Proposal Overview
LAFCo has received an application submitted by the Humboldt Community Services District (HCSD or District) requesting annexation of approximately 72.35 acres (5 parcels) of land located adjacent to the District boundary and within its adopted Sphere of Influence (SOI). The proposed annexation would enable the District to extend water, wastewater, and street lighting services to the North McKay Ranch Subdivision—a mixed-use development with up to 320 housing units—located at the eastern terminus of Fern Street in the Cutten area.
The Commission received an informational presentation on the proposed annexation at its September 17, 2025 LAFCo meeting. The associated staff report included a detailed discussion of the proposal.
The Commission APPROVED the annexation on January 21, 2026 by adoption of Resolution 26-02.
Informational Staff Report – September 17, 2025
Public Hearing Staff Report – January 21, 2026
Public Hearing Notice
Notice is hereby given that the Humboldt Local Agency Formation Commission (LAFCo) will hold a public hearing to consider the proposed Humboldt CSD annexation of the North McKay Ranch Subdivision on:
Wednesday, January 21, 2026 at 9:00 a.m.
City of Eureka Council Chambers
531 K Street, Eureka, CA
The meeting will be conducted in a hybrid format, allowing for both in-person and virtual participation. Those wishing to participate remotely should consult the meeting agenda for the video conference link or call-in information. The agenda and related meeting materials will be available at least 72 hours prior to the meeting here.
Please direct comments, questions, or requests to review documents to: Humboldt LAFCo, 670 9th Street, Suite 202, Arcata, CA 95521. Phone: (707) 445-7508. E-mail: info@humboldtlafco.org.
Reasons for the Proposal
The main property owner for the annexation area, Fairhaven Cottages LLC, has requested HCSD expand their jurisdictional boundary to provide water, wastewater, and street lighting services to the following APN’s: 017-032-003, 017-071-009, 017-072-003, and 017-073-007. In addition, one parcel owned by Field Committee Corporation (APN 017-073-008) is proposed for annexation due to the proximity of the land entirely surrounded by the North McKay Ranch Subdivision Project.
Plan for Services
Resolution of Application
Development of Subdivision
The North McKay Ranch Subdivision consists of seven parcels totaling approximately 81 acres and is proposed to be developed in nine phases. The project includes a mix of residential and commercial uses, with full buildout allowing for up to 320 residential units and approximately 22,000 square feet of commercial space. Residential development would include 50 small-lot single-family homes, 96 standard-lot single-family homes, and 174 multifamily units. An additional 34 accessory dwelling units (ADUs) may also be constructed, bringing the potential total to 354 residential units.
The anticipated residential mix includes 146 single-family homes and 174 multifamily units. Approximately 21.73 acres of the site would remain undeveloped and preserved as open space, to be dedicated to the County for future trail management and public use. The subdivision is expected to be built over a 20-year period, with actual phasing to be determined based on market conditions.
The project also includes a variety of on-site and off-site infrastructure improvements to support development. The subdivision was approved by the Humboldt County Board of Supervisors on March 7, 2023, through a General Plan Amendment, Zoning Reclassification, Tentative Subdivision Map, and Planned Development Permit (County Record No. PLN-9902-GPA).
A portion of the subdivision is already within the Humboldt CSD boundary as shown in the map below:
Provision of Public Services
HCSD will provide water, wastewater, and street lighting services to the annexation area. To accommodate increased service demands associated with the North McKay Ranch Subdivision, the project’s Water Supply Assessment identifies several critical infrastructure improvements.
HCSD will provide water, wastewater, and street lighting services to the annexation area. To accommodate increased service demands associated with the North McKay Ranch Subdivision, the project’s Water Supply Assessment identifies several critical infrastructure improvements.
A new 250,000-gallon water storage tank and upsizing of approximately 1,000 feet of existing water main along Walnut Drive (between Holly Street and Cypress Avenue) to 12-inch diameter are required to ensure adequate capacity and fire flow. These improvements will be funded by the project proponent, Kramer Properties, and are incorporated as Conditions of Approval. The water tank must be permitted before building permits are issued for Phase 2 and beyond, and it must be operational prior to final occupancy of any Phase 2 and beyond development.
HCSD currently provides water service to an existing single-family residence on APN 017-071-002, which lies outside the annexation area but is served by infrastructure that traverses the project site. As a condition of approval, HCSD will ensure that this existing service is maintained without interruption during all phases of project construction and implementation.
Wastewater service to the annexation area will require construction of a new sewer lift station in the northeastern portion of the site, also to be developed by the project proponent. In addition, the Hemlock Sewer Transmission Line Project—funded and completed by HCSD—must be in place before wastewater connections can be made for Phase 2 and beyond. Only Phase 1, consisting of three single-family homes on an extension of Manzanita Avenue, may proceed prior to completion of this capital project.
If street lighting services are requested, the developer will establish one or more assessment zones in accordance with HCSD Code. All necessary infrastructure will be installed at no cost to the District, and funding for ongoing services may come from private or other sources.
The annexation area is located within the jurisdiction of the Humboldt No. 1 Fire Protection District and will continue to be served by Humboldt Bay Fire Authority for fire protection and emergency response services.
Property Tax Exchange
This proposal is subject to the provisions of Revenue and Taxation Code (R&T Code) Section 99.01, as it involves the extension of services by a special district to an area where those services have not previously been provided by any local agency. In such cases, the exchange of property tax revenue is limited to the annual tax increment generated within the annexation area and attributable to the affected local agencies.
The County Auditor-Controller determined the applicable Tax Increment Factor (TIF) allocated to HCSD for the annexation area is 0.01061, based on the existing tax distribution in Tax Rate Area (TRA) 081-009 and excluding school district shares that are not eligible for reallocation under state law. HCSD adopted a resolution accepting this allocation.
The statutory negotiation period provided under RTC §99(b) allows affected agencies to voluntarily agree to a redistribution of property tax increment beyond the base allocation identified by the Auditor-Controller. In this case, no affected agency elected to share additional increment with HCSD during the negotiation period. The County has confirmed that, notwithstanding the absence of additional voluntary sharing, the property tax increment identified in the Auditor-Controller’s notice will be implemented upon completion of the annexation and recognition by the State Board of Equalization. Tax rate area boundaries and property tax allocations will become effective for the assessment roll as of the date stipulated by the State Board of Equalization.
Environmental Review
The North McKay Ranch Subdivision Project was subject to environmental review pursuant to the California Environmental Quality Act (CEQA). An Environmental Impact Report (EIR) was prepared to evaluate the potential environmental effects associated with the proposed development. Both a Draft EIR and Partial Recirculation Draft EIR were circulated for public review and comment, with all responses to comments incorporated into the Final EIR.
On March 7, 2023, the Humboldt County Board of Supervisors certified the Final Environmental Impact Report (SCH# 2019049166), finding that the EIR had been completed in compliance with CEQA and that it adequately analyzed the environmental impacts of the project. As part of the certification, the Board adopted CEQA Findings of Fact, a Statement of Overriding Considerations, and a Mitigation Monitoring and Reporting Program (MMRP) to ensure implementation of required mitigation measures.
Humboldt LAFCo is a Responsible Agency under CEQA for this project and will rely on the certified EIR during its review and consideration of the proposed annexation.