Midway Rising may be getting a special tax district to fund development
SAN DIEGO (FOX 5/KUSI) — San Diego city leaders on Monday voted to consider changing the property tax structure for a sliver of the Midway District as the ambitious Midway Rising development project inches closer to becoming a reality.
During Monday’s regularly scheduled meeting, the City Council approved a resolution to explore establishing an “Enhanced Infrastructure Financing District” (EIFD) for the Sports Arena to generate revenue for work to the proposed entertainment and housing hub.
An EIFD would freeze property tax levels for the Sports Arena area at the “base level” in the current year. Any additional taxes collected above that level, called a “tax increment,” would then be diverted into a special pool that can be used specifically to fund improvements in that area.
Portions of property taxes that are mandated to go towards schools would remain untouched by the EIFD.
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These specialty tax districts, which have a separate oversight authority, have historically been used to fund infrastructure projects like highways, transit facilities, sewage treatment plants, libraries, parks or flood control levees, among others.
According to city staff, the specialty tax district was identified as the best funding mechanism for Midway in 2021 — when the council voted to begin the project — given its predictability, flexibility and revenue potential without an increase in general taxes.
The council is anticipated to take a final vote on an EIFD structure later this year. If it is approved, it would become the second EIFD in the city, joining the one created for a slew of public facility projects in Otay Mesa back in 2017.
Monday’s discussion comes while city staff remain in the midst of state environmental review and negotiations to lease the 48.5-acre site surrounding Pechanga Arena for the Midway Rising project. A potential groundbreaking for the project likely will not come until 2025.
The current plan includes a new 16,000-seat stadium, 2,000 affordable housing units, a park and other mixed-use spaces. Hundreds of “middle-income: housing units and a hotel were in the initial proposal, but were ultimately scrapped by the developers due to issues of financing.
“Making sure we do have dollars to go to infrastructure is incredibly important to me,” Councilmember Marni von Wilpert said during the meeting Monday. “We need to build out housing, but we need to build out the infrastructure that goes with housing.”
As it stands, however, Midway Rising would still be the largest affordable housing project in California history.
A handful of additional public workshops will be held in the coming weeks for members of the community to provide input on the project. The next meeting will be next Monday, March 18 from 6 p.m. to 7:30 p.m. at the Catamaran Resort Hotel.
More information on any upcoming public meetings can be found on the city’s website here.
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