Business · Fresno

Fresno’s growth is on hold over tax haggling. Could this housing project break the impasse?

Fresno County took the first steps on Tuesday to advance a long-awaited housing development that is intended to be annexed into the City of Fresno.

The project, which could deliver hundreds of housing units and alleviate pressure on Fresno’s housing market, brings a looming battle back to the forefront.

That battle? How much of the property tax pie will the City and County of Fresno get from freshly-annexed properties.

Last August, the tax sharing agreement for new developments annexed into the City of Fresno – which had been in place since 2003 – expired after both sides failed to come to an agreement to extend it.

That expiration left land-owner Edward Fanucchi in limbo.

He had plans to develop housing on farmland west of Highway 99 – in the area between W. Ashlan Ave., N. Polk Ave., W. Shields Ave. and N. Bryan Ave.

Fanucchi is seeking to develop 89 acres of the land into a 486-unit urban residential subdivision.

Supervisor Brian Pacheco noted that Fanucchi’s development plan got caught up with the tax sharing agreement’s expiration a year ago through no fault of his own, and Board Chairman Steve Brandau agreed.

“It’s been over a year of hard work to bring this back around, and I agree with Supervisor Pacheco that by no fault of his own, this land owner was kind of set back between the City and the County, so I’m really glad to move this forward,” Brandau said during the meeting. “This began as a conversation when I was still on Fresno City Council, so it’s taken this individual a number of years really to get what he wants to do on his property approved, so we’re glad to be a part of that today.”

The expired deal saw the City receiving 38 cents of every property tax dollar on new properties annexed from the County, while the County received the other 62 cents per dollar. 

Fresno’s City Council and then-Mayor Lee Brand took issue with the arrangement last year, arguing that – by the City’s estimation – it provides 62 percent of the services for the properties, an exact reversal of its tax dollar share.

With that concern at the forefront, the City and County were unable to come to the table and reach a long-term agreement, making Tuesday the first time the topic had been broached in an official meeting since the expiration.

Tuesday’s approval from the Board of Supervisors did not move the needle toward a long-term agreement that would provide the City a path forward for further expansion. Rather, the County is offering a standalone deal to the city at the same terms of the previous tax sharing agreement.

Following the meeting, Brandau told The Sun that the county is willing to do standalone agreements for every future annexation process if both sides do not eventually strike a long-term agreement. 

“I think that the City of Fresno stepped into it when they dismantled the MOU between the City and the County last August. It’s taken a year for them to realize that if they’re going to grow and annex, that they’ve got to come back to the table,” Brandau said. 

“Today was a baby step. It didn’t answer all of their demands, and it didn’t answer all the questions regarding the big picture tax sharing agreement, but at least we’re sending the signal that Fresno County – we’re willing to move forward.” 

On the other hand, Fresno City Council may not be willing to move hand-in-hand with the supervisors. 

Under the standalone agreement, in addition to the same 38-62 tax sharing deal, the City would also be responsible for road maintenance – further costs which could be a sticking point for the council. 

The city council is expected to evaluate the agreement at an upcoming meeting.

Daniel Gligich is a reporter for The San Joaquin Valley Sun, focusing on Fresno State Athletics and the southern San Joaquin Valley. Email him at daniel.gligich@sjvsun.com.