City Council Forms Infrastructure Financing District to Fund Major Development Projects

The City Council on Monday took the first formal step toward creating an Enhanced Infrastructure Financing District (EIFD), a mechanism city officials say could generate funding for major infrastructure improvements and redevelopment projects without raising taxes.

The district will allow the city to capture a portion of future growth in property tax revenues generated by new development and rising property values within designated boundaries.

City officials said the financing tool could help fund infrastructure improvements, affordable housing, mobility projects, open space and other public investments.

The EIFD stems in part from the city’s efforts to capitalize on redevelopment opportunities created by the transfer of approximately 50 acres of former state-owned land in the State Route 710 (SR-710) corridor to Pasadena in 2022.

City officials view the former freeway stub area as a major opportunity for infrastructure investment, land-use changes and future development.

“My family has been in Pasadena for 130 years, so I think a lot about what we leave behind for the next generation,” said Councilmember Justin Jones. “That is why yesterday felt so massive for our city. It’s rare to see an immediate win for the community and a giant plan for our future click together perfectly like that.”

“This gives us the local financial tools to truly improve our neighborhoods, our specific plan areas, the 710 stub, our commercial corridors, and other big opportunity areas throughout the city.” said Councilmember Center Justin Jones. “I really think this will be a day future generations look back on.”

According to the report prepared by Economic Development Director David A. Klug, the financing district will provide a way to capture future tax revenue growth generated by development in the 710 corridor and other strategic sites and use those funds to support infrastructure projects needed to stimulate additional economic activity.

The district will encompass approximately 551 acres, representing about 3.7% of Pasadena’s land area. While the boundaries remain subject to refinement, they include several development opportunity sites near the 710 study area.

Officials stressed that establishing the district would not increase property taxes or create new taxes for residents or businesses.

Instead, the district would receive a portion of future tax increment revenue generated by increases in assessed property values.

The city has also begun discussions with Los Angeles County about participating in the district. Property tax revenues in Pasadena are currently distributed among 16 taxing entities, with roughly 21% going to the city and about 28% allocated to the county’s general fund. Under state law, school districts and educational entities cannot contribute tax increment revenues to an EIFD.

City staff and county officials have conducted outreach meetings, including a recent tour of the proposed district area. According to the report, county officials have responded positively and expressed openness to partnering with the city.

Potential projects identified during preliminary discussions include mobility and utility infrastructure, multimodal transportation improvements, sustainable water features, clean energy initiatives, affordable housing projects and public open space improvements. Specific projects would be identified in a future Infrastructure Financing Plan.

The district will be governed by a five-member Public Financing Authority consisting of two City Council members, one appointee from the Los Angeles County Board of Supervisors and two public members appoied separately by the city and county. The council would also appoint an alternate member.

The first meeting of the Public Financing Authority is expected in July, with public hearings scheduled later this year.

Under the proposed timeline, final action on formation of the district could occur in December. Property owners and residents within the proposed boundaries would be notified of hearings and given opportunities to comment throughout the process.

If more than 50% of affected property owners or residents formally oppose the district, formation proceedings would be terminated.