Kannapolis officials to look into $2 million bid for rural land at Monday’s meeting
Published 12:00 am Tuesday, December 1, 2009
By Hugh Fisher
hfisher@salisburypost.com
KANNAPOLIS ó A $2 million bid to buy and preserve almost 560 acres of land along Second Creek will be up for consideration at Monday’s Kannapolis City Council meeting.
The fate of the land, also known as the White Road property, has been in question recently.
An option for the LandTrust for Central North Carolina to purchase the property expired because the group could not come up with the funds.
But local partnership Moore Smith LLC has put in a $2 million bid for the land.
According to a city staff report, the partnership “consists of two persons that are interested in preserving the land in its rural state, which is consistent with the mission of the LandTrust.”
But the partners have stated they will consider selling some of the land to a farmer who has currently been leasing part of it from the city.
And, unlike the original option agreement with the LandTrust, the agreement would include a provision to put into place no more than six single-family dwellings, in locations approved by the city.
That is a move requested by Smith Moore that the staff report to council members terms “a last resort ‘exit strategy’ should they find a need to resell the property to secondary investors.”
The agreement would otherwise largely remove development rights from the property.
Without those development rights removed, the property is valued at approximately $3.8 million.
New TIF agreement
Also at Monday’s meeting, members will vote whether or not to pursue a new financing option in place of the original tax increment financing plan (TIF).
The original plan would have brought in $168.4 million to be repaid out of property taxes on the downtown N.C. Research Campus district.
When the recession hit, investors shied away from TIF bonds, seeing them as too risky because they were based on future construction, Kannapolis City Manager Mike Legg said.
After months of holding out for improvement, last month Kannapolis City Council members approved having Legg and city staff begin preliminary negotiations for alternatives.
The result: a preliminary agreement with BB&T for an arrangement called a bank-placed TIF.
The bank would be the sole investor, instead of selling the bonds on the open market.
That plan would bring in $30 million if approved, not the original $168 million.
But the smaller amount is backed by construction that’s already in the works ó the new $15 million Cabarrus Health Alliance building, which the city will put forward as collateral.
“The interest rate is going to be more attractive because of that,” Legg said.
As under the original TIF plan, Castle & Cooke will be bound to a minimum valuation agreement. That means the owner of the Research Campus will pay a set amount of property taxes every year, even if the actual tax value is less.
Cabarrus County has agreed to match the city up to a max of $1.3 million per year for 20 years to pay debt service on the new TIF, Legg said.
And the original TIF agreement as approved by state regulators should still be in effect, Legg said.
“All things considered, I think this is the very best option to pursue,” Legg said.
After the Cabarrus Health Alliance building is constructed, the remaining $15 million would be used to repay the city and Castle & Cooke the monies they put up for necessary infrastructure improvements in recent years.
Any leftover cash would be used for more such improvements.