Presentation to South Bay Infrastructure Working Group Economic Development 2.0 The Power of Partnerships June 15, 2016 by: 1230 Rosecrans Avenue, Suite 300, Manhattan Beach, CA 90266 (424) 456-3088 www.kosmont.com
New Deal Making Paradigm in CA State has approved new “districts” (EIFDs, CRIAs, other): • Enable tax increment financing for local/regional projects • Compel joint ventures with cities, counties, special districts and private developers New districts creating paradigm shift in California • Districts geared to sustainability, infrastructure, energy efficiency Districts induce multi-jurisdictional partnerships for economic development and infrastructure 2 2
E.D. 2.0 Supports Partnerships – Legislative Direction Successful Economic Development Sustainable Policy Post-RDA Projects New Revenues and Jobs Compliance AB 32 (Perez) Enhanced Infrastructure Financing Districts Cap and Trade: Community Development Investment Tax Credits Special Districts Annex Area and Former Military SB 375 (Steinberg) Bases for Infrastructure Financing & Revitalization GHG Emissions Reductions: Sustainable Communities Strategy Infrastructure and Revitalization Financing Districts SB 1168 (Pavley) on Former Military Bases Groundwater Sustainability Agency & Plan: High- and Medium-Priority Basins Community Revitalization Authority AB 1739 (Dickinson) SB 743 (Steinberg) Groundwater Management: Sustainability CEQA: Environmental Quality Streamlining for Plan & Extraction Reporting TOD / Infill Dev. SB 535 (De Leon) AB 850 (Nazarian) Greenhouse Gas Reduction Fund: Benefits Financing Public Capital Facilities: Water Quality to Disadvantaged Communities AB 1471 (Proposition 1; Rendon) SB 350 (De Leon & Leno) Financing Water Quality, Supply & Infrastructure Accelerated emissions standards including Improvement: Bond Issuance required energy reduction for buildings AB 2660 (Aguiar) SB 32 (Pavley) Statewide GHG emission limits accelerated Infrastructure Financing Act: User Fees and P3s Local & Regional Infrastructure Regional Sustainability 3
Economic Development 2.0 Today, use partnerships to accomplish: Sustainability Infrastructure Energy/Resource Efficiency GHG Reduction Regional Cooperation PLACEMAKING 4
Post-RDA Economic Development Cities have 9 BASIC TOOLS for Public/Private Projects Real Estate & Property Joint Powers Special Districts Authorities (Tourism, BIDs, (JPAs) etc.) Economic P3 / Project Rebate of Taxes Delivery Methods / Revenues Development Real Estate Land Use / Project Enhanced Infr. Zoning (Higher Financing Density; Districts (EIFDs) Parking) Community Property Revitalization & Assessed Clean Inv. Authority Energy Finance (CRIA) Program (PACE) New tools require collaboration 5
Pubic Public Ventures Mean More $$$$ for Projects EIFD/CRIA districts push cities to create local/regional infrastructure projects (water, roadway, sewer, digital) EIFDs can finance implementation of regional infrastructure via Public Financing Authority which uses property tax increment Most cities need other agencies increment to fund/expedite projects Regional approach elevates eligibility for external funding sources • Cap-and-trade grant funds (GRGF) reward projects that reduce GHG emissions with billions in potential funds • Prop 1 contains over $7.5 billion in water infrastructure project funds 6
EIFD: New Economic Development Tool • Can be used as a replacement to redevelopment City can revitalize an area through Tax Increment Financing (TIF); City allowed to use County or Special District property tax share as well as revenues pledged by special districts, if mutually agreed • Catalyzes projects in development driven scenarios Developer interested in pursuing project can use EIFD tax increment to help finance necessary infrastructure (reimbursement) • EIFD created for 45 years with a focus on infrastructure, energy efficiency, and P3 partnerships Managed by Public Financing Authority with 1 or more public agencies 7
Types of Projects EIFDs Can Fund Industrial Structures Aff. Housing / Mixed Use TOD Projects Wastewater/Groundwater Light / High Speed Rail Civic Infrastructure Parks & Open Space Childcare Facilities Brownfield Remediation Source: SB 628 – Bill Text 8
EIFD - Summary of Key Terms The Area 1. Enhanced Infrastructure Financing District • Governmental entity established by a city or county that carries out a plan within a defined area to construct, improve and rehabilitate infrastructure 2. Public Financing Authority (PFA) The Team • Legislative body that governs the EIFD • Composed of participating governments and members of the public 3. Infrastructure Financing Plan The Strategy • Plan adopted by city or county. Describes public facilities & development to be financed by the EIFD • Implemented by Public Financing Authority (PFA) 9
How is an EIFD Formed? 1. Adopt Resolution of Intention 2. Prepare & Adopt Infrastructure Financing Plan 3. Enter into tax sharing agreements with other public entities/special districts 4. Approve IFP and form EIFD 5. PFA implements Infrastructure Plan 10
EIFD - Property Tax is Primary $$$ Source Property Tax: How Much Goes to Your City? City 21% 27% Special Districts 7% Local Schools 45% County Source: Board of Equalization & California State Controller 11
EIFDs – Uses Diverse Funding Sources Can use multiple funding sources with tax increment: • If Bond Issuance then 55% voter approval required Potential to apply State funding sources: • Proposition 1 bond funds • Cap-and-trade proceeds Federal & State Grants Greenhouse Gas Reduction Funds Federal DOT/EPA/DOE funding programs Other Funding Sources: • Property tax revenue including RPTTF • Vehicle License Fee (VLF) prop. tax backfill increment • Development Agreement / Impact Fees • User fees • City / county / special district loans • Hotel TOT • Benefit assessments • Contribution from Special District EIFD • Levied by EIFD Fund • Private investment 12
EIFD Case Study: City of La Verne Proposed EIFD (TOD focus) 13
Case Study: La Verne TOD EIFD • EIFD Status EIFD under evaluation by City of La Verne as lead public agency La Verne’s EIFD Goals: • Induce development around future gold line station via development agreements that advance City Specific Plan , capitalize on TOD demand • Access to Statewide sustainable funding sources such as Greenhouse Gas Reduction Fund (GGRF) & commercial PACE to increase property tax increment for District & sustainability compliance • The Proposed District Proximate to Univ. La Verne, Fairplex properties & future Gold Line Station 388+ acres adjacent to La Verne’s Old Town Specific Plan Area • Projects (pubic and private) Station area improvements, circulation infrastructure next to Foothill station Development of mixed-use housing, potential hotel, retail and event space Sustainable improvements to commercial and industrial structures, 14
La Verne Preliminary Potential EIFD Map Fairplex TOD (SA 1) Campus West (SA 2) North Area TOD (SA 3) Future Gold Line Station Old Town SP Area 15
La Verne EIFD: Infrastructure Around Gold Line Station Parking Infrastructure Rail Station Improvements for increased Improvements Pedestrian Access to Rail Station • Parking: The Old Town La Verne Specific Plan parking needs assessment identifies average need for approximately 1,225 parking spaces in Arrow Corridor on a Saturday in a typical month. Potential demand could peak at about 1,760 spaces per day during peak holiday season. • Plan calls for four future parking structures at buildout, including a 600-space structure at the Gold Line Station. If built out, these parking structures could provide up to 2,015 spaces. • Gold Line Improvements (Sub-Area 1): Improvements around the Gold Line extension may include platforms, bicycle racks for commuters and improved streetscape around the stop. • Pedestrian Access: The TOD may need new bike lanes, pedestrian sidewalks, and a footbridge across Arrow Route to connect proposed Fairplex development to the Gold Line station. Source: Old Town La Verne Specific Plan 16
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