City, county approve tax-sharing deal key to growth near UC Merced
Merced County and the city of Merced officially have a revenue-sharing agreement, paving the way for development near UC Merced as the campus moves forward with plans to double its size and capacity.
During its meeting Tuesday, the Merced County Board of Supervisors unanimously approved the contentious tax-sharing deal with the city and heard from the university’s chancellor on the details of the construction plan, known as the 2020 Project, set to be complete in four years.
The board vote was the final approval needed for the deal after the Merced City Council unanimously approved the agreement Monday night.
Board Chairman Hub Walsh noted that part of negotiating deals like this means making sacrifices, but he congratulated County Executive Officer Jim Brown, Merced City Manager Steve Carrigan and their staff for reaching agreement.
“I want to congratulate both parties in getting a deal,” Walsh said. “This is one of those things where no entity gets their costs fully covered. So we kind of have a sharing process. I appreciate you looking at the out-of-the-box compromising.”
The two entities have been discussing a new revenue-sharing agreement for about 10 years, during which the county has seen three CEOs and the city’s gone through three city managers. The previous agreement ended in 2014.
At one point in the negotiations earlier this year, the Merced City Council voted to hire a third-party mediator since the city and county couldn’t work out a deal. Carrigan published an editorial in the Sun-Star accusing Brown and the county of standing in the way of a deal. The comments eventually sparked a new round of negotiations without the mediator, which led to the method approved on Tuesday.
County officials view the deal as somewhat risky since it divvies up the money using a nontraditional concept. The city will receive all of the fire fund and general fund property taxes. Money that must go to the state for education is deducted before the city reimburses the county for its services, a method that provides more money to the city and county. The deal sends 53 percent of the revenue to the city and 47 percent to the county overall.
Both supervisors Jerry O’Banion and Deidre Kelsey expressed trepidation about how the state will respond to the agreement.
“Sticking your necks out sometimes works,” Kelsey said. “And sometimes it doesn’t.”
A revenue-sharing agreement is necessary for the city to annex land for development in the Bellevue Corridor near UC Merced. Merced city leaders have said developers are knocking at the door to build on land near the campus.
The deal includes a backstop in case the state rejects the method, a requirement requested by O’Banion, as well as an agriculture mitigation agreement for land converted to urban development, a request from Kelsey.
“We understand these issues are not easy. They are complicated,” Brown said. “Trying to achieve a balance that provides opportunities for individual cities to grow, as well as fund services that are provided to all county residents, while also trying to protect agriculture where most of the property tax dollars come from, is very challenging.”
Carrigan has only worked in Merced since January but said he may already have been part of the most important deal he’ll see in his time in town.
“This will probably be the biggest thing I work on as the city manager,” he said Monday at the council meeting.
What does this mean? “It means now we can build,” he said.
UC Merced 2020 Project
Before the Board of Supervisors voted on the revenue-sharing deal, UC Merced Chancellor Dorothy Leland gave a presentation to the board on the university’s 2020 Project, which will double the university’s size by 2020 to grow enrollment to 10,000 students.
“The last time I was here, this project was just a dream,” Leland told the board. “Now it’s rapidly becoming a reality.”
The project will add 1.2 million gross square feet to the campus, 1,700 new beds for on-campus housing and 1,500 new parking spaces with a $1.3 billion budget for design and construction.
Additions to the campus will include more student housing, a conference center, tennis and basketball courts, a competition swimming pool, mixed-use buildings for student housing and classrooms, labs and a dining hall.
Two factors that proved to be tricky in making additions to the campus while keeping a unified feel were the canal that splits the campus and Little Lake. Under the new design, Little Lake will become the new heart of the campus, Leland said, and a new entrance will be on Bellevue Road.
The university’s development partner in the project is headed up by the Plenary Group, and Webcor Builders is the lead contractor.
Part of the construction plan includes using small businesses from the San Joaquin Valley for 30 percent of the workers in the first phases of the project. In later stages, planners look to have 60 percent of the workforce come from graduates of local apprenticeship programs.
“This is not just about UC Merced,” Leland said. “It’s about the wonderful communities that have always been there with us and the impact that this campus can have on the well-being of the community.”
Leland said the project’s economic impact on the community will be about $1.9 billion in terms of jobs.
Walsh, who said he served on the original committee that persuaded the UC Regents to bring the university to Merced, said he was pleased to hear the update on the project. Walsh also was Merced’s mayor when the new campus opened.
“It’s great to see this happening,” he said.
This story was originally published August 16, 2016 at 5:20 PM with the headline "City, county approve tax-sharing deal key to growth near UC Merced."