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Uploaded: Thursday, March 4, 2010, 12:13 PM
What happens when tax district sunsets?
Council discusses effects on downtown after revitalization district expires in 2011
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by Daniel DeBolt
Mountain View Voice Staff
The city's "downtown revitalization district," a special tax district created to give that neighborhood a boost, is set to expire in 2011, which means the city will lose millions per year in revenue designated for downtown improvements. On Tuesday, city officials held a study session to discuss how this will affect the downtown's future.
During the meeting, economic development director Ellis Berns gave some background on the tax district, explaining that Mountain View's is one of the first such districts in the state to expire, so there is little to learn from other cities' experience. He also said the city looked into extending the district, but concluded that it would be difficult, partly because the downtown is no longer blighted.
The tax district was started in 1969 to fund revitalization of what was then a downtown known for its empty lots and storefronts. Using the new income, "Basically the entire Castro Street was rebuilt," said city manager Kevin Duggan.
Illustrating just how far the area has come, the 16 blocks in the district -- which is located between Mercy, Franklin, Evelyn and Hope streets -- were valued at $21 million in 1969 ($122 million in today's dollars) but have since grown to be worth $418 million in 2009.
Tax revenue from the district, $4.7 million this year alone, has been used to attract downtown businesses, plant trees, acquire property for parking and numerous Castro Street improvements. About 20 percent goes to the city's affordable housing fund, which currently is paying for a 51-unit family housing project on Evelyn Avenue. It also paid for part of the city's new $18 million parking garage on Bryant and California streets.
Tax districts like this one siphon property taxes away from schools and other services and when they finally sunset, those funds begin flowing back to local schools, and to the city's general fund. But although the downtown tax district is set to expire in 2011, it may not be until 2019 that local schools get their share of downtown property taxes.
That's because, after 2011, the city will continue to receive its "tax increment" from the district until $25 million in debt is paid off, which is expected no later than 2019.
Once the debt is paid, the Mountain View Whisman School District will receive 17.7 percent of the newly released property taxes. That would have amounted to $832,000 this year, according to a March 1 presentation by Craig Goldman, the school district's chief financial officer. Similarly, the city's general fund would have received $700,000 this year.
Local high schools, community colleges and the county will also begin to get a portion of downtown property tax revenues, once the debt is paid off.
On Tuesday, the council briefly considered how to spend the district's remaining funds before it expires. They brought up a longstanding proposal, using $1.5 to $2 million of the tax district's revenue, to subsidize a grocery store downtown. And city staffers proposed several studies be conducted with the funds, including one on the impacts of high speed rail downtown, one on downtown parking needs, and others.
Staffers also proposed that the city allow Castro Street businesses and property owners to apply for funds for building facade improvements, which council member Margaret Abe-Koga said can be an expensive city requirement on a new business.
Mayor Ronit Bryant said that a study on downtown high speed rail impacts should be a top priority. The city will only have 45 days to comment on the project's draft environmental impact report once it is released by the California High Speed Rail Authority, she said, and right-of-way maps which would show the impacts of running two additional tracks up downtown's Caltrain corridor may be released within the next month.
Council member Jac Siegel echoed the concerns of downtown businesses that the grade-separated crossing required for the high speed train at Castro could shave severe impacts on downtown, especially the historic 100 block.Are you receiving Express, our free daily e-mail edition? See a sample and sign-up for Express.
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Posted by eric, a resident of another community, on Mar 4, 2010 at 2:42 pm Little late for the council to realize that HSR will decimate downtown, now, isnt it? Palo Alto's boondoggle tunnel will have to emerge, giving MV the noisiest and most unsightly part of the track. Way to go, council, for sticking your heads in the sand on this!
Still waiting for someone to talk about the impact fees that will require the city to build such density in downtown that it'll make Mintons look like a dog park
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Posted by Impact fees?, a resident of the Old Mountain View neighborhood, on Mar 4, 2010 at 3:55 pm @eric - What impact fees are you talking about that would require the city to build at a certain density downtown?
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Posted by NUTS!, a resident of the Waverly Park neighborhood, on Mar 4, 2010 at 5:11 pm "subsidize a grocery store downtown"!!!???
What business does this city have in subsidizing a grocery store downtown. If one were economically feasible, it would already be there! Why does this city engage in such fantasies? What is wrong with downtown citizens who can't drive, walk, or bike to the next nearest store like the rest of the world?
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Posted by Steven Nelson, a resident of the Cuesta Park neighborhood, on Mar 4, 2010 at 5:15 pm Hooh RAY! Why are there not enough funds in the General Fund (> 100 residents show up at Council)? This special district (and 8X bigger Shoreline District) It is time for this city slush fund to go to the general needs of the community (two school districts, city General Fund and the county). Businesses NEED to pay their share of the community they thrive off of!
The problem with Shoreline's $3 Billion "off the rolls" is that the general community will NEVER SEE any of this tax money unless our state assembly man can see to introduce a law to change "the perpetual nature" (city attorney words) of the Shoreline District. Give them 5-10%, and let the entire community (not just the Shoreline Community), get the rest! (your assemblyman is Paul Fong)
The schools forum - instead of facades, why not invest this community money in the substance of the schools? Businesses say they support schools - let's see them demonstrate this by insisting that this money (denied to the schools) be spent on schools rather than business fronts. Chamber - where are you?
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Posted by NeHi, a resident of the Cuesta Park neighborhood, on Mar 4, 2010 at 5:53 pm I did learn one lesson: the "sunset date" doesn't mean much at all.
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Posted by eric, a resident of another community, on Mar 4, 2010 at 10:48 pm @impact, the surprises in the HSR package are many. Lots of cost to cities, LOTS of eminent domain, little regard for existing property, communities or businesses.
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Posted by Jay Tulock, a resident of another community, on Mar 4, 2010 at 11:48 pm HSR will not be built, because they are destroying towns and parks up and down the state. I tell you, folks are ready to RIIII-ot! Once everyone unites and raises a few million to pay signature gatherers for a citizens 1A reversal initiative, it is all over, because there is so much negative press that 2% lead is already gone. Diridon cry cry cry. Kopp head go boom.
Jay Tulock, Vacaville
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Posted by conservative87, a resident of another community, on Mar 5, 2010 at 7:45 am It is clear, to the rest of the state, that these wealthy little cities suffer from the Nebraska, Louisiana Syndrome. They want this project, but they are holding it hostage to get as many freebies as possible, that the rest of us, sensible tax payers, have to pay. What a bunch of parasites! It is clear that this is a logical evolution of transportation. I live in the valley, and it is very expensive for me to fly to New York or drive to LA. I have to drive 2 hrs to SFO. Park in a very expensive parking lot. Stand in line for the cattle-call safety inspection. I am not allowed to smoke a cigarret after disrobing and having angry security police feel me all over. Fly like sardines, and hold on using the toilet, because all the suspicious looks. I have been stranded in airports or on the tarmac many times. I often had to sleep in the airport or pay expensive flee infested motels. How is that for a good reason to build the HSR? Enough with your winning. You are not making any points.
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Posted by Mike Laursen, a resident of the Monta Loma neighborhood, on Mar 6, 2010 at 10:19 pm There already IS a grocery store downtown: Mountain View Market.
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Posted by Mike Laursen, a resident of the Monta Loma neighborhood, on Mar 6, 2010 at 10:23 pm conservative87, there're a few things you say that I don't get.
Why is it expensive for you to fly to L.A.? Are you not able to take advantage of the same cheap fairs as everybody else? And why do you have to fly out of San Francisco instead of San Jose?
Do you think HSR won't be perceived as a potential terrorist target, and won't have security lines?
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Posted by Political Insider, a resident of the Sylvan Park neighborhood, on Mar 7, 2010 at 10:40 pm Correct. There are 3 stores in the downtown area but not one for the wealthy elitists who refuse to shop at the ethnic stores.
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