Pacific Palisades Recovery District

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What this is

A Recovery District, also called an Enhanced Infrastructure Financing District (EIFD), is a public financing tool allowed under California law. It lets a community fund rebuilding and safety upgrades by using a portion of future property tax growth.

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Tax rates do not go up. Instead, the district borrows against future revenue and invests now, when rebuilding and risk reduction are most urgent.

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At the County level, this is often called a recovery district or EIFD rather than a resilience district, but the underlying tool is the same.

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This is not a new or experimental idea. Variations of tax increment financing districts have been used in the City of Los Angeles before, including after the Northridge earthquake, to support large-scale recovery and rebuilding.

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Why this matters now

After the fire, property values in the Palisades dropped sharply. As homes rebuild, values will rise again.

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Without a district, all of that future property tax growth flows into the City’s general fund, while the Palisades waits years for funding that may never come back in meaningful amounts.

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At the same time:

 

• FEMA and state funds are slow or not materializing

• City wildfire recovery funds are nearly exhausted

• Infrastructure needs are immediate and large

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A Recovery District allows the Palisades to recover faster, safer, and in a more coordinated way, while still increasing long-term revenue for the City by speeding up recovery.

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Most large disaster recoveries in recent decades, including events like the Northridge earthquake, 9/11, and Hurricane Katrina, relied on some form of dedicated governmental rebuilding authority to coordinate funding and accelerate recovery. The Palisades is facing a similar scale of challenge.

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What a district could fund

A district would operate under a public plan and could fund projects the City cannot realistically cover on its own right now, including:

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• Stabilizing hillsides and bulkheads

• Undergrounding utilities

• Improving evacuation routes and drainage

• Reducing fire risk through infrastructure upgrades

• Supporting block-by-block rebuilding to higher fire-safe standards

• Filling gaps where city, state, or federal money falls short

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These are practical recovery needs, not theoretical projects.

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How it works in simple terms

First, the City approves a feasibility study. This study looks at numbers, boundaries, timelines, and options.

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If the numbers work, the district is formed.

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The district captures a portion of future property tax growth for a fixed period, often 20 to 30 years.

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Bonds are issued to fund recovery projects now.

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As rebuilding happens and property values recover, the bonds are paid back using that future growth.

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The City ultimately benefits from a faster recovery and a stronger tax base.

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What this is not

It does not raise tax rates.

It does not take money from other neighborhoods today.

It does not give control to private developers.

It does not replace normal city services.

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Important note about taxes

The main financing tool for a Palisades district would be tax increment financing, which does not raise taxes.

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However, a district could also be structured to include special taxes or special assessments that would increase costs for property owners.

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That is optional, not automatic.

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Whether a district includes special assessments would be a political and community decision made when the district is set up. This is a key messaging issue and something the community would need to discuss openly.

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Why there is hesitation

The hesitation is mostly about control and precedent.

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City leaders are cautious about allowing any neighborhood to temporarily keep a share of future property tax growth. There is concern that approving this for the Palisades could lead other districts to ask for the same thing.

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Because Recovery Districts are still unfamiliar and long-term, decision makers often default to caution instead of speed, even in disaster recovery situations.

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Who is already doing this

Los Angeles County has already created recovery-style financing districts covering Altadena, Malibu, and nearby unincorporated areas.

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Malibu chose to join the County’s effort rather than create its own.

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These districts are already being used to fund recovery and infrastructure after fire by investing now using future property tax growth.

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This is already happening in LA County. It is just not yet happening within the City of Los Angeles.

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What needs to happen next

The City needs to approve a feasibility study to show the options clearly.

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At the same time, the Palisades needs a shared vision for what a district would actually deliver.

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Education and outreach are essential so residents and City leaders understand how this works and why it helps the entire city, not just one neighborhood.

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The bottom line

Without a new tool, rebuilding will be slower, more fragmented, and less safe.

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A Recovery District or EIFD is one of the only realistic ways left to fund the scale of work the Palisades needs, while reducing long-term risk and cost for the City of Los Angeles.