On Point: Little-used districts seen as solution for shuttered bases

On Point: Little-used districts seen as solution for shuttered bases

Michele Ellson

City leaders eager to move forward with plans to revitalize Alameda Point are pinning their hopes on new legislation that could allow them to use future property tax dollars to pay for roads, schools and other new public facilities at the Point and other defunct military bases.

A bill from Assemblywoman Susan Bonilla, D-Concord, would allow California base reuse authorities to set up special infrastructure financing districts to rejuvenate shuttered bases. It’s one of a host of bills aimed at restoring locals’ ability to redevelop blighted properties and to use future property tax money to pay for affordable housing following the demise of the state’s redevelopment programs.

The city is facing an estimated $600 million tab for new public facilities at Alameda Point, close to a third of which city staffers had planned to cover using future property tax dollars when redevelopment agencies still existed. But the elimination of redevelopment programs in February took away local agencies’ power to divert property taxes to fund those costs.

“We need something to get going. It’s very likely that if we don’t have something like this, we can’t move forward,” said Jennifer Ott, chief operating officer of Alameda Point.

The Bonilla bill is slated for a committee hearing on Wednesday.

Under existing law, cities and counties can create the districts on undeveloped land to pay for public facilities like roads, sewers, schools, parks and libraries if two-thirds of property owners in the proposed district approve. Cities, counties and special districts that would have received the property tax revenues that are diverted to pay for those facilities also have a say in whether a district can be created (schools retain their share of the property taxes created by new development).

The law has been used just once in the 22 years it’s been on the books, proponents of the districts have said, due to concerns over the constitutionality of taking the tax money. In 1998, then-Attorney General Dan Lungren issued an opinion dismissing that concern, though an April 2011 presentation to the California Association for Local Economic Development co-authored by the city’s bond counsel, Paul Thimmig, said those questions still exist.

Still, Thimmig and others have pointed to the districts as a potential solution for municipalities seeking fresh options for funding redevelopment plans after the elimination of redevelopment. A bill crafted by Assemblyman Tom Ammiano, D-San Francisco, which passed in September authorizes the city and county of San Francisco to create a special financing district around the waterfront area that will host the upcoming America’s Cup.

Base reuse communities across California have embraced the districts as well.

“It in no way, shape or form replaces redevelopment. But it certainly is better than nothing,” said Mike Wright, director of the Concord Community Reuse Project, whose city was one of several that have been working with Bonilla’s office.

City leaders and residents there developed a mixed-use, transit-oriented plan to revitalize the Concord Naval Weapons Station that would see 12,200 homes and 6 million square feet of commercial retail space built on around 2,000 of the station’s 5,000 acres. But the estimate cost of infrastructure for the development is more than $1 billion, Wright said.

Allowing the special districts to be created for old military bases would allow cities to collect 40 to 60 cents for every tax dollar they used to collect under redevelopment, said Wright, who called the elimination of redevelopment “a pretty big blow.”

Wright said the sheer size of shuttered bases and the issues they pose – which include environmental cleanup, preservation and buildings and infrastructure not built to city codes – make them a challenge to develop. The loss of redevelopment also leaves cities without a major dedicated funding source for affordable housing, though other bills – including one sponsored by Senator Darrell Steinberg, D-Sacramento, that would create new housing and community development authorities that would regain redevelopment powers – could address that issue.

Another bill, sponsored by Senator Lois Wolk, D-Davis, would eliminate the vote requirement and would allow the districts to exist for a longer period of time in order to finance and pay off infrastructure. The bill, which passed the state Senate, has yet to be discussed in the Assembly.

Wolk’s bill drew support from a state association representing special districts, which said it removes impediments to using the financing districts (the association opposes Steinberg’s bill). But the California Taxpayers Association is opposing it, saying it takes away voters’ voice and also tax dollars that could benefit other public institutions.

Ott pointed out that Alameda Point isn’t yet on the tax rolls and said those tax dollars will never be created if the base isn’t developed.

“No one is getting money from these bases,” she said. “If we don’t have a (tax collecting) tool, good portions of these bases will never be developed, or it’ll be an extremely long time because of the major infrastructure challenges and the major costs that go along with them.”

Comments

Submitted by Richard Bangert on Sun, Apr 22, 2012

Why mess around with a little-used district scheme when there is a new bill targeted specifically at closed military bases? It is Assembly Bill 1644, California Military Base Reuse and Preservation Act of 2012, introduced Feb 13, 2012, by Assembly Member Carter. http://www.aroundthecapitol.com/billtrack/text.html?bvid=20110AB164498AMD

Would any of the bills mentioned in this "On Point" piece be necessary for Alameda Point development if this new bill is enacted? Maybe it is implied in the bill that we could proceed as if redevelopment law never ended for Alameda Point, but it is not clear to me.

Submitted by Michele Ellson on Mon, Apr 23, 2012

Hey Richard: Thanks for your comment. The information I had was that this bill was going to be pulled, though it's always worth double-checking.