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Billion Dollar Riverfront Makeover Emerges From Flood Project Buttressed by Tax-Increment Financing

State-Local Partnership Once Again Provides Impetus and Structure for a Showcase Success

April 26, 2013
Note: With job creation and affordable housing on the minds of public officials across California, the power of state-local partnerships in creating good paying construction and other private sector jobs merits attention. This is part of a series of special papers on some successful partnerships.
 
In 1998 the city of Napa found itself facing an opportunity. Following decades of design work and planning, voters finally approved moving forward with an ambitious vision to transform the city’s unused riverfront into an economically viable business district. This success story is featured in Napa’s Strong Cities Strong State profile.

About six miles of the lower Napa River lie within the city limits and are tied into a significant estuary system. That stretch of river and a mile of Napa Creek comprise the Napa River Flood Project. The federal government approved flood improvements in 1965, but the funding did not follow, and the riverfront lingered in a state of neglect for years.
River Project Before 
By 1998, however, the city’s Flood Protection Project had morphed into something special. Partnerships involving the city and state, the Napa County Flood Control and Water Conservation District and the U.S. Army Corps of Engineers came into beneficial play.
 
What began as a series of public improvements to a largely unused area of riverfront was now an urban planning project of a high order and great promise, integrating carefully planned public spaces with infrastructure thoughtfully designed to interface with potential commercial projects.
 
Parks, river walks and trails, parking garages, major hotels, top quality restaurants, wine tasting rooms and more popped up along Main Street, First Street and other thoroughfares. A thriving business district took hold, and along the way these projects generated new jobs.  The Napa Mill complex offers as a vivid example of the success the city achieved — and how it was accomplished.Napa Mill Hatt Before
 
The historic mill had been vacant since the 1970s, a diamond in the rough. Before it could be occupied, it required toxic remediation and renovation as well as seismic retrofitting. To help accomplish that the city used tax-increment financing, extending a $180,000 “gap loan“ to the mill’s owner in 1998. The owner repaid the loan in 2003. The city also made a $160,000 grant to “secure an outdoor public plaza and public restrooms” adjoining the complex.
 
That loan and grant provided the leverage needed, triggering private investments of $16 million in the mill complex.
 
“Tax-increment funding was an essential tool driving the renaissance of our business district,” said Napa City Manager Mike Parness. “Almost $1 billion — more than $990 million, to be exact — in new public and private investment has occurred in our downtown since 1996.”
 
The Napa Valley Register agreed, calling tax-increment financing the “single greatest tool to revitalize the city.”Napa Mill After
 
The city has tracked with pride the public and private money that has fueled its downtown business district renaissance over the past two decades. More than 100 projects are now part of or stimulated by the flood protection project. They represent a total property valuation of $412 million in private investments and $203 million in public investments.
 
The project has touched everything from the restoration of the Napa Valley Opera House façade to the renovation of Coombs Street Plaza, and from making city street garage signs and lighting improvements to seismic retrofitting of existing structures. It has also generated many pedestrian improvements, from creating the Napa ARTWalk to improving and filling in a large gap in the city’s Riverfront promenade.
 
Such improvements have drawn one new private investment after another. These private dollars have been plunged into such enterprises as the Oxbow Public Market’s Kitchen Door Restaurant (a $300,000 valuation), a Starbucks ($263,000), a number of new wine-tasting venues, the Westin Verasa ($100 million) and a Riverfront mixed-use project ($72 million), among many others.  
 
Without tax-increment financing, Parness said, “the city simply could not have achieved this success.”
 
In 1998 the city of Napa found itself facing an opportunity. Following decades of design work and planning, voters finally approved moving forward with an ambitious vision to transform the city’s unused riverfront into an economically viable business district. This success story is featured in Napa’s Strong Cities Strong State profile.

It is a view shared widely throughout the city. In the words of The Napa Valley Register, Napa’s downtown has been rendered ”infinitely more attractive to commercial developers.”

Without the public-private partnerships made possible through tax-increment financing, an editorial in the newspaper noted, “the city may not have [had] an AVIA hotel (now known as the Andaz Hotel) or thriving West End district. It’s not likely the Riverfront commercial and residential project with its tourist-friendly restaurants would exist in their current form, nor would the Historic Napa Mill have been reshaped or the Fifth Street Parking Garage have been built.”

In other words, a once-neglected riverfront has been remade into a showcase business district that looks particularly enchanting at night as the lights come on along the riverbank.

The winning combination of federal and state and local partnerships with the public and private investments has reaped handsome dividends in the form of thriving businesses and economic growth.


 
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