Public-Private Dev

RSG Principal Hitta Mosesman Featured Speaker at Housing CA Conference (Sacramento) - March 2017

Housing California is the State’s leading housing organization with a mission to educate lawmakers and others on stabilizing housing, creating more housing opportunities, and implementing proven solutions that reduce the number of homeless men, women, and children in communities. The focus of Housing California is Land Use, Budget and Funding, and Homelessness.  The annual 2017 Housing CA conference, with over 1,400 in attendance, was “Block by Block – Improving Neighborhood Health.”   Workshops focused on all aspects of housing and homelessness, including financing, funding sources, policy, advocacy and new and emerging affordable housing solutions.

Hitta Mosesman, partner and principal with nearly 20 years of consulting experience in affordable housing, finance, real estate and community development, was a featured panel speaker on Community Land Trusts (CLTs) as an innovative method of ensuring affordable housing for generations.  The panel included Mark Asturias, Executive Director of the Irvine Community Land Trust (and City of Irvine’s Housing Manager), Jean Diaz, Executive Director of the San Diego Land Trust and Stephen King, Executive Director of the Oakland Land Trust.  The panel’s joint presentation focused on explaining CLT structures and benefits, as well as the different CLT models (home ownership, rental and co-op).  A link to the presentation is provided below.

https://media.wix.com/ugd/209952_d643b5c0976d49508c0e70fc98150613.pdf

 

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

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

Are CRIAs or EIFDs Right for You?

Community Revitalization and Investment Authorities (CRIA) and Enhanced Infrastructure Financing Districts (EIFD) are receiving a lot of hype as the “new” redevelopment options. While they offer many valuable tools, they have many restrictions. CRIAs and EIFDs are not one-size-fits-all solutions and may not work for every community.  

The major benefit is the ability to collect tax increment revenues and issue bonds to fund projects such as infrastructure and building improvements, environmental remediation, business assistance, and affordable housing. Unlike EIFDs, CRIAs allow the use of eminent domain, but they also mandate a 25% set-aside for affordable housing.  A big hurdle is that either your agency’s share of property tax must be large enough to fund desired projects or other taxing agencies must agree to contribute. Lastly, CRIAs can be challenged by a protest vote, and EIFDs require voter approval to issue bonds

The main questions to consider are:

•    Do CRIAs or EIFDs fund the projects we need?
•    Are the proposed boundaries eligible?  
•    Will my agency’s share of property tax revenue be enough to fund projects, or will there be enough support from other taxing agencies to share the cost?
•    Will elected leaders and the community support a new CRIA or EIFD?

RSG can help you determine which tool is best, based on your area’s eligibility and needs.  Call us to learn more.

Written by Suzy Kim, a Senior Associate at RSG

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

How Regulation Can Help Avoid Airbnb Backlash

There has been a lot of discussion among municipalities about Airbnb and the impact of short-term rentals in the new tech-sharing economy. According to planner Jeffrey Goodman, cities may solve some of the problems with the help of more appropriate and better-enforced regulation. 

Goodman’s article in Planning magazine describes his three-part process to reduce tensions between cities, residents, short-term renters, and owners renting their property. Goodman’s three-part process is:
•    Hold Airbnb and similar rentals to the same safety, zoning, garbage, and other standards as other property owners.
•    Tailor regulations to local needs – identify the goal of the regulation to customize the regulation itself (e.g., regulation to reduce noise and traffic will differ from regulation focused on housing affordability for long-term residents).
•    Enforce regulations – coordinate with Airbnb to help owners comply with laws.

Of course, there are other considerations, such as ensuring that Airbnb property owners pay their fair share of taxes. Still, Goodman provides good advice to ensure Airbnb creates less resistance and more benefits in local communities.

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

Serving Successor Agencies

On Friday, March 18, the Irwindale Successor Agency closed escrow on the sale of a property listed in its Long Range Property Management Plan. Located at 4954 Azusa Canyon Road, the property is 0.52 acres, zoned for light manufacturing, and improved with an approximately 10,000 square foot building.

RSG served as the broker for the transaction. We marketed the property, preparing and distributing an offering memorandum and other marketing materials to interested parties and local businesses and advertising the property in various online forums. In order to recommend the best offer to the Successor Agency, RSG reviewed all of the offers, guided by the Successor Agency’s vision for the property, the content of the offers, and the experience of those making the offers.

As consultants who provide Successor Agency services, we also drafted staff reports and resolutions for the Successor Agency and Oversight Board meetings in which the Exclusive Negotiation Agreement (ENA) and Purchase and Sale Agreement (PSA) were approved. We attended those meetings and coordinated with the State Department of Finance to ensure the approval of the sale.

Given RSG’s mission to improve communities, we provide more services than a traditional broker. In addition to wanting to sell the property, we endeavor to ascertain that the property is sold to a buyer who will develop or maintain it as an asset to the community.

Congratulations, Irwindale! If your city’s Successor Agency needs assistance in selling properties, give us a call.

Written by Dominique Clark, an Associate at RSG