Monday, June 21, 2010
Rubicon’s Financial Strategy for AuthentiCity
Below's a funding outline for the proposed AuthentiCity and Boqueria California Plan.
By summarizing Rubicon’s project into two financial columns (equity & public funding) the city staff oversimplified Rubicon’s funding strategy. This led the city staff unfortunately to inaccurately represent what Rubicon’s ‘Financial Ask’ of the City is. Rubicon is not asking for $100 M in City funding. In fact, Rubicon’s 700 Block-Only proposal uses half the City Funding that the city staff’s committee recommendation uses to achieve the Same Size project in the Same Time frame.
Rubicon knows the City has but $80M remaining for redevelopment on K Street: $40M of land value (the purchase price of the 700/800 land), $20M of available funds, and $20M of MOPA Funds (ear-marked for David Taylor). Rubicon’s approach is to conservatively leverage this $60M City Investment to create as many jobs, residential units, unique trips, sales tax and real estate tax dollars as possible.
This is not so different than when someone has $20,000 and wants to buy a house. She can buy a smaller house that will cost her $20,000 or the house that is a better fit for $80,000. In order to buy the larger house she leverages (adds additional resources) to the $20,000 to accumulate the $80,000 necessary to buy the larger house. In other words she leverages her available funds to get more.
Rubicon proposes safely leveraging the City’s resources so the City gets more without putting the City at financial risk by using methods the City itself is exploring on other projects and in other parts of town.
If one looks closer at Rubicon’s financing there are basically three categories of funding: Existing Public Funds, New Project Funds, and the Reinvestment of Project Generated Funds.
-The Existing Public Funds consist of the City’s available funds (described above).
-The New Project Funds consists of Rubicon’s Equity and Debt (Rubicon is investing more equity than the staff committee’s recommended project) and not City but Private, State, Federal and Parking funds. The Boqueria California is a perfect example of this. By partnering the City’s land with the State’s Food and Agriculture Industry its possible to create a Civic Amenity that draws potential visitors from through out the region, bringing tax dollars into the downtown without cannibalizing from other parts of Sacramento such as Midtown or the R St Corridor. Another way of saying this is Rubicon is leveraging the Land to attract an investment from the $40Billion/yr Food & Agriculture Industry and create something that otherwise could not be possible.
-Reinvestment of Project Generated Funds consists of funds created by the project that would not exist without the project. These are reinvested into the project.
Because its difficult to summarize Rubicon’s entire proposal into a few paragraphs, let’s compare Rubicon’s 700 Block-Only proposal side by side with the staff committee’s recommendation on all three blocks.
With Rubicon’s proposal Sacramento gets the Same Size project, in the Same Time frame, at Half The Cost and still reserves the opportunity to do something special on the 800 Blocks and still has the $20M of MOPA funds for future reinvestment. (click here for detailed comparison and background data)
SACRAMENTO GETS MORE w/ LESS IN RUBICON’S PROPOSAL.
Please email the City Council in support of this proposal.