Minutes 03-27-2014 - Laserfiche WebLink

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Kenneth C. Pennoyer said the ability to do it would be more marginal, and it would be much tighter. He feels the town would likely push ahead to try and make it work. He said the County's participation creates a partnership that makes a strong, marketable debt structure. Commissioner Dorosin asked for clarification that the borrowing is not like the tax increment bonds that were subject to the constitutional amendment from several years ago. Kenneth C. Pennoyer said this is considered a synthetic tax increment financing (TIF). He said the project development financing through the state has only been used by two projects. He said the reason is that there are easier and less expensive alternatives, such as the synthetic TIF. He said it looks like regular installment financing to a creditor, as they see an asset backing the debt, whereas the statutory model is backed by the hope of development. Council Member Palmer said the town is letting the County in on a really good thing. She said the cost of not doing it right needs to be considered. She said development is moving to Durham and Chatham, and the town is trying really hard to revitalize Chapel Hill. She said the town is going to do this, because there is no other option. She said the town needs to bring in businesses and people. Commissioner Price questioned what will happen if this is like Greenbridge. She asked if this is possible. Mayor Kleinschmidt said as soon as Greenbridge was built it started paying taxes. He said there are many projects that are ready to go, and many people have come to their meetings that want re-development. Commissioner McKee asked if all of the tax revenues are going to go to debt service because of the build-out. Kenneth C. Pennoyer said the town would look to make up the difference in any tax revenue gaps in the early years. He said the town does have extra tax increment that can be used to offset other costs or supplement the general fund. Commissioner McKee said the town has generated a lot of conversation, and he has received telephone calls and email from district 2. He said some of the comments in the calls were not on target, and he encouraged the town to carefully control their message. Council Member Lee Storrow said he has been vocal in his support for this project. He said there are some unanswered questions and work to be done, but it is getting close to an outcome everyone can be proud of. He encouraged everyone not to be so risk adverse that they miss out on this opportunity. He said he wants to know that when his kids are going through the public school system in the future there will be a more solvent economic base and support system. He said this is a good opportunity to get on board with something exciting. Council Member Cianciolo questioned what the financial risk is to the County, other than the potential cost of schools. Kenneth C. Pennoyer said the worst thing that could happen is that the project does not see the expected development, or it takes longer to develop. He said in this case the County is fairly well protected, due to the limited contribution of 50 percent of their actual increment. He said another way to look at this is to consider the cost benefit tradeoff based on the development that is happening and what the County will be expected to deliver in terms of services. He said this presentation was done conservatively, and there is no mention of the additional revenues that may be generated by the retail outlets in the development or by additional automobile tax. He said the concentration was put on the most dependable source, which is the property tax. Council Member Bell said the towns and the County are intimately connected, and she knows Orange County would not let this economic development opportunity go by the wayside. She said, while this will benefit the town, the actual economic impacts will be minimal compared to what will happen for the County. In reference to schools, she thinks there needs