In the end the decision on the CFD (Community Facilities District) came down to philosophy, with both Rochelle Swanson and Lucas Frerichs arguing the need for the timing on the funding to be more immediate in order for the Cannery put the proposed infrastructure in place.
Lucas Frerichs also noted that when the citizens had concerns that the CFD was too much money, when the issue came up in March, that staff went back to work with the applicant to make it smaller. “It came back significantly smaller,” Councilmember Frerichs said.
Councilmember Brett Lee, who along with Mayor Pro Tem Robb Davis remained in opposition to the CFD, expressed appreciation to the New Home Company for lowering the cost of the CFD and said he believes this will be a “nice place to live” for the community. However, he argued, he could not support the CFD because he “thinks its bad public policy.”
Ron Glick during public comment noted, “The agenda says you’re still going to bond $17 million.” He continued, even if it is $8 million, “I still think $8 million is too big. They’re pulling forward stuff that’s going to be completed this year.”
He countered the argument that the CFD would facilitate the building of these amenities, noting that they will be completed regardless. “These are amenities that they need to market their houses,” he pointed out. “I don’t know why you’re putting it on the future homeowners.”
The staff report notes that the $17 million figure represented “the initial bond size expected when the CFD proceedings started, however, the reduction of the special taxes will result in a bond issue of $10,100,000, which will produce proceeds available for improvements of $8,000,000.”
The attorney that the city brought in from Best, Best & Krieger explained, “The bond amount is set at a maximum of $17 million, however the special taxes have been reduced so that they are calculated to only support a maximum bond issue of $10 million which would yield net proceeds of only $8 million for construction of facilities.”
So, she explained, you can authorize the higher bond amount, but without the special taxes in place, you cannot really achieve that. “It won’t support that high of a bond issue,” she said. They kept that amount in there to keep it consistent, but she said the important factor is the reduction in the special taxes.
Mayor Pro Tem Robb Davis said, “I’ve opposed this CFD from the beginning. The main reason… is that we had an agreement to do the project without recourse, so I’ve never really been understanding why it’s needed to accomplish what was agreed to without it.”
He noted the memo from the Plescia Company which had the pro forma on the fiscal analysis for the project back in November 2013. The city asked for this analysis so that it “knew the ballpark of the asks of what (the developer) could do for community enhancement funds.” The conclusion, he read, “the extend of the overall site development improvements off-and on-site appears to be financially supportable while still yielding a positive net land value for the project.”
There was no CFD expected in the Plescia report – “CFD was not mentioned, it was not a funding source.” In addition, the per square footage cost of housing has gone up substantially since that report in November 2013.
“Plescia said to us as a city – New Home Company is going to do fine – there’s a lot of cost, but they’re going to be able to sell homes,” he said. “The Council used those findings to negotiate some extra community enhancement funds. New Home Company agreed to those community enhancement funds.”
“I still don’t understand why the New Home Company needs this CFD to cover their costs. The infrastructure that we’re approving tonight, $6 million is already in place – they found a way to finance it. It’s already in place. $6 million of the $8 million is already in place according to Bob Clarke,” he said.
Mayor Pro Tem Davis proposed a substitute motion that would finance that remaining $2 million. It was seconded by Brett Lee, but, not surprisingly it was defeated 3-2.
Councilmember Rochelle Swanson said, “For me it’s about timing. Consistently it’s about timing.” She said at some point we have just “agree to disagree” as to the history.
“I know there are some who want to believe there are nefarious reasons, or some kind of plot or conspiracy as to who we represent, all I can do is speak for myself, it does come down to consistency,” she added. “I think it would be honest if people were just able to state it’s not about there’s ever going to be a number that’s right. There’s a disagreement about to whether it should be there. I can respect both sides of that.”
She noted that at Cap-to-Cap that there was excitement over the Cannery and its coming forward as a positive project that people can be excited about. However, they did not understand the flap over the CFD “just because it’s so commonplace today.”
Councilmember Swanson added, “Timing really is important.”
Councilmember Frerichs said, “(The CFD) absolutely was part of the developer agreement. It was a part of those conversations all along with the entire council, particularly the former subcommittee of both myself and former Mayor Joe Krovoza.”
Community members certainly had some concerns that “the CFD is too much money,” he said. “We directed staff to go back and work with the developer and applicant to make it smaller. It came back significantly smaller. Some folks disagree with those numbers – that it’s too much.”
He showed the chart that compared the original rates to the new rates. These show that at the top end with a 32 percent reduction of fees, the smallest homes under 2011 square feet, they are cut from 40 percent to nearly 50 percent reduction.
He called this a significant change responsive to the concerns of residents in the city.
The councilmember said he voted against the substitute motion because with only $2 million bonded for, he was not sure of its feasibility. “I’m not sure how feasible it is and worth it to actually go forward,” he said.
Councilmember Brett Lee added that “I do appreciate the willingness of New Home to work with the city and reduce those amounts – that has not gone without notice.” However, he added, “I’m not supportive of the CFD, I think it’s bad public policy.”
The vote once again was 3-2 on the CFD itself. The council took several votes. First, the property owners had to vote to approve the CFD – which they did and that was counted by City Clerk Zoe Mirabile. She counted the four ballots.
The council voted 3-1-1 on that vote, with Brett Lee abstaining, noting that the clerk has the ability to count the four votes and he did not want to imply that the election was not properly held or the ballots were miscounted.
The final vote was 5-0 to modify the developer agreement so that a 3rd bicycle access point in the west could be considered eligible for funding.
—David M. Greenwald reporting