ST. ALBANS CITY — St. Albans City voters will go to the polls next month to approve or reject a $13 million tax increment financing (TIF) bond for the construction of a parking garage and improvements to nearby intersections.
The five-level garage would be located on the city’s core parking lot. The 370-space parking facility would connect directly to a proposed state office building on Federal Street. One hundred and seventy spaces would be sold to the state for staff in that building.
The city council unanimously approved the bond vote Tuesday night, setting a vote date of Tuesday, Sept. 10.
The garage itself will cost between $6.5 million and $6.9 million. Site work, including removal of underground storage tanks, pollution cleanup, and transferring electric service to multiple buildings underground, will add another $2.3 million to the cost. The total cost of the site work and construction will be between $8.9 and $9.6 million once a contingency is added.
Included in the bond request is funding for improvements at the intersection of Lake and Federal Streets. The city recently received grant funding to cover a portion of the $325,000 needed to install a signal light at the intersection.
The city also has applied for $1.25 million in federal transportation funds for additional improvements to the intersection as were outlined in the plan for the Federal Street multi-modal connector. Those plans call for making Catherine Street one way going north and Market Street one way heading south. The streets are on either side of what now is the temporary Ace Hardware building on Lake Street. If the federal grant is received, the city would undertake more extensive improvements at the intersection.
Also included in the project costs are funds for the purchase and demolition of three buildings and the purchase of land from Americanadian, downtown city property owner Keith Taruski’s company, which owns a portion of the parking lot on which the garage will be built. Those costs are:
- $75,000 for purchase of Americanadian parking lot;
- $290,000 for purchase and demolition of the Moose Lodge;
- $330,000 for purchase and demolition of the Rail City Salon building;
- $91,000 for the demolition of the Brickyard Tavern, which the city previously purchased for $225,000.
Voters already approved $500,000 in TIF funding for the design of the garage and $400,000 for professional services related to TIF projects, including the garage.
As part of the project, the city will relocate and upgrade water and sewer lines. Funds for those improvements, roughly $320,000, will come from the water and wastewater reserve funds.
Total costs for the garage and intersections’ project will be between $11.7 million and $15.5 million, with $1.5 million in funds already secured. The bulk of the difference comes from the Lake and Federal intersection. If the federal grant funds are received the cost of the intersection improvements will increase from $325,000 to $1.6 million.
The net cost of the project will be between $10.2 million and $12.7 million. The city is asking voters to approve $13 million in TIF funding.
The bonds would be repaid from TIF funds.
The city created its TIF district in April 2012. At that time a snapshot is taken of the value of the properties within the TIF district. As those properties increase in value, 75 percent of the taxes on that increased value are diverted to pay for public infrastructure projects within the district.
The district is the city’s downtown area and the projected Federal Street Corridor. That narrow corridor would run either side of the so-called Federal Street Extension that begins from a point west of the Interstate 89, Exit 19 access road and north to Lower Newton Street.
The city must have voter approval for the infrastructure projects and the bonds to fund those projects are repaid from the diverted property tax funds.
The theory is that the new infrastructure will attract development and increase property values. Revenue from those increased property values is, in turn, used to pay for the infrastructure.
In this case, the city will be adding a new building to its tax rolls, with $150,000 in estimated tax revenue annually. The sale of the existing state office building on Houghton Street will bring that currently tax exempt building – with an estimated value of $5.4 million — onto the tax rolls as well. Seventy-five percent of the property taxes on both buildings would go to pay for TIF projects, including the garage.
“There’s no way, absent tax increment financing, something like this could come off,” said city manager Dominic Cloud. “The cost is prohibitive.”
There will be two informational meetings prior to the vote. The meetings will be held on Aug. 26 and Sept. 9. Both meetings will be at 7 p.m. at city hall.