Board takes no action on Kannapolis bonds
Published 12:00 am Thursday, December 3, 2009
By Mark Wineka
CONCORD — The Cabarrus County Board of Commissioners took no action on self-financing bonds for Kannapolis Monday night — and that was a good thing for Kannapolis.
By not opposing boundaries for a tax incremental financing (TIF) district or an accompanying financing plan, commissioners kept things on go for Kannapolis to pursue special financing.
Rowan County commissioners acted similarly in November, taking no official position on Kannapolis’ plans to create a special tax district to support infrastructure improvements connected to the North Carolina Research Campus.
Kannapolis is hoping Cabarrus County will share equally the annual costs of debt service on $76 million of self-financing bonds, which have to be approved by the Local Government Commission. The bonds would be paid off over 20 years.
The LGC was supposed to consider Kannapolis’ financing proposal today, but the exact amount of the bonds is still up in the air.
Negotiations continue with Castle & amp; Cooke, which is developing the biotech campus, and Cabarrus County also has yet to approve an interlocal agreement saying what its obligation will be on the bonds.
Castle & amp; Cooke representatives have told Kannapolis officials they would like to see the city issue more than $76 million in bonds.
The company wants the bond amount to be as large as can be supported by tax revenues that a special district would generate.
Meanwhile, commissioners have yet to say whether they will pledge 100 percent of the tax revenues from a special district toward paying off the debt service on the bonds.
That decision will come — or the pledge will be reduced — with the interlocal agreement.
“That’s your leverage in the transaction,” Steve Cordell, Cabarrus County’s bond attorney, told commissioners Monday night.
Kannapolis has said it would be responsible for roughly $60 million in infrastructure improvements: 17 street and traffic projects ($18.3 million); eight utility projects ($13.5 million); five parks and recreation projects ($9.8 million); three streetscape projects ($6.4 million); and a parking deck to serve the Core Laboratory now under construction ($2.7 million).
Castle & amp; Cooke would be responsible for about $316 in additional improvements under the proposed plan.
Self-financing bonds, or tax increment financing bonds, can be issued by a city to fund public improvements and encourage development within a special district.
The additional property tax revenues generated by development within the special district (which would include the research campus and other parts of Kannapolis) are used to pay off the bonds.
A recent fiscal impact report said Kannapolis and Cabarrus County could pay off the 20-year bonds, absorb additional expenses related to the campus and still have excess revenues.
Contact Mark Wineka at 704-797-4263, or email@example.com.