Mesquite: Council postpones TIF reimbursement

The city council voted Monday to postpone the approval of a tax increment financing incentive package for the development of an active senior project until the July 20 meeting

The project is planned to consist of a 250 room age-restricted, multi-family resort style facility to be built at the northeast corner of U.S. Highway 80 and Gus Thomasson Road. The facility is designed to be a five story structure with retail on the ground level and living areas on the top four levels.

“[City staff members] think this is a very unique project for the city of Mesquite. We are excited about it, thinking it would be a good front door for our city, a project unlike anything we have seen in the city,” Economic Development Manager Tom Palmer said.

To obtain funds for the project, the developers are going through a Housing and Urban Development program that guarantees payments to a third party lender.

“There (are) no low income restrictions at all with the specific program,” project architect David Gunderson said. “The reason that we are applying through that method is obviously the standard credit markets for this type of development are completely frozen. We think this is one of the few avenues available to fund this.”

The HUD approval process takes several months and the developers were not sure how much of the loan would be approved by HUD up front, so they presented the council with the project divided into two phases.

It was the possibility of a two phase project that raised concerns with council members. Council member Stan Pickett questioned the payment of a full tax increment financing district reimbursement on the project since it may not all be fully completed when the payments are made.

“We want to be a participant with the economic development in our city, but we also like see projects be completed or at least 60 to 75 percent,” Pickett said. “I know at this point you don’t know whether or not it is going to be a one or two phase project.”

The developers told the council that the TIF would be used to help pay for the infrastructure that has to be replaced in order to complete the project.

“Almost all of the expenditures on the infrastructure will be done on the first phase of this [project]. Having met with city staff on water and sewer that needs to be replaced, it is going to have to be done regardless of whether there are 100 units or 300 units.” said Rich Billings, one of the property owners.

Pickett said that he did not feel that he could justify giving full reimbursements for a project with too many maybes involved. Mayor John Monaco echoed Pickett’s concerns.

The council tabled a vote on approval so that a plan could be put into place to have the TIF line up with the amount of the project that is completed at the time of reimbursement.

- Star Community Newspapers, Kenny Green Staff Writer, July 8, 2009 (full article here)

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