HomeMy WebLinkAbout2.e. Subdivision Improvement ProcessAGENDA ITEM: Subdivision Improvement Process
AGENDA SECTION:
Update
PREPARED BY: Eric Zweber, Senior Planner
AGENDA NO.
E.
ATTACHMENTS: None
APPROVED BY:
DnJ
RECOMMENDED ACTION: Information Item
S ROSEMOUNT
CITY COUNCIL
City Council Work Session Date: April 13, 2011
EXECUTIVE SUMMARY
ISSUE
The City of Rosemount has about 100 single family lots remaining and developers are considering
requesting approvals for new subdivisions. The developers are questioning the past development
and improvement process since the recession and new financial regulations. Staff would like to
discuss the possibility of subdivision improvements being constructed through the 429 assessment
process.
DISCUSSION
The City has about 100 single family lots remaining for development and the only residential
development that has occurred during the last three years has been completing the final phases of the
Glendalough and Harmony Subdivisions. The final 25 lot phase for Glendalough is on the agenda for
the April 19 City Council and there are no more single family phases in Harmony. There are several
developers (DR Horton, Lennar, Pulte) discussing additional single family development in Rosemount
but all the developers are stating that it is more difficult to meet the City's existing development and
improvement obligations due to the recession and the new financial regulations. In the past,
developers have paid the costs upfront for the subdivision improvements and additionally provided a
letter of credit (LOC) for 110 In today's financial environment, developers tell us that the banks
look at LOCs as an equal financial obligation requiring developers to borrow 210% (actual cost plus
110% LOC) of the improvement costs four months or more before they can get their first building
permit. The developers have questioned if there is another improvement process that would have the
developers fulfill the full financial obligation of the improvements while minimizing the up -front costs
of development.
Staff has investigated the use of the 429 special assessment process to finance the subdivision
improvement to provide the assurance that residential development will pay for its own costs while
minimizing the up -front costs for development. The assessment process has been discussed to
finance the subdivision improvements and trunk utility charges over a five year term. The City would
borrow funds for the development costs and the developer would pay the assessment back during the
first five years of tax payments or on a per lot basis at the sale of each house, whichever comes first.