What's at stake:
Thursday will be the first time city council members discuss whether or not to raise taxes across the city to help pay for SEDA.
Mayor Jerry Dyer is proposing city residents fork over as much as $19.5 million in subsidies to kickstart the first phase of his mega-development plan in southeast Fresno, known as SEDA.
The subsidies are part of a program to lay the first sewer pipe for SEDA’s first phase, known as South SEDA. City residents would also be indentured to pay $86 million in bond debt for the area around Jensen Avenue. The debt would kick off in 2029, the long-awaited South SEDA financial plan shows.
“South SEDA can pay for itself,” Dyer’s team concludes in a presentation for city council members set for Thursday.
City residents would pay off the debt, Dyer’s financial plan proposes, either through increased utility bills or moving money from the city’s General Fund. The promise of SEDA would be that developer fees repay the city, interest-free, if and when SEDA gets built out.
“This study assumes no interest accrues on the outstanding subsidy,” the financial plan says.
The subsidies and SEDA debt will cover only the $72 million sewer trunk main on a stretch of land near Jensen Avenue that’s currently a bunch of orchards. Dyer’s plan imagines 18 million square feet of industrial uses and more than 10,000 homes.
Left out of Dyer’s plan are water, roads and storm drainage for all that development. The last time the city published a full infrastructure cost for this ground — in May 2025, under a land plan the council has since revised — the total costs for the South SEDA area came to $672 million, of which developer fees would cover $233 million.
The new report does not address the $439 million shortfall, which last year’s report assigned to a “SEDA Special Financing District” that does not currently exist.
Dyer hopes that SEDA will eventually be built out enough that the homes will contribute a surplus to the general fund.
However, that surplus – and the promise of city residents getting paid back after coughing up higher utility rates – rests on a bunch of assumptions, including packing in homes at the edge of town eight times denser than the city average.
On paper, Dyer’s packed in homes so tight, there’s no room left for streets or parks, a comparison of city documents shows.
Why can’t the developers put up the money for SEDA instead?
One reason is that, if it were your money, you would probably not want to take the risk.
That was close to the conclusion made by a team of financial consultants hired by Dyer last year. Infrastructure costs would eat up more than 20% of the project’s total value — too much, the consultants wrote, for the project to pencil out.
Economic & Planning Systems, the consultants, put the Southern phase’s infrastructure burden at 22.4% of market value.
Anything above 20%, the firm wrote, “suggest[s] that a project may not be financially feasible.”
The new report, done by the same firm, says one way for developers to build their own infrastructure is off the table.
One solution long touted by city council members, called a Mello-Roos district, would take the risk off city taxpayers and put it onto the landowners who would profit off the development.
Such a scheme to provide upstart cash wouldn’t work, the report says. The currently undeveloped land in South SEDA is not valuable enough to work as collateral. Under state law and bond market practice, there’s a threshold that requires three dollars of current land value for every dollar of debt.
“Currently, South SEDA consists largely of undeveloped land with limited value, and this threshold cannot be met at the outset,” the report says.
Utility rates paid by Fresno residents are much more valuable, however.
How would SEDA subsidies work?
Dyer’s new plan excludes other upfront costs like potable water, roads and storm drainage. How to pay for those other necessities is not covered by the report.
Only SEDA’s first sewer pipe is covered — and not all of the sewer, since the smaller lines feeding individual subdivisions were carved out for “a future nexus study.”
“Other backbone infrastructure, including streets, water, and other utilities, will also be required as phased residential and nonresidential development occurs,” the report says.
“This infrastructure is expected to be funded by private developers as a condition of development approval, rather than through the mechanisms discussed in this chapter, and is not addressed further in this report.”
The last time the city priced this ground in full was May 2025, when its consultants put the southern phase at $672 million and found developer fees would cover $233 million of it. That phase was smaller than what the city now calls South SEDA – 6,362 homes against today’s 10,070 – because the council revised the land plan in December.
The new report does not update the total, and it does not say where the $439 million that last year’s report assigned to a “SEDA Special Financing District” would come from. That district does not exist.
The debt for the pipe would be covered by “utility user rates and surcharges” — meaning your sewer bill would carry a SEDA surcharge — or “lease payments funded by the City General Fund.”
All told, the surcharges or General Fund diversions require $86 million in debt to lay $72 million in pipe.
Because bondholders expect routine payments and SEDA will not cover the costs at first, the report puts the subsidy for the residential area at $3.2 million and between $4.4 million and $21.5 million for the industrial area. Financed together, the two areas would need between $7.1 million and $19.5 million.
Total debt service across the city’s assumed 30-year term is $183.6 million.
The city would be paid back through a $1,300 Mello-Roos special tax on every new home in SEDA, $1,000 per apartment and $10,000 per acre of commercial and industrial land for the next three decades. The tax is paid by the homeowner on the property tax bill, not by the developer at permit. Depending on how fast the industrial land fills, residents are projected to be paid back, minus interest, sometime between 2034 and 2047.
The city projects that development will throw its way $1.54 billion to $1.65 billion in new property tax revenues over 45 years, and add $11.9 million to city revenues once South SEDA is finished.
That projected surplus rests on the whole chain of assumptions coming true: 10,070 homes built, 8,140 of them single-family houses sold for $525,000 to families earning on average $143,000 a year, absorbed on schedule for 18 straight years, plus 18 million square feet of industrial space finding tenants.
Are the assumptions realistic?
Setting aside most of the other costs left unaddressed by the report, the whole arrangement of South SEDA’s sewer main penciling out turns on a count of houses, a Fresnoland analysis of this surplus shows.
Two-thirds of the projected new property tax revenue comes from the residential part of South SEDA. Industrial land would contribute $480 million to $595 million, and the residential area about $1.06 billion.
This billion-dollar projection rests on a buildout of residential neighborhoods denser than anything standing in the region today, including the neighborhoods that went up in the postwar boom.
The City of Fresno averages 2.50 housing units per acre, according to 2020 census counts of housing units measured against land area. Clovis is 2.70, Sanger is 2.11, Stockton is 2.56.
For South SEDA, Dyer’s financial plan assumes eight times that: 20 units per acre across 407 acres, and 21.5 across the residential subarea as a whole.
In the county’s history, no area has ever cracked more than 7 units per acre at the scale South SEDA proposes, a Fresnoland analysis of census data shows.
It’s so hard to hit 20 units per acre because whatever density you hope for, a lot of land gets taken up by other uses – such as parks or drainage areas.
Last year, Dyer’s financial consultant estimated a third of the land would be lost to other public uses like roads, and reported a buildout average of 13.2 units per acre.
In the rush to make SEDA pencil, it is unclear if Dyer’s team remembered to put in space for parks and roads.
Dyer’s team dropped the one-third carve-out for roads, assuming all 469 acres would be either shops or homes built out at max density.
The consultant says it never checked whether the numbers would work in reality.
“EPS has not independently evaluated the feasibility of the proposed land uses as part of this study,” the report says in a disclaimer.
The plan also requires three acres of parkland per 1,000 residents — about 90 acres for the 29,800 people the city projects for South SEDA.
Apply last year’s conversion to the same 407 acres and it yields about 5,450 homes. Carve out land for parks, streets and drainage basins at the rate last year’s report assumed, and it falls to about 4,000.
All of this would create shortfalls in the SEDA debt owed to bondholders, requiring longer repayment schedules and increasing SEDA’s eventual subsidies shouldered by residents: either higher utility rates, for example, or more general fund diversions.
Other uncertainties abound, such as whether the $1,300 Mello Roos special tax will bring in expected home prices on its small lots.
The report caps total taxes and assessments at 1.7% of a home’s price and lands at exactly 1.70% – $8,928 a year – on a $525,000 house. The same bill against the $432,323 that comparable small-lot homes fetch would be 2.07%, over the cap.
“Actual tax rates could be lower, which could result in a higher subsidy and longer repayment timeframe.”
The city council will discuss the plan Thursday at a workshop.
