Urban Design

What is the Return on Investment for Infrastructure Improvements?

Infrastructure improvements are a sizable investment of public funds - it makes sense that evaluating the return on investment is a good first step in determining how communities prioritize these funds.   RSG recently completed an economic study assessing the impacts resulting from different rail improvement options along the Carlsbad portion of the Los Angeles-San Diego-San Luis Obispo (LOSSAN) corridor.  This study calculated the economic/fiscal effects of the different options on regional economic output including:

•    Jobs created
•    New development
•    Property values/taxes
•    Sales taxes
•    Value of lives saved/accidents avoided
•    Value of reductions in noise and traffic

RSG’s study is part of an overall Feasibility Study prepared by the San Diego Association of Governments (SANDAG).  A link to the City of Carlsbad website that provides an overview of the Study (as well as links to the actual reports) is provided below:
http://www.carlsbadca.gov/news/displaynews.asp?NewsID=1321&TargetID=61
 

Written by Hitta Mosesman
 

CEQA Litigation: Harmful for Housing?

Litigation abuse under the California Environmental Quality Act (CEQA) undermines Californiaʹs environmental, social equity, and economic priorities, according to a Holland & Knight report, the first comprehensive study of lawsuits filed under CEQA. Analyzing all CEQA lawsuits filed from 2010 to 2012, the report systematically documents widespread abuse of CEQA litigation.

 

The study says that 49% of all CEQA lawsuits targeted taxpayer-funded projects with no business or other private sector sponsors. Projects designed to advance California’s environmental policy objectives – transit, renewable energy, and housing -- are the most frequent targets of CEQA lawsuits. Infill projects are the overwhelming target of CEQA lawsuits. CEQA litigation is overwhelmingly used in cities, targeting core urban services such as parks, schools, libraries, and even senior housing. 64% of those filing CEQA lawsuits are individuals or local “associations,” primarily the domain of Not In My Backyard (NIMBY) opponents and special interests.

According to the report, ending CEQA litigation abuse is the most cost-effective way to restore the state's middle-class job base, make housing more affordable, ensure that taxpayer funds are spent on projects, and improve the future of the nearly nine million Californians living in poverty. The authors recommend three moderate reforms to curtail the abuse:

  1. Require those filing CEQA lawsuits to disclose their identity and interests.

  2. Eliminate duplicative lawsuits aimed at derailing plans and projects that have already completed the CEQA process.

  3. Preserve CEQA’s existing environmental review and public comment requirements, as well as access to litigation remedies for environmental purposes, but restrict judicial invalidation to projects that would harm public health, destroy irreplaceable tribal resources, or threaten the ecology.

Written by Dima Galkin, an Associate at RSG

Build It, and They Will Prosper?

Copyright 2016 Kelly Wilson, Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Copyright 2016 Kelly Wilson, Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Do sports stadiums generate net economic benefits for the community? 

The consensus is generally no. Economists say that sports teams spur little new spending in the community. 

While stadiums are limited in use, politicians and developers claim that a stadium is a win for local communities. Proponents say that sports facilities improve the local economy by creating construction jobs, generating new spending, attracting tourism and multiplying local income and job creation. Advocates argue that new stadiums spur so much economic growth that subsidies are offset by revenues from ticket taxes, sales taxes, and property tax increases.

These arguments may overstate the benefits of stadiums. Economic growth takes place when a community’s resources become more productive. Increased productivity can arise from economically beneficial specialization by the community or from local value added. Building a stadium is good for the local economy only if it is the most productive way to make capital investments and use its workers.

Still, there are non-economic benefits, such as community pride and cultural activity. Some projects, such as the NFL Rams’ return to Los Angeles, which occurred with limited financial obligations for Los Angeles taxpayers, provide a valuable lesson in how to attract sports teams and new stadiums based on a market’s strength rather than subsidies.

Calculating the economic and fiscal impacts of a development is crucial when deciding on whether or not a project should break ground. RSG has extensive experience in projecting tax revenue from projects and can help determine if a sports stadium or other large municipal investment would be a good idea in your community!

Written by Jeff Khau, a Senior Analyst at RSG

Could Now Be the Time for a CRIA?

Copyright American Planning Association Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Copyright American Planning Association
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

AB 2492 extends Community Revitalization and Investment Areas to wealthier regions of the state, without much change to financial benefits of these tax increment financing (TIF) districts.

Last month, RSG discussed the limited financial benefits of Enhanced Infrastructure Financing Districts, one of several newer tax increment financing tools that provide limited benefits similar to redevelopment financing. Community Revitalization and Investment Authorities (CRIAs) are similarly structured and provide these tools AND opportunities for other community development tools. These characteristics have attracted some of our clients to evaluate their benefit. As it turned out, most of California could not benefit from a CRIA given the narrow socioeconomic requirements. 

However, just this week, the Governor signed Assembly Bill (AB) 2492 (Alejo) into law that makes changes to CRIAs, so we took a hard look at these changes and how they affect cities looking for help on community development projects. As it turns out, AB 2492 primarily expands the net on eligibility for CRIAs, but fails to provide much needed new capital to communities.

Here are the main changes:

  • More communities qualify – a greater number of lower income neighborhoods qualify because AB 2492 allows wealthier areas of the state to identify CRIAs in areas that have a median income less than 80 percent of the city or county median income, not just the state;
  • More flexibility - Added flexibility in measuring what parts of communities qualify by allowing the use of census tracts and/or block groups;
  • Any California Environmental Protection Agency-designated “disadvantaged community” automatically qualifies for CRIA - this certainly helps some very low and low income neighborhoods that would otherwise not qualify under the old law; and
  • Some added financial benefit – in addition to tax increment generated by the CRIA, special districts may now have the authority to allocate funds from certain tax and assessment revenues to the CRIA.  Cities and counties already had this ability.

We would love to see more done to make these districts more attractive by:

  • increasing the amount of tax increment revenues,
  • lowering the costs for startup, and
  • providing some other efficiencies like those RSG outlined in last month’s article for EIFDs. 

It’s important to note -  qualifying alone does not mean this tool is right for you.  It’s important to look at the financial feasibility carefully before jumping ahead.

Written by Jim Simon, a Principal at RSG

Seeking Greater Housing Affordability

Copyright American Planning Association Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Copyright American Planning Association
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

A recent Urban Land Institute Terwilliger Center for Housing article emphasizes the scope of the US housing shortage. According to the article, new residential construction is below its historic average and even Great Recession-era levels.

Currently, much new apartment development aims for the high end of the market to make the financials work for developers. Rising land and labor costs, local regulations and NIMBYism make it even more difficult and expensive to build new housing. 

Many cities are spending precious funds to subsidize rent-restricted units, proving that we as a society care about housing affordability. Maybe we should consider the maxim of “first, do no harm.” How can cities reduce barriers to encourage more housing development, both market-rate and rent-restricted? How can we get community stakeholders to recognize that some development and change is needed to accommodate new residents and maintain affordability for renters? 

We passionately discuss topics like this affecting cities and towns at the RSG office, in search of solutions. Contact us today if you’re looking for such solutions.

Written by Dima Galkin, an Associate at RSG

Customizing Economic Development

What is the perfect economic development strategy? It depends on the community.

People often describe the economic development strategy of corporate tax breaks and subsidies as an old strategy that fails to work in today’s environment. One of the newer economic development ideas suggests that creating vibrant neighborhoods with many amenities will attract the type of workforce that will in turn bring in established businesses and create new ones.

At RSG we know that there is no silver bullet for any community's or region's economic development. Each effort requires consideration for both a city's individual characteristics and broader trends.

Sometimes an appropriate subsidy can serve as a catalyst to turn a neighborhood or local industry around, especially if it supports a policy goal. Contact us today to learn how we can help you craft and implement the perfect economic development strategy for your town.

Written by Dima Galkin, an Associate at RSG

San Carlos Breaks Ground on a Landmark Hotel

 

The City of San Carlos recently broke ground on a new four-story, upscale, extended-stay Landmark Hotel. The hotel will include 204 guest rooms with individual kitchens, outdoor patio areas with a pool and sport court, fitness and laundry center, and a meeting room.

 

 

The hotel will be located near the City’s gateway entrance off the 101 freeway. It will provide much needed transient occupancy tax revenue to diversify the city’s tax base and increase revenues to fund services for the community. All buildings previously on the site have been demolished, and the entire project is expected to be completed in August 2017

RSG was involved in every step along the way from site assembly and acquisition, drafting purchase and sale agreements, relocating existing businesses, developer negotiations and agreements, and obtaining approval from local agencies. Call us to find out how we can facilitate your next project.

Written by Suzy Kim, a Senior Associate at RSG

Keeping Up with Community Trends

Photo credit: USC Alumni Real Estate Network

Photo credit: USC Alumni Real Estate Network

One community trend is the transit renaissance in Los Angeles. Dima and I attended an event at which Philip Washington, the new CEO of Los Angeles County Metropolitan Transportation Authority, spoke about five mega-trends affecting the future of transportation in Los Angeles:

1.     Funding is crucial, but sustainable funding is a struggle. Funding comes from federal, local, and private institutions.

2.     Safety and security are priorities. Our infrastructure needs to be reliable for the next 100 years.

3.     Workforce and lifestyle changes affect travel behavior.

4.     Demographic shifts, such as gentrification, should be addressed as transit-oriented development breaks ground.

5.     By accelerating technological advances, we can better serve the public. Uber and Metro are partnering to provide access to the new Expo line.

Photo credit: USC Alumni Real Estate Network

Photo credit: USC Alumni Real Estate Network

Washington’s points set the stage for a potential ballot measure, expected to go to LA County voters in the November ballot. It would raise $120 billion over a 40-year period to fund transportation infrastructure maintenance and construction. The measure would augment Measure R—the current half-cent sales tax—by an additional half-cent. It would also extend the sales tax by another 18 years. More details regarding the plan can be found here.

RSG keeps up with trends affecting communities. To learn more about how RSG’s knowledge can benefit your project, call us today.

Written by Jeff Khau, a Senior Analyst at RSG

Photo credit: USC Alumni Real Estate Network

Photo credit: USC Alumni Real Estate Network

Economic Development for People and Places

Aaron Renn recently wrote a thoughtful, balanced opinion piece about the dilemma between people-based and place-based economic development. People-based economic development is theoretically more effective. Place-based economic development, which is sometimes the only available approach for local governments because of their territorial nature, generally is structurally incentivized and provides quicker gratification.

At RSG, we are very familiar with this dilemma. Our clients are usually cities. We recognize that they need to generate property and sales taxes now to fund core services. Investments in education that pay off 20 years later (and possibly somewhere else) are needed, but difficult to justify. At the same time, with our focus on people and relationships, we know that people-based investments are more sound in the grand scheme of things.

Renn provides solid advice for state and federal governments to change the incentive structure to make it easier for local governments to pursue people-based economic development. Keeping in mind the glacial pace of state and federal policy change, we’re here to help cities balance economic development for both people and places.

Written by Dima Galkin, an Associate at RSG

Push to Expand Brownfield Cleanup in California

As developable land becomes increasingly sparse in California, federal and state governments have implemented initiatives to push developers toward the abundance of contaminated sites throughout the state. 

Among these initiatives is the recent introduction of Senate Bill (SB) 820, that seeks to extend the California Land Reuse & Revitalization Act of 2004 (CLRRA) beyond its set expiration date of January 1, 2017. The law has helped propel the cleanup and development of vacant hazardous waste sites across the state. CLRRA encourages revitalization of blighted properties by allowing purchasers of contaminated lots to negotiate a cleanup plan with the state in exchange for liability protection from damages associated with the original contamination. Senator Bob Hertzberg, along with sponsorship from CALED’s Brownfield & Land Revitalization Committee (BLRC), have been the leading force behind SB 820.

Another big movement to clean blighted sites has been the availability of numerous funding programs, all with varying eligibility requirements and fund limits. The Center for Creative Land Recycling recently held its “Back in Business: Resources for Redevelopment & Land Recycling” workshop, highlighting the major players involved in funding within California, including: US Environmental Protection Agency (EPA), California State Water Resources Control Board (SWRCB), and California Department of Toxic Substances Control (DRSC).

RSG understands that recycling abandoned and under-utilized properties is challenging for all parties involved, but with the right team and knowledge it can be a truly rewarding project. RSG is experienced with all facets of brownfield remediation, such as identifying and obtaining funding; projecting assessment, cleanup and development costs; community outreach; and management of third party consultants. We are also actively involved with CALED’s Brownfield & Land Revitalization Committee and pursuing new development opportunities with clients continually. Call us to find out how we can help you navigate the process.

Written by Nate Gunderman, an Associate at RSG