The purpose of this Mayor and Council Communication (M& C) is to authorize actions to set the framework for implementation of the Quail Valley PID over the course of the next several years.
In September 2016, the City Council approved the creation of the Quail Valley PID, encompassing approximately one-fourth of the entire Walsh Ranch property, as a vehicle to reimburse the Developer for certain infrastructure costs. Full implementation of the PID will occur over several years as phases of the Quail Valley area are developed. This M& C sets out a roadmap for that implementation by authorizing the execution of a Master Reimbursement Agreement (MRA) for the Quail Valley PID. The MRA will serve as a guiding document, outlining essential terms by which reimbursement for improvements within the Quail Valley PID will occur.
The MRA sets a maximum reimbursement amount for the entire Quail Valley PID at $47 million, which is consistent with the figure referenced in the resolution creating the PID. This document also requires that the Developer fund the construction of all improvements in the Quail Valley PID, to be reimbursed for a portion of the improvements from assessments to be levied and collected in each phase after the improvements in such phase have been completed. Interest on any reimbursement owed to the Developer will not commence until after the assessments have commenced.
The MRA reflects the fact that a capital PID is an extraordinary development vehicle not normally employed by the City, but that is being utilized here to expedite full development of the Quail Valley PID. In that vein, the MRA requires that PID assessments for all phases be in place within 25 years, limits collection of the assessments levied for each phase to no more than 30 years, and ties issuance of bonds (and expediting of reimbursement) to prompt development of subsequent phases.
Although the PID is divided into 7 phases, all assessments must be made (and, therefore, all improvements within the PID must be completed) within 25 years of the first assessment. So, for example, if $30 million of the possible $47 million in reimbursement has been allocated to and assessed against Phases 1 through 5 within that 25 year period, but assessments have not been placed on Phases 6 and 7 by the deadline, then the Developer' s total compensation would be limited to $30 million (plus interest, as applicable), and no assessments would be made against Phase 6 or 7.
With respect to possible bonds, the MRA outlines basic conditions that must be met for the City to consider issuing debt for any phase of the PID. Those conditions are: (a) the Developer has filed and the City has accepted the final plat for the entire subsequent phase (not applicable to final phase); (b) the final plat for the subsequent phase has been filed within five years from the date the assessments were levied on the phase for which bonds are being requested; and (c) the issuance of debt is contingent upon the Developer' s full and continuing compliance with the terms of each Continuing Disclosure Agreement as required under the United States Security and Exchange Commission, Rule 15c2-12. |