Alameda Landing taxes moving forward

Alameda Landing taxes moving forward

Michele Ellson

Residents and business owners in the new Alameda Landing development may pay thousands of dollars more in taxes for roads, sewers and police protection than their other Island neighbors.

The City Council voted 4-0 Tuesday to move forward on a pair of proposed special districts encompassing the Alameda Landing development that, if approved, would allow the city to levy additional taxes to pay for the facilities and services; Councilwoman Lena Tam was absent. A public hearing and potential city approval of the proposed districts is set for January 7.

“The developer came to us asking (for this), they’re willing to tax themselves and we’re getting the benefit. I don’t see a problem,” City Councilman Stewart Chen said, offering one of the few comments council members made on the districts prior to the votes.

If the districts are approved, Alameda Landing homebuyers could pay up to $5,700 a year in supplemental property taxes to fund roads and sidewalks, parks and sewers, along with police and fire protection and maintenance; residents’ tax rates will be based in part on the size and type of homes they buy. Commercial property owners’ buildings would be taxed up to $1.54 per square foot for services only. The taxes will rise by a maximum of 3 percent each year.

Lower income residents who move into the development’s affordable units won’t have to pay the taxes, and residents in units reserved for moderate-income buyers will pay a reduced tax rate.

Additional taxes could be levied in the event that the city doesn’t have enough money to make its annual bond payments; the city and the East Bay Municipal Utilities District, which would jointly operate one of the districts, anticipate seeking up to $20 million in bonds to pay for infrastructure. Taxes to pay off infrastructure bonds could be levied for up to 50 years; the taxes to fund services would be permanent.

Separately, property owners at Alameda Landing will also pay annually into a fund for transportation improvements; residents are expected to pay $300 a year for shuttles and other improvements, while businesses like Target will pay a per-square-foot charge.

Residents and commercial property owners outside of those areas don’t pay extra taxes for those facilities or services. If the city wished to levy similar taxes on existing neighborhoods, they would need to win an election with two-thirds of the vote, the same amount needed to levy parcel taxes.

Since no one lives at Alameda Landing yet, landowners and council members will vote on whether to impose the taxes; the city still effectively owns much of the former military property the development is being built on. City Council members and TRI Pointe Homes, which is building houses at Alameda Landing, will vote on taxes for infrastructure and services; Target and Catellus will also get to vote on the taxes for services, Community Development Director Debbie Potter said.

The project’s developer, Catellus, asked the city in July to form the districts and Potter said the development agreement the developer signed with the city says they and others who buy land in the development will support it. If everyone agrees to waive their right to an election – which is likely – the decision to form the districts could be finalized on January 7.

After the districts are voted on and approved, the council can vote to levy the taxes and the city can seek bonds.

The Mello-Roos Community Facilities Act of 1982 gave California’s municipalities and special districts the power to set up the facilities districts in order to levy taxes to pay for infrastructure and services. Hundreds of the districts exist throughout California.

Special districts were set up to pay off bonds for infrastructure in Marina Village and Harbor Bay, and Bayport residents pay a supplemental levy to fund police, fire and other services; this year homeowners in four-bedrooms Bayport homes will pay an extra $1,173.92 for services that residents outside the special districts don’t pay extra for. Bonds for the Marina Village development were paid off this year.

The real estate website Trulia listed the average home sale price for Alameda at $605,000 between August and November; Alameda’s property tax rate is 1.1432 percent of a home’s assessed value, plus extra assessments for schools, Alameda Hospital and an array of other services.

TRI Pointe plans to build 275 new homes at Alameda Landing, an amount slated to include 91 single-family homes, 79 two-story condominiums, 26 single-level flats, 56 townhomes and a 23-unit apartment building. The entire Alameda Landing development will span 45 acres.

The council has discussed imposing similar taxes on residents and businesses at Alameda Point, in an effort to make the development cost-neutral for the city. The council has mandated that the redevelopment former military property in Alameda pay for itself.

Separately, the city will also seek new state legislation that would reinstate its ability to collect property taxes to fund services and infrastructure – a power they lost when state lawmakers shut down California’s redevelopment program.

Proponents say they provide a critical funding source for infrastructure and services in a post-Proposition 13 world in which local agencies’ ability to raise the funds needed to pay for those services is limited – at a cheaper rate than developers could get on their own. But critics have called them an end run around the voter-approved limitation on property taxes and have also questioned the fairness of levying taxes on future residents without giving them a vote.