by Matt Wright
Financing for The Lake District took center stage at a special called meeting for the Board of Commissioners Thursday evening, January 6th.
A resolution presented to the BOC stated a change in language was required to move forward with the bond financing portion of the project. Dexter Muller, the economic development coordinator for Lakeland, told the BOC when he originally wrote the economic impact plan for The Lake District he anticipated there would be a construction loan for 5 years and then a bond issuance for 15 years. Now that the construction portion of the massive multi-use project is in year 3, a lender in Chicago is already willing to issue a bond. However, that would make it a 17 year bond issuance, instead of the 15 years mentioned in the plan. While reviewing the economic impact plan for the project, the Chicago based lender realized it called for a 15 year bond issuance. Stating federal regulations, Mr. Muller said the lender wants to “cross all their I’s and dot’s all their T’s” and asked that the impact plan be amended to a say a 17 year bond issuance instead of 15 before they proceed.
The economic impact plan is what permits the TIF (Tax Increment Financing) to be provided through the issuance of bonds in the amount of $39 million. The proceeds of any TIF would be used to pay the costs of the eligible public improvements to the property such as roads and sewers.
Mr. Muller told the board nothing about the TIF changes saying, “It’s still a 20 year TIF, there’s no extension to that, there’s no (additional) financial impact. This is just a clean up of language.”
The change to the language from a 15 year bond to a 17 year bond has already been approved by the Lakeland IDB (Industrial Development Board) and the Shelby County Commission Economic Committee. The amendment will go before the full Shelby County Commission next week and it’s expected to pass easily. However, it was not that simple for two of the members of the Lakeland BOC.
In what seemed like an attack on the largest economic project in Lakeland’s history, Commissioner Richard Gonzales said he was tired of dealing with The Lake District. “This was supposed to be done by 2022 and all we have is a bakery and a sign,” Mr. Gonzales said. It’s assumed he was referencing Frost Bake Shop (scheduled to open in January) and the lighted TLD monument sign. Starbucks is also open in the development, and they do have baked goods but it’s unclear if that’s what the Commissioner was referencing. Other retail buildings in phase are also complete and multiple businesses are in the process of building out their retail space. Townhomes are also under construction in the residential section of the property but that was not discussed. Commissioner Wesley Wright reminded Mr. Gonzales that COVID was and continues to be part of the delay equation, but Mr. Netanel adapted to those challenges and moved forward.
Mr. Gonzales also argued The Lake District only pays $7,000 dollars in property taxes per year, which is not much different from a larger home in Lakeland according to the Commissioner. That statement was not correct though. City attorney Will Patterson explained to Mr. Gonzales that he was only looking at the taxes generated from one parcel of the large property when in fact it had many parcels. The correct amount according to Mr. Patterson is actually $180,000 in property taxes and that number will rise substantially in the next few years. Mr. Gonzales replied with “I stand corrected.”
Yehuda Netanel, the developer of The Lake District, was in attendance and went to the podium at City Hall to address Mr. Gonzalez’s attack on the mixed-use project and his sentiment of being “tired” of the $435 million project. “If anyone here should be tired, it’s me,” said the California developer. He told the BOC he’s personally been responsible for over $50 million in loans so far on the project. He also told Mr. Gonzales he’s already paid over $1 million in fees and permits which is sitting in city coffers. Mr. Gonzales waved off Mr. Netanel’s comment saying, “those are just fees.”
Also voicing opposition to the amendment was Mayor Mike Cunningham. He said he would like the economic impact plan for the project to be totally rewritten, even if it did take a while. “I don’t understand the rush,” the Mayor said. But the need for the rush was explained to the mayor by both Mr. Muller and Mr. Netanel saying they assumed he would like to approve the amendment before the County Commission does next week. Mr. Netanel also explained the fluidity of the capital markets is not something you wait on in today’s environment saying, “waiting will have an impact.”
Commissioner Jim Atkinson, who was also the former City Manager for Lakeland, confirmed Mr. Netanel’s statement saying there was no financial impact to the city at all and this was simply a wording change. “It’s housekeeping, that’s all, it’s a no-brainer. If we don’t approve, we’re just making it harder for him (Mr. Netanel) to move forward,” Commissioner Atkinson said.
After the debate ended, a roll call vote was taken with Commissioner Gonzalez and Mayor Cunningham voting no, while Commissioner Wright, Commissioner Atkinson, and Vice Mayor Michelle Dial voted yes, thus approving the amendment and allowing The Lake District to take another step forward to completion.
