This all may be much ado about nothing in the end because it's in everyone's best interest to resolve this dispute quickly and no one really wants a lawsuit but tensions remain high between developers in the Transbay district and the powers that be in City Hall. The issue, as discussed on Tuesday, is the Mello-Roos community facilities district that the Board of Supervisors voted into being this week, and that the developers, in theory, were on board with until recently. The district provides for a tax-assessment structure that will bring in money from the developments getting built, at a rate of 0.55% of assessed land value over 30 years, that will be used to pay for the downtown rail extension from CalTrain to the new Transbay Transit Center as well as parts of the transit center itself. Now the Chronicle delves into some further detail about what's at stake if this deal were, truly, to be dead and everyone decided to go to court for years on end.
Let's be clear on this point: This is a lot of hand-wringing HIGH DRAMA of the sort that local politicos love to get excited about over Mai Tais at Smuggler's Cove, and realistically speaking this is all going to get worked out, probably, without too much fuss and without the city losing out on too much goddamn money. Hopefully.
But here are the takeaways:
- The developers are calling this a bait-and-switch even though they all knew full well that their assessed values had gone up in the last two years, and therefore so did their tax burden.
- The city won't be able to issue the bonds it will need to build the downtown rail extension and finish the transit center if all this stuff gets tied up in lawsuits. And that would be bad.
- There's $1.5 billion in federal and state matching funds at stake if those bonds can't get issued to create the local matching funds.
- There's $200 million at stake that is necessary to finishing the transit center itself.
- TMG Partners CEO Michael Covarrubias, whose company is developing this awesome tower at First and Mission and who sent one of the protest letters to the city this week over this tax deal, was quoted this week as saying, "If there were a God in heaven, we could do one solution to fit all, but that is very challenging, and so rumors of lawsuits abound. We have been doing this for 30 years — 20-plus projects in the city — and we have never threatened to sue the city. It’s a challenge, and needs to get fixed. Hopefully, cooler heads will prevail."
So, there you go.