By Audrey Young, City of Lake Elsinore and Student Representative, Public Realm Initiative Council
With the dissolution of the Redevelopment Agencies in California, efficient infrastructure and public-private partnerships are the key to financing redevelopment projects. At the ULI Public Realm Initiative/Public-Private Partnership Council meeting on June 2, 2016, several leaders in the field shared their stories for navigating the new rules.
Pete Carmichael, the Director of Great Park Planning and Development, presented two different projects with alternative financing strategies that have achieved successful outcomes. The historic Redondo Beach Waterfront redevelopment project, a 500,000 SF hotel/retail project is moving forward as a result of public considerations for redevelopment, successful negotiations for land acquisitions by the City, including the use of 100% lease-leaseback financing. In addition, through negotiations with the City, the developer agreed to complete approximately one hundred million dollars in infrastructure improvements to support future development in lieu of up front land payments during the retail developments. The Great Park in Irvine is another prime example of public-private partnerships implementing an ambitious 688-acre public amenity that includes recreational and cultural amenities as well as infrastructure development. The Great Park will include a 200-acre sports park, potential museums, and a major civic library. These alternative financing arrangements are key for the implementation of redevelopments and are made possible through creative public-private partnerships at the nexus of local land use jurisdiction and incentivized private investment.
As Larry Kosmont, of Kosmont Companies, shared at the Council Meeting, environmental and infill development regulations such as SB 743 and AB 32 are forcing government agencies to respond with carbon reducing solutions. Meanwhile, cap and trade funds are being collected by the State and allocated for carbon reducing infrastructure. Local and regional governments are going after these funds for redevelopment of their infrastructure, but in order to qualify for this funding, financing plans must be in place, multiple agencies must be involved, and private investment must be demonstrated.
Governments are demonstrating their plans for carbon-reducing infrastructure, using new tools such as Enhanced Infrastructure Financing Districts (EIFDs) and Community Revitalization and Investment Authorities (CRIAs). Forming EIFDs and CRIAs require land owner votes, regional partnerships, private investments, and proposed infrastructure that demonstrates carbon footprint reduction. In order to fund an EIFD, a successor agency adopts a Resolution of Intention to create an EIFD and Public Financing Authority (PFA), and then drafts an Infrastructure Financing Plan before a public hearing is held. Once the EIFD has been formed, the Infrastructure Financing Plan is approved by Resolution. Governments can work together to negotiate with private entities to become special district fee revenue eligible for contribution to EIFD. The collaboration amongst government entities shows compliance with regional strategies for reaching carbon emission reduction targets and allows for the pooling of funds in order to implement a redevelopment infrastructure project. A variety of infrastructure projects, such as affordable housing/mixed use, TOD projects, brownfield remediation, parks/open space, roads and rail transportation infrastructure, etc., qualify for EIFD funding.
The need for redevelopment hasn’t changed, just the method of reaching the goals have changed. State funding priorities have shifted to focus on regional collaboration, energy efficiency, sustainable infrastructure development, partnerships through districts, and private sector investment. As Kosmont says, this results in “public financing with private development skills to deliver a product.”
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