Property taxes are the City’s main revenue source at just over 50% of all General Fund revenues. While the basic overall property tax rate in the City is 1% of assessed value, the percentage of what the City receives of that overall rate varies throughout the City. For the former mall site, the City receives 9% of the 1%. For example, if the mall is currently assessed at $100M, the total property taxes paid by MGP would be $1M. Of that amount, the City would get 9%, or $90,000. If after redevelopment, the site was assessed at $500M, the City would get $450,000 annually. The City will also benefit from on-going revenues from the redevelopment of the project such as sales taxes and transient occupancy taxes. MGP will also pay one-time revenues to the City in the form of traffic impact fees, park development fees, development application fees, and building permit fees. The amount of on-going revenue to the City from MGP’s project is unknown at this time; however, the City will be commissioning the preparation of a fiscal impact study to evaluate costs and revenues to the city as a result of the potential development of the project. The study will evaluate the costs of providing all municipal services. The study will be made available for public review.
March 2021 Update: The Fiscal Impact Study prepared by the City for the project has identified a net positive affect on the City budget. A summary of the report’s findings are as follows:
Annual general fund revenues of $2.99 million:
a. Includes $1 million in property tax, over $1 million in direct and indirect sales tax, and $670k in hotel / transient occupancy tax.
b. Compares favorably to the declining sales tax from the original mall (see update to FAQ 12)
c. Tax revenue can be used for improved County Sheriff services.
d. After accounting for projected increased City expenses (~$1.69 million), the project will generate an annual net fiscal surplus of $1.3 million at buildout to the City.
A full copy of the fiscal impact analysis is available at: https://www.lagunahillsca.gov/176/Planning-Projects-New-Developments under “Village at Laguna Hills”.