Clearing and groundwork inside the Old Register Road Tax Allocation District, where road construction will enable the Tormenta FC soccer stadium, a supermarket and other businesses to be built, has recently become obvious.
Contrary to what people might expect, the widening of a section of public Old Register Road and construction of an adjoining, new city street called Tormenta Way is not being managed or directly funded by the city of Statesboro. Instead, under a recently approved agreement, the private developers will pay to build the roads before eventually being reimbursed almost $4.75 million by the city. The city will get the money from bonds or a loan to be repaid with tax allocation district, or TAD, revenue.
“You can do it lots of different ways, but that was the city’s decision, and it’s fine. This is actually a pretty smart way to do it,” said Tormenta FC President Darin Van Tassell. “In the development agreement that was passed, we pay for the cost up-front … and when we show them paid receipts, they reimburse us only for public infrastructure costs.”
Under the agreement unanimously approved by City Council on April 16, the city will reimburse the developers in at most two installments, not on a monthly or other more frequent schedule. The agreement is formally between the city and limited partnerships BVT Akins LP and J Edward Akins Farm LP, which own the land in the tax district.
Another investor entity, JGR Development LLC, is developing the stadium and other commercial and residential projects in the district. But the city’s agreement had to be with the landowners, said Van Tassell, who is also JGR’s lead investor.
After a bidding process, the developers awarded winning bidder Mill Creek Construction, based in Statesboro, the contract for the road project, he reported.
Widen Old Register
Currently only two lanes, Old Register Road will be widened to five lanes from just south of The Clubhouse family entertainment center, northward past the planned stadium and supermarket to Veterans Memorial Parkway. In January, interim Assistant City Manager Jason Boyles estimated this as a distance of about four-tenths mile.
Just at the intersection with the parkway, turn lanes will actually make Old Register seven lanes wide, Van Tassell said.
Also roughly 0.4-mile long on the city’s map, Tormenta Way will parallel the parkway eastward from Old Register Road. Traffic light-systems are planned for Old Register’s intersections with both Veterans Memorial Parkway and Tormenta Way.
Mill Creek Construction has contracted to complete the TAD roadwork by the first week of January, Van Tassell said.
Conditions of funding
Meanwhile, the development agreement commits the city to issue bonds or obtain “other alternative financing,” such as bank loans, to be repaid by TAD funds as they accumulate
The amount to be borrowed is the same as the TAD’s maximum revenue, $4.75 million, and the agreement states that the city will not reimburse the developers for any costs above that amount minus the city’s financing or bond issue cost. Another passage states that the city will not make the first disbursement until at least $2,375,000, half of the total, has been deposited into the city’s special TAD account.
These terms imply that the developers will be paying the contractor for several months before the city reimburses the developers for anything. But by borrowing the money, the city will still be able to reimburse them much sooner than the actual tax increment revenues accumulate.
Under the city’s Old Register TAD authorization, the revenue will come from new construction and rising property values, with last Dec. 31’s values as a baseline. So the TAD revenues won’t even begin to accrue until taxes are due again at the end of this year.
That is also true of a share in county property tax growth in the district, under the city’s agreements with the county commissioners and school board.
Some of the $4.75 million could also reimburse the developers for engineering and other costs associated with infrastructure that will become public property, as well as the road construction. The city will be inspecting the work as it is done, and in the end the landowners must deed the added lanes, the new street and any other funded public infrastructure to the city.
“Our costs will certainly exceed the $4.75 million – but not by a lot,” Van Tassell said Monday. “I mean, we did a good job of making sure we had the budgeting down.”
No timeline for bond
City staff members, including interim Assistant City Manager Frank Neal, have been meeting with the city’s bond counsel and financial advisor. As of Monday, city officials did not know yet whether the route chosen will be a bond issuance or another form of financing. They don’t have a timeline yet for the financing.
“Unfortunately, we are still in the early stages and we do not have answers to those questions yet,” Neal wrote in a reply email.
He added that it will be “probably a good six weeks or so” before the questions are answered.
Besides preparations for lane construction, the groundwork now underway involves relocation of utility lines. The city, which has water, sewer and natural gas lines along Old Register Road, has long been active and supportive in the planning, and the contractor is also working with power, cable and phone companies to coordinate this work, Van Tassell said.
An extension of Akins Boulevard that would connect with the eastern end of Tormenta Way is a proposed Georgia Southern University project and not in the TAD.
While acknowledging that the timing is not certain and that the roads must reach a certain stage before construction of the stadium complex can begin, Van Tassell is holding onto a goal to have it ready for the start of Tormenta’s next season, in April 2020.
“The challenge with this project is like getting married, and we told everybody we were engaged about two and a half years before the wedding. So, had we waited longer to tell everybody, they’d probably wonder less about how come it’s not moving faster,” he said, laughing. “It just takes a while.”