San Diego Forms the State's Second EIFD with KMA Assistance
On July 24th, the Public Financing Authority (PFA) for the Otay Mesa Enhanced Infrastructure District (EIFD) unanimously approved the Resolution to adopt an Infrastructure Financing Plan (IFP) and to officially establish the Otay Mesa EIFD. The Otay Mesa EIFD is the State's second EIFD, the first being recently established West Sacramento EIFD No. 1. Both EIFDs were formed with KMA assistance.
KMA served as the financial advisor to the City of San Diego through the formation process. During this process, KMA tested the feasibility of numerous scenarios, evaluated the revenue-generating capacity of the proposed EIFD, prepared the IFP, and assessed the fiscal impacts of anticipated new development. The goal of the EIFD is to facilitate economic development in the City and region, and to improve the quality of life for residents in the area by accelerating the development of much needed infrastructure within Otay Mesa.
The Otay Mesa EIFD will include the entire Otay Mesa Community, or roughly 9,300 acres located at the City's southern limits. It is bounded by the Mexican border to the south, Interstate 805 on the west, County of San Diego on the east, and Chula Vista and the Otay River Valley on the North. Otay Mesa is a rapidly developing area, and the City envisions it as a major employment center with industrial-focused businesses, including transportation logistics, warehousing and manufacturing.
EIFDs are similar to California's former redevelopment areas in that they allow defined areas to allocate future increases in property taxes (tax increment) to public facilities and infrastructure. However, unlike former redevelopment project areas, tax increment is limited to the city and/or county share and excludes school districts. The City has used redevelopment project areas extensively in the past and is now seeing to use this new EIFD tool to promote economic growth.
KMA projected that the EIFD could generate approximately $670,000 in tax increment commencing Fiscal Year 2019, growing to $42 million by Fiscal Year 2062, for a gross total of $967 million over the projected life of the district.
KMA has extensive experience in preparing financing plans for public improvements and unmatched experience in preparing IFD financing plans. In addition to the Otay Mesa EFID and EIFD No. 1 (West Sacramento), KMA has also prepared the financing plans for the following established districts: Treasure Island IRFD, Historic Core Pier 70 EWIFD, Rincon Hill IFD, and Legoland IFD. For more information, please click here.