presentation to the eco-rapid transportation...

Presentation to the Eco-Rapid Transportation Summit

Building a Healthy, Sustainable Transit Corridor Through Public Private Partnerships

by:

Kosmont Companies 865 S. Figueroa Street, Suite 3500, Los Angeles, CA 90017

213-417-3300 www.kosmont.com

November 18, 2015

Economic Development 2.0

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Today, Economic Development for Cities is about:

Sustainability

Infrastructure

Energy/Resource Efficiency

GHG Reduction

Placemaking

How do the Pieces Fit Together?

The Problems: • Greenhouse Gas Emissions (GHGs) • Drought • Climate Change • Insufficient regional transportation • Aging Infrastructure

Water transportation infrastructure Sewer infrastructure Electric & utility plants

• New Infrastructure Needed For shift to multifamily housing Transit-Oriented Development in

designated high-quality transit areas (HQTAs)

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Sustainable Policy Compliance

Economic Development New Revenues and Jobs

Enhanced Infrastructure Financing Districts SB 614 (Wolk) & AB 229 (Perez) Special Districts Annex Area and Former Military Bases for Infrastructure Financing & Revitalization

AB 229 (Perez) Infrastructure and Revitalization Financing Districts on Former Military Bases SB 743 (Steinberg) CEQA: Environmental Quality Streamlining for TOD / Infill Dev.

AB 850 (Nazarian) Financing Public Capital Facilities: Water Quality

AB 1471 (Proposition 1; Rendon) Financing Water Quality, Supply & Infrastructure Improvement: Bond Issuance AB 2660 (Aguiar) Infrastructure Financing Act: User Fees and P3s

Community Revitalization Authority

Local & Regional Infrastructure

Successful Post-RDA Projects

ED Approach By Cities – Legislative Direction

AB 32 (Perez) Cap and Trade: Community Development Investment Tax Credits

SB 375 (Steinberg) GHG Emissions Reductions: Sustainable Communities Strategy

SB 1168 (Pavley) Groundwater Sustainability Agency & Plan: High- and Medium-Priority Basins

AB 1739 (Dickinson) Groundwater Management: Sustainability Plan & Extraction Reporting

SB 535 (De Leon) Greenhouse Gas Reduction Fund: Benefits to Disadvantaged Communities

Accelerated emissions standards including required energy reduction for buildings

Statewide GHG emission limits accelerated

Regional Sustainability

Approved Post RDA Legislation and Regulation

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How Cap-and-Trade Works

Source: California Air Resources Board, Climate Action Reserve

• California’s cap-and-trade program sets a statewide pollution limit on the largest polluters such as oil companies, power utilities and manufacturing firms

• The primary forces that govern the cap-and-trade process are outlined below:

Companies can cover up to 8% of their emissions by purchasing credits from industries such as: • Farms that capture

methane emitted by cows • Businesses that destroy

ozone-depleting chemicals • Landowners that manage

their forest to store carbon

Companies

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• SB 535 (De Leon) “Greenhouse Gas Reduction Fund (GGRF) – Investments to Benefit Disadvantaged Communities” Targets investment of proceeds from State’s cap-and-trade program

• 2015 revenues estimated at $1 billion (revenues growing annually) Investments aimed at improving public health, quality of life and economic

opportunity for disadvantaged communities while reducing GHG emissions • 25% of fund must be spent on projects that benefit disadvantaged

communities • 10% of 25% must be spent on projects within disadvantaged

communities Greenhouse gas cutting projects eligible for GGRF revenues:

• Energy efficiency • Public transportation • Affordable housing

Recent Economic Development Legislation

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• SB 743 (Steinberg): “CEQA Reform Bill” Reduces CEQA analysis for Transit-Oriented Development (TOD) / Urban

Infill projects Expands CEQA exemption to include commercial development/mixed use

projects proximate to transit and consistent with Sustainable Communities Strategy

Provides opportunities for local governments to designate “infill opportunity zones” in “transit priority areas”

For residential, mixed-use, or employment center projects on such sites, no CEQA review for aesthetic or parking impacts

OPR to develop new guidelines for significance of transportation impacts of projects within transit priority areas – promote multi-modal transportation and GHG reduction

• Recent changes to CEQA guidelines include shift from Level of Service (LOS) to Vehicle Miles Traveled (VMT)

Recent Economic Development Legislation

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Economic Development Real Estate

Project

Post-RDA Economic Development Cities have 9 BASIC TOOLS for Public/Private Projects

These tools often work best when used together

Real Estate & Property Special Districts

(Tourism, BIDs, etc.)

Rebate of Taxes / Revenues

Land Use / Zoning (Higher

Density; Parking)

Community Revitalization &

Inv. Authority (CRIA)

Property Assessed Clean Energy Finance Program (PACE)

Enhanced Infr. Financing Districts

(EIFDs)

Joint Powers Authorities

(JPAs)

P3 / Project Delivery Methods

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Project







Density; Parking)




(EIFDs)


(JPAs)


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PACE Financing as an E.D. Tool What is PACE? • Property Assessed Clean Energy (PACE) finance programs allow property owners to

finance energy improvements on residential and commercial properties and repay the cost as part of property tax bill.

• Open market PACE loans permit lenders to benefit from security of a senior tax lien. • Lenders participate in the program by purchasing a privately placed bond secured

by a contractual tax assessment with senior position.

Eligible Improvements Energy efficiency • HVAC/ chillers/ boilers • Building automation • Occupancy and daylight sensors Water efficiency • Low flow toilets and urinals • Smart irrigation systems Renewable energy • Solar Panels/ solar hot water • Fuel cells Seismic Retrofit

City/County Repays financer

PACE Investor Provides capital

for project

Property Owner Completes project & repays

through property tax bill

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Types of Improvements PACE Can Fund

Elevator Modernizations LED Lighting Retrofits

Solar Projects HVAC System Upgrades

Controls & Sensors

Building Automation

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Project










(EIFDs)


(JPAs)


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Density; Parking)

Land Use & Zoning can be E.D. Tools 1. Expedited Processing of Entitlements and Permits:

For the private sector time is money. Reduced processing time is a win-win

Shorter timeframes for CEQA and other local Permitting requirements

2. Development Agreement (DA): Think “prenuptial agreement”

DAs lock in benefits for public & private sector: e.g. infrastructure/public amenities

3. Specific Plans: Incorporate “ED” priorities and convert them to zoning policy objectives

4. Development Opportunity Reserve (DOR): Assign density for preferred uses (mixed use, retail, tax and job generators);

Reward the Buyer/investor not the owner 5. Transfer of Development Rights (TDR):

Specific Plans with an Economic Development “kicker.”

6. Post Construction Operating Covenants: Valuable for financing improvements made by a developer and/or tenant

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Land Use/Zoning Options- Density as E.D. Tool

Development Opportunity Reserve (“DOR”): Problem: Upzoning used to stimulate economic development often results

in a windfall to existing landowners, not targeted end users or uses

Bright Idea: Combine Specific Plans (SP) with Econ. Development “Kicker”

Zoning/Density should protect/advance community desires as per the SP

Place ‘Added’ density into a “Reserve Account” but do not distribute per parcel

Higher density to new projects that comply with pre- set “community objectives”

Economic value of “DOR” density goes to desired projects vs. existing owners

Successful Example of DOR: Burbank Media District Specific Plan Burbank Media Overlay District Zone (1991- present) – allows more density

through CUP process for projects that meet community goals (e.g. infrastructure)

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Project







Density; Parking)





(JPAs)


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(EIFDs)

New Tool: Enhanced Infrastructure Financing Districts New legislation push cities to create local/regional infrastructure

projects that conserve water & reduce GHG emissions • SB 375 sets baseline for streamlined environmental review for projects that

improve local and regional sustainability • Cap-and-trade grant funds (GRGF) reward projects that reduce GHG

emissions with billions in potential funds • Prop 1 contains over $7.5 billion in water infrastructure project funds

EIFDs can finance implementation of regional infrastructure via Public Financing Authority which uses property tax increment in tandem with a variety of funding sources for project incentives

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Types of Projects EIFDs Can Fund

Aff. Housing / Mixed Use

Civic Infrastructure

Brownfield Remediation

Wastewater/Groundwater Light / High Speed Rail

Parks & Open Space

Industrial Structures

Childcare Facilities

Source: SB 628 – Bill Text

TOD Projects

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EIFD - Summary of Key Terms 1. Enhanced Infrastructure Financing District

• Governmental entity established by a city or county that carries out a plan within a defined area to construct, improve and rehabilitate infrastructure

2. Public Financing Authority (PFA)

• Legislative body that governs the EIFD • Composed of participating governments

and members of the public

3. Infrastructure Financing Plan • Plan adopted by city or county. Describes public

facilities & development to be financed by the EIFD • Implemented by Public Financing Authority (PFA)

The Area

The Team

The Strategy

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EIFDs – Diverse Funding Approach Can use multiple funding sources with tax increment:

• If Bond Issuance then 55% voter approval required Funding Sources:

• Property tax revenue including RPTTF • Vehicle License Fee (VLF) prop. tax backfill increment • Development Agreement / Impact Fees • User fees • City / county / special district loans • Hotel TOT • Benefit assessments

• Contribution from Special District • Levied by EIFD

• Private investment

Potential to apply State funding sources: • Proposition 1 bond funds • Cap-and-trade proceeds

Federal & State Grants Greenhouse Gas Reduction Funds Federal DOT/EPA/DOE funding programs

EIFD Fund

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Case Study: La Verne TOD based EIFD • The Site

388+ acres adjacent to La Verne’s Old Town Specific Plan Area Located proximate to the University of La Verne, Fairplex properties & future Foothill

Gold Line Station

• The Project Station area improvements, circulation infrastructure improvements next to Gold Line Development of TOD: housing, potential hotel, retail and event space Sustainable improvements to commercial and industrial structures, partnerships with

the University of La Verne/Fairplex, airport improvements for Brackett Field

• Status EIFD under evaluation by City of La Verne as lead public agency Goals for La Verne EIFD

• Induce development around future TOD infrastructure • Access to Statewide sustainable funding sources such as the Greenhouse Gas

Reduction Fund (GGRF) & utilize commercial PACE as a means to increase property values, increment for district & sustainability compliance

• Induce private development via development agreements that compliment existing City plans and anticipate future demand from TOD

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Infrastructure Around the Gold Line Station

Parking Infrastructure Rail Station Improvements

Improvements for increased Pedestrian Access to Rail Station

Source: Old Town La Verne Specific Plan

• Parking: The Old Town La Verne Specific Plan parking needs assessment identifies average need for approximately 1,225 parking spaces in Arrow Corridor on a Saturday in a typical month. Potential demand could peak at about 1,760 spaces per day during peak holiday season.

• Plan calls for four future parking structures at buildout, including a 600-space structure at the

Gold Line Station. If built out, these parking structures could provide up to 2,015 spaces.

• Gold Line Improvements (Sub-Area 1): Improvements around the Gold Line extension may include platforms, bicycle racks for commuters and improved streetscape around the stop.

• Pedestrian Access: The TOD may need new bike lanes, pedestrian sidewalks, and a footbridge across Arrow Route to connect proposed Fairplex development to the Gold Line station.

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EIFD Sub-Area 1

EIFD Sub-Area 2

EIFD Sub-Area 3

CFD 90-1 Area

La Verne Preliminary Potential EIFD Map

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Old Town SP Area

Potential Partners

Potential Public/Private Partnerships

Potential Core Public Agencies

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Project







Density; Parking)



(EIFDs)


(JPAs)


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RDA Approved Legislation • AB 2 (Alejo) “Community Revitalization Investment Authority (CRIA)”

Signed into Law by Governor Brown in September, 2015 Goes into effect on January 1, 2015

Restores redevelopment authorities to disadvantaged communities Carries out provisions of Community Redevelopment Law

Authorizes establishment of Community Revitalization & Investment Authorities as long as project area meets 4 necessary conditions

Allows projects to be financed by bonds serviced by tax increment 30 years to issue debt; 45 years to repay indebtedness

Can fund projects for economic revitalization in disadvantaged communities

Powers of eminent domain granted to CRIAs for first 12 years of district

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AB 2 Eligibility Conditions of a Community Revitalization Area:

80% of land (calculated by census tracts) must have median household income less than 80% of statewide annual median income average

Must exhibit at least three of the following conditions:

1. Non-seasonal unemployment rate 3% higher than statewide median

2. Crime rates are 5% higher than statewide median

3. Deteriorated or inadequate infrastructure

4. Deteriorated commercial or residential structures

25% affordable housing requirement

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Types of Projects CRIAs Can Fund

Generally CRIAs can fund economic revitalization in disadvantaged communities

Roads / Circulatory Inf. Civic Infrastructure

Brownfield Remediation

Wastewater/Groundwater

Assist Businesses Affordable Housing

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Implementing a TOD Economic Development Strategy • Four Key Steps for Strategy & Implementation:

1) Basic Tool Kit: Real Estate, Zoning, Districts, Revenue/Tax, P3, EIFD, CRIA

2) Determine which tools to use and target objectives

3) Create “E.D. Inventory” of potential projects / review initial opportunities

• Post RDA Properties

• Create station based districts and apply zoning & DORs, and ED Tools

• P3 Projects

4) Pick “priority” projects, confirm feasibility, and implement

• E.D. Projects w/o RDAs are more challenging but achievable Need well conceived strategy prior to implementation

Econ Dev & public finance complexities demand a highly skilled team

Work with recognized professionals and infrastructure developers

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Thank You

Any Questions?

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APPENDIX

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GGRF Expenditure Plan – 2014-15

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