I pointed out in my first post that the Stop Domain Subsidies charter amendment would extend the ban on city subsidies to infrastructure improvements and that, although the charter amendment language includes an exemption for certain infrastructure improvements, "the definition of the latter will leave room for lots of disagreement."
We now learn that these disagreements may extend to Mueller. From the Chronicle:
According to Jim Cousar, an attorney with Thompson & Knight LLP and the city's outside counsel for the Mueller deal, "The real problem with the SDS amendment and Mueller – and I'll say at the outset that I sure don't think this was intended – is that it depends on public financing to build a lot of the infrastructure out there." Under the Mueller Master Development Agreement, Catellus Development Group pays for big infrastructure such as major roads, and the city sells bonds to pay them back, which it pays for with a mixture of property and sales taxes. The city created a tax increment financing district to manage the property tax, but the sales-tax component could create problems. "The property tax is OK with the SDS amendment, because the amendment has an exemption for tax increment finance districts," Cousar said. "The time that Mueller was created, there was no such thing as a sales-tax TIF."
The Chronicle also quotes Brian Rodgers, who said there are adequate exemptions to cover the Mueller development, but the article does not explain what those are.
Catellus, Mueller's master developer, has now issued a statement (pdf) "respectfully" opposing the Stop Domain Subsidies charter amendment:
After careful review of this amendment by legal counsel, it is clear to us that if it passes it will have a negative impact on Mueller. We also feel this charter amendment will make it harder, not easier, for the community, the city and developers to achieve the Mueller model of responsible, successful development with ample community benefits -- such as parks and affordable housing -- that fulfill the spirit of true public/private ventures.
I continue to believe that it is a bad, bad idea to enact a charter amendment that poses such a clear risk of unpredictable, potentially drastic consequences.
