Irvine’s city council members tonight will vote to consider whether to establish a new tax district in the Orange County Great Park, pushing the total amount of potential bonds to over one billion dollars if approved by the council.
The special tax districts allow the city to place a Mello-Roos tax on the homes there that is used to pay for the development of infrastructure in that neighborhood and to help finance the construction of the Great Park.
Homeowners have little control over where the money goes, and often don’t realize that their tax dollars are going to fund the development of Orange County’s largest civic construction project.
While special tax districts like this are common in Irvine, the Great Park’s taxes are higher than most of the surrounding area and are set up to not expire once development is complete. The rates are reduced once all the bonds are paid back, but will be used to fund park maintenance for around $37 million every year according to city records.
The city of Irvine has received $93 million from special taxes on the Great Park in the last five years and is set to receive an additional $30 million by June 2020 according to city records. Currently, the council has approved over $280 million in bonds, with a ceiling of $999 million in bonds.
The new tax district will cover approximately 120 acres and hold $155 million in new bonds, raising the ceiling to over $1.1 billion. The cost per home will stretch from almost $3,800 to just under $21,200. The $3,800 statistic is for a home less than 800 square feet.
The bonds issued in the Great Park also end up routinely costing twice the original cost of the bond. While $280 million in bonds were issued, the final cost will be over half a billion dollars without any further bonds according to city records.
The homeowners are given a disclosure before they purchase the homes that explains the cost of the special taxes and where the money can be spent, but the documents provided by developers and reviewed by Voice of OC reporters never explicitly state that the money will go towards the Great Park.
When asked about the disclosures, Mayor Christina Shea said it was the homeowner’s responsibility to understand what they were signing, and that the process of approval for the Great Park has been carried out publicly for years.
“It’s their responsibility to know or they shouldn’t be buying a home,” Shea said. “The community has every right to come out and question disclosures when they purchase homes. We’re not directly involved in those disclosures once the homes are approved.”
Voice of OC reporters spoke with residents in the Great Park, who said that while they understood they were taking on additional taxes, they didn’t know that most of those funds would go towards the Great Park.
Councilman Anthony Kuo said that the establishment of the new district was “business as usual and part of what’s happening in every neighborhood.”
“In every other neighborhood, neighborhoods have neighborhood parks and community parks. The Great Park Neighborhoods have no community parks, the OC Great Park is their community park, so they’re receiving the benefit of having the park they could walk to,” Kuo said. “They’re not spending more than the average homeowner.”
However, an analysis by Voice of OC showed that homes with the same assessed value outside the Great Park often paid several thousand dollars less in special taxes than homes in the Great Park according to records from the OC Tax Assessor’s office.
Councilmembers Melissa Fox, Mike Carroll and Farrah Khan did not respond to requests for comment.
At a council meeting in January where the public forum was scheduled, Shea clarified how the bonds are repaid and that the debt is not held by the city.
“We’re not holding the debt for the developer, it gets passed off to the homeowners,” Shea said. “This is a standard process that’s gone on the 20 some years I’ve been here. We facilitate the bonds, but it’s not on our books or anything.”
If approved by the council, the special taxes and potential bonds would go into effect after a second reading on Mar. 24.