cra group 1 powerpoint 1
TRANSCRIPT
U S C S O L P R I C E S C H O O L O F P U B L I C P O L I C Y P P D 6 1 9 : S M A R T G R O W T H & U R B A N S P R A W L
CITY OF LA: POST REDEVELOPMENT
GROUP 1 JOY-ALONICA BAUTISTA JEFF KHAU MARISOL MACIEL THOMAS WONG
RESEARCH OUTLINE
q Background Context
q Meeting w/ City of LA’s Planning Department
q Case Study of California Cities q City of Alhambra
q Best Practices of Economic Development q Chicago, Ilinois q Phoenix, Arizona q New York, New York
Source: http://la.curbed.com/tags/budget
BACKGROUND CONTEXT
q California Redevelopment Agencies died on February 1, 2012.
q Land-use conflicts and much more…
q Successor agencies
q What is LA doing to spur economic development?
RECOMMDENDATION #1 CITY OF ALHAMBRA
Section 108 loanslong-‐term loans secured by some form of collateral and revenues generated from a project or paid
from a portion of the city’s annual CDBG allocation
Annual CDBG allocationideal for infill development projects and tenant improvements under the category of job creation or
elimination of blight
CDBG Program Income net proceeds from any project made possible through the use of CDBG funds
New project-generated sales tax rebates
new net sales taxes from a development that can be rebated to offset project costs
New project-generated property tax rebates
new net property taxes from a development that can be rebated to offset project costs
Short term lines of credit secured and repaid by new net project generated property or sales taxes
Federal/State Grants or Economic Development
Initiatives
increases access to capital for small businesses–a key component of job creation, and helps provide additional security for a Section 108 loan
Potential Tools for Financing Economic Development
ADDITIONAL FINANCING TOOLS
Loans from General Fund or Enterprise Reserve Funds
may require a loan agreement as well as an interest component to do some types of projects
Sale of city assets set aside funds from sale of city assets
City fees that are discounted, waived or deferred
negotiated incentives to make it easier to attract new businesses and investments
Brownfields assistanceassistance to assess and remediate abandoned or underused industrial and commercial property
(possible funding available via the EPA or Federal/State agencies)
Infrastructure Financing Districts (IFDs)
bonds through IFDs can be used to help pay for infrastructure-‐type projects by diverting property tax revenues to pay debt service from other local governments, except schools (requires two-‐thirds
voter approval)
Revenue bondsbonds backed by revenue generated from a project funded with bond proceeds and repaid by
earnings from the operations of a revenue producing enterprise
Conduit revenue bondstax-‐exempt bonds issued by chartered cities for economic development or multi-‐family housing. The
bond is payable from loan payments received from the non-‐governmental developer on the condition of a public benefit, and presents no liability for the governmental entity
Community Facilities Districtsbonds used mainly to finance public works improvements and services or to pay for specific, limited improvements related to privately-‐owned or real property (requires two-‐thirds voter approval to
establish the parcel tax, i.e., Mello-‐Roos)
Assessment Districtsa charge assessed against real property whereby there is a benefit from a particular public works or public services project or activity undertaken by the city. The special weighted voter-‐approved
assessment becomes a part of the funding mechanism to defray the cost of the project
RECOMMENDATION #2
NYCEDC
q Commercial Tax Incentives
q Empower Zone Benefits
q Commercial Revitalization Program
Source: http://www.nycedc.com
RECOMMENDATION #2
New York State EDC
q Brownfield Cleanup Program (BCP) Tax Credits
q Industrial Development Agency Program q Abatement of sales tax
Example of IDA Benefits Project "X" builds 50,000 sq. ft. building for $5,000,000, and has $4,000,000 mortgage. Mortgage recording tax savings (1% of mortgage) = $40,000 Real Property Tax abatement = $275,000 over 10 years Sales tax savings on construction materials and non-manufacturing equipment = $120,000 + $54,000 = $174,000 Total savings over 10 years = $489,000 Source: http://www.nysedc.org/
RECOMMENDATION #3
Chicago Skyline Source: http://www.prlog.org
Restructuring: Chicago’s Model § Department of Housing and
Economic Development § Comprised of Commissioner’s Office
and three bureaus § Bureau of Housing § Bureau of Economic Development § Bureau of Planning and Zoning
§ Bureaus do the bulk of the work in regards to execution of projects.
§ Commissioner’s Office assists in the decision-making process § Composed of private individuals
who attend meetings once a month
§ Community Development Commission (CDC) § Oversight body created to review
expenses; unpaid positions
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RECOMMENDATION #4
q Streamlined process
q Simplified way to get involved with development
q Department that knows about the start-up process
q Desire to have a relationship with business owners
Source: http://phoenix.gov
CONCLUSION
q Pass Limited Transition Ordinance
q Institute economic development plan using alternative financing tools
q Capitalize on incentives and provide a customer advocacy program
q Streamline planning & development processes
THANK YOU! QUESTIONS?