A deal was struck yesterday that will avoid litigation by downtown property owners that potentially could have stalled construction of the Transbay Terminal over a hike in Mello-Roos taxation based on an increase in underlying property values.
Wait, what the heck did any of that mean? Let's back up and make that comprehensible.
There's a Transbay Transit Center under construction at First and Mission that will include a new Cal train stop. The developers of buildings near there will benefit from increased property values because of the transportation hub. The city wants to set up something called the Transbay Transit Community Benefits District, a legal structure that allows them to tax those developers and use the money to help build the Transit Center. In exchange, the developers are allowed to build significantly taller buildings than would have been otherwise allowed. All sounds good, so far, right?
Except that leading up to yesterday's Board of Supervisors meeting, some of those developers accused the city of planning to charge them more than had been originally agreed to. City officials responded by saying that as property values increased, the taxes owed would be as well—even though the rate hadn't change. The developers threatened to sue. The progosphere—rightly—sounded an alarm.
So what happened? More or less, the city won. There won't be a lawsuit. The taxes will remain the same—as estimated $1.4 billion in total. The amount of time the developers will have to pay them over will stretch from 30 to 37 years (which, thanks to theory of the present value of money means its a small win for the developers). And we all still get the Transit Center and this awesome park. The Board agreed to delay its vote by two weeks so that the new details could be worked on.
Yay? Yes probably, yay. As Supervisor Scott Wiener was quoted in the Bay Guardian today, "It's not even a compromise. The phrase I used was, 'this is too good to be true.'" There you go. See you in two weeks.