Oh boy, here we go again.
In today’s Alameda Journal newsletter from “former councilmember” Barbara Thomas which is so rife with bad information that it hints at why she was so spectacularly voted out of office in her run for reelection in 1991. (she received barely 20% of the vote in 1991, just beating Don Roberts for fourth place).
Given that Ms. Thomas once sat on the City Council, one would assume that she understands redevelopment financing and property assessment districts, and since her letter omits a lot of information regarding the proposal for Alameda Point and these issues, it becomes clear that she has not familiarized herself with the plan she is crtiticizing.
It is clear that Ms. Thomas has not read the plan, because her letter only refers to housing, not the 3.5 million square feet of Commercial which would be contributing. It’s a letter based on a false premise and therefore its conclusions are false. (shouldn’t the paper at some point correct this information instead of allowing itself to become a fount of constant, incorrect information? this isn’t opinionating, it’s verifiable facts that are being presented incorrectly).
The facts are that services will be covered by fees that are set before anybody moves in. The services provided for Alameda Point are required, by city policy, to be covered by the new residents and businesses in the development.
Currently there is no property tax collection from Alameda Point. This is both the obvious and extremely important fact. Therefore, the argument that tax increment collected at Alameda Point is somehow money lost by the city, or the schools, or by anybody else, holds absolutely no water. Without development at Alameda point there is no property tax collection. Therefore if a good chunk, let’s say a majority, of the property tax collected during the first, say, 30 years goes to paying back infrastructure bonds for affordable housing and public infrastructure, and fees and assessments go to pay for services provided at Alameda Point, there is no argument about lost tax money.
Folks interested in pursuing this line of thought, an important one given the city’s policy of fiscal neutrality, should start identifying places in which this neutrality may actually be in jeopardy. At this point, given the constant refrain of bad information, one has to begin to wonder whether the goal is to raise valid concerns, or insert poisonous information into the public dialogue.
Ms. Thomas writes:
Tax increment financing makes current residents pay for the developers’ profits by absorbing the cost of expanded municipal services for the life of the bond.
The money is obtained by issuing bonds that earn interest for the life of the bonds, probably 30 to 40 years. Somebody has to pay that back – plus the principal. The money will used to build roads, sewers, etc., that the developer needs before it can sell the 4,500 homes.
If you can afford a million-dollar house, what’s an additional $10,000 per year to pay off the bond? Not the whole story. Alameda will only get taxes based on the value of the original undeveloped land. The current value based on the $108 million undeveloped sales price times the current tax rate of 1.134 percent equals $1.4 million annually. However, assume that each of the 4,500 $1 million homes are built and sold. Taxes on those homes valued at $ 4.5 billion at the current rate equals $51 million a year. But only the original $1.4 million goes to the city to pay for fire, police, libraries or any other city services those 4,500 homes and their residents want or use for the 30-40 years of the bond life. That is about $150,000,000 the citizens forego in lost services, not including any commercial improvements.
It doesn’t stop there. Those of us who live in existing houses and own existing businesses will pay for all the services those new 4,500 homes need for the next 30-40 years.[Ed. Note: as noted above, this statement is neither supported by the facts presented, and ignores key parts of the financial plan for Alameda Point]
Will you vote for an amendment to Measure A that allows developers to skim the cream off the top and leave our island sinking under the debt, traffic, congestion and global warming that the development causes, while they take their profit and fly off to Neverland? Either build a project that abides by the rules Alamedans have voted on three times, or move on. Alameda can do just fine without SunCal.