With Urban Renewal set up, Lost Rabbit closer to revival
Wednesday, July 9, 2014 1:00 PM
Madison County supervisors moved one step closer to getting rid of the troublesome Lost Rabbit Public Improvement District by setting up a new urban renewal district during Monday's meeting.
After a lengthy public hearing and rehash of the omnibus settlement agreement, supervisors approved the creation of the URD in a 4-1 vote. District 3 Supervisor Gerald Steen was the lone no vote.
He questioned the nearly $13 million the county would spend over 25 years - through 17.19 mills of taxes and special assessments - to pay off urban renewal bonds that include nearly $7 million in interest. He also questioned if the Pearl River Valley Water Supply District, which oversees the land and any zoning changes, could alter future development plans to include different style homes.
District 2 Supervisor Ronny Lott, who had previously voted against a settlement at Lost Rabbit, switched his vote in support of the project this time.
Lott, who recently won the Republican nomination for Madison County Chancery Clerk in a special election, said he changed his mind over the past few months after meeting and talking with Lost Rabbit residents.
"It wasn't going anywhere without our help," Lott conceded. "Three lawsuits are settled. Projected growth figures outweigh the fact that if we do nothing, I feel like people will do nothing but leave."
Lott said he spoke with many residents and others in the county who feel it's beneficial to the future of the overall county.
"It will impact home values of the entire county," he said.
Monday's public hearing was the first of three formal steps leading up to a projected Aug. 27 public hearing to rescind the current Lost Rabbit PID.
The second step will be for the URD board, which was formed on Monday, to meet and issue $5.235 in urban renewal bonds.
The bonds will be sold privately to Allstate, current holder of $18.6 million in bonds, and essentially swapped out.
Board Attorney Mike Espy, architect of the omnibus settlement agreement, said it was possible to create the URD because the development can be classified as "blighted" using statute.
"We don't want to fool anybody," he said. "Lost Rabbit is not a slum. Lost Rabbit is not deteriorating. It certainly does not constitute a menace to Madison County."
He said for the purpose of the URD, blighted just means a combination of factors, including tax delinquencies.
"A lot of that land went into tax default," he explained. "We also have foreclosures out there."
Also, he said the diversity of ownership was another reason for blight, meaning outside people or companies own a lot of the properties. Allstate, a Chicago company doing business out of a Virginia LLC, owns 72 lots.
Three members of the new URD board were approved on Monday, with the other two being named on July 21.
John Sigman, executive director of the Pearl River Valley Water Supply District, joins two Lost Rabbit property owners, Jim Kennedy and Stacey Wall, on the board.
Espy said he is advising supervisors to appoint the remaining two people not invested in Lost Rabbit to the board.
Once the board is full, they will meet and receive the infrastructure assets from the PID. This includes roads and utility piping.
From there, the board will recommend the $5.235 million bond be issued and it will not have the full faith and credit of Madison County, Espy said.
"If nothing happens out there, if we're wrong about development, there's no risk to Madison County," he added.
Steve Rogers, a consultant hired by the county to help with the settlement, said his models show a benefit of $33 million at the end of 25 years to the county through increased ad valorem taxes from development. That's based off an initial two lots sold per month.
There are currently 55 homes at Lost Rabbit and the properties there generate approximately $89,000 a year in taxes to the county. If no development at all takes place, that's $1.7 million that would normally go into the general fund that is instead diverted to pay off the bond.
If the bond is not paid off after 25 years, Allstate eats the remainder.
In addition to the 17.19 mills diverted from Lost Rabbit properties, a 1 percent special assessment on new lots and homes will be used to pay off the new bonds.
The settlement agreement eliminates three lawsuits and also a negative option on Lost Rabbit South, which has approximately 230 lots that have been unable to be developed.
Terry Lovelace has the option to develop Lost Rabbit South and Espy has indicated he is ready to move dirt upon the finalization of the settlement.