Developers will pay bulk of first phase of infrastructure
A plan for developers to pay the bulk of Pleasant Valley's first phase of infrastructure costs received a preliminary blessing by Gresham city councilors Tuesday, April 3.
City staff members will fine-tune an agreement with at least three developers, and as many as seven, and bring it back to councilors for final approval in May or June.
'You're on the right track, move forward,' said Gresham Mayor Shane T. Bemis, summing up the council's direction.
The plan originally was for a more balanced public-private development partnership. But when a $16.4 million funding gap surfaced last fall, three major Phase I developers commissioned a study to retool the list of needed improvements - things like water, sewer and parks - and their costs.
Those developers - Pacific Lifestyle Homes Inc., Pacific Landmark Development and Tim Aldinger and Associates - plan to build 650 new homes on about 120 acres in Pleasant Valley. The land is part of 541 acres east of 182nd Avenue and north of Kelly Creek that residents voluntarily annexed into Gresham last year. Approximately 280 of those acres are considered Phase I.
The developers managed to shave $2 million off the $33.6 million infrastructure price tag by scaling back improvements to 190th Avenue. Instead of starting out with a five-lane road, three lanes will be built with two more added as the rest of Pleasant Valley is developed.
Also by redistributing costs and taking on a greater burden of upfront expenses, the developers were able to bridge the previous funding gap.
'Yes the gap has been bridged,' said Alice Rouyer, Gresham's executive director. For example, last fall the city planned to pay for improvements to 190th. Now the developers will.
The cost of infrastructure is such a huge issue because developing Pleasant Valley, a largely rural area, is like building a city from scratch.
System development charges that usually pay for things like water and sewer connections can't fund Pleasant Valley's infrastructure because the area doesn't have that kind of infrastructure to connect to. Also, the system development charges are not paid until after development takes place, but the infrastructure is needed before development can take place.
According to the agreement, developers will pay about $18.62 million in water, stormwater, parks, transportation and wastewater infrastructure costs. Also four more developers have expressed interest in being part of Phase I and might help share the financial burden, Rouyer said.
Developers would be reimbursed through future system development cost credits. Infrastructure costs not eligible for such credits, but that will benefit adjacent land if it's developed, could be defrayed through a reimbursement district. But only those who develop their property would have to pay.
In return for the developers paying nearly $19 million in upfront costs, Gresham will pay $12.92 million, including a $3.2 million sewer project called the Jenne Road Interceptor.
The city has already budgeted $9.72 million as part of previous capital improvements plans and loans. The remaining $3.2 million will likely be paid for with a loan.
'To me this is an indication, it shows a commitment on the part of the development community to make something happen,' Rouyer said.
Councilor Karylinn Echols seemed relieved that the $16 million gap has been bridged. Last fall, Echols said she 'wondered what would happen and was a little concerned.'
Not any more.
'Now the results are here.'