High-Speed Rail wants to capture taxes, control development around Merced station
AI-generated summary reviewed by our newsroom.
- HSR Authority seeks zoning control over land it owns and within ½ mile of stations.
- City leaders and residents warn of diverted revenue and unclear reinvestment plans.
- Uncertain station site complicates legislation and local planning.
The state agency in charge of California’s high-speed rail project wants control over land-use and tax revenues of the area within a half-mile of its future stations — including the proposed Merced station.
The details of the idea have not been fleshed out, but the California High-Speed Rail Authority says it is seeking to capture the increase in property and sales tax revenues generated in an area by the arrival of a station.
That would mean city and county budgets do not capture those extra property and sales tax dollars, which typically pay for police, fire and other essential public services.
Merced Mayor Matthew Serratto expressed skepticism that the High-Speed Rail Authority’s proposal would succeed.
“It seems like it’s not going to get very far,” said Serratto, and he noted that cities are already “somewhat alarmed by the proposal.”
HSR Authority’s request is met with scrutiny
In its August CEO report, the High-Speed Rail Authority included a request to “empower the Authority with certain regulatory powers, including zoning and land use permitting controls, over land it owns and land within a one-half mile radius of high-speed rail stations.”
It also asked for legislative support to “allow the Authority to capture sales and property tax increment resulting from such development to support station area infrastructure investments.”
In Fresno, the proposal has been met with scrutiny from local officials, because a big part of Fresno’s downtown is within a half-mile of the station location.
Ben Triffo, revenue and tax legislative advocate for the League of California Cities, told The Fresno Bee that the proposal “seeks to unconstitutionally divert sales and property tax away from cities” to pay for things the rail authority should be paying for itself.
Merced councilmember doesn’t trust HSR authorities
Merced City Councilmember Darin DuPont has spoken more bluntly about the proposal than other members of the city government.
“I do not trust the High-Speed Rail Authority one bit,” said DuPont at a council meeting on Jan. 27. He raised the issue of sales and property tax revenue and emphasized the importance of verifying information from the Authority.
DuPont added that he does “not want our citizens to be burdened (and) ... left to maintain infrastructure.”
In a recent interview DuPont said he would not support a proposal that included authorizing the High-Speed Rail Authority to control zoning and collect sales and property tax from the area around a Merced station. He added that the proposal does not clarify how those funds would be used and said he was concerned that revenue from Merced would be used to build other portions of the rail.
“There’s a lot of other questions that need to be answered if they’re going to be collecting that funding,” said DuPont. “... I just don’t feel comfortable that they would be reinvesting it into that half-mile that they’re taking it from.”
Strong Towns Merced citizen group has concerns
Jerry Perezchica is a Merced resident and member of Strong Towns Merced, the local chapter of a national non-profit that seeks to “inspire people to take the future of their neighborhoods, towns and cities into their own hands.”
In Merced, the group aims to ask questions on behalf of the public and perform independent research to corroborate information from the various agencies, according to Perezchica.
He has serious concerns about the proposal and the way it is being discussed.
“I cannot honestly say that (the city councilmembers) understand this fully... It’s only been recently that the city council has actually begun to address this,” said Perezchica.
Perezchica said the proposal to collect tax revenue from the area surrounding a rail station would make the city insolvent, because infrastructure needs would fall on residents to support, “whereas the high-speed rail system would be skimming revenue right off the top.”
“It’s a significant issue,” Perezchica added, “and it’s the responsibility of those elected … to make sure that the conversations are being held at the highest level of detail. Trusting and assuming is not going to put the city on the right track, and one of our concerns is that there is not enough critical thinking going on at the city administration level, nor at the City Council or even the Board of Supervisors level.”
Added uncertainty of Merced station location
In addition to the proposal not being fleshed out, there is an extra level of ambiguity in Merced because the station location is still being discussed.
In January, Peter Whippy, HSRA’s chief of external affairs, asked the Merced City Council to consider a Southeast Merced site rather than the original proposed location in downtown Merced.
At either location, the proposal to empower the rail authority to control land use and capture tax revenue from a half-mile area around the station would have a significant impact on Merced’s development.
Serratto also noted that the current legislation specifically names the downtown location and that a change to the planned station location would require changing the law, regardless of tax revenue and control over land use.
“If it’s downtown, it captures a lot of already, potentially a lot of pre-existing businesses,” said Serratto, though he described the list of legislative changes in the August report as a “wishlist.”
The exact location of the proposed Southeast Merced station has not been confirmed yet, but a representative for the Rail Authority said it would be built “fewer than 4 miles southeast of the downtown location, and generally in the vicinity west of Highway 99 and south of Mission.“
The representative for the HSRA added that, “While it’s too early to speak to a more precise footprint of the proposed station area, we would emphasize that those details for the location under discussion, following the existing alignment, would be identified through the regular planning process with community, stakeholder, and public input.”
