City / County TIF District Partnerships in the Post-Redevelopment World: Case Studies and Lessons Learned

City / County TIF District Partnerships in the Post-Redevelopment World: Case Studies and Lessons Learned, an Article by Kosmont Companies

In the six years since enhanced infrastructure financing districts (EIFDs) were introduced by Senate Bill 628 in 2014, the economic development industry has made slow but steady progress in the implementation of these new tax increment financing (TIF) districts. Half a dozen districts have been formed across the state, and dozens more districts are in the process of evaluation and formation.

This new iteration of TIF represents a paradigm shift from the Redevelopment Agencies of the past. EIFDs, Community Revitalization and Investment Authorities (CRIAs), Affordable Housing Authorities (AHAs), and other new districts are mechanisms for the implementation of the state’s current economic development priorities: sustainable infrastructure, greenhouse gas reduction, climate change adaptation, environmental resiliency, homelessness prevention, and housing production.

The communities that have been early movers in the implementation of new TIF districts have tended to embrace the latest state-level legislative momentum, while being able to translate it into implementation of local economic development objectives, such as quality-of-life improvement, fiscal revenue generation, job creation, and transit-oriented development. Still, one of the main challenges that continues to face local communities in their consideration and execution of these tools is the recruitment of taxing entity partners like counties and special districts.

This article is intended to showcase a few of the communities that have been successful, not only in forming EIFDs, but also accessing their full capacity to attract other sources of public and private funding, such as property tax increment contributions from other taxing entities and state and federal grant funds.

City of Placentia / County of Orange TOD Packing House & Old Town EIFD
The City of Placentia / County of Orange Transit Oriented Development (TOD) Packing House and Old Town EIFD was fully formed on July 30, 2019 as the first City/County cooperative EIFD to be formed in California. The EIFD began as an initial evaluation by the City in 2016 as a tool for implementation of TOD infrastructure and economic development. The implementation phase of work began in 2018 with funding assistance from the Southern California Association of Governments (SCAG) as part of its Tax Increment Financing (TIF) Pilot Project Program. The district encompasses just over 300 acres of land, representing approximately 7% of the City. The District includes the City’s Old Town Placentia Revitalization Plan area (Old Town) and TOD Packing House District as well as other proximate areas. The nucleus of the District is a forthcoming Metrolink station for the 91 Line between LA Union Station and downtown Riverside through Orange County, which will be the first Metrolink station in Orange County in approximately 10 years. The EIFD area also encompasses two (2) Opportunity Zone (OZ) census tracts, which enables the City/County to use the EIFD as a collateral inducement for private sector investment driven by the federal tax benefits that OZ’s can provide. The purpose of the EIFD is to serve as a catalyst for private development in the Old Town and TOD Packing Housing District areas, put in place to capture value from significant (~$460 million+) residential, commercial, and hospitality development potential and to direct the funding that is generated to critical, regional transit-supportive infrastructure with transformative potential for the City and North Orange County region.

City of La Verne /  County of Los Angeles Gold Line TOD EIFD

Originally formed in October 2017, the La Verne TOD EIFD was the first EIFD formed in Los
Angeles County since the introduction of EIFDs with Senate Bill 628 in 2014. The City pledged all (approximately $0.18 per dollar) of its property tax increment, and the County of Los Angeles, two years later in January 2020, approved the contribution of 50% (approximately $0.148 per dollar) of its future property tax increment to fund approximately $33 million of infrastructure improvements around the forthcoming Gold Line Station, serving County assets such as Fairplex and Bonelli Park. The County’s approval hinged upon the estimated $37 million fiscal benefit to the County from new development and housing, including 15% affordable units. The La Verne / L.A. County TOD EIFD is the second fully-formed City-County EIFD partnership in the state, following the City of Placentia / County of Orange / SCAG EIFD. Read L.A. County Fifth District Supervisor Katheryn Barger’s comments on the La Verne EIFD Partnership in her newsletter here:

City of Redondo Beach / County of Los Angeles Waterfront Park EIFD
During the same Los Angeles County Board of Supervisors (BOS) meeting where the County’s partnership in La Verne was formalized, the County also approved the appointment of its designated governing board members to the City of Redondo Beach Waterfront Park EIFD. The City of Redondo Beach initiated the EIFD with the purpose of funding an approximately 25- acre regional coastal park on the site of the soon-to-be-decommissioned AES Power Plant within the City. Improvements to the area will include the regional coastal park along with restored wetlands, street/circulation/coastal access, parking, and site remediation efforts. The County of Los Angeles had previously adopted a Resolution of Intention to partner with the City in its EIFD in November 2019. Once fully-formed, expected by the fall of 2020, the Redondo Beach / L.A. County Waterfront Park EIFD would be the third fully-formed City-County EIFD partnership in the state.

Lessons Learned and Keys to Success
While each district partnership scenario varies widely in terms of purpose, land use, targeted
infrastructure, and community benefits, there have been some commonalities contributing to the success of the multi-jurisdictional partnerships:

  •  Elected official champions at both the City Council and County Board of Supervisors
  •  Strategic “third party” partners, such as the University of La Verne and SCAG with
    potential funding to assist in formation activities
  • Complementary tools identified, such as Mello-Roos Community Facilities Districts
    (CFD) for maintenance, federal Opportunity Zone incentives, and state and federal grant
  • Transparent and accountable community approach, taking into account the latest
    legislative guidelines for public hearings and related noticing (updated by Assembly Bill
    116, effective January 1, 2020).

Potential Changes in EIFD Legislation on the Horizon
Kosmont Companies had provided input on and is tracking several pieces of legislation with
positive potential impacts on the efficacy of special districts like EIFD, including:

  • SB 795: Affordable Housing and Community Development Investment Program
  • SB 1389: Public Investment Authorities.

It’s Kosmont’s opinion that the post-redevelopment toolkit for economic development and multi-jurisdictional partnerships will only continue to improve with each legislative session, as it has every year with the adoption of SB 628 in 2014.