In the Master Development Agreement (MDA), both the City and Catellus have committed to fund the cost of constructing the Mueller Master Plan and each will realize financial gains from the successful redevelopment of Mueller.
At the beginning of the project, Catellus will mostly use its own money to finance early infrastructure construction. The City will defer its land-sale proceeds and issue debt that is supported by project-generated tax revenues for the first few years of the development, providing “seed money” that can help finance the costly infrastructure improvements.
Once land sales begin, the proceeds from those sales will be used to repay Catellus’ previous infrastructure investments and future infrastructure costs. The City may issue more tax-based financing later in the project if the land-sale proceeds are not sufficient to cover the various costs of redevelopment.
All public financing for Mueller will be repaid out of sales taxes and property taxes generated by development at Mueller. City General Fund dollars are NOT committed to any expenditures for the Mueller redevelopment costs.
At the end of the redevelopment, after all costs and land-sale proceeds are known, there will be a final accounting, and Catellus will realize its investment returns through the money generated by land sales. While the City may also share in land-sale proceeds, the City’s primary source of financial gain will be the ongoing property and sales tax revenues generated by the project.