Enhanced Infrastructure Financing District
Resolution of Intention &
Resolution forming the Public Financing Authority
April 25, 2023
CITY COUNCIL
PLANNING AND ECONOMIC DEVELOPMENT DEPARTMENT 1
Housing Action Plan
Downtown Plan Update
RED Housing Fund
Opportunity Zone
EIFD
2 • Permit + CEQA Streamlining
• Fee + Other Incentives
• City-Owned Assets
Council Priority
BACKGROUND: Downtown Development Momentum
3 • 419 units under
construction
• 870 units in building
plan review
• 131 units completed
since 2016
ISSUED
• The Cannery
129 units, 6 stories
• Pullman Lofts Phase 2
40 units, 5 stories
4 IN PLAN REVIEW
• 425/431 Humboldt Street
88 units, 7 stories
ENTITLED
• 425/431 Humboldt Street
88 units - 7 stories
• Ross Street Development
109 units - 8 stories
• 1 Santa Rosa Avenue
120 units - 7 stories
• SMART Village, Phase I
114 units - 6 stories
• DeTurk Winery Village
185 units - 4 stories
• Avenue 320 Apartments
36 units - 3 stories
• The Flats - 24 units - 5 stories
UNDER
CONSTRUCTION
& RECENTLY BUILT
• Pullman Lofts Phase 1
74 units, 3 stories
• 888 4th Street
90 units, 6 stories
• 420 Mendocino Ave
161 units, 8 stories
EIFD: Enhanced Infrastructure Financing District
5 • Public infrastructure financing tool:
Uses property tax increment revenues
generated by community growth.
• NO NEW TAXES.
• NO additional property taxes
imposed.
• Use of tax increment:
Use portion of tax increment
generated by existing 1% ad valorem
property tax. Cannot use increment
from educational agencies (e.g. school
districts; community college district).
EIFD: Formation Process
6 City Council Meeting – April 25, 2023:
• Resolution of Intention (ROI) adopted.
• Approved boundaries + list of improvements/projects
• Public Financing Authority (PFA) established.
• 2 City Council members, 1 County Supervisor, 2 members of the public • Oversees development of Infrastructure Financing Plan (IFP); process includes “off ramp” decision points
• Administers the EIFD; orders the preparation of the Infrastructure Financing Plan (IFP) Infrastructure Financing Plan:
• Includes the Fiscal Impacts analysis on the budgets of participating local public agencies and general description of projects.
• Copy of IFP made available to all property owners within the proposed EIFD and to the County, and presented at a public meeting occurring before the first PFA public hearing.
EIFD: Formation Process, cont.
7 Public Financing Authority:
• Holds 3 public hearings at least 30 days
apart.
Board of Supervisors & City Council:
• Each adopt Resolutions approving the
IFP.
Statement of Boundary Change
• filed by PFA with State Board of
Equalization by Dec. 2, 2023.
NOTE:
• Approval of ROI by 6/30/2023 allows the tax
increment generation “Base Year” to be FY
2023- 24.
• This is the earliest potential Base Year for the
proposed EIFD
EIFD: Formation Process, cont.
8 • No election is required unless 25% of property owners protest at third PFA public hearing.
An EIFD is abandoned if over 50% of property owners protest the formation . • Council approves the IFP by resolution
The PFA adopts the IFP and approves the Resolution of Formation establishing EIFD at the third public hearing.
• PFA files “Statement of Boundary Change” with California Board of Equalization by December 1, 2023.
NOTE:
• Unlike old redevelopment districts that utilized tax increment financing, there is no blighted area requirement to establish an EIFD
EIFD: Bonds
9 • WHO: Public Financing Authority makes the decision to sell bonds • WHEN: PFA may decide to sell bonds when sufficient ad valorem property tax and VLF increment has accrued to support debt service.
• Minimum debt service coverage is 125%
• Bonds cannot be sold until after some development has occurred and tax increment is generated, so EIFDs are often used as a reimbursement mechanism • HOW: Bonds are secured only by tax increment generated within the EIFD, NOT by the City’s General Fund.
NOTE:
• Proceeds may be utilized to fund any public improvement with a useful life of 15 years or more that provide community benefit
EIFD: Eligible Public Improvements
10 • Roads, highways, streets/streetscapes,
parking facilities, and transit facilities
• Affordable housing
• Internet access services
• Childcare facilities
• Libraries
• Parks, open space, and recreational
facilities
• Improvements related to fighting climate
change
• Brownfield restoration and other
environmental mitigation
• Transit priority facilities
• Sewer, reclamation, and water facilities
• Solid waste facilities
• Flood control facilities, retention bases,
and drainage channels
NOTE :
• EIFD funding cannot finance public services unless they involve maintenance of facilities built with EIFD funding.
EIFD: Boundary Considerations
11 Downtown Station
Area Specific Plan
Downtown
Community
Benefit District
Railroad Square
Community
Benefit District
EIFD Boundary
EIFD: Boundaries
12 EIFD Tax Increment Estimates
FY22- 23 – 2% Growth Assumption
13 EIFD Tax Increment Estimates
FY22- 23 – 3% Growth Assumption
14 EIFD Tax Increment Estimates
FY22- 23 – 5% Growth Assumption
15 Recommendation
16 It is recommended by the Planning and Economic Development Department that the Council:
1) adopt a Resolution of Intention to form the Downtown Enhanced Infrastructure Financing District; and
2) adopt a Resolution to establish a Public Financing Authority as the Governing Board of the District, and authorizing other actions.