Granite Falls CDA Lays Groundwork
PRINCE EDWARD-Members of the Granite Falls Community Development Authority (CDA) met November 17 and continued steps to assist in the development of the proposed Granite Falls hotel and conference and training centers.
CDAs are created to facilitate development and have the ability to levy special assessments within the established area on the sale of food and beverages on businesses. The assessments, if approved, could provide financing for public improvements such as roads, water and sewer projects and parking facilities in connection with the proposed hotel and conference center.
Specifically, the CDA board (consisting of the eight members of the board of supervisors) approved a resolution authorizing hiring consultants in connection with the issuance and sale of CDA bonds and a resolution outlining the CDA's intent to reimburse itself from the proceeds of financing for the infrastructure and related improvements.
“This is not approving anything,” outlined Attorney Mark Williamson of McGuire Woods, the firm assisting the CDA in the process. “This is just giving us the green light to go ahead and to see if we can structure a deal that everybody feels comfortable with…”
He noted that they're in a preliminary meeting, that they're getting the people in place that they can come back to the CDA and offer what they think will work, the structure of the bonds they think will work.
The board's action essentially sets the process in motion, but ultimately, once the CDA has completed its work, the board of supervisors would have to approve assessments and structure to back up the funds-with total debt or other financing projected at $17 million, which includes approximately 35,000 square feet of an approximately 55,000 square foot conference center and related facilities.
It was highlighted by Williamson that these are revenue bonds payable by specific identified revenue sources, not general obligation of the county. County Administrator Wade Bartlett confirmed that it has always been the plan, the economic development agreement approved by the IDA and board of supervisors, to look to tax increment financing.
That includes revenues generated from the CDA district to pay the debt.
Robert Fowler, of Prince Edward Development, which plans on building the hotel and conference center at an old quarry site just south of the County school complex, presented information on two firms that the CDA was asked to retain at some future point: an underwriter (headquartered in California), necessary to sell the bonds, and an administrator for the CDA, to basically run the operations of the CDA on an on-going basis after the bonds are issued.
Underwriters are expected to be in attendance at the December CDA meeting. Fowler noted that the firm, Stone and Youngberg, is the “nation's leading underwriter for these types of bonds.” He also told the board that they've done a majority of the CDA financings in Virginia.
In separate action, the CDA board agreed to adopt a resolution to adopt a member agreement to join the Virginia Association of Counties to obtain liability insurance. The cost is $1,485 per year. The developer, it was noted, has agreed to reimburse the County for that cost in case nothing goes forward. (The funds could come from a $75,000 escrow account.)
The CDA meeting, the first since April of 2010, also afforded a chance to get caught up on the history of the project. Fowler cited that the Prince Edward Development, in October of 2008, began searching for a site in the county for a hotel and conference center; made their first presentation to the County Board of Supervisors in April 2009; entered into an agreement to purchase 94 acres from the IDA; the County rezoned the IDA's property to commercial in August of 2009 to permit the development of the hotel. VDOT approved a $1 million revenue sharing grant in October of 2009 for the relocation of Route 628; and the Board of Supervisors created the CDA to finance the public improvements related to the hotel as well as the conference center and training center in November of 2009; and in December of 2009, a market feasibility study for a 150-room hotel and entered into an economic development grant agreement between the County, IDA and Prince Edward Development.
Fowler highlighted that in January of 2010, Granite Falls Hospitality LLC, the owner of the hotel, was created; in May of 2010, Granite Falls Hospitality entered into letters of intent with Marriot International to brand the hotel as a Renaissance and entered into a letter of intent with Crestline Hotels and Resorts to manage the hotel; in July 2010, an update of the market feasibility study was done to reflect a room count of 176 rooms and Renaissance as the flag and Crestline as the manager; in October of 2010, the Tobacco Commission approved a $1.5 million special projects grant and a $145,000 southside economic development grant for the conference and workforce training centers; in December of 2010, the CRC and Farmville Area Chamber of Commerce completed a needs assessment for the workforce training center to determine that there was sufficient need to justify the development of those facilities; in January of 2011 WM Jordan delivered a draft guaranteed maximum price for the hotel conference center; in March, SVCC agreed to operate the workforce training center on behalf of IDA; in August, the County received bids for the relocation of Route 628; in October, the Virginia Tourism Corporation rolled out their Virginia Tourism Development financing program: and this November, there was a request to create a tourism zone to access a new tourism development financing program for the hotel.
Fowler also offered several highlights of the project:
*Noting that it represents a $51 million investment in the county, excluding the Route 628 project.
*That they would “fully reimburse” the County for its share of the Route 628 relocation costs.
*During construction, they would employ over 100 individuals during the 18-month period.
*Once open, they would employ approximately 140 people, a 100 full-time equivalent.
*Have an annual payroll of approximately $2 million.
*Establish the first full-service hotel in the region.
*Establish the first workforce training center in the county that will be operated by Southside Virginia Community College.
*Will pay approximately $700,000 in water and sewer connection fees (although he noted based on the article in the paper, that might be slightly over $700,000) and will require a capacity of approximately 50,000 gallons per day of potable water.
*And that they would generate approximately $26 million of net tax revenues to the County over the first 30 years of hotel operations-net of the economic development grant agreement.
CDA member Jim Wilck reflected (when he was on the IDA) that the original price on the hotel Fowler mentioned was about $35 million and he asked about the difference between the two costs.
“You know, I'd have to go back and take a look at the numbers. I think…originally we were talking 150 rooms; obviously…going to 176 adds some. I think the conference center space is slightly larger than what we anticipated as well. I mean, I could do that analysis and at the next meeting, I'd be happy to give you a detailed comparison between those two budgets and let you know.”
Wilck also asked about a copy of the feasibility study.