Bell Creek CDA in Hanover remains solvent
While one Community Development Authority in Hanover went underwater, another has stayed afloat since the early 2000s because of two big differences that set them apart.
One big difference between the Bell Creek and Lewistown CDAs is the type of development they contain. Bell Creek, which consists of 250 acres, has a residential component while the 186.5-acre Lewistown CDA is primarily a commercial development and has been struggling financially.
Rhu Harris, county administrator, believes that could be because of the type of development as well as the timing of its establishment.
Because it was formed in 2007, just before the downturn in the economy, the timing was not in the Lewistown CDA’s favor.
“[The Bell Creek CDA] came on when the development was still going much stronger than when the [Lewistown] one came along,” Harris said.
“Timing for the Bell Creek CDA was much better than [Lewistown],” he added.
In addition, Harris said the housing developer with the Bell Creek CDA agreed to pay off bond assessments after houses were sold.
“They had a cash flow that was different than [Lewistown] and it got started back when housing was much stronger,” he said.
Last month the board of supervisors approved restructuring Lewistown CDA bonds because the developers could not make their bond payments. To date, Bell Creek has not had any known financial struggles.
“[The Bell Creek CDA is] meeting its obligations from an administrative stand point,” said John Budesky, deputy county administrator.
Budesky said that this CDA has been built outward and its property owners have not defaulted on their bond payments.
“That project and CDA is doing exactly what the CDA tools are designed to do and is meetings its terms and obligations whereas the [Lewistown CDA] was not in the same position and they ended up looking at the restructure,” Budesky said.
In the past, Budesky has worked with other CDAs such as one in New Kent, which he helped establish. He said in most cases, county officials like himself don’t interact with CDAs very often if things are running smoothly.
But, he said there are a number of things that can impact the success of a CDA such as its location, type of development and how the market is faring during that time.
Another difference between the two CDAs is the size. Bell Creek’s bond totaled $19 million while Lewistown has a $37.7 million bond.
“That amount of difference in paying things off is a whole lot,” Harris said.
He added that the infrastructure improvements for the Lewistown area were more expensive than the ones needed for the Bell Creek CDA. For instance, a bridge had to be built across the major creek in Winding Brook.
“If it’s nowhere near as big, then that’s a huge thing to start with right there and then if it had a bunch of money up front because the housing was being sold, then it got a much sounder footing right at the beginning than the Winding Brook was able to get off to,” Harris said.