Anaheim OKs Special Taxes for Two Areas

Thousands of future Anaheim homeowners were slapped with special taxes Tuesday night to pay for more than $21 million in road improvements, a park and a new police station to be built in the eastern part of the city.

On a 4-0 vote, with one abstention, the City Council created two special tax areas called Mello-Roos districts, the first of their kind in Anaheim. The lawmakers postponed a vote, however, on a final list of road projects to be built in a third such proposed district. That district, for a development called the Summit, is expected to be created by a City Council vote in late March.

No one yet lives in the three planned communities--Sycamore Canyon, the Highlands and the Summit--but lot grading for the 5,500 new homes and condominiums has already begun. The special tax will be imposed as a supplemental property tax on homeowners in the upscale communities after they move in.

For example, the owner of a $300,000 home in the Sycamore Canyon Mello-Roos District will pay an extra $1,277 in annual property taxes, according to city officials.

The special taxes were requested by the communities’ developers. Previously the developers--Woodcrest Development, Presley of Southern California and the Baldwin Building Co.--had agreed to city conditions that they would build certain roads and provide other area improvements as a condition for housing construction.

Councilwoman Miriam Kaywood, who abstained in the vote Tuesday, said last week: “This is very disturbing to me. We had development agreements reached last year on the three ranches and they had well over 100 conditions. They had agreed to a number of things very willingly, perhaps because Measure A (the countywide slow-growth initiative) was pending. Then they got all excited about Mello-Roos.”

Mello-Roos districts were made possible by a state law passed in 1982. Anaheim is only the second city in north Orange County to establish one, the first having been created by Yorba Linda in 1987 as a back-up financing tool for a road bridge. But such special tax districts have become increasingly common in the undeveloped south county area.

The County Board of Supervisors has used Mello-Roos districts to pay for new roads, libraries, fire stations and other public construction. Mello-Roos was the central financing device for the Foothill Circulation Phasing Plan that will generate $240 million from developers for a network of new roads east of Mission Viejo.

The bill to allow the creation of such districts was jointly sponsored by Sen. Henry Mello (D-Watsonville) and Assemblyman Mike Roos (D-Los Angeles). Its passage created a novel way for special taxing districts to be formed to get around Proposition 13, the 1978 measure that slashed local governments’ ability to raise money through property taxes.

Proposition 13 rolled back property tax rates and required a two-thirds vote of a community before any new tax could be imposed.

Under Mello-Roos, only the concurrence of the developer or property owner is necessary to impose the additional tax after a local government creates a Community Facilities District on undeveloped land.

Money from Anaheim’s Mello-Roos Community Facilities districts will pay for a new police substation in the eastern Anaheim Hills area, provide a new park in Deer Canyon and a storm drain, extend Serrano Avenue to Weir Canyon Road, widen Santa Ana Canyon Road and subsidize part of the ongoing costs of area police and fire services.

City Will Sell Bonds

Under the plan approved Tuesday night, the city will now sell bonds to pay for the improvements. The bonds will then be repaid over a 25-year period by homeowners in the Mello-Roos districts, said Gregory Trombley, administrative services coordinator for the city’s public works and engineering department.

As part of its agreement with the developers, the city required that first-time home buyers in the districts be warned of the additional property taxes they will be paying, Trombley said.

Each development will have a different tax rate, all above the prevailing annual property tax rate of 1.05% for nearby communities already built, according to a city report. In Sycamore Canyon it will be 1.48%, for the Highlands 1.46%. And if the Mello-Roos district is approved for the Summit, the rate there will be 1.34%.

According to city building permits, more than 50 of Sycamore Canyon’s final 1,100 homes should be constructed by this summer. More than 100 of the Highlands’ 2,000 homes should be built by that time. The Summit development, with more than 2,000 homes planned, probably won’t have any structures until the summer of 1990.

Estimated prices for the most expensive homes in the developments range from a low of $328,000 in Sycamore Canyon to a high of $434,500 for the Summit, according to city figures.