Community Facilities District (CFD)
On May 11, 2010 Council approved moving forward with the formation of a Community Facilities District (CFD) as part of the proposed stadium project. A CFD is a special district that can issue tax-exempt bonds for the planning, design, acquisition, construction, and/or operation of public facilities, as well as provide public services. Special tax assessments levied by the district are used to repay the bonds. A CFD can be formed only if approved by a majority of affected property owners.
This new CFD includes all eight hotel properties in the vicinity of the proposed stadium. These eight hotel property owners voted unanimously to place a special tax on hotel room nights equivalent to a 2% transient occupancy tax (TOT). This special tax will be pledged to finance portions of the publicly owned infrastructure for the proposed stadium project, up to a cap of $35 million (excluding debt service and other financing costs), and the City will be authorized to issue and sell bonds or incur other forms of debt to finance these improvements. The bonds will be secured by and payable solely from the special taxes to be levied on the eight hotel properties within the community facilities district, and will not represent an obligation or debt of the City or the General Fund.
The hotel tax does not take effect until the stadium is opened. If the stadium ballot measure does not pass on June 8, the CFD will be dissolved.