A $48.9 million planned development in Lakeland was unanimously approved for $5.4 million in TIF revenue tonight (11.12.18) with no cost or liability to the City of Lakeland.
Both the IDB (Industrial Development Board) and BOC (Board of Commissioners) approved an economic development plan for the 42-acre Lakeland Commons Planned Development at 9768 U.S. Highway 70 at the southwest corner Seed Tick Road and the Highway. The plan included a request for TIF (Tax Increment Financing) for up to 20 years.
Al Bright, Jr. attorney for the IDB, repeated several times there is no debt being assigned to the City. “There is no debt being assumed by the City,” said Mr. Bright. “There is no pledge by the IDB, City or Shelby County. It is all on the developer. The developer owns the parcel and he’s asking for approval of the economic development plan.”
Developers are Vince Smith and David Andrews.
The project is time-sensitive, said banker Brandon Cooper of Simmons Bank, because the project has approval through the end of 2018. After that, the process must start anew and possibly not be approved. He reiterated that for the TIF loan, the developers are guarantors of the debt. “The developer is on the hook for the loan. There will be no default to Lakeland.”
Mr. Cooper added, “If the project is not started by years-end, we will have to re-start the project. Pricing goes up, if it can even be reapproved.”
Mr. Smith said lack of re-approval concerns him. “It frightens me to death,” he said. “The costs for construction and materials are going up. There is inflation.”
Mr. Cooper said the structure for repayment of the TIF would be TIF funds and land sales. Explaining land sales, Mr. Smith said there would be outparcels on Highway 70 or parcels in Phase II. He would come back to the City at that point to identify what might be sold.
Once Phase I is permitted and ready to go in the spring, Phase II will start with design detail and plans and include land dedicated by the developer for a Lakeland City Hall and second Lakeland fire station.
On the drawing board since 2015, the project is expected to start construction in spring 2019 and open a year later with restaurants, office space, boutique retail and multi-family residential.
During both meetings, presentations were made by Al Bright, IDB attorney, about the TIF; Cory Brady, a planner representing the developer, with a slide presentation on the project; Brandon Cooper with Simmons Bank, sharing details about the financing; and Vince Smith, developer who answered questions.
Richard Gonzales, who last week was elected as a Lakeland commissioner, addressed both Boards with a message from Mayor-elect Mike Cunningham. Mr. Gonzales asked that the proposal be postponed until he and Mr. Cunningham can take office. (That is expected to be Dec. 6th after the Shelby County Election Commission certifies the Nov. 6th election on Nov. 26th.) Mr. Gonzales noted it was important for those coming into office to understand the impact the funding might have on the City budget. He said it is not time-sensitive and should be postponed. Although he said he believed in the development, “Our administration should have ownership in this project.”
Martha Higdon, Lakeland resident, did not formally address the IDB, but spoke from the audience against voting on the measure until Mr. Gonzales and Mr. Cunningham could take their seats on the BOC.
Michele Dial, whose potential position on the BOC hangs in the balance of uncounted provisional votes, spoke in favor of the project saying, “As a potential commissioner, I would vote in favor of it.” She encouraged the BOC to vote now, saying she believed the project was time-sensitive and could not wait for new BOC members to be seated next month.
In the proposal to the Boards, it was noted the project is not feasible without significant investment in new infrastructure and parking in the area, including construction of roads, sidewalks and pedestrian walkways, traffic signals, lighting, water lines, electrical line, gas lines, sewer lines and parking areas.
The request was for the City to approve a plan for Tax Increment Financing through the Lakeland IDB to provide funds to pay a portion of the costs of the improvements that are needed to permit the construction and operation of the project.
Mr. Bright said with the current value of the property, taxes are $1,200 with $300 of that property tax coming to Lakeland.
The total additional Lakeland and Shelby County property taxes to be generated by the project during the term of the TIF (after the payment of certain fees to the Shelby County Trustee and the Lakeland IDB) are estimated to exceed $6.9 million. Of these additional property taxes, Lakeland will receive approximately $2.3 million, and Shelby County will receive approximately $4.6 million. A portion of the new property taxes generated in the plan area will be applied to pay for eligible costs and administrative expenses of the project
The project is also expected to generate additional local sales tax and other local tax revenues in the approximate amount of $1.05 million annually and support approximately 736 jobs in the area.
Mr. Brady offered a series of slides showing project benefits to the City along with elevations of the project. Google album:
https://photos.app.goo.gl/vc2QJbHfax2su2TE7
Asked about the sewer work for the project, Mr. Smith said, “We will extend all utilities.” He said the work would benefit not only Lakeland Commons but projects three to five years in the future.
“We want this to be a walkable, desirable concept,” said Mr. Smith. “We want to see people shopping and living and a city center for maybe a homecoming parade or a farmers market.”
Asked about the land for City use, Mr. Smith said after Phase II is amended, he will dedicate two parcels for a fire station and city hall for his partnership with Lakeland. It would be up to the City to build the two facilities.
Mayor Wyatt Bunker thanked Mr. Smith, saying the project initially included big-box retail. “It was years coming and I’m glad it’s finally come to fruition.” Mr. Smith replied, “Through your leadership, I believe it is a much better project.”
Commissioner Clark Plunk asked a number of questions including when construction would start (spring 2019); names of anchors for the project (No, nothing right now); how will parking be handled (mostly hidden behind buildings but some on the main street).
Mayor Bunker said Lakeland Commons was three years in the works. “We initiated it, we saw it through. The economic impact is going to be phenomenal. The community will be able to come together. The developer is going to donate land for fire station #2 and city hall. There is no downside. If we wait, we jeopardize the project.”
Vice Mayor Josh Roman said the IDB passed the resolution unanimously and the project will help with infrastructure and sewer. He then called for the question which was approved by the BOC.
Agenda for IDB: https://tn-lakeland.civicplus.com/ArchiveCenter/ViewFile/Item/802
Agenda for BOC: https://tn-lakeland.civicplus.com/ArchiveCenter/ViewFile/Item/801
… Photos by Jim Willis, Lakeland Currents
