DIVISION 7. Downtown Revitalization and Economic Recovery Financing Districts
62400.
For purposes of this part:(a) “Board of Supervisors” means the Board of Supervisors of the City and County of San Francisco.
(a)
(b) “Designated official” means the appropriate official designated pursuant to Section 62405.
(b)
(c) “District board” means the governing board of the downtown revitalization and economic recovery financing district.
(c)
(d) (1) “Downtown revitalization and economic recovery financing district” or “district” means a legally constituted governmental entity separate and distinct from the local government that established it pursuant to this division
the City and County of San Francisco for the sole purpose of financing office-to-residential conversion projects or other projects of communitywide significance that support downtown revitalization and economic recovery as authorized by this division. A downtown revitalization and economic recovery financing district is a local agency for purposes of Chapter 9 (commencing with Section 54950).
(2) A downtown revitalization and economic recovery financing district shall be deemed a district within the meaning of Section 1 of Article XIII A of the California Constitution.
(d)
(e) “Downtown revitalization financing plan” means an adopted financing plan prepared pursuant to Section 62406.
(e)“Legislative body” means the city council or board of supervisors.
(f)“Local government” means a city, county, or city and county, whether general law or chartered.
(f) “Lower income households” has the same meaning as defined in Section 50079.5 of the Health and Safety Code.
(g) “Moderate-income households” means households of persons and families of moderate income, as defined in Section 50093 of the Health and Safety Code.
(g)
(h) “Office-to-residential conversion project” means a housing development project that converts an existing qualifying commercial office building to market rate or affordable housing by either reuse of the existing commercial office building or by replacing the commercial office building with a new residential building.
(h)
(i) “Opted-in taxable property” means the property of an office-to-residential conversion project that has opted in to receive incremental tax revenue pursuant to Section 62409.
(i)
(j) “Qualifying commercial office building” means a commercial office building identified in the downtown revitalization financing plan pursuant to subdivision (d) of Section 62406.
(k) “San Francisco” means the City and County of San Francisco.
(l) “Very low income households” has the same meaning as defined in Section 50105 of the Health and Safety Code.
62401.
A legislative body of a local government The Board of Supervisors of the City and County of San Francisco may establish one or more proposed a downtown revitalization and economic recovery financing district pursuant to this division. Proceedings for the establishment of a district shall be instituted by the adoption of a resolution of intention to establish the proposed district and shall do all of the
following:(a) (1) State that a district is proposed to be established under the terms of this division and describe the boundaries of the proposed district, which may be accomplished by reference to a map on file in the office of the clerk of the city or in the office of the recorder of the county, as applicable. county. The map may identify, within a the district, certain areas which shall be referred to as “project
areas.”
(2) The boundary of a boundaries of the district shall satisfy both of the following criteria at the time the resolution of intention is adopted: be contiguous with the boundaries of the City and County of San Francisco.
(A)At least 50 percent of the built area in the geographic boundaries of the district shall be used as commercial office space.
(B)The commercial office building vacancy rate shall be 20 percent or greater.
(b) State the need for the district and the goals the district proposes to achieve.
(c) State that incremental property tax revenue from the local government within the district San Francisco will be used to finance these activities.
(d) Fix a time and place for a public hearing on the proposal.
62402.
(a) (1) The district board’s membership shall consist of three members of the legislative body of the local government, Board of Supervisors, and two members of the public chosen by the legislative body. The legislative body Board of Supervisors. The Board of Supervisors may appoint one of its members to be an alternate member of the legislative body
district board who may serve and vote in place of a member who is absent or disqualifies themselves from participating in a meeting of the authority. district. The appointment of the public members shall be subject to the provisions of Sections 54970 and 54972.(2) For purposes of this subdivision, “legislative body” may include a directly elected mayor of a charter city or charter city and county who is not a member of the city or city and county’s legislative
body under the city or city and county’s adopted charter. mayor.
(b) The legislative body Board of Supervisors shall ensure the district board is established at the same time that it adopts a resolution of intention pursuant to Section 62401.
(c) Members of the district board established pursuant to this chapter shall not receive compensation but may receive reimbursement for actual and necessary expenses incurred in the performance of
official duties pursuant to Article 2.3 (commencing with Section 53232) of Chapter 2.
(d) Members of the district board are subject to Article 2.4 (commencing with Section 53234) of Chapter 2.
(e) The district board created pursuant to this chapter shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)), the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
62403.
(a) (1)The purpose of a the district is to finance office-to-residential conversion projects with incremental tax revenues generated by office-to-residential conversion projects within the district.(b) Incremental tax revenues generated by office-to-residential conversion projects within the district shall be allocated to, and when
collected shall be paid into a special fund of, the district for all lawful purposes described in this section.
(c) The district shall finance only office to residential office-to-residential development projects that the district determines are of communitywide significance and that provide significant benefits to the district or the surrounding community. San Francisco.
(d) The district shall ensure that incremental tax revenues allocated to the
district are limited to those revenues described in Section 62407 that are generated through office-to-residential conversion projects within the district that have opted in pursuant to Section 62409.
(e) The district shall ensure that the requirements of this division are met every 10 years.
62404.
The creation of a the district and the adoption of a downtown revitalization financing plan pursuant to this division shall not be deemed a “project” for purposes of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).62405.
After adopting the resolution pursuant to Section 62401, the legislative body Board of Supervisors shall send a copy of the resolution to the district board. The district board shall designate and direct the appropriate local government official to prepare a downtown revitalization financing plan pursuant to Section 62406.62406.
After receipt of a copy of the resolution of intention to establish a the district, the official designated pursuant to Section 62405 shall prepare a proposed financing plan. The financing plan shall be consistent with the general plan, and specific plan, if applicable, of the local government within which the district is located general plan and applicable specific plans of San Francisco, and shall
include all of the following:(a) A map and legal description of the proposed district, which may include all or a portion of the district designated by the legislative body Board of Supervisors in its resolution of intention.
(b) A description of the potential office-to-residential conversion projects and other forms of development that is that are proposed in the area of the district, including those to be provided by the private sector,
those to be provided by governmental entities without assistance under this division, those public improvements and facilities to be financed with assistance from the proposed district, and those to be provided jointly. An office-to-residential conversion project may be mixed use, but at least two-thirds of the square footage of the office-residential conversion shall be designated for residential use. Mixed-use developments shall be limited to residential and commercial uses.
(c) A requirement that if nonresidential development is included in the development pursuant to subdivision (b), at least 25 percent of the total planned
units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy.
(d) (1) A requirement that an opted-in taxable property shall not receive a property tax allocation unless it meets one of the following:
(A) At least 5 percent of total units for rent are affordable to very low income households or the local inclusionary requirement, whichever is higher, for a minimum of 55 years.
(B) At least 10 percent of total units for rent are affordable to lower income households or the local inclusionary requirement, whichever is higher, for a minimum of 55 years.
(C) At least 10 percent of total units for sale are affordable to households of moderate income or the local inclusionary requirement, whichever is higher, for a minimum of 45 years.
(2) The affordability requirements established pursuant to this subdivision shall not apply to the first 3,000,000 square feet of opted-in office-to-residential conversion projects.
(c)
(e) A finding that the potential office-to-residential conversion projects and financial assistance are of communitywide significance
and provide significant benefits to an area larger than the area of the district.
(d)
(f) Identification of each existing commercial office building within the district that is eligible for conversion to residential use and that may opt in to receive incremental tax revenue pursuant to this division.
(e)
(g) A requirement that the incremental tax revenues generated by each individual office-to-residential conversion project within the district pursuant to this division
be allocated back to that project for the purpose of financing the debt service of the project. Each individual office-to-residential conversion project shall receive an annual allocation on a pay-go basis in the amount equal to the amount of incremental tax revenues generated by the project for a maximum of 30 years or until the district ceases to exist. exist, whichever occurs first.
(h) A requirement that the first allocation of incremental tax revenue to an office-to-residential conversion project
pursuant to subdivision (g) commence with the fiscal year that begins after the project is issued a certificate of occupancy.
(i) A requirement that if an opted-in taxable property is sold or otherwise transferred to a new property owner, the allocation described in subdivision (g) shall also be transferred to the new property owner.
(f)
(j) A requirement that any incremental tax revenues remaining after the allocation of revenues pursuant to subdivision (e)
(g) be allocated to uses supporting downtown revitalization. Once the allocation of revenues has ceased, the tax increment shall be allocated to, and, when collected, shall be apportioned to, San Francisco.
(g)
(k) A requirement that local administrative costs to implement this section do not exceed 5 percent of the tax revenues allocated pursuant to the section.
(h)
(l) A financing section, which shall contain all of the following information:
(1) A specification of the maximum portion of the incremental tax revenue of the local government San Francisco proposed to be committed to the district for each year during which the district will receive incremental tax revenue. The portion need not be the same for all affected taxing entities. The portion may change over time.
(2) A projection of the amount of tax revenues expected to be received by the district in each year during which the district will receive tax revenues.
(3) A limit on the total number of dollars of taxes that may be allocated to the district pursuant to the plan.
(4) Either of the following:
(A) A date on which the district will cease to exist, by which time all tax allocations to the district will end. The date shall not be more than 45 years from the date on which the district allocates funding to the first office-to-residential conversion project within the district.
(B) If the district is divided into project areas, a date on which the
downtown revitalization financing plan will cease to be in effect and all tax allocations to the district will end and a date on which the district’s authority to pay incremental tax revenues received under this division will end, not to exceed 45 years from the date the district or the applicable project area has actually received one hundred thousand dollars ($100,000) in annual incremental tax revenues under this division. After the time limits established under this subparagraph, a district or project area shall not receive incremental tax revenues under this division. If the district is divided into project areas, a separate and unique time limit shall be applicable to each project area that does not exceed 45 years from the date the district has actually received one hundred thousand dollars ($100,000) in incremental tax revenues under this division from that project area.
(5) An analysis of the costs to the local government San Francisco of providing facilities and services to the area of the district while the area is being developed and after the area is developed. The plan shall also include an analysis of the tax, fee, charge, and other revenues expected to be received by the local government San Francisco as a result of expected development in the area of the district.
(6) An analysis of the projected fiscal impact of the
district and the associated development upon the local government. San Francisco.
(i)
(m) If any residential dwelling units within the territory of the district are proposed to be removed or demolished in the course of an office-to-residential conversion project within the area of the district, a plan providing for replacement of those units and relocation of those persons or families consistent with the requirements of
Article 2 (commencing with Section 66300.5) of Chapter 12.
(j)
(n) The goals the district proposes to achieve for each project financed pursuant to this division.
62407.
(a) A downtown revitalization financing plan shall contain a provision that taxes, if any, levied upon opted-in taxable property in the area included within the downtown financing district each year by or for the benefit of the State of California, or the local government, San Francisco, shall be divided, subject to the provisions of Section 53993, as follows:(1) That portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for the local government
San Francisco upon the total sum of the assessed value of all of the opted-in taxable property in the district, as established pursuant to subdivision (b) of Section 62409, shall be allocated to, and when collected shall be paid to, the local government San Francisco as taxes on all other property are paid.
(2) That portion of the levied taxes each year specified in the adopted downtown revitalization financing plan for the local government San Francisco in
excess of the amount specified in paragraph (1) shall be allocated to, and when collected shall be paid into a special fund of, the district for all lawful purposes of the district. Unless and until the total assessed valuation of the opted-in taxable property in a district exceeds the total assessed value of the opted-in taxable property in the district as shown by the last equalized assessment rolls referred to in paragraph (1), all of the taxes levied and collected upon the opted-in taxable property in the district shall be paid to the local government. San Francisco. When the district ceases to exist pursuant to the adopted downtown revitalization financing plan, all moneys thereafter received from taxes upon the opted-in
taxable property in the district shall be allocated to, and, when collected, shall be apportioned to, the local government. San Francisco.
(b) Notwithstanding subdivision (a), where any district boundaries overlap with the boundaries of any former redevelopment project area, any debt or obligation of the district shall be subordinate to any and all enforceable obligations of the former redevelopment agency, as approved by the Oversight Board and the Department of Finance. For the purposes of this chapter, the division of taxes allocated to the district pursuant to subdivision (a) shall not include any taxes required to be deposited by the county auditor-controller
into the Redevelopment Property Tax Trust Fund created pursuant to subdivision (b) of Section 34170.5 of the Health and Safety Code.
(b)
(c) (1) That portion of any ad valorem property tax revenue annually allocated to a local government San Francisco pursuant to Section 97.70 of the Revenue and Taxation Code that is specified in the adopted downtown revitalization financing plan for the local government,
San Francisco, and that corresponds to the increase in the assessed valuation of taxable property shall be allocated to, and, when collected, shall be apportioned to, a special fund of the district for all lawful purposes of the district.
(2) When the district ceases to exist pursuant to the adopted downtown revitalization financing plan, the revenues described in this subdivision shall be allocated to, and, when collected, shall be apportioned to, the respective local government. San Francisco.
(d) The
downtown revitalization financing plan shall not divide revenues that are allocated to other taxing agencies that are not part of San Francisco.
62408.
The district board shall consider adoption of the downtown revitalization financing plan at a single public hearing.62409.
(a) (1) After the adoption of the downtown revitalization financing plan, the district shall establish a process for eligible office-to-residential conversion projects identified pursuant to subdivision (d) of Section 62406 to opt into receiving incremental tax revenue pursuant to this division. A district shall establish a process to reconsider the amount of incremental tax revenue to be allocated to a project if there is a change in use or the square footage of office space converted to housing planned to be built.(2) An eligible office-to-residential conversion project may opt in
to receive incremental tax revenue pursuant to this division at any time before the project is issued the first building permit for the project.
(3) An office-to-residential conversion project shall not be eligible to opt in to receive incremental tax revenue pursuant to this division after December 31, 2032.
(b) For purposes of paragraph (1) of subdivision (a) of Section 62407, after an office-to-residential conversion project opts in to receive incremental tax revenue, the district shall establish the base assessed value for the applicable property, as shown upon the assessment roll used in connection with the property by the local government,
San Francisco, last equalized prior to the first building permit being issued as a part of the conversion of the office-to-residential conversion project.
(c) An eligible office-to-residential conversion project that opts in to receive incremental tax revenue pursuant to subdivision (a) shall comply with the labor standards established in Section 62410.
62410.
It is the intent of the Legislature to subsequently amend this section to establish labor protections applicable to office-to-residential conversion projects that opt in to receive incremental tax revenue pursuant to Section 62409.62411.
All costs incurred by a county San Francisco in connection with the division of taxes pursuant to this division for a the district shall be paid by that the district.62412.
(a) If San Francisco establishes a district pursuant to this division, it shall develop and submit an annual report to the relevant committees of the Legislature regarding the office-to-residential conversion projects financed by the district.(b) The reports submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795.