UPDATE: An earlier version of this post reported that the Board was meeting in closed session. This was incorrect.
The Board is meeting today to consider amending the San Francisco Redevelopment Agency’s (SFRA) budget to issue an additional $70 million in tax increment bonds and appropriate $75.4 million ($70 million in bond proceeds, plus $5.4 million tax increment). The request, which comes on the heels of last year’s $64 million request, represents a 109.4 increase of tax increment bonds in 2010-2011. The city says thiis has nothing to do with Gov. Jerry Brown’s proposal to eliminate redevelopment agencies. But the last-minute timing of today’s session looks a tad fishy at best. And it’s playing out as a vote on Treasure Island’s final environmental impact report approaches, and against a backdrop of extreme funcertaintly related to all things Redevelopment, as Mayor Ed Lee and other city leaders try to figure out ways to prevent or reduce the affordable housing fallout from the governor’s elimination proposal.
According to a Budget and Legislative Analyst’s summary of today’s request, the requested bond issuance and expenditure is part of the “SFRA’s normal course of fulfilling its obligations under the tax increment allocation pledge agreements between the city, SFRA and FOCIL-MB (Catellus’ successor entity at the Mission Bay redevelopment sites), and not as a result of the Governor’s proposal to eliminate local redevelopment agencies. Ms. Lee [deputy executive director at the SFRA] states, that, as of the writing of this report, the impact of the Governor’s proposal on the Mission Bay Redevelopment Project is currently unclear and ambiguous as to whether approval of the Governor’s proposal would affect the requested bond issuance and expenditure authority.”
“At the time of the development and approval of the FY 2010-2011 budget, the Agency and Tax Assessor did not have available tax roll information that resulted in a significant increase in property taxes in Mission Bay due to the accelerated assessment agreement between the Assessor and the Agency,” states today’s Board resolution that Mayor Lee sponsored, explaining why there’s a request for an additional $70 million in bonds, so soon on the heels of the $64 million that the Board approved last year.
“The Agency wishes to amend its budget for the fiscal year 2010-2011 to permit the receipt of additional tax increment of $5.44 million and bond proceeds in the amount of $70 million for the purposes of low moderate housing and for the reimbursement of public improvements made by Catellus pursuant to the tax increment allocation pledge agreement between the City and County of San Francisco, San Francisco Redevelopment Agency and Catellus made in November 16,1998 for Mission Bay North and South,” the resolution continues.
Mission Bay North and South are two separate redevelopment areas that encompass 303 acres, bounded by King Street and AT&T Park on the north, the San Francisco Bay and the I-280 freeway on the east and west, and Mariposa Street to the south, according to Redevelopment Agency documents.
The Budget and Legislative Analyst notes that of the $5.4 million in additional tax increment, an estimated $3.48 million would fund a portion of the Agency’s required educational revenue augmentation fund payment to the state for FY 2010-2011. And that the remaining $1.95 million would be distributed to tax entities, with $870,400 to be expended on the agency’s low and moderate income housing fund.
The BLA notes that the proposed sale of $70 million in tax increment bonds will provide $60.345 million bond proceeds, including $12 million (20 percent) to fund the construction of 1180 4th Street, a development of 150 units of family rental housing, including 25 units for formerly homeless families and $48. 276 million (80 percent) to reimburse Catellus’ successor, FOCIL-MB, LLC, for public infrastructure development that FOCIL-MB constructed..
“If the proposed resolution is approved, of the $177 million total estimated debt service, $100, 890,000 or 57 percent will be paid from the City’s General Fund. The City’s General Fund estimated additional annual cost would be $3,648,000 for the first 20 years, decreasing to $2,793,000 for the next ten years.” The BLA concludes, explaining that approval of the proposed resolution is a Board policy decision because it adds up to a total General Fund cost of more than $100 million.
According to the BLA report, Amy Lee, SF Redevelopment Agency deputy executive director, the requested $70 million in tax increment bonds would be sold in late March 2011, “such that no debt service payments would be required in FY 2010-2011.
The BLA also notes that if the Board approves the proposed resolution, the net effect of each property tax dollar expended for tax increment that is provided to SFRA would result in a reduction of $0.57 on each dollar from the city’s General Fund.
“In other words, for each tax increment dollar provided to SFRA, the City would no longer have to provide payments to other tax entities,” the BLA observes.
These entities include the city’s Children’s Fund, Library Preservation Fund, Open Space Acquisition Fund, and the General City Bond Debt fund, the Community College district, the San Francisco United School District, BART, and the Bay Area Air Quality Management District, which total approximately $0.43 of each property tax dollar.
It’s because of these property tax dollar equations that the annual cost to the city’s general fund for proposed increased debt service would rise, if the Board approves today’s Redevelopment resolution, by more than $100 million over the next 30 years.
And as local Democratic Party chair and former Board President Aaron Peskin explains, there’s nothing much the Board can do about the deal today, but they might want to reconsider getting into more deals like this at Treasure Island and beyond, in future.
“A deal is a deal is a deal,” Peskin said. ‘So, there’s nothing the Board could do differently, but that’s $3.648 million that otherwise would be going into the General Fund, and it’s a sign we should pay attention to, when considering Treasure Island, as deals like this will continue to impoverish the General Fund.”
“Even though they deny it has nothing to do with Gov. Jerry Brown’s pending legislation to eliminate redevelopment agencies, I have never seen something scheduled so quickly,” Peskin added, noting that the Board’s agenda is published Thursday evening or Friday morning, but this item wasn’t on that agenda, hence the need to publish a separate notice.
Meanwhile, Treasure Island’s final environmental impact report has been released, and the way the current plan looks, will forever alter our view of the Bay.
“It will have enormous impacts on services for the City and traffic for the entire Bay Area,” Saul Bloom, executive director of Arc Ecology, told the Guardian.
On April 7, a joint session of the San Francisco Planning Commission and Treasure Island Development Authority will be meeting to consider certifying the EIR, but Arc is asking for an extension of two more weeks to provide the public with 42 days for review.
“Fourteen additional days for public review is a very modest request for a project with such significant impacts yet, the City has thus far refused,” Bloom notes.