impact associated with adoption of the CIIP resolution. However, any future agreement will result in the City foregoing a portion of property tax revenues in exchange for large-scale manufacturing investments and job creation commitments outlined in an executed Community Services Agreement. Staff will ensure program guidelines and procedures are in place to minimize potential fiscal impacts, only offer the incentive to companies that would not otherwise locate/expand in the City, and ensure the City’s projected net benefit, including job creation, exceeds the CIIP payments. Any future fiscal impacts will be presented for Council consideration on a project-by-project basis.
The City's fiscal exposure is partially mitigated by the statutory requirement that annual CIIP payments are contingent upon the proponent's payment of the community services fee. If a proponent becomes delinquent on the fee, the proponent is ineligible to receive the corresponding CIIP payment. The Community Services Agreement must also establish delinquency provisions, including interest, and provide for recapture of previously paid incentive amounts if the proponent fails to meet specified operating requirements. The City may also incur administrative and enforcement costs associated with collection and any potential difficulty recovering previously paid amounts for any delinquent entities.
Prepared by: Evan Webb, Project Manager
Jessica M. Gonzales, Senior Project Manager
Approved by: Miranda Evans, Community and Economic Development Director Certified as to
availability of funds: Julie Nemes, Finance Director
Approved by: Thomas R. Hatch, City Manager
Approved as to form: James Johnson, City Attorney
Attachments:
Draft Resolution Establishing a Capital Investment Incentive Program Presentation
Capital Investment Incentive Program Proposal ● Page 2