Fresno has been hurting for redevelopment money. Does this leader have a solution?
Fresno has been without adequate tool for redeveloping blighted properties for nearly a decade, but a City Council member is championing a program he hopes will solve the problem.
Council member Nelson Esparza has been working on the idea of special tax districts since taking office a year ago. He believes it could make up for the loss of Fresno’s redevelopment agency in 2011.
Fresno’s redevelopment agency was one of 400 eliminated across the state after legislators passed a 2011 law ending them. Redevelopment money was re-routed to public services — like public safety and education — as the state was dealing with budget shortfalls after the Great Recession.
Under Esparza’s proposal, the special districts would allow for “tax increment financing.”
The idea is the program identifies baseline property values across the city. Landowners continue to pay their property taxes as they normally would but, as property values rise, the city captures a portion of the increased value and aims it into redevelopment. Officials refer to the increase as the “tax increment.”
“Local governments in California and especially Fresno have lacked any real economic development tools ” Esparza said. “Tax increment financing isn’t new or revolutionary. We saw tax increment financing when we had (a Redevelopment Agency) years ago.”
There could be two two kinds of special districts under the idea: an Enhanced Infrastructure Financing District (EIFD) or the Community Revitalization and Investment Authority (CRIA). The most notable difference between the two is that a CRIA has a greater emphasis on affordable housing.
A few dozen cities around the state have created such tax districts, many of them in Southern California. Fresno would be the biggest city yet if it decided to approve the idea. The closest district to Fresno is in Madera County.
Fresno County
If Fresno carried out the effort on its own with a smaller portion (say 25% of the increment), the city would have a bonding capacity of $20 million in five years, according to estimates. The amount grows exponentially if city leaders can convince county leaders to buy in and give a piece of the property tax collected by the county.
One estimate that includes a city and county portion shows a capacity for $60 million for redevelopment within the city by five years, but Fresno County’s elected leaders would have to be convinced to join.
That kind of money could go a long way in improving infrastructure on the southern half of Blackstone Avenue, among other projects, according to Esparza. His District 7 is the only council district that doesn’t border the outer edge of the city. Any project in District 7 would essentially be an infill one.
“I’m very excited. I think this has lots of potential for my district, for downtown Fresno, for other parts of the city,” Esparza said.
In a proposal on what the district would look like in Fresno, consulting firm Kosmont Companies said underprivileged and business-heavy parts of the city could benefit from the tax districts. Downtown, west Fresno, most of Blackstone Avenue, Kings Canyon Road and portions of south Fresno could all qualify.
The plan would not create new taxes, according to Joseph Dieguez, senior vice president of Kosmont. “If you’re a resident or business owner, you don’t see any difference on your tax bill or business license application,” he said. “This is a public agency choosing to dedicate some portion of future revenue.”
Council reacts
The idea was first publicly introduced to the council on Thursday, and seems to have gotten an open, if not warm, reception. The council has not voted on any part of the program yet.
“I’m particularly interested in the housing component,” Councilmember Esmeralda Soria said. “I’ve been pushing additional investments from the city of Fresno to try to leverage more dollars from both the state and federal to build affordable housing developments. Just because we know how expensive they can be.”
Councilmember Garry Bredefeld, who often comes down on the side opposite of his more left-leaning counterparts, also praised the idea around special tax districts.
Councilmember Miguel Arias said he sees potential in the plans, saying such a tax district could have made a difference after the Amazon fulfillment center opened in May 2018. The captured dollars could have been used in the disadvantaged neighborhoods near the distribution center.
The timing may also be right for the new districts, Arias said, as downtown is seeing increased interest from developers and plans for a state High-Speed Rail station.
“We expect higher values in downtown,” he said. “We should find a way to ensure that those higher values improve infrastructure in those areas so we don’t have to then subsidize (improvements) at the expense of the rest of the city.”
The program could go before the council later this year.
This story was originally published February 3, 2020 at 12:24 PM.
