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Board endorses Mission Rock special-tax bonds to fund Phase 1 infrastructure
Summary
The committee recommended the issuance of up to $43.3 million in special-tax Community Facilities District bonds to fund Mission Rock horizontal infrastructure (streets, sewers, park) for Phase 1; the financing structure relies on developer prepayments, port land value and CFD/IFD tax increment.
The Budget and Finance Committee on Dec. 2 recommended the Board of Supervisors approve two related resolutions to support infrastructure financing at Mission Rock: a revised pledge agreement for an infrastructure financing district (IFD) and authorization for special-tax Community Facilities District (CFD) bonds up to $43.3 million.
Wyatt Donnelly Landolt, presenting for the Port and project team, said the bonds will fund the Phase 1 "horizontal" infrastructure — roads, sewers and China Basin Park expansions — needed before vertical development. He said the special-tax district and a port/land-value component, together with developer prepaid ground leases, form the project's financing stack.
The CFD's development tax is designated to secure these bonds; the Port's appraisal of the CFD produced a valuation that permits the requested bond sizing while maintaining the city's conservative 3:1 value-to-lien policy. Donnelly reported an estimated true-interest cost of about 4.68% and a bond maturity schedule through 2050; the bond proceeds were sized to produce roughly $39.8 million for infrastructure with estimated total debt service just over $88 million across the 30-year term.
The committee's budget analyst recommended approval because the financing is consistent with prior board policy and prior actions that created the CFD and IFD for Mission Rock. Committee members voted to recommend the two resolutions to the full board by roll call (Supervisors Walton and Mandelmann and Chair Feuer voted aye).
What happens next: the Port and the project team will proceed with the preliminary official statement and final sale process; the Port and city will monitor risk factors (development-stage, nonrated debt) while moving to fund and construct the Phase 1 infrastructure over the next two to three years.
