SANTA CRUZ >> At its meeting Tuesday, the Santa Cruz City Council took the initial step to establish an enhanced infrastructure finance district in portions of the city and chose the conceptual design for the future home of the Downtown Santa Cruz Farmers Market.

Following oral communications, mayoral proclamations and the passage of the meeting’s consent agenda, the City Council unanimously approved the second reading of an ordinance that amends the city’s municipal code regarding sidewalk vending.

The City Council then heard a presentation from Economic Development Director Bonnie Lipscomb and a consultant from El Segundo-based Kosmont Cos. about the establishment of an enhanced infrastructure financing district in the city.

“The item before you today is just the initial first step,” said Lipscomb at the meeting. “If you move forward today, it’s the resolution of intention for us to really study and go through the process of creating an infrastructure financing plan. Also today, if you approve, would be to establish the three public members of the City Council that will serve on the public financing authority, which is the legal entity that would oversee the district and it is comprised of three members of the City Council and two members of the public.”

An enhanced infrastructure financing district is a way for a city to use property tax revenue above a certain threshold and within designated areas to finance economic development and public infrastructure projects such as the construction of housing or a new sports arena. As Kosmont Cos. Senior Vice President Joe Dieguez pointed out at the City Council meeting, the district would not create a new tax on property owners in the city.

“It’s a funding and financing tool that’s all about infrastructure,” Dieguez said. “The very first thing I will say and I might even repeat it, is that this tool is not a new tax. It’s very important to understand, it is not a new tax.”

Dieguez explained that the enhanced infrastructure financing district defines a specific boundary in the city and within that boundary, the assessed property value is frozen at a certain threshold. As property values grow over time, the city would be able to use a share of the tax revenue above that threshold for city projects.

“The idea is that as the value grows, within the specific boundary, above the baseline of today’s value, the city is able to take some piece, not all, some piece of its share of the property tax dollars and relegate it in a special fund,” said Dieguez. “And that fund would be specified, restricted, for infrastructure dollars.”

Dieguez also mentioned that the legal entity known as a financing authority would be created to manage the finance district, but before one is established in the city, there would be multiple points of community outreach. Although there is no public voting process associated with the finance district, city residents and property owners within the proposed financial district are able to protest its creation before it is established.

The tentative boundary for the district proposed at the meeting contains about 540 acres of the city or about 5% and includes portions of the downtown, Westside and Beach South of Laurel area, which are seen as “areas of growth.”

Following the presentation, the City Council unanimously voted to declare the intention to establish the Santa Cruz Enhanced Infrastructure Financing District and the Santa Cruz EIFD Public Financing Authority.

The City Council then heard a presentation from Lipscomb about the future plans for the Downtown Santa Cruz Farmers Market. Because the current home of the farmers market will be replaced with a mixed-use building, parking structure and library, the market will be relocated to the city parking lot next to the current Downtown Santa Cruz Library known as Lot 16, when construction begins on the mixed-use project in the coming months.

Once the new library is constructed in a few years, the city plans to demolish the current library to make way for a more permanent home for the farmers market. At the meeting, the City Council was presented with three options, which were developed over time with community members, for what the future location of the farmers market could look like.

Of the three options, the City Council chose to pursue Concept B, which includes a rectangular, mixed-use building that would contain about 19,000 square feet of commercial space and roughly 100 affordable housing units. The concept includes a public plaza that is nearly an acre and could house 84 stalls for market vendors.

The motion to develop Concept B was made by Councilmember Shebreh Kalantari-Johnson, who added direction to ensure that the architecture of the concept should be consistent with the style of Santa Cruz City Hall. The motion passed in a unanimous vote.

To watch the meeting, visit cityofsantacruz.com.