The B Street development includes building a Hyatt Hotel here. Photo courtesy of the City of Marysville

MARYSVILLE, CA (MPG) - A proposed partnership that directly affects the development of B Street property became a pause for concern.

At the July 2 council meeting, Community Development Director Dan Flores detailed the importance of partnering with the California Statewide Communities Development Authority (CSCDA) and the Statewide Community Infrastructure Program (SCIP) for the development of a Hyatt Hotel, Grocery Outlet and a Starbucks.

 The B Street development also includes bringing a Grocery Outlet and Starbucks to town, with some groundwork beginning in September. Photo courtesy of the City of Marysville

According to Flores, the California Statewide Communities Development Authority is a joint powers authority sponsored by the League of California Cities and the California State Association of Counties. Established in 2002, "the SCIP allows property owners in participating cities and counties to finance development, impact fees and public capital improvements through pooled special funding," Flores said.

That special funding is by way of tax-exempt bonds issued through the program, Flores said.

"The city is never at risk for payment," Flores said of the well-researched question he and the city manager investigated. "So there are benefits for the property owners."

The bonds offer "access to low-cost, long-term tax-exempt financing, which is much lower cost than traditional bank financing for infrastructure construction," Flores said.

"And they get the ability to pay off assessments at any time," he said, adding, "They can also get smaller mortgage payments compared to the bank financing currently at 8%."

The Statewide Community Infrastructure Program's funding is in the two to three % range, Flores said, and the California Statewide Communities Development Authority handles all the bond issuance and management.

"Once you pass this resolution, the agreement goes between the property owner and the city," Flores said, using B Street as an example. "When they go for infrastructure, they will do all the arrangements with CSDCA."

This gives immediate access to funds for infrastructure, which Flores said is exciting because they intend to close on B Street by September and begin groundwork.

But it's not just about B Street, according to Flores.

"At the end of the day, it is a financing mechanism for property owners," Flores said.

Vice-Mayor Bruce Buttacavoli had membership concerns, noting how Marysville might be tied to the League of California Cities beyond a regular membership.

Councilmember Dominique Belza asked for more clarity by way of a question.

"If a developer has a $100,000 for infrastructure impact fees, they would apply directly to CSCDA, who would then apply an assessment to their property taxes, enabling them to pay off over time," Belza said. "So this would streamline the $100 grand to them in which they pay the city those impact fees directly."

Precisely, according to Flores.

Mayor Chris Branscum was “glad to hear” that after the B Street property improvement, the city's participation in the Statewide Community Infrastructure Program could lead to other opportunities, especially given the current high interest rates.

Belza asked to table the matter for two more weeks before the vote but the mayor said, upon counsel's advice, it should pass immediately.

"If we are not closing until September, then I suppose that two weeks of further investigation would probably not kill this transaction with the developer," Belza said.

Flores confirmed "the sense of urgency" to pass the resolution for the partnership. That was not good enough for Belza, who reminded the council that there was no first reading on the matter and that it was being expedited.

City Manager Jim Schaad said officials can contact the California Statewide Communities Development Authority but he “is positive” that the developer wants to proceed with this financing.

Flores concurred, again highly recommending the program based on other cities, and made it clear one more time that it is to the city's advantage to become part of the Statewide Community Infrastructure Program.

"It is essential at this point for the cost of funding," Flores said. "If there is a chance there is no SCIP available to them like in other communities where these developers build, they won't build in the city of Marysville if you were to vote it down."

Councilmember Brad Hudson moved the motion forward, with Buttacavoli noting no matter what, Marysville benefits from the new infrastructure before he seconded the motion, with Belza voting yes.

"I love happy endings," Branscum said.