'Economic Development 2.0': California’s Enhanced Infrastructure Financing Districts
Like redevelopment agencies, Enhanced Infrastructure Financing Districts (EIFDs) capture tax increment. But unlike the CRA, they only get contributions from agencies that agree to join up and create an infrastructure-financing plan. In other words: They have to cooperate.
To expert Larry Kosmont, this design marks a shift in California toward a new model of economic development. He tells The Planning Report:
The shift is to an “Economic Development 2.0” model, which is about sustainability, infrastructure, resource management, and interagency cooperation, as opposed to sales tax, retail, and a “one outfit does it all” mentality.
Lawmakers also gave EIFDs new flexibility to combine a variety of funding sources. That opens the door to pursuing multiple benefits; for instance, an EIFD could be eligible for funds from California's cap-and-trade auctions—provided the projects outlined in its plan fulfilled state sustainability goals.
For now, Kosmont notes, early adopters of the EIFD structure tend to be in suburban communities, where often, fewer entities can work together to cover more area. But he predicts the tool will evolve to urban infill, for which it was arguably intended. Already, Los Angeles has considered creating one around the LA River.