Title:
Title
Overview of the Draft Infrastructure Financing Plan for the Aggie Square Project
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FileID
File ID: 2021-00031
Location
Location: Stockton Boulevard at 2nd Avenue, District 5 and District 6
Recommendation:
Recommendation
Provide information and receive comments about the draft Aggie Square EIFD Infrastructure Financing Plan.
Contact: Leslie Fritzsche, (916) 808-5450, Economic Investment Manager; Office of Innovation and Economic Development, City Manager’s Office; Eric Frederick, Program Specialist, (916) 808-5129; Sheri Smith, Special Districts Manager, (916) 808-7204, Department of Finance
Body
Presenter: Leslie Fritzsche, (916) 808-5450, Economic Investment Manager; Office of Innovation and Economic Development, City Manager’s Office; Jamie Gomes, Economic Planning Systems, (916) 649-8100.
Attachments:
1-Description/Analysis
2-Schedule of Proceedings
3-Aggie Square Draft EIFD Infrastructure Financing Plan
Description/Analysis
Issue Detail: Located on the UC Davis Sacramento Campus (home of the UC Davis Medical Center), along the Stockton Boulevard corridor, the Aggie Square project is envisioned as an innovation hub for the Sacramento region, hosting Sacramento start-ups, growing local companies, bringing new companies and jobs to Sacramento and adding vitality to the Stockton Boulevard corridor.
Aggie Square will provide a state-of-the-art collaborative hub for research, innovation development, and education unlike anything currently located in the Sacramento Region. The project will couple the key elements of a successful innovation ecosystem including publicly and privately funded research, commercial office and lab space, convening space, housing, public spaces, with abundant opportunities for learning and growth. The project exemplifies best practices in innovation and inclusive economic development by leveraging the research strengths of UC Davis to create opportunities for academic, industry and community collaboration.
Phase 1: Phase 1 will consist of up to 1.2 million square feet in multiple buildings which will contain a variety of UC Davis and private sector uses, including science, technology, data and research uses, co-working space, community serving retail, and residential, in addition to a parking garage, open space and other public infrastructure. Each of these important elements, from the shared office and lab space, to the turnkey commercial labs, to the public “living room” infrastructure of Innovation Hall, allows for entrepreneurial collisions and connections, ongoing community engagement, commercial co- location clustering with startups, and new job creation/workforce development. Phase 1 of Aggie Square is currently projected for late 2023.
Aggie Square Phase 2: Phase 2 is not a part of the public-private partnership with Wexford , but is proposed to be developed by UCD in the future: This phase includes 600,000 square feet in two buildings consisting primarily of science, technology, and research uses. The anticipated land uses in Phase 2 include the following uses:
- 370,000 sq. ft. of science and technology
- 200,000 sq. ft. of university research space
- 22,000 sq. ft. of co-working space
- 8,000 sq. ft. of community-serving retail
EIFD and Draft Infrastructure Financing Plan
On October 27, 2020, City Council adopted a Resolution of Intention (ROI) proposing to establish an EIFD for Aggie Square (Resolution No. 2020-0352). Pursuant to the ROI, the Aggie Square EIFD Public Financing Authority (PFA) was established as the governing board of the proposed EIFD. On November 18, 2020, the PFA ordered the preparation of the Infrastructure Financing Plan (Plan), the statutory requirements of which are codified in Chapter 2.99 of Part 1 of Division 2 of Title 5 of the California Government Code (commencing with Section 53398.50) (EIFD Law).
The City Clerk distributed a Notice to each owner of land in the proposed EIFD and each affected taxing entity notifying them of the PFA public meeting of December 1, 2020, to review the draft Plan. Notice of this meeting was also listed on the PFA’s website.
The draft Plan was presented at the PFA’s December 1st meeting and is included herein as for further discussion.
Pursuant to the EIFD Law, the PFA must hold three public hearings before approval of the final Plan. The first public hearing is scheduled for February 2nd and the other two will follow with the last envisioned by the end of April. At the third public hearing the PFA may adopt the Plan and form the EIFD. However, the City Council must approve the Plan prior to the PFA forming the EIFD. A proposed Schedule of Proceedings is included as Attachment 2.
A summary of the key requirements included in the Plan is provided below.
Map and legal Description: The proposed EIFD consists of approximately 42 acres on 19 parcels. It includes properties owned by Abrego Partners, Fairgrounds Plaza Partners, LLC, Glassrock Partnership, The Regents of the University of California, and Shriners Hospitals for Children. All property owners are aware of their inclusion and have not protested their inclusion. A map and legal description of the proposed boundaries are in the Plan.
Public Facilities and Development Proposed to be Financed: The public capital facilities proposed to be financed through the EIFD include roadway, storm water, sewer and utility improvements within and surrounding the Project. Other development to be financed includes the design and construction of housing as well as public gathering areas, open spaces, and buildings and parking facilities within the Project area. The improvements are of communitywide significance and provide significant benefit to the area of the proposed EIFD and surrounding community. A list of the public improvements and development that may be financed by the EIFD is provided in Exhibit B to the Plan.
Necessity of EIFD: The formation of the EIFD is necessary to finance the construction of public infrastructure and development that serves the Aggie Square project and surrounding community while providing significant communitywide benefits.
Use of Incremental Tax Revenue: The EIFD will use incremental property tax revenue to finance facilities and costs authorized by law to be financed through the EIFD. The authorized incremental property tax financing is described in the Plan, a copy of which is attached. As noted above, the City Council will have the opportunity to review and approve the Plan and the proposed use of incremental property tax revenue prior to formation of the EIFD by the PFA. The Plan indicates that the EIFD will use incremental property tax revenue that is generated by parcels within the boundaries of the EIFD to finance direct funding of facilities and reimbursement of the developer for its cost of construction of facilities, and to pay costs of issuance of bonds or other debt of the EIFD, of a community facilities district of the City, or of any other public agency for authorized facilities and payment of debt service thereon to finance facilities and costs authorized to be financed through the EIFD.
Goals of the EIFD: The primary goal in financing the public facilities is to catalyze significant private investment for the development of a mixed-use innovation and research center located on the UC Davis Sacramento Campus which will further catalyze activities along the Stockton Boulevard corridor. The EIFD goals are further detailed in the Plan.
Other items required by the EIFD Law are included in the Plan, which is attached hereto.
Policy Considerations: Establishing the EIFD is a necessary step towards the successful development of the public infrastructure and other projects of communitywide significance necessary for development of the Project. Proceedings for the establishment of the EIFD are begun through adoption of the ROI, which occurred on October 27, 2020.
Economic Impacts: Aggie Square will generate significant economic benefits to the community, the City and the region. The Regional Economic and City Fiscal Impact Analysis (Impact Study) completed by Economic Planning Systems in July 2020, estimates that the project when fully built out would bring about the following benefits:
• Approximately $5 billion annually and 25,000 ongoing jobs would be added to the six-county region.
o Of these on-going regional economic impacts, approximately $3.3 billion annually and 15,600 ongoing jobs would be added to the Sacramento County economy.
• In addition, it is estimated that the construction of Aggie Square would generate a one-time economic impact of $2.6 billion added to the six-county region.
o Of these one-time regional economic impacts, approximately $1.8 billion would be added to the Sacramento County economy.
• Finally, City of Sacramento revenues are estimated to be increased by approximately $5 million annually.
The Impact Study provides detailed breakdowns of the wide-ranging employment opportunities generated by the project over both Phase 1 and Phase 2 of Aggie Square, as summarized below.
Aggie Square Phase 1 and Phase 2
Estimated Job Impacts
|
Job Types* |
Six County Region |
Sacramento County Only |
|
Phase 1 - All Construction Period Jobs |
9,993 |
7,374 |
|
Direct |
5,611 |
5,611 |
|
Indirect |
4,382 |
1,763 |
|
Phase 2 - All Construction Period Jobs |
5,754 |
4,260 |
|
Direct |
3,255 |
3,255 |
|
Indirect |
2,499 |
1,005 |
|
Total - All Construction Period Jobs |
15,747 |
11,634 |
|
|
|
|
|
Phase 1 - All On-going Jobs |
15,909 |
10,014 |
|
Direct |
3,685 |
3,685 |
|
Indirect |
9,489 |
3,149 |
|
Induced |
2,735 |
2,180 |
|
Phase 2 - All On-going Jobs |
9,109 |
5,542 |
|
Direct |
1,720 |
1,720 |
|
Indirect |
5,695 |
2,478 |
|
Induced |
1,695 |
1,344 |
|
Total - All On-going Jobs |
25,018 |
15,555 |
Sources: EPS Table 1, Table E-1, and Table E-2 (Phase 1 - Scenario 2 and Phase 2)
* Construction period jobs are calculated by job years.
Environmental Considerations:
California Environmental Quality Act (CEQA): The action involves review of the potential financing mechanisms for improvements associated with the Aggie Square project. The action is not considered a project under the California Environmental Quality Act (CEQA). The action involves review and discussion of the creation of a government funding mechanism or other government fiscal activities, which do not involve any approval or commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA review is not required. CEQA Guidelines section 15352.
Sustainability: Not applicable.
Commission/Committee Action: None.
Rationale for Recommendation: Formation of the EIFD is necessary to support the development of the Project, and review of the draft Plan is a necessary step in the formation process pursuant to the EIFD Law.
Financial Considerations: The allocation of revenues to the EIFD from the City will be limited to incremental property tax revenue and property tax revenues in lieu of vehicle license fee (PTILVLF) revenue generated by property within the boundaries of the EIFD, which is to be used to assist in the direct funding of facilities, reimbursement of the developer for its cost of construction of facilities, payment of debt service on bonds, issued to finance eligible costs, or all or some of the foregoing. The Plan contains a limit on the total dollars of taxes that may be allocated by the City to the EIFD, and the date on which the tax allocation to the EIFD will end. The City has no obligation to contribute revenues to the EIFD beyond the limits set forth in the Plan.
Local Business Enterprise (LBE): Not applicable.