Truckee grants access to new development funding
Developers could now find it easier to construct public facilities with the help of Mello-Roos financing, an alternative method of funding for projects that could not be built otherwise.
Mello-Roos financing, which Truckee’s Town Council approved Tuesday, offers a tax-exempt interest rate that is lower than private financing, making it more attractive to developers. According to a staff report, multiple developers have previously requested the town consider this type of financing, asserting it “may be the only feasible way to get a project built.”
Jason Hansford, Truckee Railyard project manager, said almost $22 million has been spent to clean up the Railyard site.
“We’ve really transformed that, but it comes at a high cost. This is an important component of doing that,” he said of the Mello-Roos financing.
As Truckee has never offered this type of financing, it will be treated as a pilot program and evaluated again in three years. In Truckee, this funding could go toward workforce housing, recreation facilities, dedication of land and environmentally beneficial activities, according to a staff report.
“The advantage and the energy that it gives to those disadvantaged areas is significant and something that’s really important to me,” said Councilmember Morgan Goodwin.
Any public facility project within the town’s boundaries will be considered, but it must meet certain criteria.
Projects must be significantly sized with an estimated value of at least $20 million. The project must also offer an “extraordinary” public benefit to the town. To set the bar for “extraordinary,” the benefit must represent at least 20 percent of the total amount requested for public financing.
The Mello-Roos Community Facilities Act of 1982 was enacted to provide an alternative method for financing public facilities and services through a Community Facilities District. CFDs are normally formed in undeveloped areas and are used to build roads and install water and sewer systems so that new homes or commercial space can be built, according to the California Tax Data website. They can also be used in older areas to finance new schools or other additions to the community.
Once approved, projects will be funded through the development company, then paid for by residents through property taxes. Only those who live in the district where the project is located will be responsible for the tax.
The town has previously used CFD financing for smaller projects such as sidewalk maintenance and snow removal but has not allowed its use for the funding of public facilities.
Hannah Jones is a reporter for the Sierra Sun. She can be reached at 530-550-2652 or email@example.com.