Settlement nears end
Work could start later this month
Wednesday, August 6, 2014 1:00 PM
Plans to start work on 100 lots in an undeveloped portion of the troubled Lost Rabbit development could be under way as early as the end of August.
Commercial development is expected to be a key component to future work.
Steve Rogers of Rogers & Associates told Madison County supervisors Monday that developer Terry Lovelace, who has an option to develop 156 acres of land known as Lost Rabbit South, plans to start work as soon as a planned settlement is finalized.
An omnibus settlement agreement at Lost Rabbit could wrap up later this month when $5.235 million in urban renewal development bonds (URD) are issued and the current troubled public improvement district (PID) is dissolved. The PID has defaulted on $18.7 million in bonds.
Rogers said Lovelace had initially planned to develop the property with 288 lots but changed that to 295, with an average lot size of 9,000 square feet.
"There's more lots and the lot sizes are slightly larger," Rogers said, noting the new plan for Lost Rabbit will be better than the original plan.
Attempts to contact Lovelace were unsuccessful.
Rogers and Mike Espy, attorney for the Board of Supervisors, said there were a few slight changes with Allstate, the bond insurer, for the overall settlement, but nothing bad for the deal itself.
"There are no changes that concern me, nor should it concern the county," Espy, the architect behind the settlement, said.
One of the most notable changes involves two payments a year instead of one, totaling $479,000. The money will come from 17.19 mills of ad valorem tax generated on properties plus a roughly 1 percent urban renewal bonds yearly fee.
There are no other financial obligations or guarantees by Madison County, and Allstate has agreed not to default on the new URD bonds if there is a shortfall in cash.
Allstate owned the $18.7 million in original PID bonds and is "substituting" those bonds for the new URD bonds in a private sale. Interest generated for Allstate over the 25-year life of the new bonds is over $7 million.
Rogers has also asked the county to provide a letter indicating a report he produced for the county not be called the "Rogers Report" and to indemnify him of any liability associated.
District 3 Supervisor Gerald Steen was the lone vote against moving forward with issuance of the URD bonds, continuing to question the diversion of county general fund taxes to pay for a development.
District 1 Supervisor John Bell Crosby, who has taken the lead from the supervisors' position, nominated all the new URD members and has pushed the settlement along each step of the way.
"Hopefully everyone sees it more as a positive impact," he said. "Allstate was elated. We were the first ones that ever came to them with something (like this)."
On Tuesday, the Lost Rabbit URD board met for the first time at the Pinnacle Trust office in Lost Rabbit. The board approved new bylaws, elected officers, and legal documents facilitating the transition from a PID to a URD.
"You guys know this is really dear to me," Board President Stacey Wall said. "Because of (Pinnacle Trust), a house, a couple of lots out here. Lost Rabbit is really important to me. I'm excited to see things turn around."
Jim Turner was elected vice president and Diane Dyar was elected secretary. Dyar replaced Jim Kennedy, who resigned because of time constraints before the board even met.