It’s January 4th, 2022, and we, collectively, as a world, America, and our states, and finally cities like our Oakland, find ourselves still in the clutches of the Coronavirus Pandemic. In all, the toll it has taken on us is as massive as it is depressing: 284 million cases and 5.4 million people dead, worldwide.
The depths of economic loss are so great, we’ve not even calculated them (consider the millions of people who’ve joined the ranks of the self-employed and thus, not officially counted in the workforce under our traditional measuring system). And worse, we just don’t seem to collectively want to solve the problem. For every solution here comes another group saying why that will not work, or is not the answer. But we have to act. In Oakland, and California, we can.
Eating is our basic must and restaurants have grown into an entire industry over the decades. But now, the sheer cost of maintaining an eatery has outstripped revenues to pay it because of the Pandemic. And then our State and Local Government has the habit of slapping on COVID-19 restrictions that keep patrons away, thus choking off money to run the establishments!
There’s no pool of monetary aide for Oakland businesses to dip into for help, either. We’ve relied on the Federal Government to come to our rescue, but with the SBA Loans, and how establishments like Bank of America and Chase have handled them, some of us find ourselves stuck and ordered to pay loans we were told were going to be forgiven. And the politicians that voted the programs into life seem not to want to fix their problems. Well, folks, there is a solution, and here’s how it will work in Oakland.
Using AB 464 To Capture Our Property Tax Revenue For Oakland Small Business Needs
My idea is based around the AB464 law Barbara Bobby Lopez worked to get the California Legislature to pass last July 2021, and Governor Gavin Newsom to sign into law. Called “AB464 Enhanced Infrastructure Financing Districts”, it allows the same tax increment financing approach proposed for Howard Terminal, to be used to direct property tax money toward local use for helping Pandemic-damaged businesses get monetary help to recover (full bill text here).
First, here’s Barbara talking about AB464 with this vlogger:
Second, here’s the steps we can take:
- We establish a public financing authority that would draw a tax increment boundary or set of boundaries for the purpose of floating bonds to the end of a business investment corporation that we would call The Oakland Business Investment Corporation.
- The public financing authority then works with Alameda County and the City of Oakland to form the legally required Infrastructure Financing Plan, and use the boundaries of the 11 current business improvement districts as a basis for larger zones and then mathematically combine them into one super zone of tax increment financing revenue collection.
- The Oakland public financing authority would collect the TIF revenue and use it to pay down a 45-year-bond issue. If Oakland’s collective total assessed value is $70 billion, it should not be a problem to gain a base-year-assessed value of $1 billion. Over a 45-year period, assuming a small 4 percent rate of growth in assessed value per year, we are looking at a stream of revenue for a bond issue of approximately $808 million.
- We can effectively use 50 percent of that revenue stream to form a bond issue of $404 million. That’s $404 million specifically earmarked for use in business assistance in Oakland. We then form a plan of disbursement of that money to businesses on an as-needed basis. AB 464 allows that money to be specifically given to businesses who have suffered pandemic loss – that’s every restaurant in Oakland. We set aside two tiers of funds: one for restaurants and the other for non-restaurant businesses, and then a third tier for micro-grants of $500 to $5,000.
And that’s my idea. All that remains is for this to be placed on the Oakland City Council Agenda for discussion, and then form a resolution to direct City of Oakland Staff to start, first, the creation of the public financing authority, and authorize it to establish the AB464-based program. There are more technical issues I will present latter, but there’s the broad-brushstrokes of a program to save Oakland’s restaurants (and other businesses) through the Pandemic, and rebuild the industry, beyond. I welcome your feed back via email at [email protected]
Stay tuned.