Farmington initiates possible $3.5M bond

FARMINGTON — City officials have formally started the process to bond for as much as $3.5 million to help move a key development project forward.

The city council voted 5-0 Tuesday night to approve a parameters resolution for a sales tax bond to build a new road as part of the Station Parkway development near Burke Lane, dubbed the “road to the north.”

The bonds would be paid back over a 21-year period and will be backed by city sales tax revenues, though city officials expect development fees generated by the project will be used to repay the debt.

The resolution is the first step of a legal process that could put the city in position to bond as early as this spring. The resolution requires the city to file formal notices on the bond and a public hearing, and then allows at least a 30-day comment period before bonds can be issued.

Initially, a public hearing on the bond was to be scheduled Feb. 16, but City Manager Max Forbush has recommended the hearing be delayed until March 2, to allow Benchland Water District to move forward with plans to build a new reservoir.

The city hopes to team with the water district in one phase of the project and perhaps save as much as $600,000 in the process.

Reservoir project plans are still subject to review by the U.S. Forest Service. Scott Parsell, manager of the water district, said the Forest Service has already been heavily involved in reservoir plans and he expects final approval of the project before March 1.

Forbush said he doesn’t think the city will need to bond for $3.5 million, and he stressed that once development at Station Park starts, the financial risk to the city will diminish.

“We fully expect this will be short-term (debt), which will be retired after a couple of years,” Forbush said.

Councilman John Bilton asked how the city would handle the debt should development in the Station Park area continue to run into delays.

Forbush admitted the city would have to look at raising taxes to pay off the bonds if plans fall through.

“It’s a leap of faith, but not that big of a leap,” Councilman Rick Dutson said.

CenterCal Properties, the developer of Station Park, bought 62 acres for its project on the west side of the city at the intersection of Interstate 15, Legacy Parkway, U.S. 89 and a FrontRunner train stop, and has projected spending as much as $250 million to develop the area.

Plans for a new Harmon’s grocery store and a new movie complex have already been announced, and Forbush suggested more stores might formally announce their plans later this spring.

In the meantime, city officials need to move forward with infrastructure plans for the project, including the road to the north.
The project is expected to cost as much as $7.8 million.

The city’s share of those costs is expected to reach $2.6 million, the city manager said.

City officials have already paid $125,000 for project costs and have another $550,000 set aside to fund the work.

City officials have been working with Zions Bank to work out possible bonding plans.