City on Path for More Developer Subsidies. Who Pays?

The City of Signal Hill is on the path to use the city’s own revenues to help developers with commercial projects. In April the City Council, in a unanimous vote, approved the Economic Development Assistance Program. Developers with plans to build commercial projects in Signal Hill now know that the City is ready to deal.

The City Council can raise revenue through new taxes or increase existing taxes like sales and property taxes, establish fees through property assessments, or increase charges for city services. Just like the former redevelopment agency, the city also can buy, sell, exchange, lease or rent property. Eminent domain is limited to non-residential property. Anything the redevelopment agency could do to finance commercial projects, the city can do on its own.

The revenue can be used to buy property, clean it up, and sell it at a discount. Or, new revenue could be used to strengthen the general fund so a sales or property tax rebate can go to a developer. There are several ways to provide subsidies.

The Assistance Program is city-wide.

Signal Hill Community First asked the City Council to hold community workshops to explain the new program before approving it. But, the Council disregarded Community First’s suggestion and moved rapidly to approve it.

Signal Hill residents should be informed about the City’s intent to go into the economic development business on its own. Drawing on revenue that goes into the general fund (which funds police, public works and community services) needs to be explained to the community. Also, the community ought to be informed so as to better understand how the developer subsidies might effect them.

State law requires most of the revenue raising methods to go to a vote of registered voters or property owners. But, there are important exceptions; and, Signal Hill taxpayers, residents and businesses deserve to be informed in order to protect or advance their own interests. At a minimum, being informed allows people to let the council know how they feel about the direction the city is moving.