City Council authorized a $2-million bond ordinance to fund infrastructure improvements, including the extension of Monroe Street, as part of a downtown development currently under construction.
The measure (O-15-19) was introduced at the governing body’s June 10 combined pre-conference and regular meeting before a public hearing and final approval at the July 16 combined meeting. There was no comment from the public or council members before the ordinance was adopted by a 7-0 vote (two members were absent).
The first phase of the 208-unit Main and Monroe development, also referred to as Dornoch II, is currently under construction on Main Street. Phase 1 consists of about 116 rental apartments and is expected to be completed by January 2020, according to the ordinance. Construction of Phase 2 will be based on completion and lease up of Phase 1, and is expected to begin in July 2020, with completion slated for January 2021.
Dornoch II, which is comprised of Vienna, Va.-based Slokker Real Estate Group and other development partners funding the project, had asked the city to consider accelerated payments on Redevelopment Area Bonds (RABs) for the project. The Redevelopment Agency in October amended the financial agreement to allow for use of RABs to fund the Monroe Street extension. City Council followed up with a $500,000 bond ordinance in December for the improvements.
During his report to commissioners at the Redevelopment Agency meeting in May, Redevelopment Executive Director Robert Landolfi said the city decided not to acquiesce to the request for accelerated payments but discussed what would trigger the RAB payment going forward.
For the project to proceed, according to the ordinance, the redeveloper “needs to incur substantial costs for environmental investigation and remediation and for public infrastructure improvements, including the extension of Monroe Street from Main Street to East Cherry Street, streetscape improvements, utilities and provision of public parking.” Development of the project “is not economically feasible absent financial assistance” by the city.
The developer’s payment of an annual service charge through the 30-year Payment In Lieu Of Taxes (PILOT), starting at about $360,000 in year one, will be “sufficient to pay debt service due on the bonds,” according to the ordinance.
