CYPRESS : Special Tax OKd for Housing Project

A special tax has been approved by the City Council for the Sorrento Homes development project.

Under the plan, home buyers in the project will pay as much as $2,500 in additional taxes each year to finance various projects within the development.

More than 670 homes are to be included in the housing tract, formerly known as the “Texaco Tank Farm.” The homes are expected to sell for about $400,000 when the development opens next month, officials said.

According to preliminary figures, developer Cypress Homes Inc. will receive as much as $10 million from the special tax. The money is earmarked for parkway landscaping, streets, traffic signals and other projects.

Under the Mello-Roos tax district that will be created, property owners pay the additional tax along with the standard level of property taxes. Such districts were approved by the state Legislature to counter public funding limitations imposed by Proposition 13.

City Manager Darrell Essex called the plan a “win-win situation,” saying it helps finance the projects that are needed while keeping the housing prices down. “If we didn’t have the district, they would be paying for all of these things anyway,” Essex said.

Citing a potential conflict of interest, Mayor Cecilia L. Age did not vote on the project. Her employer, Security Pacific Bank, made loans to the developer.

The council also agreed to reimburse Cypress Homes Inc. $4.5 million from redevelopment funds for “regional” improvements to the site. The money will be given to the developer immediately so that construction can start on the various projects, Essex said.

The funds will be used to construct a storm drain and a pumping station to handle runoff from both the housing site and the adjacent county flood-control channel.

The multimillion-dollar project is expected to generate millions of dollars in property tax money. As required by law, a portion of the money will be put into providing low-income housing somewhere in the city, Essex said. One project that may benefit is the housing project near the Senior Center, he said.

“We are hoping to do a lot of good things with the money,” Essex said.