Committee to Weigh Tax Increment Financing District That Could Generate Up To $230 Million for Pasadena Infrastructure

The Economic Development and Technology Committee is scheduled to consider recommending that the City Council adopt a Resolution of Intention to establish a Pasadena Enhanced Infrastructure Financing District at its meeting on Tuesday, May 19. The proposed district would span approximately 551 acres, roughly 3.7% of the city, and could generate up to about $230 million in present-value tax increment financing capacity to fund public infrastructure.

Because the Economic Development and Technology Committee is a strictly advisory body, any vote taken on May 19 would be a recommendation only. The City Council retains final authority over whether to adopt the Resolution of Intention, which is currently tentatively scheduled to come before the Council on June 15.

According to the staff report from the Office of the City Manager’s Economic Development Division, Enhanced Infrastructure Financing Districts, or EIFDs, were authorized by Senate Bill 628 in 2014 as a successor tool to the redevelopment agencies that California dissolved in 2012. EIFDs would capture a portion of future growth in property tax revenue within a defined district boundary to pay for public facilities and infrastructure. The staff report states that EIFDs do not increase property tax rates or create new taxes for landowners within the district.

The proposed Pasadena EIFD boundary includes the SR-710 Northern Stub area, approximately 50 acres of former state-controlled right-of-way that Caltrans relinquished to the City in August 2022, plus surrounding parcels and portions of the Lincoln Avenue, Fair Oaks/Orange Grove, and North Lake Avenue specific plan areas. The roughly 551 acres in total represent approximately $1.31 billion in existing assessed value, or about 3.2% of the citywide assessed value. The staff report identifies eligible project categories that would include mobility and utility infrastructure, multimodal improvements, sustainable water features, clean energy and renewables, affordable housing, and public and open space.

Property tax revenue in Pasadena is distributed among 16 different taxing entities. According to the staff report, approximately 21% of property tax revenue is allocated to the City of Pasadena and approximately 28% is allocated to the Los Angeles County General Fund, with the remainder distributed among educational entities, special districts, and other local entities. Under California EIFD law, school and educational entities would not be eligible to contribute tax increment revenues. The City has been conducting outreach with County officials, including a recent tour of the proposed EIFD boundaries with Kosmont Companies, the City’s consultant, and feedback from the County has so far been positive.

If the City Council ultimately approves the Resolution of Intention, the EIFD would be governed by a Public Financing Authority subject to the Brown Act. The proposed Public Financing Authority membership would consist of two City Councilmembers, one County Supervisor appointee, one member of the public appointed by the City Council, one member of the public appointed by the County Board of Supervisors, and an alternate board member representing the City Council. The Resolution of Intention would also tentatively set the first public hearing for November 9 at 6 p.m. in the Council Chamber.

A revenue analysis prepared by Kosmont Companies, included in the agenda packet, lays out four allocation scenarios. Under a scenario in which the City contributes 50% of its share and the County contributes a matching 48% of its share, the EIFD could generate approximately $230 million in present-value revenue over 50 years and approximately $577 million in nominal total. Under a City-only 25% contribution scenario, that figure would drop to approximately $57.6 million in present value. The analysis projects that potential new development within the study area could include 2,879 market-rate residential units, 629 affordable units, 54,850 square feet of commercial and retail space, 759,000 square feet of office space, and 185 hotel rooms, with a total assumed assessed value at buildout of approximately $2.18 billion.

The staff report notes that if the Council approves the Resolution of Intention on June 15, the formation process would continue through 2026. The Public Financing Authority would hold its initial meeting in July 2026 and review a draft Infrastructure Financing Plan in August. The City Council and County Board of Supervisors would each separately consider resolutions in September approving the Infrastructure Financing Plan and the allocation of property tax increment. The Public Financing Authority would then hold its first public hearing in November and a second public hearing and protest proceeding in December. A majority protest, defined as formal opposition from more than 50% of affected property owners or residents, would terminate the formation. The staff report also points out that there is no immediate fiscal impact from the proposed action, since dollars allocated to the EIFD would be dollars not available to the City General Fund, and that further fiscal analysis would be included in the Infrastructure Financing Plan.

The Economic Development and Technology Committee is scheduled to meet at 5 p.m. on Tuesday, May 19, in the Council Chamber, Room S249, at Pasadena City Hall, 100 North Garfield Avenue, in Pasadena. For more information call (626) 744-7311 or visit https://www.cityofpasadena.net/commissions/agendas/.