Hanover supervisors to weigh Lewistown bond restructuring
Winding Brook, the commercial development situated along Interstate 95, was expected to house numerous shops and retailers, restaurants and an anticipated outlet mall. The bond for the development was issued in 2007 and the Lewistown Community Development Authority was formed in October 2006.
But the 185-acre area has only seen some of what was initially projected.
“The recession prevented the commercial development that was projected from showing up as anticipated,” said Economic Development Director Edwin Gaskin.
The area suffered when the economic recession began in 2008; property value did not increase as much as anticipated and the $37,675,000 bond borrowed from numerous stakeholders was not paid back as expected.
In March 2014, the landowners defaulted on the bonds, which don’t belong to the county and they have no liability for. However, the county agreed to split new tax revenue from developments with the CDA.
As a result, Gaskin is asking the board of supervisors to approve a restructuring of the existing bond, which would make the area more marketable to potential developers by decreasing the current assessment from $300,000 to $100,000 and would also allow full repayment of bonds.
“If you’re inclined to look at that site, the situation just got better,” Gaskin said.
He said the assessment reduction would greatly improve the area’s ability to sell, because the property is “prime real estate” and is in a great location because of its proximity to I-95.
But Gaskin said the real issue has been with the “financial burden” from the Lewistown Community Development Authority.
The CDA was created to build infrastructure in the area so that the property would be more marketable for commercial development. The developer, Holladay Properties, formed the CDA after getting approval from county supervisors and gets bonds to fund developments. As part of the CDA, each property owner in the area must pay a levy and an assessment to pay for the improvements.
“Somebody or a group of somebodies is not paying their assessments and so that’s why the bonds are in default,” Gaskin said. “That’s why the term ‘financially underwater’ is relevant.”
Once roads, water and sewer were created, those improvements helped entice Bass Pro Shop to open a 15,000 square-foot store including a restaurant, retail and some entertainment on part of the property. The fast-food chain Bojangles and a few other businesses have also opened locations in the area.
If the several undeveloped properties were developed, the area could be more successful and the bond could be paid back. Gaskin said the discussion of restructuring the bond has been going on for the past few months between property owners, bondholders and the county.
June 25, supervisors will hold a public hearing to receive citizen input on the matter. Ultimately, the board of supervisors must give the final stamp of approval for the restructuring to take place. Gaskin said if the board approves the proposal, the new deal would close in August.
Gaskin believes the proposed changes to the existing bonds would help the location and make it more successful in the long run.
“[I hope] it will catalyze commercial investment in Winding Brook,” Gaskin said. “That’s our goal. That’s our only goal.”