Title
Resolution of Intention to Establish the Innovation Park Enhanced Infrastructure Financing District, Establishing a Public Financing Authority and Authorizing Other Actions
End
FileID
File ID: 2026-01378
End
Location
Location: District 1
End
Recommendation
Recommendation: Adopt a Resolution of Intention to establish the City of Sacramento Innovation Park Enhanced Infrastructure Financing District (EIFD).
End
Contact
Contact: Sini Makasini, Senior Project Development Manager, (916) 808-7967, smakasini@cityofsacramento.org; Eric Frederick, Special Districts Manager, (916) 808-5129, efrederick@cityofsacramento.org; Department of Finance; Leslie Fritzsche, Economic Investment Manager, (916) 808-5450, lfritzsche@cityofsacramento.org, Office of Innovation and Economic Development
End
Presenter
Presenter: None
End
Attachments
Attachments:
1-Description/Analysis
2-Schedule of Proceedings
3-Resolution of Intention
4-Exhibit A (Proposed Boundaries of EIFD)
5-Exhibit B (Public Facilities and Development to be Financed)
6-Presentation
End
Description/Analysis
IssueDetail
Issue Detail: The Innovation Park Project (Project) is a private development partnership between Argent Management LLC (Argent)) and California Northstate University (CNU). The proposed Project covers approximately 171 acres in the North Natomas area on the site of the former Sleep Train Arena. The Project is anticipated to provide an urban mixed-use development consisting of residential, commercial, health and educational uses and public amenities. As a catalyst to jump start the development of the Project, the proposed CNU Hospital and Medical Campus would create thousands of employment opportunities. The Project is projected to provide a wide range of affordable and market-rate housing, diverse regional-scale open spaces, a future school site for Natomas residents and additional infrastructure benefiting the surrounding community.
On April 30, 2024, Council approved a non-binding term sheet for public financing assistance for Innovation Park (Term Sheet) between the City, CNU, and Sacramento Basketball Holdings (SBH). The Term Sheet provides a framework for a public-private partnership to support the financial viability of the overall Project and serves as a catalyst for project implementation. One element of the Term Sheet is the proposed formation of an EIFD to finance the design and construction of backbone infrastructure improvements within and surrounding the Project, as well as to generate funds for affordable housing. After approval of the Term Sheet, Argent acquired approximately 130 acres of land in the Project from SBH. Therefore, the current owners of land in the Project area consist of CNU, Argent, and Natomas Unified School District, although the Natomas Unified School District parcel is excluded from the proposed boundary of the EIFD.
An EIFD is a type of special financing district that utilizes a portion of tax increment revenue from a specific area to finance capital facilities or other specified projects of communitywide significance that provide significant benefits to the area within the EIFD or the surrounding community, including the acquisition, construction or rehabilitation of affordable housing. The proposed EIFD will utilize 100 percent of the City share of property tax increment revenue within its boundary, described below. The California Legislature authorized the formation of EIFDs in 2014 through Senate Bill 628, and the statutory framework for EIFDs, which has been amended multiple times since 2014, is 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).
Pursuant to the EIFD Law, proceedings for the establishment of an EIFD are initiated by Council adopting a Resolution of Intention (ROI). In addition to stating the City’s intent to form the EIFD, the ROI must:
1. Describe the boundaries of the proposed EIFD, which may identify areas therein as “project areas.”
2. State the type of public facilities and development proposed to be financed or assisted by the EIFD.
3. State the need for the EIFD and the goals it proposes to achieve.
4. State that incremental property tax revenue from the City, as the initial sole participating affected taxing entity, may be used to finance the activities of the EIFD.
5. Fix a time and place for a public hearing.
The ROI is the first step in establishing the EIFD. If approved, staff will proceed to evaluate the fiscal impacts, confirm eligible facilities, and prepare an infrastructure finance plan for future Council consideration. At the same time as the ROI is adopted, the Council must establish a Public Financing Authority (PFA) as the governing board for the EIFD.
A brief summary of each of these requirements is provided below.
Proposed Boundaries: The proposed EIFD boundary consists of approximately 171 acres on two parcels. Property owners Argent and CNU are aware of their inclusion and have not protested their inclusion. The Natomas Unified School District parcel in the area is excluded from the proposed boundary of the EIFD. A map of the proposed boundaries is included as Exhibit A to the ROI.
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 and a pedestrian overcrossing bridge bringing connectivity to areas surrounding the Project. These improvements were outlined in the Term Sheet approved by Council in April 2024. Other developments to be financed include the design and construction of affordable housing. It is anticipated that 80% of the tax increment generated by the EIFD will be used for public capital facilities and 20% will be used for affordable housing. 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 developments that may be financed by the EIFD is provided in Exhibit B to the ROI.
Necessity of EIFD and Goals: The formation of the EIFD is necessary to finance the construction of public infrastructure and development that serves the 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 to be financed through the EIFD. The authorized incremental property tax financing will be as described in an Infrastructure Financing Plan (IFP) to be prepared in accordance with the EIFD Law. Council will have the opportunity to review and approve the IFP and the proposed use of incremental property tax revenue prior to formation of the EIFD. The IFP is expected to indicate that the EIFD will use incremental property tax revenue that is generated by property within the boundaries of the EIFD to (1) finance direct funding of facilities and/or reimbursement of the developer for its cost of construction of facilities, and to pay debt for bonds used to finance facilities and costs authorized to be financed through the EIFD and (2) finance investments in affordable housing.
The primary goal of the EIFD is to stimulate a large economic development project in the area. Accordingly, the Infrastructure Financing Plan will include specific language conditioning any reimbursement of public infrastructure costs from the EIFD to the vertical construction of a Catalytic Economic Development Project (defined below).
“Catalytic Economic Development Project” shall be defined as a project containing approximately a minimum of 350,000 sq. ft. or a size approved by City Council which further develops and/or grows targeted industry clusters or tradeable sectors, results in a significant number of high paying jobs for City and regional residents, materially increases revenue for the City and serves as a stimulus for additional and adjacent investment in the City. The City Council shall make the determination of whether a project meets that definition.
Public Hearing: The public hearing on the proposal is set for Tuesday, December 1, 2026, at the time of 9:30 a.m., or as soon thereafter as possible, at City Hall before the PFA. This is the first of two public hearings required by the EIFD Law.
Establishing a PFA: The EIFD Law requires that the PFA be established at the same time Council adopts the ROI. The PFA will serve as the governing board of the EIFD and is to consist of three members of Council and two members of the public. The first action of the PFA will be to order the preparation of the IFP which, upon its completion, will be distributed to Council and other interested parties as identified in the EIFD Law. The PFA will also hold a public meeting at which PFA staff will present a draft IFP and afterwards will conduct two public hearings on the draft IFP and related matters. Upon conclusion of the second public hearing, and assuming no majority protest as defined in the EIFD Law, the PFA can officially establish the EIFD and approve the IFP.
A summary of the key actions for establishing the EIFD, as well as estimated dates of completion, is provided in the Schedule of Proceedings (Attachment 2). As shown in the Schedule of Proceedings, staff will return to Council in the future with the proposed IFP for Council’s review and approval, and the PFA cannot establish the EIFD, and the allocation of tax increment revenues that would otherwise be allocated to the City, without Council first approving the IFP.
End
PolicyConsiderations
Policy Considerations: Establishing the EIFD is outlined in the Term Sheet as a necessary step towards the successful development of the public infrastructure and other projects of communitywide significance necessary for large economic development project. Proceedings for the establishment of the EIFD will begin through adoption of the attached ROI. Upon successful adoption of the ROI, notices will be posted to fill the vacant positions of the PFA and a copy of the ROI will be mailed to all landowners and affected taxing entities within the proposed EIFD boundaries pursuant to the EIFD Law.
End
EconomicImpacts
Economic Impacts: Not applicable.
End
EnvironmentalConsiderations
Environmental Considerations:
California Environmental Quality Act (CEQA): The ROI to establish the EIFD is a notice regarding financing, organizational and administrative activity that will not result in direct or indirect physical changes in the environment. A subsequent resolution establishing the EIFD and other actions, including review under CEQA, are required prior to any proposed physical changes. Thus, the adoption of the proposed Resolution does not constitute a project and is not subject to CEQA review. CEQA Guidelines section 15378(b) (4) & (5); 15060(c)(3).
End
Sustainability
Sustainability: Not applicable.
End
Commission/Committee Action
Commission/Committee Action: Not applicable.
End
RationaleforRecommendation
Rationale for Recommendation: Formation of the EIFD is necessary to support the development of the Project, and the actions described in the ROI are necessary to the formation process pursuant to the EIFD Law.
End
FinancialConsiderations
Financial Considerations: The allocation of revenues to the EIFD from the City would be limited to incremental property tax revenue generated by property within the boundaries of the EIFD. As part of the preparation of the IFP, a fiscal impact analysis will be completed. The City has no additional financial obligation if the incremental property tax revenue generated is insufficient to cover the cost of the proposed improvements or debt service on bonds issued to pay for the proposed improvements.
End
LocalBusinessEnterprise
Local Business Enterprise (LBE): Not applicable.
End