The Board of Supervisors is slated Tuesday to approve a resolution expressing support for the revenue sharing plan that will be at the heart of a proposed Enhanced Infrastructure Financing District for the Temecula Valley Wine Country.
The proposed EIFD has been in the works since April, and a 76-page financing plan was composed to specify how the district will operate and what it will fund.
The district must receive two-thirds super-majority approval from all those who reside within it before it can be formally established.
The board’s action Tuesday will determine whether the Riverside County Assessor-Clerk-Recorder moves forward with filing a request with the State Board of Equalization to initiate the process of defining jurisdictional boundaries of the EIFD, which would then be recognized as a special “tax rate area,” according to documents posted to the board’s agenda.
“The establishment of the EIFD will not result in any new taxes or fees to the property owners,” according to the county Office of Economic Development. “Increase in property value from the resale and development of properties will be used for future infrastructure projects with community-wide and economic benefits.”
The proposed district would encompass 9,007 acres within the 33,000-acre Wine Country, situated to just east of Temecula and just west of Vail Lake. There are 825 parcels in the 9,000-acre space, according to the EIFD draft financing plan submitted to the board by Newport Beach-based DTA Corp.
Some of the properties are residential, others commercial, including vintners, and many properties are vacant and undeveloped, according to the report.
The proposed EIFD would be in operation for 45 years, and during that time, it’s anticipated that the district will become home to 400 additional residences, as well as 39 more wine growers, with numerous parcels being converted to vacation rental space and tourist attractions.
According to proponents, mainly the Temecula Valley Wine Growers Association, roughly $30 million in improvements would be funded by the proposed EIFD. Those include landscaping beautification, monuments, trail expansions, road upgrades and new parking facilities.
Financing districts, which were written into state law eight years ago, rely on “tax increment” to survive, meaning property values must increase before any revenue is generated.
Under the proposed EIFD, the county would receive 25% of the tax increment generated annually after fiscal year 2022-23, with the balance going to the district. Proposition 13 caps yearly property tax increases at 2%, regardless of the overall rate of inflation.
The current composite value of properties within the district is $556.46 million, according to DTA Corp. However, the projected composite value by the expiration of the district in 2067-68 will be $4.44 billion.
Revenue netted through tax increment would help cover the cost of bonds issued to pay for projects district-wide. A public financing authority, already authorized by the board, would be responsible for administering bond floats.