Friday, April 12, 2024

Leland could pay Brunswick Forest developer $3.3 million in incentives

The Town of Leland will consider paying Brunswick Forest's developer up to $3.3 million in economic development incentives to fund development west of the rail line. (Port City Daily photo/Johanna Ferebee)
The Town of Leland will consider paying Brunswick Forest’s developer up to $3.3 million in economic development incentives to fund development west of the rail line. (Port City Daily photo/Johanna Ferebee)

LELAND — Leland is proposing to offer up to $3.3 million in economic development incentives to Brunswick Forest’s developer to add 1,790 homes west of the Military Ocean Terminal Sunny Point (MOTSU) rail line.

The new homes would add nearly half-billion dollars to the town’s tax base by 2030-2031, town documents estimate.

Related: In six months, Leland approves over $1 million in incentives tied to free-market residential projects

Incentives would cover the cost to extend utility service and roads in phases seven and eight of Brunswick Forest, which Funston Land and Timber, its developer, intends to develop in early 2020.

The town would essentially reimburse Funston Land and Timber an estimated $2,647,000 to cover the cost of utility installation in phases seven and eight, but no more than $3,308,750 (representing 125 percent of the current cost estimate). Leland would then acquire, operate, and maintain the utilities upon completion.

Brunswick Forest

Brunswick Forest residents make up roughly a quarter of the Town of Leland’s population. Jeff Earp, manager of Funston Land and Timber and president of Brunswick Forest, attested in May his master-planned community has added nearly $1 billion to Leland’s tax base since its mid-2000s inception.

The community is comprised of 3,361 residential units and projects a total of 12,642 units when fully built out, according to town documents released this week.

So far in 2019, Leland has pledged to pay three developers a total of $1,025,000 in economic development incentives. Each incentive agreement funds public infrastructure, involves land that was recently annexed into town limits, and is associated with privately owned high-density residential developments (not public or affordable housing projects). Land in the Brunswick Forest Planned Unit Development is already located within town limits.

Funds are being allocated from System Development Fees — not taxpayer dollars. These funds are paid by developers to connect to existing utility systems into a separate town account. Once terms in agreements are met, the town pays the developers back for the utilities out of this fund.

If Leland Town Council approves its offer to Funston Land and Timber, set for review Sept. 19, it could bring the town’s total economic incentive obligation this year to $3,672,000 or a maximum of $4,333,750.

Also at that meeting, Council will consider a $164,000 economic incentive offer to Sunset Land Investments, LLC. If both are approved, it would bring the town’s obligated incentive maximum total to $4,497,750.

(Top) Area included in incentive proposal, (bottom) former SAD:

(Port City Daily graphic/Johanna Ferebee, Base maps courtesy Town of Leland)
A new proposal to offer Funston Land and Timber up to $3.3 million in economic development incentives to extend utilities in phases seven and eight of the Brunswick Forest Planned Unit Development does not include phase nine. In 2018, Funston Land and Timber sought to establish a Special Assessment District (SAD) that would have covered the developer’s $16 million fees to extend infrastructure in phases seven, eight, and nine. (Port City Daily graphic/Johanna Ferebee, base maps courtesy Town of Leland)

SAD vs. incentives

Last year, Funston Land and Timber was seeking to establish a $16 million Special Assessment District (SAD) in the same area.

In that deal, the Town of Leland would have acted as a financial middle man.

Leland could have opted to issue a revenue bond, which would be paid back to the town through individual assessments paid for by future subdivided property owners. Upon issuance of the bond, the developer would have been paid back for costs incurred while extending public infrastructure, including roads, utilities, stormwater improvements, and public paths.

Generally, developers take on these costs themselves. Infrastructure costs are typically passed on to future homeowners through the sale of the final product. In the SAD process, the cost of public improvements would have been paid for directly from future homeowners in annual property tax assessments via a lien.

The SAD was proposed on approximately 1,643 acres west of the MOTSU rail ine, including phases seven, eight, and nine of the Brunswick Forest Planned Unit Development.

Related: Rezoning case presents ‘lesser of two evils’ as development density surrounds MOTSU property

Economic incentives would cover utility installations and road expansion in phases seven and eight totaling 716 acres — this does not include phase nine. These two phases would add 1,790 new residential units by 2030-2031. This would add an estimated $1,088,186 in sales tax, increasing the town’s tax base by $447,500,000.

In February, Leland officials confirmed Funston Land and Timber had stalled SAD discussions and were declining to move forward.

Economic incentives in phases seven and eight would cover the cost to:

  • Connect Hewett Burton Road to Brunswick Village Boulevard creating a new crossing over MOTSU’s rail line. This crossing is already permitted, according to a MOTSU representative.
  • Extend utilities on Kay Todd Road

Funston Land and Timber would donate 32 acres of land to the town in the agreement, to be used as a public park. This donation is valued at $1.6 million, the town estimates, approximating a $50,000 value per acre.

Leland Town Council meets Sept. 16 at Town Hall beginning at 6 p.m. to review this proposal. View the full meeting agenda online now.

View the proposed economic incentive Memorandum Of Understanding below:  

MOU: Leland, Funston Land and Timber by Johanna Ferebee on Scribd

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