The
Acquisition District
The Developer
Borrows the Money From The Bank,
Builds the Public
Improvements And Is Paid Back
Upon Public Dedication, This is
another form of Developer Financing
through the issuance of Tax Exempt
Municipal Bonds.
The formation process of an Assessment
District can be accomplished
through two different procedures.
The first and most popular method
of forming an Assessment District
is to publicly bid the project.
Upon acceptance and verification
of the bids the developer progresses
through normal procedural channels
for the formation of the district
and at conclusion the bonds are
sold prior to construction. The
second method, which is gaining
in popularity because of the benefits
it provides to the developer is
the utilization of the Acquisition
type assessment district.
The major difference between
the acquisition type of assessment
district and public works district
is that the developer has much
more control over major areas
related to the construction of
the improvements. This is because
the developer builds them, rather
than going through the public
works department for construction.
The same engineering, designing,
and approval is required, however
tax exempt bonds are
sold once the project has been
built and accepted by the political
entity reimbursing the developer
for all out of pocket expenses
directly related to the construction
of the public improvements.
Some entities will also reimburse
the builder for a portion of their
cost to carry during the build
out of the improvements. The developer
has much more control over the
project since he is building the
improvements and they are not
being constructed by the city
public works department. By control
we are talking directly about
the costs of implementation, and
as importantly, the timing of
the project. By utilizing this
acquisition type of formation
process the issue of timing i.
now in the control of the developer
subject to the receiving of all
proper approvals from the engineering
department.
Once the improvements are constructed
and accepted by the city the bonds
are sold. The formation process
for the acquisition type assessment
district echoes the formation
process of a public works assessment
district except for the utilization
of the acquisition agreement.
This agreement is a binding contract
between the city and the developer
in which all the procedures and
preliminary costs of the improvement
are identified; also stated are
the rights and obligations of
the contractual parties.
Once the document has been approved
by a vote of a council or a board
the developer can begin construction.
Upon completion of construction
and approval of the public improvements
by the public works department,
the normal resolutions occur.
The final step is the marketing
of the tax exempt bonds of the
Acquisition District reimbursing
the developer for his out of pocket
expense of the developer
financing portion of
the project.
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