Plan to finance AES purchase moves forward
The City of Redondo Beach has approved a plan to create a tax financing district that would allow it to purchase all or part of the AES power plant land, pictured. File photo
The Redondo Beach City Council has taken its next step toward the city’s plan to redevelop the AES power plant site, authorizing staff to set the framework for a tax financing district that would help purchase all or part of the site.
This follows last November’s joint press conference, when the City announced its plan to purchase the site, with the support of Los Angeles County Supervisor Janice Hahn and Assemblyman Al Muratsuchi.
“We’ve been working on this for almost a year, and I feel like we’re at a real turning point in terms of what can potentially happen with that AES power plant site,” Councilman Christian Horvath said. “We’ve got a real chance for once to do something extremely generative that could affect this area for centuries.”
The crux of the city’s plan is the Enhanced Infrastructure Financing District, a mechanism created in 2014 through the passage of SB 628. EFIDs allow for tax increment financing from new development. Essentially, new tax revenue generated off of district land after it is created, can be captured to fund local or regional projects. It’s not an increase in taxes, but a redirection of tax revenue.
The purpose of the district, and those bonds, would be to fund the improvements needed to buy at least a portion of the AES site, potentially to create a regional park.
The AES plant will shut down by 2020, in accordance with state regulations for coastal, water-cooled power plants. Last year’s announcement indicated that the City of Redondo Beach was interested in working as a third party in any agreement between AES and a private developer.
As city real estate consultant Larry Kosmont said in November, Redondo “can’t rely on any one source” of funding.
A key to financing the deal would be the passage of SB 5 in June. SB 5, which is supported by Assemblyman Muratsuchi and based on work from his predecessor, David Hadley, is a $4 billion open space bond measure that includes up to $60 million toward repurposing fossil fuel power plant sites, such as the AES property.
The City’s next step, as approved unanimously by the Council, is to begin discussions and applications for the EIFD with the County, which may be aided by Supervisor Hahn’s support.
“We’ve been working with the County… and they see this as the poster child for this kind of program,” Mayor Bill Brand said. “Right now, they feel whatever they can contribute back to us is an investment for the future for them to build on any tax increment they would get eventually.”