Oakland News Now Blog – vlog by Zennie62 YouTube.
The City of Oakland repeated an Oakland A’s Howard Terminal tax increment financing error I first discovered when the Century Urban Report was released.
I wrote this is Oakland News Now Blog:
“The report by the Los Angeles-based consultant firm called Century Urban and that was presented by the City of Oakland at the Alameda County Meeting as containing the Howard Terminal Tax Increment Financing Revenue Estimate, in point of fact, did not do that.
The report states that there is an existing redevelopment area (the Downtown Oakland Redevelopment Area) that does not “sunset” or end until 2039. Read this from the report on page 6 of 19:
The City and A’s contemplate that an Enhanced Infrastructure Financing District (“EIFD”) will be formed over the Project site and certain project-generated revenues will be contributed to the Project. Should the County elect to contribute all or a portion of its share of project-generated property tax revenues to the EIFD, these amounts would be deducted from the total amounts projected in this analysis for the duration of the IFD term, which is typically 45 years. Furthermore, a majority of the Howard Terminal site is part of a former Redevelopment Agency area (“RDA”) and, as a result, property tax increment is currently and will continue to be captured by the RDA through 2039 to fulfill certain redevelopment obligations before any remaining tax increment is passed through to taxing entities or the EIFD. Based on the projections provided by the A’s property tax consultant and reviewed by Century | Urban, an average of 37% of annual property taxes generated by the new proposed development would be captured by the RDA to fulfill existing obligations. The remaining 63% would be passed through to taxing entities including the County. The RDA’s obligations are projected to be fully satisfied in 2039. Thereafter, all tax increment would flow to the taxing entities, and if an EIFD has been formed and the County has contributed all or a portion of its share of project-generated property tax revenue, this share would be captured for the benefit of the Project for the remaining duration of the EIFD term.
But rather than estimate a new tax increment financing revenue number for Howard Terminal’s TIF after 2039, Century Urban just plain stopped at 2039, after writing that their calculation period starts at 2020 and because the existing RDA ends in 2039 – and that’s that.
There is no explanation of basic assumptions that are part of any tax increment financing revenue estimate: what the annual rate of growth in assessed value is and why; whether the base year will be before construction starts (thus allowing for the collection of taxes from unsecured property which will be the machines and vehicles used during the ballpark construction period); what the assessed value for each phase of construction is (they should give you the final number, instead, they give you the assessed value per square foot, but don’t break down how they arrived at those numbers for those specific years when the buildings are to be complete); and the identifiable final tax increment revenue estimate representing a simple-to-see 45-year-period.
The reference to “RDA” in the consultant report concerns the existing Former Oakland Redevelopment Agency Downtown Area, and not any new organization that’s called for to float bonds, collect the property tax, and launch the TIF Zone as per SB 293 Skinner. This produced a misunderstanding when Project Manager Molly Maybrun was asked about the expected bond issue. Rather than say that they did not have a final estimate for tax increment financing revenues or a bond structure, she winged it. She claimed that $400 million in TIF
She claimed that $400 million in TIF revenue would be available for a bond issue, but did not say where that number came from. Moreover, she talked about it being the “present value” of the income stream, but that’s not how tax increment financing revenue is expressed and for two simple reasons: 1) “present value” calculations just take out the interest rate that would be applied to a bond, but the tax increment revenue increases by rate of growth in assessed value including the County-allowed two-percent increase. So, one could have a scenario where the removed bond interest rate is offset by the annual rate of growth in assessed value. Thus, a wash.
What the project manager should have explained is what the bond debt service would be versus the infrastructure cost, and the community plan, and show any remaining revenue, or not, and explain why.
None of that is explained by Century Urban, and yet the County Administrator allowed the malpractice to continue by repeating the Century Urban numbers.
And that problem was allowed to wind its way into the “talks” of recent months – without correction.
So, not surprisingly, the Oakland A’s optioned land in Las Vegas, with a chance to start all over and get it right.
Stay tuned.
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Note from Oakland News Now Blog, Zennie62 YouTube, and Zennie62Media: this Oakland News Now Blog video-blog post demonstrates the full and live operation of the latest updated version of an experimental Zennie62Media , Inc. mobile media video-blogging system network that was launched June 2018. This is a major part of Zennie62Media , Inc.’s new and innovative approach to the production of news media. This is what we call “The Third Wave of Media”. The uploaded video is from a vlogger with the Zennie62 on YouTube Partner Channel, then uploaded to and formatted automatically at the Oakland News Now Blog site and Zennie62Media -created and owned social media pages. The overall objective is smartphone-enabled, real-time, on the scene reporting of news, interviews, observations, and happenings anywhere in the World and within seconds and not hours. Now, news is reported with a smartphone: no heavy and expensive cameras or even a laptop are necessary, thus less chance for Oakland News Now Blog, Zennie62 YouTube vloggers to be robbed. The secondary objective is faster, and very inexpensive media content news production and distribution. We have found there is a disconnect between post length and time to product and revenue generated. With this, the problem is far less, though by no means solved. Zennie62Media is constantly working to improve the system network coding and seeks interested content and media technology partners.