City OKs infrastructure-boosting plan
PALMDALE — The City Council, on Wednesday, gave final approval to a financing mechanism that will help bring infrastructure to areas of the city to enable future private development.
The Enhanced Infrastructure Financing District plan designates specific areas where the city may use the promise of future increased property tax revenues to make infrastructure improvements to make those areas more conducive to development.
For example, the city could install sewer and water lines to an area ripe for development, but where the cost of the installation makes it infeasible for businesses alone to develop the site.
A property tax baseline is set when the District is formed. Then additional revenue gained when property values increase on the developed land — known as a tax increment — is reinvested into the District.
The project is a joint operation with the City and Los Angeles County. The Los Angeles County Board of Supervisors is expected to consider its final approval next month.
“This has been a collaborative effort from the get-go,” City Manager J.J. Murphy said in a press briefing, on Tuesday.
The anticipated tax increment can be used to secure funding for the infrastructure projects, through bonds, grants or other sources.
There is no cost to the property owners within the District to create the District or fund the infrastructure improvements. “It’s the city committing its future tax increment,” Economic Development Director Luis Garibay said.
A fiscal analysis by consulting firm Kosmont estimated the EIFD’s net financial benefit to the city to be $433 million over its 50-year term.
The areas selected for inclusion are those that have remained undeveloped for a long time or are in need of revitalization, and that have the potential for the best return on the investment made.
“When we looked at potential projects that could be funded through the Enhanced Infrastructure Financing District, we wanted to be sure that we looked at some of these big-dollar ones that would have big impacts on our community,”
Garibay said of the proposed projects listed for the District.
An example is an overpass on Rancho Vista Boulevard (Avenue P) at the railroad tracks along Sierra Highway, an area that is a main corridor to access Air Force Plant 42.
The EIFD would provide a portion of the estimated $60 million to $80 million for the that project.
“We looked at this as just another opportunity, a piece to the puzzle,” he said.
The entire District encompasses approximately 22,971 acres of land, or about 28% of the city. About 4,000 acres of that total are in unincorporated Los Angeles County.
The entire district is divided into three sub-areas.
The Aerospace Corridor is centered on Air Force Plant 42, and a future planned airport adjacent it. This area is zoned for industrial and commercial use, with an estimated $859.7 million in public/ private development projects.
The second area, the Palmdale Commercial Centers, includes some of the city’s major commercial areas. These include such sections as areas around the downtown core, the Palmdale Trade and Commercial and Auto Center areas, Palmdale Regional Medical Center, Palmdale Transit Village, residential and other commercial uses. The study estimates $674.2 million of public/private development in this subarea.
The third area is Las Colinas, the southwestern area of the city around the proposed Ritter Ranch and Anaverde Nuevo housing projects. An estimated $2 billion in housing projects is planned for the area, and will need significant infrastructure investment, according to the report.