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

G R O U P 1

J O Y - A L O N I C A B A U T I S T A

J E F F K H A U

M A R I S O L M A C I E L

T H O M A S W O N G

RESEARCH OUTLINE

Background Context

Meeting w/ City of LA’s Planning Department

Case Study of California Cities City of Alhambra

Best Practices of Economic Development Chicago, Ilinois

Phoenix, Arizona

New York, New York

BACKGROUND CONTEXT

California Redevelopment Agencies died on

February 1, 2012.

Land-use conflicts and much more…

Successor agencies

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 rebatesnew net sales taxes from a development that can be rebated to offset project costs

New project-generated

property tax rebatesnew 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 Fundsmay 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 deferrednegotiated 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 bonds

tax-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 Districts

bonds 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 Districts

a 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

Commercial Tax

Incentives

Empower Zone Benefits

Commercial

Revitalization Program

Source: http://www.nycedc.com

RECOMMENDATION #2

New York State EDC

Brownfield Cleanup

Program (BCP) Tax

Credits

Industrial Development

Agency Program

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/11842434-chicago-it-doesnt-get-any-better-than-

this.html

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

Streamlined process

Simplified way to get involved with development

Department that knows about the start-up process

Desire to have a relationship with business owners

CONCLUSION

Pass Limited Transition Ordinance

Institute economic development plan using

alternative financing tools

Capitalize on incentives and provide a customer

advocacy program

Streamline planning & development processes