LELAND — The developer of Brunswick Forest is in the midst of securing a Special Assessment District in Leland. It would be the first of its kind in Leland, only the fourth in North Carolina.
If approved, future property owners living in the Special Assessment District (SAD) will pay for infrastructure improvements typically covered by a developer. The proposed SAD covers an undeveloped 1,643-acre tract of land that could eventually be home to thousands of affected residents.
In the SAD process, Leland will acquire a funding from an outside investor in the form of a revenue bond, in essence, a loan to pay for improvements; that loan is then paid back, not by the town as a whole, but by the residents of the specific area covered by the SAD. In this way, a SAD shifts the risk from the developer to the town.
$15.9 bond from Leland up front
Brunswick Forest’s developer — Funston Land and Timber, LLC, owned by Jeff Earp — would have access to nearly $16 million of funds secured by the town. Those funds would be used to build out roads, open space and water and sewer services to accommodate an unknown number of future lots.
The town of Leland would pick up the $15.9 million tab up front, paid for via a revenue bond. That bond could be covered by monthly assessments – or bills – charged to future property owners in the district over a 25-year period, increasing by 2 percent annually. Upon completion, the town would maintain operation and ownership of the developer’s infrastructure improvements, including roads and sewers.
Current Brunswick Forest and Leland property owners outside the Special Assessment District (SAD) would not be responsible for paying off the revenue bond.
The “build now, pay later” is a financing mechanism designed to speed up development. Authorized by North Carolina State Statute §160A, Leland’s proposals state the town’s recent growth warrants establishing the rare district.
SADs are designed for “cities that face increased demands for infrastructure improvements as a result of rapid growth,” according to the statute. Leland is certainly growing quickly: between 2010 and 2016, Leland’s population increased by over 47 percent according to U.S. Census Bureau population estimates.
Gary Vidmar, Leland’s economic and community development director, said establishing a SAD would increase the town’s tax base.
“The town benefits because it gets tax revenue much more quickly than if the developer (paid for infrastructure) through traditional financing,” he said. “It would help build out Brunswick Forest in a much more accelerated fashion and give us tax revenues.”
With Leland’s total population at about 20,000, Vidmar said Brunswick Forest’s current population makes up about 25 percent of the town’s tax base. When fully built out, the retirement community’s residents could match Leland’s current population. Vidmar described Leland as a developer-friendly town, adding that the SAD would fit Leland’s desire to collect more tax revenues.
“This a tool that we use, by statute, to help a developer,” he said.
The town has been reviewing SAD agreement documents since the designation was formally petitioned by the developer in February. On Aug. 1, Leland’s Town Council passed a preliminary assessment resolution for the SAD during a special meeting. The town will hold another public hearing at a future date, yet to be determined, to discuss the SAD.
“There’s plenty of steps to be taken that protects the town from moving too fast,” Vidmar said. “If we are not satisfied with the information that’s provided to us, we’ll stop it.”
Author’s note: This is part one of a two-part story introducing Brunswick Forest’s Special Assessment District in Leland. Stay tuned for part two later this week.
Update: Leland’s Special Assessment District would be the fourth in the state, not the third, as originally reported.
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