There has been considerable controversy and misinformation regarding the $6.5 million infrastructure reimbursement for the Addison Grove project, so let’s look at some facts about infrastructure reimbursements.
Fact: Reimbursement for infrastructure on major developments is nothing new
It ensures proper flow of the development’s water, sewer and wastewater. When infrastructure improvements are required, the owner/developer is responsible to meet the Town’s specifications for infrastructure. In the past, Addison infrastructure reimbursements have included $50 million in debt for Vitruvian, and $14 million in infrastructure reimbursement for Addison Circle.
Fact: The 2007 $50 million incentive agreement to build infrastructure for Vitruvian is funded entirely with debt
In more detail, the 2007 $50 million incentive agreement approved by a previous Council to build infrastructure for Vitruvian is funded entirely with debt (Certificates of Obligation, which are as binding as bonds) and with no timelines or no milestones.
The decision to provide reimbursement in this manner was done without any citizen input — simply City Manager recommended with Council approval. Approximately $28 million has been spent to date and additionally, interest is currently being paid on this debt and is part of our tax rate.
This agreement also includes an 8% fee that is to be paid to UDR, the developer, for oversight of the construction of the infrastructure projects.
Fact: Learning from past experience, the current Council is considering options that the staff has prepared for reimbursement on the upcoming Addison Grove project
The options were presented to the Council at the March 22, 2016 Council meeting by the town’s interim CFO, Dr. Scott Neil. The option recommended by Dr. Neil (Option #5) will NOT require any new long-term debt, thus would not impact the town’s tax rate. Unlike the Vitruvian reimbursement, which had no timelines or milestones, the Addison Grove reimbursement is based upon responsible cash reimbursements after specific milestones are met.
The reimbursement is capped at $6.5 million. This amount is by far the least of any recent infrastructure reimbursements.
Upon completion the Addison Grove project is projected to put nearly $100 million on our tax rolls, more than ten times its previous amount. This does not take into account the additional sales tax revenue generated by new residents — a welcome relief to the surrounding businesses that have suffered in the past years.
Fact: Dr. Neil’s recommendation is based on responsible payouts that do not incur debt nor increase our tax rate
(To see Dr. Neil’s presentation watch the video of the March 22 Council meeting. )
Debt? No debt? Which do you believe is the more responsible plan for Addison?