With $200M delayed, will paying for downtown projects fall on city of Fresno?

Yahoo

28-04-2025

With $200 million promised to Fresno in 2023 still held up by the state, the city is beginning to consider how else it could pay for infrastructure upgrades that are crucial to its ambitious downtown revitalization plans.
'We need the money,' Fresno Mayor Jerry Dyer said Tuesday at a panel discussion about high-speed rail hosted by Fresnoland. 'As I shared with the governor, I don't want to go out and bond a project.'
But Dyer's office told The Fresno Bee in a statement that the mayor is already preparing to seek a lease-revenue bond, if he has to, so the city can keep building infrastructure that's already planned. Unlike a general obligation bond, a lease-revenue bond would only require the City Council's approval.
Along with replacing sewer and water mains and upgrading streets and sidewalks, building new parking structures is part of the spending plan for the $250 million that the state committed in 2023 to help Fresno improve its downtown infrastructure. The projects are necessary to support housing for a population boom Dyer envisions as downtown also prepares to be the site of a California high-speed rail station.
The city received an initial $50 million award in 2023, with the promise that it would receive another $100 million in the 2024-2025 fiscal year and the final $100 million in the 2025-2026 fiscal year. (The city has also been awarded a separate $43.7 million grant to help with the downtown upgrades.)
California's budget problems last year prompted the state to defer the remaining $200 million for downtown Fresno until the 2026-2027 fiscal year. Gov. Gavin Newsom is scheduled to present a revised 2025-2026 budget next month, though financial strains are likely to remain present in that revision, Calmatters recently reported.
In the meantime, the city has moved fast to use the money it's already received. Construction that began last year on $22 million-worth of sewer and water main replacements in downtown and Chinatown is expected to be completed this fall.
And, on Thursday, the City Council approved a $2.2 million contract for the design of a 900-stall parking structure slated to go up at H and Mono streets, just southwest of Chukchansi Park.
District 3 Councilmember Miguel Arias told The Bee that in order to award the construction contract for that parking garage, the city would need another disbursement of infrastructure money from the state.
'Or step forward and make up the difference with a city revenue bond,' he said.
That's why the city is hoping to see $100 million for downtown Fresno in this year's May California budget revision.
'The Mayor is preparing necessary documentation to request Council support at that time should the State's commitment not be realized,' Dyer's office said.
In Fresno, the City Council can approve a lease-revenue bond to help pay for construction of the H Street Parking Structure.
Under such an agreement, investors could pay for its construction, own it and then lease it to the city. The lease payments would repay — with interest — the investors who purchased the bonds that backed the construction.
The concept is not new to Fresno. As of June 2023, the city had 'several lease revenue bonds that are paid in whole or part by the General Fund,' according to a city debt report released last year.
But it's not yet clear what a lease-revenue bond agreement for parking structure financing would look like.
Early plans for the $250 million promised by the state included setting $70 million aside for downtown parking infrastructure, with about $11 million going toward a parking structure at Fulton and Tuolumne streets.
Dyer's office said the amount of a bond for to pay for infrastructure would be determined when the bond is requested and would be based on construction costs that are not already fully-funded by the initial $50 million Fresno received from the state.
Arias said that the city would stand ready to approve the bond for the H Street parking structure, if necessary.
'But that would be an absolutely last resort, given our budgetary constraints and our need to ensure that we continue to balance our budget,' Arias said.
Multiple news outlets have reported California will face difficulty drafting its next budget, in part, because of the uncertainty President Donald Trump's tariffs have created. Stock market downturns could negatively impact state income tax dollars paid by California's wealthy — an important state budget revenue source.
State Assemblymember Joaquin Arambula, D-Fresno, said it's too early to comment on what Newsom's budget revision could look like. But he said the governor has been quick to approve investments for Fresno.
Despite the state's budget difficulties, Dyer's office said the mayor 'remains hopeful that Gov. Newsom will honor his commitment to Fresno.'