The proposal for the StoneGate development special assessment district (SAD) is coming back in front of the Reno City Council tomorrow for a second time.
A previous discussion to create a SAD for the development was tabled in January because council members said they were confused about the agenda item.
The SAD seeks $37 million to cover infrastructure costs, and the developer is requesting the city approve the creation of a SAD and bonds to help pay for streets, sewer and improvements to the Highway 395 interchange.
The SAD’s proposal has more information on the city’s website than for prior meetings, including a list of criteria the project is expected to meet.
“The primary benefit of SAD financing is to reduce infrastructure construction costs so homes can be sold at more affordable prices,” city staff noted. “With this tool, mortgages and down payments in the assessment area should be reduced, which would benefit lower-income home-buyers.”
It is the largest SAD of its kind in Reno’s history.
According to staff, “The only active SAD of this type in Reno is the 2002 Special Assessment District No. 4 (Somersett Parkway), which helped fund street improvements, utilities, sanitary sewer improvements and a potable water pump station for the Somersett project.”
But staff also noted the proposal for StoneGate does not meet all of the city’s criteria.
“The request is in substantial conformance with the SAD Guidelines,” they said. “Minor deviations are supported with a finding that the deviation from the policy is in the best interest of the City.”
Those deviations include the location — StoneGate is not in the city’s high priority development area — and the request for the bonds to be issued over 30 years, not 20 years required by the city.
“Higher priority areas are primarily developed, which makes the requirement for 100% property owner consent very difficult to achieve,” staff argued. In addition, “by issuing the bond with a 30 year amortization, it decreases the annual obligation on the assessments which would lower the overall cost for the housing and is therefore consistent with the requirement that any proposed deviation be in the best interest of the City.”
The bond amount also exceeds the city’s maximum of $25 million.
“The proposed bonds total $36.7 million, which exceeds the general range that is called for,” staff said. “The analysis that determined the amount being funded with tax exempt bonds was based upon the appraised value as is and as improved.”
The city maintains the SAD has little to no risk to the city and there are provisions for the city to sell the property if payments are missed.
The developers also suggest, within the proposal, that a second SAD may be needed “to fund costs over [the] amount available from bonds.”
