Two bills that give the state the ability to control local tax increment financing advanced at the state Capitol during June. If the bills become law, state officials would have more control than ever before over local projects that rely on tax increment financing.
One bill extends the life of a redevelopment project area around the Los Angeles Memorial Coliseum by 12 years; the other bill permits cities within a five-county region of the Bay Area and San Joaquin Valley to create infrastructure financing districts. Both bills require local officials to get the approval of the state Infrastructure Bank (I-Bank) for projects that involve tax increment financing.
The redevelopment bill — AB 2805 by Assemblyman Mark Ridley-Thomas (D-Los Angeles) — allows the City of Los Angeles to extend the life of the 409-acre Hoover project area around the Coliseum and the University of Southern California for up to 12 years without having to prove that blight still exists. This would be an exception to 2001 legislation, which allows a redevelopment agency to extend a project area for up to 10 years, but only if the agency can prove blight still exists.
State Senate Local Government Committee Chairman Tom Torlakson (D-Martinez), who authored the 2001 legislation, voted for AB 2805 in committee, but he extracted a number of concessions, foremost, the requirement that the I-Bank (composed of the state treasurer, the director of the Department of Finance, and the secretary of the Business, Transportation and Housing Agency) approve any tax-increment financing plan within the project area. The bill also requires the L.A. Community Redevelopment Agency to set aside 30% of program income for low-, very low- and extremely low-income housing development, and mandates that the agency meet affordable housing production quotas.
The desire to bring a professional football team to Los Angeles is driving AB 2805. The city wants to use redevelopment tools, including tax increment financing for infrastructure, to help lure a team. The city also covets the tax increment that could be generated by NFL-driven private investment in and around the Coliseum. Ridley-Thomas estimated that the state itself, which owns the Coliseum, could receive up to $87 million over the 25-year life of a football team’s lease of the facility.
The bill passed the Assembly and Senate Local Government Committee on partisan votes. The bill could hit resistance on the Senate floor from San Diego lawmakers of both parties because the Chargers are one of two teams (along with the Minnesota Vikings) most likely to relocate to Los Angeles.
The other bill setting up unprecedented I-Bank oversight is AB 723 (Matthews). The bill permits cities and counties within the Inter-Regional Partnership project area to create infrastructure financing districts (IFDs) within designated “jobs-housing opportunity zones.” An IFD can divert property tax increment revenue for up to 25 years to pay for public works and replacement housing. Again, the bill does not require a finding of blight, but it does urge that an IFD assist development of land that is vacant and “suitable for urban use.”
While the Matthews bill passed a Senate committee in June, an unrelated IFD bill faced an uncertain future. Assembly Bill 2212 (Runner) would permit San Bernardino County to create an IFD for 100,000 acres of the Mojave Desert northwest of Barstow. The county is encouraging dairies to relocate from the Chino dairy preserve to the high desert. However, the dairies need only a few thousand acres. Why the IFD would cover 100,000 acres was unclear. The Assembly passed AB 2212 without dissent, but the bill appeared to stall in the Senate.
An important housing bill died in June. Senate Bill 744 (Dunn) proposed to create a state panel to hear appeals of local decisions regarding proposed housing developments. The bill narrowly passed the Senate in January. But Assembly Local Government Committee Chairman Simon Salinas (D-Salinas) made clear his opposition to creation of a state appeals board and he blocked the bill. Instead, Salinas and Dunn may work together on strengthening anti-NIMBY law.
A bill that sought to expand the authority of the Delta Protection Commission (see CP&DR, June 2004) passed the Assembly only after being watered down. Assembly Bill 2476 (Wolk) still calls for the Commission to update the Sacramento-San Joaquin Delta resources management plan with an eye toward development in the “secondary zone,” and the bill adds five new seats to the Commission. But gone are mandatory development mitigation measures, requirements that local governments comply with the Commission’s plan and expanded development appeals authority for the Commission.
Two bills that seek to limit the authority of Local Agency Formation Commissions appeared headed in different directions. Assembly Bill 2306 would prohibit a LAFCO from requiring a city that wants to annex territory to also annex unincorporated islands that are not contiguous to the proposed city expansion. Assembly Keith Richman (R-Northridge) introduced the measure after the Ventura County LAFCO said it would approve the City of Simi Valley’s annexation of 1,500 acres only if the city also commenced annexation proceedings for nine small islands of unincorporated land. The bill is supported by the League of California Cities, developers and real estate interests, but is opposed by the California State Association of Counties and the state LAFCOs association. The bill passed the Assembly without dissent and is headed for the Senate floor.
Meanwhile, a bill that sought to prohibit the Contra Costa County LAFCO from approving boundary changes that conflict with a voter-approved urban limit line died.Assembly Bill 2634 died in Torlakson’s committee, in part because of a long-running political feud between Torlakson and the bill’s author, Assemblyman Joe Canciamilla (D-Pittsburg).
A bill that stirred enormous conflict last year, SB 18 (Burton), appeared headed toward approval this year, but in greatly amended form. The bill addresses protection of Indian cultural sites. Last year’s version, which failed on the Assembly floor, appeared to give tribes virtual veto power over development anywhere near a cultural site. The rewritten version of SB 18 requires cities and counties to consult with tribes early in the processing of a plan or development proposal, and permits tribes to hold conservation easements. The amendments have neutralized the developers and local governments that fought SB 18 vigorously last year.