In the fall of 2010, there were pending applications to construct over 2,500 new residential units in the Rincon Hill area of San Francisco. While the area has been identified as a key location to meet the burgeoning demand for new housing, it suffers from a lack of infrastructure necessary to support new development, link the new development to job centers, and facilitate the flow of traffic to the Bay Bridge. The City and County of San Francisco identified a list of needed infrastructure improvements and prepared a plan to finance the improvements, consisting of a mix of private sector funding, impact fees, State and Federal grants, and potential revenues from an Infrastructure Financing District (IFD) to be formed around the new residential developments. The City’s goal for the IFD was to provide funding for $15 million of infrastructure improvements. As a first step, the City needed to form the IFD and retained Keyser Marston and Jones Hall to assist in the formation process. The formation was somewhat of a pioneering effort as the Rincon Hill IFD would be the second IFD formed within the State of California.
KMA prepared the IFD financing plan in support of the adoption of the IFD. As part of the financing plan, KMA projected the magnitude of property tax increment to be generated by the properties within the IFD over a 30-year period, evaluated a range of property tax increment contributions to the IFD, the leveraging capacity of annual deposits into the IFD, and annual debt service requirements. KMA also evaluated the on-going fiscal impacts of the ten residential developments on the City and County of San Francisco to determine the portion of property tax increment needed to fund on-going municipal services. KMA attended public hearings before the Planning Commission and the Board of Supervisors regarding the adoption of the IFD.
The Rincon Hill IFD Financing Plan was adopted by the Board of Supervisors and the IFD was formed in 2011