The City’s economic consultant for the Specific Plan, Keyser Marston Associates, Inc. prepared two memos in which they discuss financing options for implementation of the Specific Plan. The consultant accurately indicates that the goal of the Plan is to enhance the area for the residents and employees within the City, while not desiring to draw regional visitors as the beach City’s have done. Although some of the funding sources discussed are not appropriate or realistic for El Segundo, they were identified as common sources that have been used successfully in other communities. The following potential funding sources were identified:
Several nearby cities have successfully used redevelopment funds for downtown rehabilitation and façade improvement programs (Torrance, Pasadena, and Santa Monica). Under the redevelopment law’s current definition of "blight" it may be difficult to make the factual findings necessary to form a redevelopment area in the Plan area.
Property and Business Improvement District (PBID) and Business Improvement Area (BIA)
A PBID as well as a BIA, as discussed in Section A of Implementation and Financing, is suggested for funding a wide variety of activities. A summary of the key features of a BIA versus a PBID is provided in Appendix VII. The Montrose area of Glendale, East Village in Long Beach and numerous communities within the Cities of San Diego and Los Angeles, have created successful downtowns through the use of PBID’s and BIA’s.
The consultant suggests that a district could help to organize existing parking in a more efficient manner, and create new centralized parking if necessary. New development could pay in-lieu parking fees to off-set the cost of consolidated parking and/or the costs of a future parking structure. Glendale has successfully restructured the parking in their Montrose area through a parking district.
Community Development Block Grant (CDBG) Funds
The total CDBG funds that the City receives annually are very limited. Of the current allocation of approximately $120,000, the majority is spent on the Residential Sound Insulation Program. In the current budget year there is approximately $60,000 of unallocated funds that could be used for handicapped access and ADA improvements to the Downtown and Civic Center Plaza. CDBG funds could not be used for any other type of Downtown improvements as the area does not meet the CDBG low-income criteria and the job component requirements for the use of CDBG funds would most likely not be met.
An assessment district (other than a parking assessment district) is not considered to be a viable option. The cost of financing bonds for an assessment district with improvements that are less than 2 million dollars is generally considered to be inefficient. This is because the issuance cost is too large of a percentage of the total bond cost so the effective interest rate is quite high. The same finance issues also arise with certificates of participation.
Fees based on the square footage and type of use could be imposed on new development, similar to the City’s existing traffic mitigation fee program. A "nexus" study would need to be undertaken for any new development fees, in accordance with AB 1600.
Loans or bonds
The City could take out a loan or issue bonds to provide the seed money for a façade improvement program. The City would pledge the façade loan payments for repayment of the loan, but would need to supplement the pledge with general funds. Funds from a local lender would be another option for financing a façade improvement program. This type of funding would provide loans on an as needed basis.
Cities, as well as non-profit groups, have successfully used corporate funding for a variety of improvements and programs. Cultural facilities, special events, and economic development activities could be financed through corporate donors. Marketing and sponsorships is another growing area of potential use of corporate funds.