Friday, March 1, 2024

Leland’s process for getting developers to pay for public infrastructure

Brunswick County is requiring upgrades to road conditions in Lanvale Forest before approving new building permits (Port City Daily photo/MICHAEL PRAATS)
Road problems like this in Lanvale Forest could have been prevented by requiring the original developer to provide surety bonds (Port City Daily photo / MICHAEL PRAATS)

LELAND — Planning a new development does not happen overnight. Instead, it takes time, filled with public hearings and acquisition of permits, during which there is a lot of give and take from developers and the municipalities and one of the factors taken into consideration before approval is an agreement on who provides public infrastructure.

While local government is often the provider of public infrastructure like roads and utilities, sometimes the responsibility is passed onto developers.

Municipalities will frequently require developers to provide services, like the installation of water and sewer lines as well as paving streets and installing curbs, before giving projects the go ahead. Sometimes a developer will ask for an agreement to allow for construction to begin before infrastructure improvements are complete.

“In lieu of requiring the completion, installation, and dedication of all infrastructure improvements prior to final plat approval, the Town Code of Ordinance stipulates that the town council may enter into an improvement guarantee agreement with the sub-divider, whereby the sub-divider shall agree to complete all required improvements,” Economic and Community Development Director Gary Vidmar said.

Upon singing the agreement, the developer is tasked with providing one of three forms of assurance, a surety performance bond, a cash or equivalent security, or an irrevocable letter of credit.

“Once said agreement is signed by both parties and the security required herein is provided, the subdivision administrator may approve the final plat, if all other requirements in the ordinance are met,” Vidmar said. “To secure this agreement, the sub-divider shall provide, subject to the approval of the town council, either one, or a combination of the following guarantees not exceeding 1.25 times the entire cost.”

The reasoning for the requirement of these promissory notes is to prevent incidents like the issues that occurred in the Lanvale Forest subdivision. Residents of that subdivision were left with incomplete and deteriorating roadways after the initial developer abandoned the project.

If the county had obtained some sort of assurance from the developer, those funds could then have been used to complete the disheveled infrastructure. In projects in which such assurances are received, the developer would get those funds returned on the work is completed. 

“Upon completion of all or a portion of the work, the developer submits a written request to release or reduce the guarantee. Upon receipt of such request, the town’s engineer will inspect the completed work to ensure it has been installed according to the town’s standards. If the completed improvements are determined to be acceptable, town council votes to release or reduce the guarantee as requested by the developer,” Vidmar said.

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