San Diego County will consider grant funding for the Midway Rising project to enable the construction of thousands of rent-restricted apartments on the site of the city's sports arena in the Midway area.
On Wednesday, the San Diego County Board of Supervisors voted unanimously to consider the prospect of joining the Enhanced Infrastructure Financing District (EIFD).
The board action, proposed by Supervisor Terra Lawson Roemer, would allow the county to work with the city of San Diego to create a tax increment financing district to help pay for public infrastructure related to the Midway Rising redevelopment project. This means evaluating whether or not it should be established. The lawsuit does not obligate authorities to participate.
In an EIFD, participating public agencies contribute a share of future property tax revenues generated by the project to the special district. This funding will be used for public facilities and other improvements, such as parks, libraries, child care centers, roads, transportation centers, sewer systems, and affordable housing, identified by the public financing authority established to oversee the district. can be used as funds.
“I'm excited about the potential for affordable housing, because it's so important to each of our neighborhoods. But I'm also excited about protecting the quality of life and character of The Point's communities. “We're also really focused on securing the investment we need for Loma and Midway,” Lawson Roemer told the Union-Tribune. “We know that in order to move forward with this project, we need an EIFD component, not just from the city, but from the county.”
The county's review comes as the city and Midway Rising development team are negotiating a land lease and development agreement for the city's 48 acres of land at 3220, 3240, 3250 and 3500 Sports Arena Boulevard.
In September 2022, San Diego City Council members selected Midway Rising to redo the sports arena property. The selection is based on Midway Rising's commitment to set aside 2,000 of the project's units for low-income households with incomes at or below 80 percent of the area median income, or what the state defines as affordable housing. . That promise is now an obligation written into the team's negotiated contract with the city.
Midway Rising is comprised of Zephyr, a market-rate housing developer, Chelsea Investment Corporation, an affordable home builder, and Legend, a sports and entertainment venue operator. The Kroenke Group, a subsidiary of billionaire Stan Kroenke's real estate company, is the company's largest investor and limited partner.
The project is currently undergoing a state-mandated environmental review and calls for a total of 4,250 residential units, a 16,000-seat replacement arena, 130,000 square feet of commercial space, and an unspecified number of parks, plazas, and public spaces.
Enhanced Infrastructure Financing Districts became effective in California in 2014, two years after the dissolution of the redevelopment agency. Voter approval is not required. These are formed by one or more affected taxing entities and are managed by their own boards.
In March, San Diego City Council members agreed to consider establishing an EIFD for this project. Under the supervisors' direction Wednesday, county staff will participate in an evaluation process that will include an analysis of the project's financial assumptions.
If the parties decide to form an EIFD, they will forfeit their respective shares of future property taxes on land assessed within the district's boundaries in excess of established standards. Although nothing has been officially decided, the district boundaries will likely coincide with the project boundaries.
The tax increases collected by special districts could be used to pay down debt on bonds issued against anticipated revenues or earmarked for specific infrastructure projects.
“(Property taxes) are being diverted to support bonds,” said Norm Miller, professor emeritus of real estate finance at the University of San Diego. “Property taxes are going to be paid over the next 20 to 30 years. But if I'm a county and city, I can now use that revenue stream to borrow property taxes. . That gives us a lot of money to cover the infrastructure costs.”
It's unclear how much money is planned, but the tax increase would normally go toward the general coffers of cities and counties.
The EIFD will help offset construction costs and enable an unprecedented amount of subsidized units to be included in the Midway Rising project, the developer said.
“Midway Rising is very grateful to Vice Chairman Lawson Roemer for bringing forward this action to support affordable housing in the San Diego region,” said Midway Rising spokesperson Jeff Meyer. Stated. “City and county leaders recognize that this project is worthy of exploring innovative solutions to transform the Midway District into a much-needed vibrant entertainment and housing hub. It's great to see people buying in.'' This is the type of leadership that will make a real difference in our community. ”
The county will likely benefit from the EIFD, according to Lawson Roemer's letter recommending the board's action.
The grant will not only enable neighborhood improvements, but will also support the creation of thousands of temporary and permanent union jobs, the letter states. Additionally, the letter says the investment will help the county and city advance their joint efforts to build 10,000 affordable housing units on public land.
Lawson-Remer County, whose township covers the project area, also wants the county to participate so the agency can have a say in public infrastructure and amenities. Supervisors said they are most interested in creating park space, easing traffic congestion and establishing a connection to the San Diego River Park area just north of the site. Her board letter also specifies that stormwater, wastewater and flood control infrastructure is a priority.
Supervisor Jim Desmond voted in favor of the item, but said he didn't like the idea of the county giving up tax increment revenue to fund the project.
“That money will go to emergency services, behavioral health and some parks,” he said. “If a project doesn't work, you shouldn't do it or you should build something else. This should be in the city. When you talk about transportation and circulation, parks and infrastructure. Why put it in the city? Will they deliver? That's up to them and future developers.”
EIFD is growing in popularity. In 2017, the San Diego City Council established the EIFD for the entire Otay Mesa Community Planning Area to pay for infrastructure costs associated with the region's massive growth. The city and county are also in the process of establishing an EIFD to raise funds for improvements to the San Diego River.
