Big Question: What If Racetrack Fails?
Tulare - What if the Tulare Motor Sports Complex project is approved and then fails. Will the city be stuck with unexpected costs?
Tulare residents repeatedly have asked this question as the 711-acre project has made its way through the approval process and it was raised again during the Planning Commission's public hearing last week.
“I don't want to have Tulare
saddled with any expenses from a failed project,” Tom Drilling,
retired dentist and former Tulare mayor, told the commission.
Lance Mouw, another Tulare resident, put it more bluntly: “The city
has to cover its butt on this thing.”
City Manager Darrel Pyle said the
proposed 20-year development agreement, which the Planning Commission
saw before its 5-2 vote of support, as well as other agreements still
in the works are designed to protect the city from financial loss.
While the city is not a financial partner in the project, under the development
agreement the developer would not pay the city the estimated $26.6 million
in development impact fees (DIFs) directly. Instead, the city would use
portions of the annual transient occupancy tax and sales tax generated
by the project to off-set the DIFS.
'Unique' Agreement
The arrangement is “unique,” but not untried in Tulare, City Attorney Steve Kabot said. He explained the city had a similar, “highly successful” agreement with the outlet center when it was built in the mid-1990s.
The agreement with the motor sports park developers addresses several “what ifs” regarding the DIFS:
• If the sales and occupancy taxes are insufficient to cover the DIFS, then the city and developer will discuss the possibility of applying net property tax revenues and other revenues generated from the project to the amount owed.
• If those additional revenues don't cover the costs, the developer must pay the remaining DIFs to the city within six months of the expiration or termination of the agreement.
Another section of the agreement speaks to off-site public improvements required and states that since the city has no immediate plans or funds to build and pay for its share of the improvements, the developers will front all the costs and the city will “use its best efforts” to find the money to reimburse them, “but makes no guarantee of such reimbursement.'
A list of possible funding sources for reimbursement is included, but specifically excludes the city's general fund, which pays for essential city services such as police, fire, streets and other services.
The agreement also requires the developers to build a new city fire station on the motor sports complex property with the understanding the cost will become the responsibility of a community facilities district that will be created.
Other portions of the development agreement state:
• The parties do not intend to create a partnership, joint venture or any other joint business relationship by this agreement.
• The obligations of the agreement are not dischargeable in bankruptcy.
• If the developers transfer their right, title or interest in all or a portion of the property, the new owners assume responsibility for meeting the terms of the agreement.
• In the event of a foreclosure, the foreclosing mortgagee is not obligated to construct or complete improvements required by the agreement, but must honor any defaults in payments by the developers to the city.
One in Three
“What if it [the motor sports complex] is built and fails? That's a risk we face in every community development we approve,” Pyle said.
He and others said it is not part of the city's approval process to determine how likely it is a project will succeed.
“One of three restaurants doesn't make it,” planning Commissioner Chuck Miguel said at the public hearing. “Do we stop approving restaurants…?”
The chance of failure is possible at many stages of a project, many of which do not involve the city, Pyle said. Escrow could fail to close or a developer could fail to obtain real estate or construction financing and the project never gets off the ground, he said for example.
Pyle and others note the Tulare Motor Sports Complex Limited Partnership has invested significant amounts of money in developing plans and on an environmental impact report that alone costs about $1 million.
As with any other project, the developers will have to convince lenders and third party developers the project is feasible before they can proceed and “in every one of those instances, it's not the city that's at risk,” Pyle said. “I hear a lot of fear of risk. Is there risk? Yes, but it's others who are taking it.”
The City Council was expected to take
a closer look at all the agreements in connection with the project at
a study session this week and is scheduled to make a final decision on
the project after a public hearing scheduled for 7 p.m. Monday, Dec. 29,
at the Tulare Senior Center, 201 North F St.
Res-Com Party Raises Over $65,000
Tulare - Capt. David Scott of the Tulare Salvation Army Corps always says that the organization that helps so many families at the holidays will “get what God wants it to have.”
God — along with the owners of Res-Com Pest Control and the community at large —apparently felt the Salvation Army was well-deserving again this year of a hefty amount of support as the ninth annual Res-Com Christmas Party raised about $65,000 for the non-profit.
Res-Com is a pest control business that has helped many causes in the city over the years, but none more so than the Salvation Army's Christmas food drive.
“It's a lot of work, but I've got a lot of support,” company President Tony Taylor said, naming off family and Res-Com staff members who work tirelessly to put on the event. “I plan to do it again [next year], God willing.” He estimated the parties have raised between $250,000 and $300,000 total over the years.
This year's event drew another large
crowd – about 500. And while the names of some of the many sponsors
changed due to the economy, the number did not.
Tony Taylor said sponsors had contributed $46,750 prior to Thursday's event,
which was about $2,000 more than last year. That figure jumped another $4,000
when Sandy Williams of Bank of the West presented Scott with a check prior
to the live auction, bringing the bank's donation to $5,000 this year. The
bank had already contributed $1,000 to the effort.
“That's good in this economy,” Taylor said.
A live auction of 16 items brought in an additional $9,500.
The Army plans on distributing approximately 2,000 food boxes to 500 families just before Christmas, said Scott. Included in each box will be staples and poultry – most likely a turkey. In addition, clothes and toys for approximately 2,000 children will be provided.
Scott stresses it is only the working poor families who get the Army's help and he is seeing a lot of new families this year. Working poor families are those who choose work rather than take public assistance. Scott says they are the ones who really deserve the Army's help.
To meet the needs this year, the Army will have to raise approximately $82,000 and Scott said he is hopeful the kettle drive will make up the difference between what the party raised and what is needed.
“The kettle drive is doing well,” he said. “Last year I saw this coming – the recession. You learn to see these go in cycles. Last year was down, but this year we're back up,” he said. He attributes the increase in kettle donations in part to more volunteers ringing the bell for the Army.
The kettle drive will continue until
6 p.m. on Christmas Eve.
Bill Cooke Had 'Heart for City’
Tulare - Former Mayor William “Bill” R. Cooke was remembered this week as a man of integrity who was a “servant” of the people and committed to making Tulare a better place for all its residents.
Mr. Cooke, 79, died at 6 p.m. Saturday in the intensive care unit at Stanford Medical Center, where he was taken earlier in the week after suffering an aneurysm in the brain.
“He was a very just and fair man in all aspects of his life,” Councilman David Macedo said. “He truly had a heart for this city and what he thought was the best for it.”
Macedo, who often disagreed with Mr. Cooke politically but treated him with a respect that was obvious to those who watched their interactions, called Mr. Cooke “mayor” long after he held that title.
“I called him mayor up to the last time I saw him at the annual Christmas Tree Lighting ceremony,” Macedo said. “He earned that title and he earned it for life as far as I'm concerned.”
Mr. Cooke, who moved to Tulare in
1980 to pastor what is now River of Life Church, won his seat on the City
Council in 1992. His church and his home were in West Tulare and he had
become well-acquainted with the problems and concerns of its residents
and championed their causes on the council. Prior to his and Nettie Washington's
election that same year, none of the seated council members lived west
of the Union Pacific Railroad tracks.
City
Proposes 35.9 Percent
Sewer Rate Increase
Tulare - Proposed rate hikes for sewer, garbage and water would raise the average city residential utility bill to a minimum of $77.27 by July 2011, which is an increase of $18.77.
The Board of Public Utilities will conduct a public hearing on the planned increases at 3 p.m. Jan. 22 in the Council Chambers in the Civic Affairs Building, 125 South M St.
Residents were notified in their monthly utility bill of the increases, including a previously unannounced 35.9 percent hike in sewer rates over three years to pay for wastewater treatment plant improvements.
If the increases — 13.6 percent the first year, 11.8 percent the second and a 10.5 percent the third — are approved, the current $29.93 average monthly sewer bill would rise to $42 per month by July 2011.
The lengthy public hearing notice utility
customers received is required under Proposition 218, which also says rates
cannot increase if a majority of property owners file written protests.
Those protests can be filed up to the time of the hearing.
In addition to the sewer rate increase, the notification also informed customers
of two previously announced proposals for:
• Three consecutive 10 percent annually increases in the garbage fund to plug a deficit. The move would raise the current $19 monthly garbage rate to $25.30 by July 1, 2011.
• A 7 percent water rate increase
to allow the city to buy excess surface water in wet years to recharge the
water table. The impact of the water increase will not be the same for everyone
because the quantity of water used is a factor. The residential metered
rate, which includes 10,000 gallons of water, would increase 40 cents to
$10.07 a month. The cost of each additional 1,000 gallons would increase
from 54 cents to 58 cents.
Emergency Aid to Open Thrift Store
Tulare -Tulare Emergency Aid Council is opening a thrift shop, proceeds of which the non-profit plans to use to expand services and programs.
The new shop inside Emergency Aid, 424 North N St., will open Saturday and a free hamburger feed will be held between 11 a.m. and 2 p.m. for clients and others who want to check out the store.
The Tulare Chamber of Commerce also plans to hold a ribbon cutting at 2 p.m. Friday.
Emergency Aid was considering opening a thrift shop in the future, but decided to do so now at the urging of Capt. David Scott of the Tulare Salvation Army, which in early fall announced it was unable to receive donations because transportation to the Fresno thrift shop was no longer available.
A $4,500 donation from Kawneer, an Alcoa subsidiary in Visalia, made it possible for Emergency Aid to make the needed building improvement to open the store.
Shop hours initially will be 9 a.m.
to 1 p.m. Monday through Saturday.
For information or to volunteer to help in the store: 686-3693.
The above stories are the property of The Valley Voice Newspaper and may not be reprinted without explicit permission in writing from the publisher.
December 18, 2008
