The city of Mission is poised to start charging the Gateway property $600,000 per year to pay back the city’s investment in storm water improvements.
Under the proposal, the developer will be required to pay a $600,000 per year assessment for 20 years. That will give the city back the $12 million it invested in making storm water improvements that made the 16.2 acres of Gateway land possible to fully develop.
At a council committee meeting Wednesday, the possibility was raised that this new financial requirement on the developer could force some action on its redevelopment. “This may precipitate some actions by the owner,” bond counsel Gary Anderson said in responding to council questions. “I’ve been pushing for this for four months now,” Councilor Pat Quinn said. “I’m all for it.” Other council members agreed to start the process this month.
As part of the development agreement negotiated between the city and developer Tom Valenti, the developer agreed not to protest any benefit district created to levy an assessment on the land. If the land is sold, a new owner would also pay the assessment unless a new deal is negotiated. Even if the current development agreement is canceled, Valenti can’t protest the assessment, the council was told by its development attorney.
The original development agreement, months in the making, was approved by the city nearly two years ago – in January 2013 – but no development has started. In that agreement, the city was to provide $30 million in development financing plus get $6 million of its $12 million back upfront when bonds were sold. Those bonds would be funded by additional sales and property taxes at the site. The last $6 million was to come back to the city at the end of the special taxing period after development bonds were paid off.
Anderson noted that the city completed the storm water work several years ago and since has been paying debt service on the bonds that financed the work. “You need to do what is in the best interest of the city,” Anderson said. The city has given “the developer a number of years to get this done,” he noted.
Several steps, which could take until March, are required to get the assessment in place. The first bill for $600,000 would appear on the December tax bill for the Gateway. When Valenti appeared last month, he said it is imperative for him to get something built so he can begin to recoup his investment in the property which has been vacant for years.