[00:00:02]
IN HERE TO GET SOME WATER AND THEN WAITING HER BACK FROM THE SEVENTH.ARE WE ON LINE NOW? YEAH, WE'RE ON LINE NOW.
IF ANYBODY IS OBSERVING THIS MEETING, WE'RE UH, GOING TO WAIT A FEW MORE MINUTES FOR ADDITIONAL MEMBER OF THE EDA, PERHAPS, UH, COUNTY SHOW UP.
SO BEAR WITH US AND WE'LL BE IN FORMAL SESSION IN JUST A FEW MOMENTS.
OH, I JUST NOTICED IT SAYS YOU THIS MEETING LIVE 5:30 PM WHAT DID IT SAY THAT IT'S NOT TO THE AGENDA? STANDARD LANGUAGE? YES.
SAYS, BUT THEN THE MEETING TIME SAYS FIVE.
ADVERTISE MEETING TIME AT FIVE SAYS.
WE'LL WAIT AND SEE IF ANY FEEDBACK FROM LISA REAL QUICK.
PLEASE WANNA GO AHEAD AND GET STARTED.
HEREBY CALL TO ORDER, EXCUSE ME, THE WEDNESDAY MAY 8TH, 2024 MEETING OF THE GOLAND ECONOMIC DEVELOPMENT AUTHORITY AND, UH, MAD DIRECTOR, SECRETARY, I'LL SUGGEST WE DON'T NEED TO HAVE A QUORUM HERE BECAUSE WE'RE NOT GONNA BE CONSIDERING ANY VOTES OR ANY ISSUES, SO THEREFORE THERE'S NO NEED TO DETERMINE A QUORUM.
HOWEVER, WE DO HAVE, UH, THREE OF THE MEMBERS OF DDA WITH US, AND WE ALSO HAVE THIS REPLIED SUPERVISOR, JONATHAN LYLE WITH US TOO.
AND WE ARE GOING TO BE, UH, GOING THROUGH A PROCESS OF BEING, UH, EDUCATED ABOUT, UH, VARIOUS FINANCING OPTIONS FROM OUR BONDS.
AND SIR, I DON'T KNOW IF YOU WANT TO INTRODUCE YOURSELF OR, SURE.
UM, KEVIN ROD, I WORK FOR A FIRM CALLED PUBLIC FINANCIAL MANAGEMENT FINANCIAL ADVISORS.
I'VE HAD THE GOOD FORTUNE OF BEING THE COUNTY'S FA FOR THE LAST 15 YEARS, AND I'M A GOOCHLAND RESIDENT.
SO, UM, YOU KNOW, I'VE WORKED IN THIS BUSINESS FOR 36 YEARS NOW, FOCUSED EXCLUSIVELY ON VIRGINIA ISSUERS AND HELPING THEM, UH, WITH THEIR CAPITAL BORROWING AND FINANCIAL PLANNING NEEDS.
CERTIFIED FINANCIAL PLANNER? UH, NO, NO, NONE OF THAT.
JUST, UH, A BUSINESS DEGREE FROM THE UNIVERSITY OF RICHMOND.
UM, AND WHAT WE DO, WHAT WE'LL DO IS IF IT'S NOT OF ANY TROUBLE, YOU, UH, WE WORK GENERALLY IN A RATHER COLLEGIATE FORM, SO THERE'S NO NEED TO ADDRESS THE CHAIR, PER SE, TO, FOR ENGAGING DISCUSSIONS AND S AND SO FORTH.
SO IF YOU WANT TO JUST PROCEED WITH YOUR PRESENTATION, YOUR THOUGHTS, YOUR EDUCATION OF US, AND, UH, WE, WE, GREAT.
WE APPRECIATE YOU BEING HERE TO BE ABLE TO UNDERSTAND FINANCING OPTIONS, BONDS, AND WHAT, UH, WHAT WE CAN WORK WITH.
YEAH, I'D BE GLAD TO, AND I APPRECIATE THE, THE OPPORTUNITY TO SPEAK WITH YOU TODAY.
UH, WHEN SARAH REACHED OUT, UM, IT WAS, YOU KNOW, THERE'S, IT'S A BIG TOPIC, AND SO I TRIED TO START WITH THE, YOU KNOW, THE BASICS OF THE, UH, LARGER SCALE THINGS THAT OTHER JURISDICTIONS HAVE DONE, BUT CERTAINLY, YOU KNOW, THIS CAN BE AN ONGOING DISCUSSION BECAUSE I WOULD SAY NO SITUATION'S REALLY THE SAME.
IT'S, IT'S TAILOR MADE TO WHAT YOUR NEEDS ARE, WHAT YOU'RE TRYING TO ACCOMPLISH.
AND SO, UM, AND I AM GLAD IT'S CASUAL, SO PLEASE STOP ME AS WE GO AND JUMP IN AND, AND YOU KNOW, IF I, IF I SAY SOMETHING, UM, THAT YOU'RE NOT FOLLOWING, JUST, UM, STOP ME
[00:05:01]
AS AS WE GO.UM, BUT AS I, AS I SAID, I PUT TOGETHER, UH, THIS PRESENTATION, I WAS TRYING TO THINK OF, YOU KNOW, SOME OF THE POTENTIAL ROLES THAT, UH, EDS PLAY IN VIRGINIA.
UM, ONE OF THE ROLES IS THAT, UH, CITIES IN VIRGINIA CAN ISSUE GEO BONDS WITHOUT A REFERENDUM.
COUNTIES ON THE OTHER HAND, CAN'T.
UH, AND SO A LOT OF TIMES THEY'LL GO THROUGH THEIR EDA, UH, FOR BORROWING NEEDS, UH, AND THE LAWYERS FIGURED OUT SOME LEASE, LEASE BACK ARRANGEMENT, UH, AND IT'S CALLED A MORAL OBLIGATION SUBJECT TO APPROPRIATION, UH, BY THE BOARD OF SUPERVISORS, UM, TO MAKE THE PAYMENT.
AND SO WHEN YOU DO THAT AND YOU GET INTO THE BOND RATINGS, IT'S A LITTLE LESS SECURE BECAUSE IT'S GOT THIS EXTRA STEP.
UM, BUT CERTAINLY, UM, YOU KNOW, HIGH RATED COUNTIES SUCH AS GOOCHLAND ARE NOT GONNA NOT APPROPRIATE ON THE PROJECTS.
AND IN THESE TYPE OF PROJECTS WE'RE TALKING, IT COULD BE POTENTIALLY SCHOOLS, BUT A LOT OF THOSE GO THROUGH VIRGINIA PUBLIC SCHOOL AUTHORITY.
IT COULD BE SUCH THINGS AS A COURTHOUSE OR A COUNTY ADMINISTRATION BUILDING.
SO IT'S TYPICALLY, YOU KNOW, WHAT WE WOULD DEEM MORE ESSENTIAL PROJECTS.
UM, JURISDICTIONS HAVE, YOU KNOW, DONE OTHER THINGS, UH, LIKE HENRICO DID THE, UM, YOU KNOW, CONVOCATION CENTER, UH, AND, UH, BASKETBALL ARENA.
SO THEY DID THAT THROUGH THE ECONOMIC DEVELOPMENT AUTHORITY.
UH, SO YOU COULD DO BORROWINGS LIKE THAT.
UM, YOU COULD DO LAND PURCHASE, UH, IF THE COUNTY WANTED AND THE EDA WANTED TO PURCHASE A BLOCK OF LAND, UH, YOU WOULD DO THAT THROUGH THE EDA, MORE THAN LIKELY.
UH, YOU KNOW, AND SO THEN IT GETS DOWN TO WHAT'S, WHO, WHO'S PAYING THE DEBT SERVICE.
UM, YOU KNOW, IN MOST OF THESE INSTANCES, THE COUNTY'S PAYING IT BECAUSE, UH, YOU KNOW, AS WHAT'S IDENTIFIED, Y'ALL HAVE LIMITED REVENUE SOURCES.
SO TYPICALLY THE, THE, UM, PAY THE PERSON PAYING THE DEBT SERVICE IS THE COUNTY.
SO THAT'S THE PRIMARY WAY THAT WE SEE EVAS ISSUE.
THERE ARE EXAMPLES WHERE EVAS WILL ISSUE FOR, UH, HIGHER ED EDUCATION WHO MAY OR MAY NOT BE ABLE TO ISSUE ON THEIR OWN FOR HEALTH SYSTEMS. UM, SO EDS OCCASIONALLY GET INVOLVED WITH THAT, UH, THROUGH, UM, PRIVATE SECONDARY SCHOOLS.
SO THOSE ARE DIFFERENT FINANCINGS.
BUT WHAT WE DO SEE IS THE LAST BULLET THERE IS, YOU KNOW, EDA IS GETTING REALLY INVOLVED WITH ECONOMIC DEVELOPMENT AND SENATE PACKAGES OF PUTTING BACK TOGETHER.
AND SO ON THE NEXT SLIDE, WE'RE GONNA TALK ABOUT A FEW OF THOSE, UH, MECHANISMS HERE.
AND AGAIN, THERE'S MORE THAT I COULD HAVE FILLED UP THE SCREEN WITH, BUT THESE ARE, UH, FOR THE PRIMARY, UH, ONES THAT YOU MAY HAVE HEARD SOMETHING ABOUT, UH, THE FIRST BEING THE COMMUNITY DEVELOPMENT AUTHORITY.
UM, AND WE'LL WALK THROUGH THAT IN IN GREATER DETAIL.
UH, YOU'VE, I'M SURE, HEARD ABOUT TAX INCREMENT FINANCINGS, AND WE'LL EXPLAIN THAT.
UH, SERVICE DISTRICTS AND, YOU KNOW, GLAND HAS ONE OF THE LARGEST AND BEST KNOWN SERVICE DISTRICTS IN THE CREEK SERVICE DISTRICT.
SO, WE'LL, I'LL GIVE YOU A LITTLE BIT OF BACKGROUND ON THAT.
AND, UM, AND THEN TRANSPORTATION IMPROVEMENT DISTRICTS.
SO THOSE ARE THE FOUR, UH, THAT WE'RE GONNA TALK ABOUT.
I'LL GIVE YOU SOME OF THE SPECIFICS ON THAT.
AND THEN, UH, LIKE THE MAJORITY OF THE PRESENTATION WILL BE, HE'S SHOWING YOU SOME CASE STUDIES OF HOW OTHER, UM, GOVERNMENTS HAVE DONE THIS.
A CDA PROBABLY CAME INTO VIRGINIA IN THE EARLY TWO THOUSANDS.
UM, SO IT WAS SOMEWHAT NEW TO VIRGINIA.
IT'S NOT THAT OLD A FINANCING VEHICLE, BUT IT'S VERY POPULAR IN OTHER STATES LIKE FLORIDA.
THEY HAVE A LOT OF, UH, CDAS, UM, JUST DIFFERENT, UM, STATES AROUND THE COUNTRY HAVE, UH, HAD A WIDE USE OF CDAS, UM, IN VIRGINIA, YOU CAN SEE THE LIST THERE ON THE RIGHT SIDE OF A LOT OF LOCA LOCALITIES THAT ABUSE THEM.
SOME ARE GOOD STORIES, YOU KNOW, SHORT PUMP MALL WAS ONE OF THE FIRST CDAS DON THE EXTREMELY SUCCESSFUL, UH, THE, YOU KNOW, THE COUNTY BACKED THAT, UH, BY OFFERING SOME, UH, TAX INCREMENT REVENUES, IT QUICKLY REPAID ITS DEBT.
AND THEN THAT CDA WAS DONE, HAD DONE ITS PART.
OTHERS STARTED TRYING TO FOLLOW IN THE SHORT PUMP MODEL, GOT IN THERE, AND THEN 2008, 2009, CREDIT CRISIS CAME ALONG.
AND SEVERAL OF THESE TRANSACTIONS, UM,
[00:10:01]
STRUGGLED.LIKE THE FARMS IN NEW CAMP EXPECTATION, A LOT OF HOMES, A LOT OF DEVELOPMENT, EVERYTHING SLOW.
UH, THERE'S A DEVELOPMENT RIGHT IN YOUR COUNTY CALLED THE MARQUEE THEY WERE GONNA BRING IN.
AND, UM, THEY HAD TARGET AS AN ANCHOR AND, AND DICK'S AND SEVERAL BIG BOXES.
AND THEN THEY WERE GONNA FOLLOW IT WITH SOME RETAIL AND SOME RESIDENTIAL, AND IT JUST NEVER DEVELOPED.
SO THERE'S BEEN, YOU KNOW, GOOD CASES OF THIS AND, AND BAD CASES, UM, OF HOW CDAS HAVE BEEN USED.
AND A LOT OF THE ONES THAT DIDN'T WORK OUT WERE REALLY SUBJECT TO THE TIMING.
THE TIMING WAS JUST BAD ON, YOU KNOW, DEVELOPMENT CONTINUING.
UM, REAL QUICK, CAN YOU DELVE INTO HISTORICAL USE OF THE MARQUE? I'M NOT, I'M NOT, I DON'T KNOW IF, DID YOU SAY THAT WAS IN GLAND IN YORK? UH, YEAH.
IF I SAY GO GLAND, I APOLOGIZE.
IT'S RIGHT NEXT TO, YES, THANK YOU,
IT'S RIGHT NEXT TO WATER COUNTRY.
SO IF YOU'VE EVER GOTTEN OFF AT AN EXIT AND YOU SEE LIKE A HALF DEVELOPMENT GOING OVER THERE, HAMPTON HAS SOME THAT HAVE BEEN SIMILAR.
THEY START, AND THEN THEY JUST DON'T CONTINUE ON.
IT TAKES ANOTHER, THE SECOND DEVELOPER TO COME IN.
UH, NORMALLY THE COUNTY THOUGH IS, AND WE'LL TALK ABOUT THAT.
THE COUNTY IS, YOU KNOW, JUST FINE IN THIS BECAUSE THEY DON'T HAVE A LEGAL RESPONSIBILITY TO GO IN THERE AND CLEAN IT UP.
THEY'RE SUPPOSED TO HELP ADMINISTER IT, UH, AND, AND MAKE SURE THAT IT'S TRYING TO ADVANCE.
AND AS WELL, THEY WOULD WANT TO, BECAUSE YOU DON'T WANT A HALF OF A DEVELOPMENT, UH, GOING ON.
BUT THERE'S ONLY SO MUCH YOU CAN DO IN, IN SOME OF THESE DEVELOPMENTS, AND IT, IT, IT TAKES TIME.
BUT WHAT A CDA DOES IS IT GOES IN AND IT DOES THE PUBLIC INFRASTRUCTURE PART OF A DEVELOPMENT.
LIKE FOR SHORT PUMP, IT WAS THE RING ROAD, SOME OF THE PARKING INFRASTRUCTURE UTILITIES COMING IN.
THE, THE DEVELOPER GOES IN AND, AND BUILDS THE MALL PART OF IT.
BUT THE PUBLIC INFRASTRUCTURE PART OF IT, CDAS CAN DO, AND CDAS, UM, CAN GET DEVELOPED, GET, GET CREATED, UH, BY 51% OF LANDOWNERS PUTTING A PETITION IN, UH, TO THE BOARD OF SUPERVISORS.
TYPICALLY, IT'S A HUNDRED PERCENT, TYPICALLY IT'S ONE BIG DEVELOPER THAT HAS ACQUIRED ALL THE PROPERTY.
SO, UM, YOU WOULDN'T, I HAVEN'T SEEN CASES WHERE IT'S JUST 51% AND 49% ARE FIGHTING AND SAY, DON'T DO THIS.
UM, THE BOARD OF SUPERVISORS WOULD PROBABLY BACK AWAY FROM THAT.
SO EVEN THOUGH, BUT THE LAWS 51% COUNSEL PASS, OR THE BOARD PASSES A RESOLUTION, AND THEN THE BOARD IS ACTUALLY RESPONSIBLE FOR ESTABLISHING THE CDA BOARD OF DIRECTORS.
UM, AND SO THEY KIND OF HAVE SOME OVERSIGHT OF IT.
THE DEVELOPER TYPICALLY WANTS A MEMBER OR TWO ON THAT BOARD, WHICH MAKES SENSE.
UM, BUT THAT'S, THAT'S HOW IT'S FORMED.
UM, YOU KNOW, WHY ARE THESE ATTRACTIVE TO DEVELOPERS? UH, BASICALLY BECAUSE IT'S A SOURCE OF MONEY.
UM, IF, IF YOU SAY IN THE SHORT BUMP EXAMPLE, YOU DON'T HAVE TO COME UP WITH THE MONEY FOR THE ROADS AND THE, UH, UTILITIES GOING IN THERE, IT'S GONNA DRIVE DOWN.
IT'S GONNA ALLOW THEM TO TAKE THEIR EQUITY AND PUT IT TOWARD, UH, THE ACTUAL DEVELOPMENT.
AND IT CAN BE FINANCED ON A TAX EXEMPT BASIS WHERE THE DEVELOPER'S GONNA BE GETTING A HIGHER COST OF FUNDS.
AND SO THAT'S GONNA, UH, BE BENEFICIAL, UH, TO THEM TO GET TO, TO INCREASE THEIR RETURN ON EQUITY.
SO THEREFORE, DOES THE BOND RATINGS, UH, APPLY TO THE PROJECT PER SE? OR IS IT ALSO A REFLECTION OF THE COUNTY'S? UH, IT'S THE PROJECT ONLY, ONLY IN, IN, IN, IN A, IN A TYPICAL CDA EXAMPLE.
UM, SO OOPS, UH, SO THAT'S IT, IT WILL BE THE PROJECT ITSELF.
UM, AND SO THAT'S HOW THE BOND HOLDER OR THE RATING AGENCIES ARE REDEEMING THE PROJECT, WHICH IS, WE'LL SEE, IT'S GENERALLY TYPICALLY PRETTY SPECULATIVE.
A LOT CAN GO WRONG VERSUS, YOU KNOW, YOU BUYING A, A GLAND COUNTY, UH, GO BOND, YOU KNOW, THE COUNTY'S GOT A GREAT TAX BASE, YOU'RE GONNA GET YOUR MONEY BACK.
THIS, WE'RE GONNA BUILD A NEW DEVELOPMENT.
WE'RE GONNA HOPE THAT THE, YOU KNOW, ALL THE CONTRACTS COME IN THAT THE ECONOMY HOLDS THAT ALL THIS.
SO THERE'S JUST A LOT MORE, UH, GOING ON IN CDAS.
AND SO, AS WE'LL SEE, TYPICALLY THEY START OUT, OUT AS WHAT'S CALLED NON-RATED HIGHER, HIGHER INTEREST RATES VERSUS IT HAVING A, A PROVEN TRACK RECORD.
[00:15:01]
ON, ON CDAS, YOU KNOW, THIS IS SUBJECT TO, YOU KNOW, THE BOARD AND THE EDA THINKING THROUGH LIKE, WHAT DO I NEED TO GIVE TO THIS DEVELOPER TO MAKE THIS HAPPEN? IN A LOT OF CASES, LIKE SHORT PUMP, I'LL KEEP USING THAT EXAMPLE.SO, WELL, I'LL SHOW YOU A SLIDE, BUT THE TAX INCREMENT, THERE WAS A BASE OF THE REAL ESTATE VALUE IN THAT, UH, THERE MAY OR MAY NOT HAVE BEEN A HOTEL ON THAT.
SO IF YOU PUT A HOTEL AND YOU HAVE A TRANSIENT OCCUPANCY TAX, YOU'RE GONNA GENERATE MORE REVENUE.
SO ALL OF THIS STUFF THAT YOU PLEDGE IS NEW.
AND SO COUNTIES WILL SAY, I'M GOING TO GIVE THIS NEW REVENUE TO SUPPORT THIS STREAM OF PAYMENTS.
AND THE COUNTY GETS TO DECIDE WHATEVER INCENTIVE PACKAGE THAT THEY WANT TO MAKE ON THAT.
THEY MAY SAY, I'M GONNA GIVE YOU 50% OF THE REVENUE STREAM.
I'M GONNA GIVE IT TO YOU FOR FIVE YEARS.
I'M GONNA GIVE IT TO YOU FOR 10 YEARS.
I'M GONNA GIVE IT TO YOU FOR 20 YEARS.
AND AS WE WALK THROUGH THIS, ALL OF 'EM ARE SORT OF DIFFERENT.
IT'S JUST A DIFFERENT EXAMPLE.
HOW BIG'S THE DEVELOPMENT? HOW MUCH MONEY DO THEY NEED, HOW MUCH REVENUE IS GONNA BE SPUN OFF? BECAUSE FROM THE COUNTY'S PERSPECTIVE, YOU'RE DOING THIS NICE NEW DEVELOPMENT.
IF YOU GIVE ALL THE REVENUES AWAY, OKAY, I GOT, I, I DIDN'T GET ANYTHING FROM THIS.
MAYBE I GET MORE JOBS, MAYBE IT'S BETTER FOR MY CITIZENS.
BUT IN TERMS OF WHICH FINANCE DEPARTMENTS, SEE, YOU'RE NOT GETTING, UH, YOU KNOW, ANY, YOU KNOW, BIG REVENUE HIT FROM DOING THE DEVELOPMENT.
AND SO THAT'S PART OF THE PROCESS.
SO THAT COULD BE ONE THING THAT'S OFFERED.
UH, IT COULD BE, YOU COULD BE IMPOSING A SPECIAL TAX ON THE, ON THE, UM, YOU KNOW, UM, BUSINESSES IN THERE AND SAY, YOU'RE GONNA PAY A HIGHER TAX RATE, UH, THAN YOUR GENERAL REAL ESTATE TAX RATE.
THAT COULD BE SOMETHING IN THERE.
AND THEN THE BOTTOM LINE IS A SPECIAL ASSESSMENT.
SO IF, IF ALL ELSE FAILS, THE DEVELOPER IS ON THE HOOK FOR PAYING THE DEBT SERVICE.
IF THEY DON'T PAY THE SPECIAL ASSESSMENT, THEIR PROPERTY CAN GO INTO FORECLOSURE.
SO THE DEVELOP DEVELOPER GOES IN, THEY BUILD SHORT PUMP MALL, THEY, THEY, UH, THE COUNTY GIVES 'EM THIS TAX INCREMENT FINANCING.
THE FINANCING DOESN'T MATERIALIZE.
YOU GO TO THE DEVELOPER AND SAY, HEY, WE'RE SHORT DEBT SERVICE, YOU GOTTA PAY IT.
IF THEY SAY, I DON'T WANT TO PAY IT, THEN THEY SAY, OKAY, YOU'RE GONNA LOSE YOUR PROPERTY.
YOU'RE GONNA LOSE THE BUILDINGS ON THIS AND EVERYTHING ELSE, NOT JUST THE INFRASTRUCTURE THAT THESE BONDS SUPPORT.
UM, SO, UH, BUT THAT'S, THAT'S TYPICALLY THE LAST, UH, LAYER THAT, THAT YOU WOULD SEE OFFERED.
UM, TO ANSWER YOUR QUESTION EARLIER, MORAL OBLIGATION VERSUS CDAS.
SO AS WE TALKED ABOUT EARLIER, THE COUNTY CAN ISSUE MORAL OBLIGATION BONDS OR YOU COULD CREATE A CDA.
WHAT ARE THE DIFFERENCES? THE MORAL OBLIGATION BONDS ARE ON THE COUNTY'S BOOKS.
THE CDAS ARE NOT NO LEGAL RESPONSIBILITY TO COME IN THERE.
AND IF EVERYTHING DOESN'T GO WELL TO HELP THEM OUT, NOW THEY'VE GOT A, YOU KNOW, OBLIGATION TO MAKE SURE THAT THE DEVELOPERS WORKING WITH THE BONDHOLDERS AND DOING EVERYTHING THEY CAN.
BUT THERE'S NO LEGAL OBLIGATION, MORAL OBLIGATION, MUCH STRONGER.
IN YOUR CASE, THE COUNTY IS TRIPLE, TRIPLE A RATED.
SO YOUR MORAL OBLIGATION BONDS WOULD BE THE NEXT LEVEL DOWN, WHICH WOULD BE DOUBLE A PLUS, DOUBLE A ONE, AA PLUS VERY STRONG.
AND SO YOU PROBABLY WOULDN'T A COUNTY THIS STRONG BE REQUIRED TO HAVE LIKE A SECURITY DEPOSIT, WHAT'S CALLED A DEBT SERVICE RESERVE FUND.
CDA BONDS DEFINITELY HAVE A LOT OF RESERVES THERE BECAUSE THINGS CAN GO WRONG AND YOU DON'T WANT IT TO GET DOWN TO THAT BOTTOM LEVEL OF POTENTIALLY DEFAULTING AND LOSING YOUR PROPERTY.
YOUR CASE, STRONG BOND RATINGS, AS WE SAID EARLIER, CDA BONDS TYPICALLY UNRATED STRONGER THE RATING LOWER YOUR INTEREST COST.
YOU KNOW, IN TODAY'S MARKET, THE, THE COUNTY COULD BORROW IN THE LOW 3% RANGE, UM, WHICH IS A LITTLE INFLATED FROM WHEN WE DID THE HIGH SCHOOL.
BORROWING ON THE GO, MUCH LOWER.
BUT INTEREST RATES ARE STILL A LITTLE BIT HIGH.
CDA BONDS PROBABLY SIX AND A HALF PERCENT RANGE.
SO IT'S NOT QUITE DOUBLE, BUT IT'S, IT'S SIGNIFICANTLY, IT'S SIGNIFICANTLY HIGHER.
IT BASICALLY ALLOWS THE PROJECT TO START AND ACTUALLY GET RAMPED UP.
IT'S A SOURCE OF REVENUE TO THE DEVELOPER.
SO IT'S A, IT'S INCENTIVE TO THEM, REGARDLESS OF WHAT, YOU KNOW, YOU PUT ALONG WITH IT, THE CONSIDERATIONS.
[00:20:01]
A, A LOT OF PEOPLE AT THE TABLE, UM, YOU KNOW, THERE'S SOMEBODY DOING THE REVENUE PROJECTIONS.THERE'S A HANDFUL OF LAWYERS, THERE'S A NEW BOARD, THERE'S A LOT GOING ON WITH IT.
UH, BUT YOU KNOW, DEVELOPERS DO LIKE THIS AND THEY'RE GETTING TO BE USED MORE AND MORE.
UH, BUT IT'S NOT WITHOUT IMPACT ON THE COUNTY COUNTY'S, YOU KNOW, GOT IT.
TO HAVE, YOU KNOW, THEY'RE, YOU'RE GONNA BE COLLECT, COLLECTING THE EXTRA TAX PAYMENTS, SO IT'S SPECIAL TAXES.
SO IT'S GONNA, IT'S GONNA AFFECT VARIOUS AREAS OF THE COUNTY'S OPERATIONS.
SO IT'S JUST NOT, LET'S SET UP A BOARD, Y'ALL GONNA DO IT, AND WE'LL JUST SIT OVER HERE, LOOK FORWARD TO THE DEVELOPMENT HAPPENING.
SO, SO FROM YOUR EXPERIENCE AND, AND KNOWING THE CONSTRAINTS WITHIN THE CODE OF VIRGINIA, WHAT THE EDA CAN AND CAN'T DO, KIND OF GENERALLY IN TERMS OF FINANCING, DOES THIS BROADEN ANYTHING? 'CAUSE OBVIOUSLY A LOT OF INFRASTRUCTURE THINGS CAN BE DONE BY THE EDA, BUT ARE THINGS THAT ARE BROADENED BY, LET'S SAY, UH, I DON'T KNOW.
WHAT'S A GOOD EXAMPLE THAT CAN BE CONSIDERED AS PART OF THE CD EIGHT? UM, THAT KIND OF ALLOWS A BROADER BREADTH? YEAH, YOU, YOU WOULD NEED A DEVELOPER THAT, YOU KNOW, HAS A REALLY GOOD PROJECT THAT THE COUNTY'S INTERESTED IN DOING THAT IS LOOKING FOR HELP.
THEY, THEY HOPEFULLY HAVE THE MONEY AND THE RESOURCES AND THE PLAN, BUT THEY'RE LOOKING, THEY'RE LOOKING TO LOWER THEIR COST OF CAPITAL.
SO, YOU KNOW, THIS SHOULDN'T BE THE LAST PIECE TO MAKE IT GO OR NO GO, BECAUSE THEN THEY'RE, YOU KNOW, OPERATING ON THREAD.
BUT THEY'RE VERY SMART DEVELOPERS OUT THERE THAT WOULD COME AND SAY, HEY, I WANT TO COME HERE.
I WANTED, I WANT INCENTIVES, AND I WANT YOU TO CONSIDER DOING A CDA.
AND WE LOOK AT IT AND WE GO THROUGH THAT, THAT PROCESS WITH 'EM, UH, WITH THE COUNTY AND, AND TRY TO UNDERSTAND EVERYTHING GOING ON THERE.
BUT AGAIN, GIVEN THE COMPLEXITY, I WOULD SAY THEY'RE TYPICALLY, YOU KNOW, JUST THE INFRASTRUCTURE PART OF IT'S TYPICALLY AT LEAST MORE THAN 15 MILLION, 20 MILLION BECAUSE THERE'S SO, YOU KNOW, THE FINANCING COSTS AND EVERYTHING ELSE, YOU WOULDN'T DO THIS FOR 5 MILLION TO, YOU KNOW, BUILD A ROAD.
YOU MAY GO FIGURE OUT ANOTHER WAY OF DOING THAT.
SO IT'S, WHEN WE GET INTO THE EXAMPLES, YOU'LL SEE THE PROJECTS, OR, YOU KNOW, IN THE 40, 50, 60 MILLION, IT, IT, UM, SHORT PUMP WAS A $25 MILLION ISSUANCE, SO IT WAS, YOU KNOW, A NICE SIZE.
UM, BUT THAT'S WHAT, BACK IN THE EARLY TWO THOUSANDS YEAH,
SO LIKE, UM, UH, THE, UM, THE DIAMOND DISTRICT, CDA, UH, SO THAT, SO THEY'RE DOING THAT DOWN THERE NOW.
THAT'S WHAT THEY'RE VOTING ON NOW DOWN IN RICHMOND.
UM, THE, UM, WAS JUST IN MY HEAD, THE PETCO SPORTS, UM, UH, THEIR NEW SPORTS TOURISM BUILDING THAT WAS DONE THROUGH A CDA, UM, AND THEN ALSO THEIR GREEN CITY WAS DONE THROUGH A CDA.
SO YOU CAN KIND OF GET THE, THE SENSE THEY'RE HUGE PROJECTS.
SAY THE GREEN CITY GOTTA BE MASSIVE.
SO, BUT YOU KNOW, AGAIN, IT'S INTERESTING BECAUSE YOU, LIKE, YOU THINK OF HOW BIG THAT PROJECT IS, BUT THEN YOU'RE THINKING OF THE PUBLIC INFRASTRUCTURE.
SO, YOU KNOW, THIS HAS GOTTA BE FOR THE LEGAL FOLKS.
IT'S GOTTA BE PUBLIC INFRASTRUCTURE.
YOU'RE NOT BUILDING AN OFFICE BUILDING, YOU'RE NOT BUILDING THE NEW, YOU KNOW, ARENA, UH, UNDER THE CDA YOU'RE BUILDING, YOU MAY BE BUILDING A PARKING LOT, UM, YOU KNOW, YOU MAY BE BUILDING THE UTILITIES THAT RUN INTO THE ARENA, BUT YOU'RE NOT, YOU'RE NOT ACTUALLY BUILDING THE ARENA.
JUST AS A SLIGHT, DOES IT MAKE ANY DIFFERENCE TO THE FACT THAT ENRICO CONTROLS THE ROADS IN ENRICO AS OPPOSED TO VDO? NO.
UM, LET'S SWITCH GEARS A LITTLE BIT, AND THEN I'LL GET INTO SOME OF THE EXAMPLES.
BUT AS, AS WE TALKED ABOUT, YOU KNOW, A, A TIFF IS JUST THAT INCREMENTAL REVENUES, AND I THOUGHT THIS CHART WAS REALLY GOOD.
UM, THE, THE MAROON THERE IS THE, IS THE BASE AB, SO THAT'S THE AMOUNT OF THE REAL ESTATE THAT WAS THERE BEFORE YOU DECIDED TO DO IN ENTER INTO THE CERTIFICATE AGREEMENT.
SO THE COUNTY CONTINUES TO GET THAT PIECE OF THE, THE ASSESSED VALUE, REAL ESTATE REVENUES OFF THAT.
THEN THE INCREMENTAL GROWTH, AND AGAIN, WHATEVER, YOU KNOW, YOU DO KNOW THE COUNTY DOESN'T HAVE MEALS TAX, BUT IF YOU HAVE MEALS TAX AND ALL OF A SUDDEN YOU'VE HAD ALL THESE RESTAURANTS COME IN THERE, THAT WOULD BE INCREMENTAL SALES TAX.
IF YOU WANT TO PLEDGE THAT IN SOME OF THESE, YOU'LL SEE IT'S JUST REAL ESTATE.
SO YOU PLEDGE IT FOR A PERIOD OF TIME, THE COUNTY DOESN'T GET THE UPSIDE OF THAT.
BUT THEN WHEN THE TERM ENDS THERE, YOU HAVE
[00:25:01]
IT, THE LIGHT GREEN, THAT'S THE, THAT'S THE WIN FOR THE COUNTY AFTER THE, THE TERM ENDS OF THE TIP PERIOD, THEY GET EVERYTHING GOING FORWARD.SO THAT'S WHY PEOPLE WILL DO THAT.
AGAIN, COULD YOU CUT THE BLUE IN HALF AND SAY, WE'RE GONNA GIVE YOU 50% OF THE INCREMENTAL VALUES, BUT WE'RE GONNA RUN IT LONGER? SURE, YOU CAN, YOU CAN DO IT ANY WAY YOU WANT TO DO IT.
UM, BUT THAT'S, THAT'S REALLY WHAT A, A TIP IS DOING.
UM, WE SAY ON THIS SLIDE, THERE'S TWO REAL TYPES OF TIFF.
THERE'S WHAT'S CALLED STATUTORY, OR THAT'S REALLY A DIRECT AGREEMENT BETWEEN THE ISSUER AND THE BOND HOLDER.
SO, YOU KNOW, AN ISSUER SAYS, I'M GONNA GIVE YOU THIS INCREMENTAL TIF REVENUES, AND IT'S GONNA BE BASED ON THIS DEVELOPMENT SCHEDULE AND EVERYTHING AND ELSE, AND IF THERE, IF IT DOESN'T DEVELOP, YOU GET NOTHING.
IF YOU ANYTHING GOES WRONG, I'LL GIVE YOU AS MUCH AS I GET OFF THIS.
THOSE DO HAVE NOT REALLY HAPPENED IN VIRGINIA, BECAUSE WHAT TYPICALLY HAPPENS IS A SYNTHETIC TIP WHERE EITHER THE COUNTY SAYS, I KNOW THE DEVELOPMENT BETTER THAN SOME FIVE, YOU KNOW, BOND BUYER OUT IN CALIFORNIA OR SOMETHING.
I'LL TAKE THAT RISK AND I WILL BACKSTOP THAT THE DEVELOPMENTS GOING TO HAPPEN AND I'M GONNA INTERNALLY, UH, DO THAT CALCULATION, OR THE REVENUES ARE PLEDGED TO A CDA AND IN THAT FLOW OF FUNDS THAT, UH, THAT I SHOWED EARLIER HERE, IT MAY BE THAT FIRST SOURCE OF REVENUE INCREMENTAL, UH, TAX REVENUES.
AND SO THAT'S, THAT'S REALLY THE, THE, UM, TWO TYPES OF TIPS.
AGAIN, THE BENEFIT IS IT ALLOWS A DEVELOPER TO, TO MOVE FORWARD BECAUSE THEY'RE, YOU KNOW, GETTING SOMETHING OUT OF, OUT OF, UM, TO HELP WITH THE DEFRAY, THE COST OF THE DEVELOPMENT.
UH, THE CONSIDERATION IS, YOU KNOW, IF THINGS HAPPEN, AND THEN A COUPLE OF CASE STUDIES, UH, FOR EXAMPLE, COVID WHO NO ONE COULD HAVE PREDICTED, YOU KNOW, VERY SOLID COUNTY THOUGHT THAT THE PURDUE ACTIONS WERE SOLID.
AND THEN, OH, BY THE WAY, THERE ARE NO INCREMENTAL REVENUES BECAUSE THERE'S NO ONE EATING OUT AND THERE'S NO SALES TAX THAT ARE LIMITED.
SO THERE ARE THESE, UM, THINGS THAT CAN HAPPEN.
ANY QUESTIONS ON EITHER OF THAT? AND BEFORE WE JUMP INTO SOME OF THESE EXAMPLES? OKAY.
SO MOSAIC IS IN FAIRFAX COUNTY, A VERY POPULAR ONE OF THE CDAS THAT'S JUST, UM, DONE GREAT.
SO IT CAME AFTER THE CREDIT CRISIS.
THIS IS LIKE A TOWN CENTER CONCEPT, BIG TOWN CENTER UP THERE.
IT'S GOT A, IT'S GOT A TARGET IN, IT'S GOT A LOT OF RESIDENTIAL, IT'S GOT, YOU KNOW, RESTAURANTS AND, AND SMALL BUSINESSES AND STUFF.
AND SO THEY ISSUED THROUGH THERE, DID IT IN 2011, NON-RATED BASIS, BECAUSE ALL THEY HAD WAS THIS PROJECTED STREAM OF REVENUES FROM A, A CONSULTANT THAT, THAT THIS IS WHAT THEY DO FORECAST AND PROJECT AND, AND HAVE VARIOUS GROWTH FIGURES AND EVERYTHING IN THERE.
WELL, THERE'S EXCEEDED ALL THE ESTIMATES AND ALL THE REVENUES.
SO IN 2020, THEY WERE ABLE TO GO BACK TO THE RATING AGENCIES AND SAY, WE GOT NOW, YOU KNOW, NINE YEARS OF HISTORY HERE.
AND IT GOT RATED A TWO, WHICH IS A LOT STRONGER.
AND SINCE THE BONDS WERE RATED A LOT HIGHER, AND THE MARKET WAS REALLY GOOD IN 2020, UM, RIGHT BEFORE COVID, THEY WERE ABLE TO REFINANCE, SAVE A LOT OF MONEY ON THEIR DEBT SERVICE, SHORTEN THE TERM OF THEIR LOAN.
NOW THAT, THAT, UH, CDA, THEIR PLEDGE TO THE STREAM OF REVENUES IS JUST REAL ESTATE REVENUES.
AND SO THEY SAY, WE'LL GIVE YOU, UH, INCREMENTAL REAL ESTATE REVENUES ABOVE WHAT THIS PROPERTY WAS BEFORE ALL THESE PRETTY PICTURES CAME IN THERE.
AND IF THOSE REVENUES AREN'T ENOUGH, THE DEVELOPERS GOTTA BACKSTOP IT.
BUT THE REVENUES HAVE EXCEEDED THE DEBT SERVICE.
AND THEN ANYTHING THAT'S EXTRA CAN GO BACK TO THE COUNTY, GO BACK TO THEIR GENERAL FUND, CAN FLOW BACK OUT TO THEM.
SO THEY DON'T HAVE TO WAIT, UH, UNTIL THE TAIL END OF THIS.
THE FINAL MATURITY ON THIS IS 2036, BUT THEY'RE GETTING ANNUAL REVENUE, UM, COMING IN HERE, BUT THE ONLY THING THEY PLEDGED, UH, WAS REAL ESTATE, UH, TAX INCREMENT ON THAT.
[00:30:01]
SCENARIOS OR CASE STUDIES YOU'RE PUTTING FORWARD, UH, CAN YOU TALK, FOR EXAMPLE, UH, BRIEFLY ABOUT THE COST OF SETTING THIS UP BETWEEN THE BONDS, OBVIOUSLY COUNCIL, MULTIPLE SITES AND SO FORTH, WHERE JUST GENERICALLY, IS IT LIKE ONE, TWO, 3% OF THE RIGHT, A TYPICAL, UH, GEO BOND ISSUANCE FOR THE COUNTY WOULD PROBABLY BE LIKE THREE QUARTERS OF A PERCENT.SO, UM, YOU KNOW, SOME, SOMEWHERE IN THAT MAYBE 1%, THESE ARE PROBABLY TRIPLE, THESE ARE PROBABLY 3%, SOMEWHERE IN THERE, UH, TWO AND A HALF TO 3%.
UM, YOU KNOW, AGAIN, YOU KNOW, SOME WOULD SAY, WELL, THE DEVELOPER'S PAYING IT OR THE TAX REVENUES ARE PAYING IT, YES.
BUT YOU KNOW, THE, THE HIGHER THAT COST, THE LESS MONEY THAT FLOWS BACK INTO THE COUNTY ULTIMATELY.
BUT IF, YOU KNOW, IF YOU WANTED TO GO, THESE ARE SOLD TO WHAT'S CALLED SOPHISTICATED INVESTORS THAT UNDERSTAND THE RISK, YOU COULDN'T GO SELL IT TO SAY YOURSELF AS A RETAIL BUYER BECAUSE, YOU KNOW, IT'S JUST THEY, THE LAWYERS WANTED TO MAKE SURE SOMEBODY THAT REALLY UNDERSTANDS, LIKE, SOMETHING CAN GO WRONG IN THIS.
AND IF YOU DO, YOU WANT THEM TO BE A PARTNER.
IF YOU WERE BUYING A MUNICIPAL BOND AND SOMETHING WENT WRONG, YOU KNOW, YOU COULD PROBABLY SUE THE MUNICIPALITY AND SAY, MISMANAGEMENT OR WHATEVER.
THIS IS LIKE, THIS WAS PRETTY RISKY.
AND SO, UM, YOU KNOW, SO IT'S, IT IS, THEY'RE SOLD TO SOPHISTICATED INVESTORS, BUT THE DOCUMENT THAT GETS MAILED TO THEM IS LIKE A LITTLE MINI PHONE BOOK WITH ALL SORTS OF REPORTS AND ALL THE SENSITIVITY ANALYSIS AND EVERYTHING IN THERE.
SO THAT'S WHY, THAT'S WHY THE COST IS UP THERE.
WOULD YOU POTENTIALLY SEE THEM THOUGH, IN AN AGGREGATED FUND THAT COULD PURCHASE? THEY WOULD BE, YES.
THEY, THEY, THEY WOULD BE IN A HIGH YIELD FUND OF SIMILAR INVESTMENTS, LIKE, YOU KNOW, A BLACK ROCK OR T ROAD PRICE, OR THEY WOULD HAVE, YOU KNOW, GO PACKAGE 10 OF THESE AND MAYBE IF, YOU KNOW, ONE OF 'EM DOESN'T WORK, BUT THE OTHER NINE DO, AND THE YIELD IS SO HIGH, THEY'LL WORK IT OUT.
SO THEY'RE IN A, YOU KNOW, FOR LONG HAUL.
AND, UM, SO THEY'RE, THEY'RE, YOU KNOW, VERY PATIENT ON WORKING WITH THE LOCALITY TO GET THE DEVELOPMENT.
UM, THIS IS A CASE OF A, OF A TIFF, UM, WHERE THE CITY OF CHESAPEAKE HAD TWO DISTRICTS, UM, ONE IN, UM, UH, GREENBRIER AND ONE IN SOUTH NORFOLK, WHERE THEY WANTED TO DO IMPROVEMENTS.
AND, UM, THEY WANTED TO KIND OF JUSTIFY THAT THE IMPROVEMENTS THAT THEY WERE PUTTING IN WERE GONNA REPAY THEMSELVES WITH THAT, THAT THE JUDGE, THAT THE INVESTMENT IN THERE WAS GONNA MORE THAN JUSTIFY IT THROUGH INCREASED TAX BASED GROWTH AND EVERYTHING ELSE.
SO THEY SET UP THESE TIF DISTRICTS AND THEY KIND OF DID THE INTERNAL, OR THEY'RE STILL DOING THE INTERNAL ACCOUNTING OF SAYING, OKAY, YOU KNOW, SAY IT WAS, YOU KNOW, A HUNDRED MILLION DOLLARS OF REAL ESTATE VALUE IN THERE, AND NOW IT'S $500 MILLION.
AND SO WE'VE MADE $400 MILLION OF INVESTMENT AND WE'VE GOTTEN ALL THIS TAX REVENUE AND THAT TAX REVENUE IS USED TO PAY THE DEBT SERVICE ON THIS.
IN THIS CASE, IT'S GOT INTERESTING, WHICH GETS THEM MY POINT ON THE, ON THE INTERNAL TIFF VERSUS EXTERNAL, THEY DID THE TIFF, BUT THEY BACKSTOP IT WITH THEIR OWN GEO BONDS BECAUSE THEY'RE A CITY.
YOU COULD IF YOU HAD GEO REFERENDUM, BUT, UM, THEY CAN GO PUT THAT, THAT DRUG, THE COST OF FUNDS DOWN, WHICH MEANS THEY'RE ABLE TO PUT MORE BACK INTO THESE DISTRICTS, UH, AND THEN THEY'LL CONTINUE TO DO IT.
BUT THAT'S KIND OF LIKE THE EXAMPLE OF A, OF AN INTERNAL TIFF, WHICH ALSO MEANS THEY'RE, THOSE GEO BONDS ARE NON TAXABLE 'CAUSE THEY'RE UNION.
AND THAT'S MORE THE, THE TAXABLE OR NON-TAXABLE IS MORE THE USE OF THE THING.
IF IT'S PUBLIC USE, IT'S GONNA BE TAX EXEMPT.
THERE ARE SUCH THINGS AS TAXABLE MUNICIPAL, UM, BONDS.
UM, BUT, BUT IN THIS CASE, THESE ARE TAX EXEMPT.
IF YOU WERE LIKE FINANCING LIKE THE, UM, THE CONVOCATION CENTER AT, UM, FOR HENRICO, THE VIRGINIA CENTER COMMONS IS A TAXABLE BOND ISSUANCE.
AND THE REASON FOR THAT IS JUST THE USE OF THE FACILITY AND, AND THE WHO'S OPERATING IT, THE COUNTY OF HENRICO DOESN'T REALLY OPERATE IT.
THEY HIRED SOMEBODY TO BASICALLY GO RENT THAT, UH, FACILITY OUT AS MUCH AS THEY COULD TO GENERATE TOURISM REVENUE,
[00:35:01]
THE COUNTY AND LOOKING TO MAKE MONEY ON THE FACILITY.THEY'RE LOOKING TO MAKE MONEY AND EATING AT CHICK-FIL-A OR STAYING IN THE HOTEL OR GOING TO THE MOVIE THEATER.
THEY JUST WANT ACT, YOU KNOW, ACTIVITY GOING IN THERE.
SO THAT'S WHAT DROVE THOSE FUNDS TO BE TAXABLE.
SO INTEREST RATES WERE REALLY LOW, UH, WHEN WE DID THAT TRANSACTION, SO IT WASN'T THAT BIG A DIFFERENCE.
UM, BUT HERE'S A CASE STUDY, UH, BALLSTON A QUARTER UP IN ARLINGTON, RIGHT THERE IN THE HEART OF BALLSTON.
UH, THEY HAD AN OLD MALL, UH, REALLY OUT OF DATE IS A, IT IS ON A METRO STOCK, VERY POPULAR AREA.
REAL ESTATE VALUES WERE EXPLODING UP THERE.
AND SO THEY, THEY WANTED TO REDO THE MALL, AND THEY DID, THEY DID THIS IN 2016.
THEY DID ALL THESE PROJECTIONS, AND THEN, THIS IS MY COVID EXAMPLE.
COVID HIT NO INCREMENTAL REVENUES COMING IN TO PAY THE BONDS.
UM, AND SO HAD TO DO A REFINANCING IN 2024, WORK IT OUT WITH THE BOND HOLDERS, UM, SAYING, YOU'RE GONNA GET YOUR MONEY.
YOU JUST GOTTA BE A LITTLE BIT PATIENT.
WE GOTTA GET THE REVENUE STREAM.
THE BOND HOLDERS, YOU KNOW, KNOW THAT NEW COVID HAPPY TO WORK WITH YOU.
THEY DIDN'T, THEY'RE, THEY'RE GONNA GET THEIR MONEY ULTIMATELY.
UH, BUT THE POINT OF THIS CASE IS YOU'VE JUST GOTTA BE VERY CAREFUL, EVEN THOUGH ARLINGTON DID NOTHING WRONG, THEY'RE AAA COUNTY AS WELL.
UH, THEY COULDN'T HAVE KNOWN THIS WAS COMING, BUT THE RATING AGENCIES CAME TO 'EM AND SAID, ALTHOUGH YOU HAVE NO LEGAL RESPONSIBILITY TO FIX THE PROBLEM, IF YOU LET THOSE BONDS DEFAULT, WE'RE GONNA LOWER YOUR CREDIT RATE.
YOU'RE NOT GONNA BE AAA ANYMORE.
ALTHOUGH THEY HAVE NO LEGAL OBLIGATION TO DO IT.
SO THE COUNTY, YOU KNOW, REALLY IS, IS GLAND DOES REALLY, UH, YOU KNOW, VALUES THEIR AAA RATINGS.
SO THEY'RE IN THERE WORKING WITH THE DEVELOPER AND THE BOND HOLDERS, AND LET'S FIGURE OUT A SOLUTION, UH, WHICH WAS WORKED THROUGH.
BUT THE POINT OF THAT IS JUST WHEN YOU SAY, YOU KNOW, THERE'S NO RECOURSE THERE, THE RATING AGENCIES DID JUMP IN AND LET IT BE KNOWN THAT THEY WERE, UM, WATCHING THIS.
A COUPLE MORE EXAMPLES HERE OF SERVICE DISTRICT.
AS WE TALKED ABOUT, UM, OUR VERY OWN CUCO CREEK SERVICE, UH, DISTRICT, UH, YOU KNOW, THE DEAL HAPPENED IN 2002, UM, PROJECTIONS, UH, YOU KNOW, DEVELOPMENT COMING, OH EIGHT HITS MAJOR.
UM, EMPLOYER DECIDES NOT TO COME.
DEVELOPMENT DOES NOT OCCUR AS QUICKLY AS POSSIBLE, ARE AS QUICKLY AS THEY THOUGHT IT WOULD.
UM, BUT THE, THE DEBT SERVICE ON THOSE BONDS IS PAID, UM, FROM TWO THINGS PRIMARILY, OR THREE THINGS, SYSTEM REVENUES, UH, 32 CENT ADOR IF YOU'RE IN THE DISTRICT, AN ADDITIONAL ON TOP OF YOUR REAL ESTATE.
AND THEN A REVENUE SHARING AGREEMENT WHERE 55% OF THE INCREMENTAL, UM, INCREASE IN PROPERTY VALUES IN THE DISTRICT GOES TO THAT, AND THE COUNTY SIDE GETS 45% BECAUSE OF THE SLOWDOWN.
WE EXTENDED IT, IT WAS GONNA, UM, GO THROUGH 2035, BUT DEBT SERVICE WAS GONNA PEAK AT 9 MILLION, WHICH WE DIDN'T HAVE ENOUGH REVENUE TO SUPPORT.
UM, THERE WERE A BUNCH OF RESERVES ON THIS, UH, BUT WE DID A REFINANCING IN 2020.
AND THE GOOD NEWS RIGHT NOW IS PROJECTIONS ARE AHEAD, AS EVERYBODY KNOWS, REAL ESTATE IN THE, IN THE COUNTY IS, IS GROWING AT RAPID RATES.
SO WE THINK WE'RE ACTUALLY GONNA BE ABLE TO PREPAID THIS DEBT IN EARLY 2000 THIRTIES.
SO IT'S ACTUALLY GONNA BE SHORTER THAN WHEN THE DEAL WAS ORIGINALLY DONE.
UM, BUT THIS IS A REVENUE SOURCE, YOU KNOW, BEFORE YOU EVEN THINK OF ADAS AND WHAT KIND OF AGREEMENTS, THIS IS A A EXAMPLE THAT WENT BACK, YOU KNOW, 20 SOME YEARS WHERE IT WAS PLEDGING AN INCREMENTAL TAX REVENUE.
THERE WAS REVENUE SHARING INVOLVED.
SO THIS IS A FORM OF A, OF A TIFF.
UM, SO THE COUNTY ACTUALLY HAS, UM, DONE SOME OF THIS, BUT IT WAS UNIQUE IN THE FACT THAT THE BRA, IT WAS THE LARGEST AT THE TIME.
I, I DON'T KNOW THAT VRAS EVER WHAT THEY'VE DONE HISTORICALLY SINCE THEN.
I MEAN, THAT'S STILL THE CASE, RIGHT? WHERE THE VA IS NOT REALLY THE VEHICLE.
AND ESPECIALLY WITH THE INTERCEPT, THAT WAS AS PART OF THE, THE AGREEMENT THAT I I I, I WAS STUNNED BY WHEN I FIRST SAW THAT, YEAH, THE VR, THE VVRA WOULD IF THIS DEAL HAPPENED, AND VRA WOULD GLADLY DO THIS.
SO V A'S THRILLED THAT WE'RE REFINANCING AND LOWERING OUR DEBT.
[00:40:01]
REASON IN OH TWO, THE COUNTY'S FINANCIALS WEREN'T WHAT THEY WERE IN 2012, YOU KNOW, WITH THE FUND BALANCES AND ALL THE OTHER THINGS.BUT IN 2002, THEY FORCED A COUPLE, A SECONDARY RESERVE, WHICH YOU RARELY SEE THE STATE INTERCEPTS IN THERE.
AND SO LIKE THIS CHART HERE IS THE, IS THE FLOW CHART OF IT, BUT THERE ARE MORE BELT AND SUSPENDERS AND EVERYTHING ELSE ON THIS THAT, YOU KNOW, YOU'D NEVER GET TO THE COMMONWEALTH JUMPING IN TO DO THAT.
YOU'VE GOT TWO RESERVES THAT HAVE TO HAPPEN.
THE COUNTY, UH, WE EVEN WOULD JUMP IN AND MAKE UP.
SO IT'S, IT IS PROBABLY THE MOST SECURE DEAL I'VE EVER SEEN.
SO, BUT WELL, IT HAD THE WORST RATING IN THE NATION AT ONE TIME.
IN TERMS OF THE BONDS, THE, THE COUNTY OR THE TCSD? THE TCSD? UM, I WOULDN'T SAY THAT.
I WOULD SAY THEY, THEY WERE GOING THROUGH DA AND DCRA'S RATING ON IT.
SO THE ONLY, THE ONLY RATING ANYBODY WOULD'VE KNOWN WOULD'VE BEEN RA'S INTERNAL RATING.
THERE WAS ACTUALLY AN EXTERNAL RATING THAT SHOWED.
NUMBER TWO WAS DETROIT WATER SYSTEM AND TUCKO CREEK SERVICES.
I, AND I, I STILL GET THAT PAPERWORK GOING ALL THE WAY BACK TO EARLY TWO THOUSANDS THAT IT WAS A, A AND I, IT WASN'T BAD BEFORE.
RIGHT, BUT IT WAS SOMEBODY WHO WAS LOOKING AT MUNICIPAL, RIGHT? OR GOVERNMENTAL, YEAH, WATER WASTEWATER SYSTEMS. YEAH, NO, I WAS STUNNED BY, BY THIS WHOLE SETUP.
YEAH, I THINK THE COUNTY'S OPTIONS AT THAT POINT WERE EXTREMELY LIMITED.
UM, TWO MORE, TWO MORE SLIDES, AND THEN I'D BE GLAD TO ANSWER ANY QUESTIONS.
TRANSPORTATION IMPROVEMENT DISTRICTS SIMILAR TO YOU, THE OTHER KIND OF SERVICE DISTRICTS? THIS IS AN INTERESTING ONE BECAUSE I MEAN, JUST WHEN I SAW THIS SLIDE, JUST THE RAW SIZE OF FAIRFAX, THEY'VE GOT THESE IMPROVEMENT DISTRICTS.
UH, THE COUNTY'S AD IS NOW OVER 9 BILLION.
THEY GET EVERY ONE OF THEIR DISTRICTS IS JUST THEIR, THE, THE TRANSPORTATION DISTRICT IS, IS LIKE TWICE THAT AMOUNT.
UM, BUT THEY BASICALLY SET THESE DISTRICTS UP.
THEY PUT A TAX TO COMMERCIAL, UM, ENTITIES IN THE DEVELOPMENT THAT PAY FOR THE IMPROVEMENTS TO THAT DISTRICT, WHICH THEN BENEFIT, UH, THAT THAT COMPANY.
AND SO THEY'VE GOT, GOT INDEPENDENT BOARDS THAT MEET THEIR TAX PROJECTIONS.
UM, SOME, SOME HAVE BORROWED MONEY, UH, SOME THREE OF 'EM HAVE ISSUED DEBT, OTHERS HAVE JUST GATHERED THE MONEY AND THEN PAID PAY AS YOU GO.
THERE'S A DIFFERENCE OF DIFFERENT TYPES OF SECURITY.
AND, YOU KNOW, THIS LAB REALLY GETS TO ME AS IT IS JUST, YOU KNOW, AS Y'ALL IDENTIFY THE NEEDS AND WHAT YOU'RE TRYING TO ACCOMPLISH, YOU KNOW, THEN YOU GET PEOPLE INVOLVED AND FIGURE OUT WHICH IS BEST.
THERE'S JUST NO, ALL THESE EXAMPLES, AND I PROBABLY COULD GIVE YOU 15 MORE OF THESE EXAMPLES.
SO IT'S JUST GOTTA BE TAILOR MADE TO WHATEVER OPPORTUNITY OR SITUATION THAT Y'ALL ARE TRYING TO ACCOMPLISH.
UM, YOU KNOW, SOME, SOME WORK, SOME DON'T WORK.
I MEAN, OBVIOUSLY ROUTE 28 UP THERE, THERE'S A BAZILLION BUSINESSES, YOU KNOW, OBVIOUSLY NOT THE CASE HERE.
UM, BUT IF THERE'S, YOU KNOW, IF THERE'S LANDOWNERS THAT WANT TO MAKE SOMETHING HAPPEN FOR A DEVELOPMENT OR A DEVELOPER COMES IN, THAT'S WHERE, YOU KNOW, THESE OPPORTUNITIES REALLY START EXPLORING DIF DIFFERENT TYPES OF, UM, YOU KNOW, AVENUES OR TOOLS THAT YOU CAN USE.
SO, HOPE I DIDN'T GO TOO FAST, A LOT OF INFORMATION FOR YOU.
UM, BUT I'M GLAD TO ANSWER ANY QUESTIONS OR IF YOU THINK OF SOMETHING, YOU KNOW, AFTERWARDS, JUST LET ME, LET ME KNOW.
I, I STILL HAVE A MILLION QUESTIONS, BUT THAT'S, THAT'S ME.
BUT I WOULD YIELD ANYBODY ELSE? ANY THOUGHTS?
UM, IT'S NOT PROBLEM, UH, THROUGH FORTH A CONJECTURE, UH, OF, LET'S SAY A PROJECT, SAY THE COUNTY AND THROUGH THE A-A-E-D-A, EXCUSE ME, IF IT MADE SENSE, WANTED TO ACQUIRE LAND NEAR TRANSMISSION LIGHTS, UM, FOR WHAT MIGHT BE CONSIDERED, UM, SPECULATIVE OR LET'S SAY EVEN IF IT WAS A, AN OPPORTUNITY FROM A CO LOCATOR NOT THINKING THAT IT'D BE A PRIME, UH, FOR A DATA CENTER, WHAT WOULD BE THE MECHANISM THAT WOULD BE MOST LOGICAL OR, UH, HOW WOULD YOU APPROACH IT THAT MAY NOT EVEN BE INCLUDED IN HERE TO
[00:45:01]
ACQUIRE LAND, UH, LET'S SAY IN THE LOCALITY, UH, THAT IT ALSO WOULD, UH, LET'S SAY SUPPORT THE TCSD WATER, UH, USAGE AND, AND, AND THINGS LIKE THAT.HOW, HOW WOULD YOU LOGICALLY THINK THE BEST WAY TO CONSTRUCT SO
UM, WELL, YOU KNOW, INTEREST RATES ARE A LITTLE BIT HIGH RIGHT NOW, SO IT MAKES IT A LITTLE HARDER.
IN THE PAST, WHAT WE HAVE DONE IS WE'VE, YOU KNOW, LOOKED, LOOKED AT EITHER PARTNERING WITH THE BANK OR DOING A STANDALONE OFFERING WITH, UM, THROUGH THE EDA, WITH THE COUNTY'S MORAL OBLIGATION SUPPORT.
IT'D PROBABLY BE ON A TAXABLE BASIS IF YOU DO IT ON A TAX EXEMPT BASIS.
YOUR DOWNSIDE IS, YOU KNOW, THERE'S ONLY SO MUCH YOU CAN DO WITH THE LAND.
LIKE, YOU COULDN'T GIVE THE LAND IF YOU REALLY HAD A DATA CENTER THAT YOU'RE LIKE, OH, THIS IS A HOME RUN.
AND THEY SAID, YOU GOTTA KICK IN THE LAND WE ISSUED WITH BONDS ON A TAX EXEMPT BASIS.
SO WE WOULD PROBABLY, WE WOULD THINK THROUGH THAT WITH THE LAWYERS, BUT YOU MAY WANT TO DO IT ON A TAXABLE BASIS.
AND THEN YOU WOULD THINK ABOUT LIKE, WHAT'S THE LOGICAL PERIOD OF TIME THAT YOU WOULD REALLY WANT TO HOLD THIS INVESTMENT? AND YOU WOULDN'T WANNA BE PROBABLY FULLY AMORTIZING THE DEBT SERVICE.
IF YOU SAID, HEY, THAT'S FIVE OR SEVEN YEARS AND IT'S A, YOU KNOW, WHATEVER, $20 MILLION PIECE OF PROPERTY.
WE WOULD PROBABLY IN OTHER SITUATIONS DO KIND OF LIKE AN INTEREST ON OR LIGHT AM AMORTIZATION OF THAT WITH THE EXPECTATION THAT WE'RE GONNA DO SOMETHING WITH IT LATER ON, UM, THAT WE'RE NOT GONNA BE IN THAT, UH, PIECE OF PROPERTY FOREVER.
BUT YOU, YOU MAY, YOU KNOW, END UP WITH IT, AND THEN IF YOU KNEW YOU WERE, YOU KNOW, WEREN'T GONNA BE ABLE TO, YOU SELL IT, YOU WOULD THEN AMORTIZE THE DEBT OUT AND THEN YOU WOULD BE PAYING AS YOU GO, AND YOU JUST EXPECT YOU BRING IT IN AS PART OF YOUR, YOU KNOW, THE COUNTY'S PORTFOLIO FOR ADDITIONAL USES OF, MAYBE IT'S NOT COMMERCIAL DEVELOPMENT, MAYBE IT'S A SCHOOL OR, OR WHATEVER ELSE, OR PARK OR SOMETHING ELSE.
UM, OR YOU JUST LEAVE IT ON THE MARKET TO BE SELLING IT.
SO THAT'S, YOU KNOW, LOCALITIES HAVE GONE OUT AND, AND PURCHASED LAND.
UM, YOU JUST GOTTA THINK THROUGH, LIKE, AND IT'S HARD BECAUSE YOU DON'T KNOW WHAT THE DATA CENTERS ARE GONNA DO, AND, YOU KNOW, SO THAT, THAT WOULD BE MY INITIAL INITIAL THOUGHT.
IT REALLY, YOU CAN'T SPECULATE, RIGHT? YOU HAVE TO HAVE AT LEAST A RELATIVE, UH, SENSE OF SOMETHING'S GONNA HAPPENED ALREADY.
IT, IT IS INTERESTING BECAUSE LIKE DATA CENTERS ARE, YOU KNOW, THEY'RE OUT THERE LIKE IN, UH, A COUPLE OF OUR CLIENTS ALONG 95, THEY, BY THE TIME THEY REALLY KNEW WHO THEY WERE DEVELOPING WITH.
THEY HAD A, THEY HAD ACQUIRED LIKE THROUGH SHELL CORPORATIONS AND ALL SORTS OF THINGS, ALL THESE PEAK PARCELS OF PROPERTY, AND THEY'RE LIKE, YOU KNOW, WE WANT THIS REZONED.
AND THEY'RE LIKE, WELL, IT'S A LOT OF IT.
AND THEY'RE LIKE, NO, WE OWN ALL THE PROPERTY
AND SO, AND SO THEY'RE, YOU KNOW, THEY'RE ONE STEP AHEAD.
BUT YES, THAT'S, YOU KNOW, IF THERE'S, IF THERE'S A PRIME PROPERTY AND YOU CAN, YOU KNOW, THAT MAKES SENSE.
IT'S, IT IS SOMETHING TO BE GOOD TO BE THINKING ABOUT STILL
WE A NUMBER OF BUSINESS PARTS WITHIN THE COUNTY.
UM, AND WE WERE TALKING ABOUT THIS YESTERDAY, AND I DON'T, SARAH, I THINK IT'S TWO OR THREE THAT WE, WE, THE EDA HAVE ACTUALLY BEEN INVOLVED IN THE DEVELOPMENT OF, UM, CAN YOU TALK ABOUT THE, HOW YOU CAN STRUCTURE, HOW THE EDA CAN WORK THROUGH THIS STRUCTURE, A BUSINESS PARK OR A TECHNOLOGY PARK, OR ANYTHING THAT IS REASONABLE, LET'S SAY TIF VERSUS CDA VERSUS GEO VERSUS, YOU KNOW, WHATEVER MECHANISMS, UH, VEHICLES WOULD BE APPROPRIATE TO WORK DOING SOMETHING LIKE THAT.
YOU THINKING LIKE SHELL BUILDINGS OR STUFF, OR WHAT ARE YOU THINKING OF? LAND WITH INFRASTRUCTURE, UM, WATER, WASTEWATER, ROADS, RIGHT? SO THE EXAMPLES I GAVE, YOU'RE GONNA WANT THE, YOU'RE GONNA WANT, UM, THE OTHER SIDE, YOU'RE GONNA WANT THE DEVELOPER, YOU'RE GONNA WANT TO KNOW A PLAN.
UM, SO YOU'VE GOT A PARTNER AND YOU'RE TRYING TO FIGURE OUT HOW TO DO IT.
SO AS YOU THINK THROUGH IT, THAT'S WHEN YOU'RE TALKING CDAS, YOU'RE, YOU'RE ACROSS THE TABLE NEGOTIATING
[00:50:01]
WITH THE DEVELOPER.IF YOU ARE SPECKING IT A LITTLE BIT, IT'S INTERNAL.
IT'S HOW DOES THIS FIT? AND, YOU KNOW, THE COUNTY'S, UH, BOARD'S VISION, HOW DOES IT, IT FIT IN THE LONG TERM GOALS AND THE, IN THE MARKETING OF THE, YOU KNOW, THE EDA AND, UM, HOW DID, HOW DOES IT JUST ALL COME TOGETHER AND LOGICALLY MAKE SENSE? AND THAT, YOU KNOW, SO THE COUNTY, UH, YOU KNOW, COULD BE IF YOU, IF YOU WANTED ROADS OR UTILITIES, THAT'S A LOGICAL VRA FINANCING, YOU KNOW, AND YOU CAN BITE THAT IN IN SEVERAL INCREMENTS.
UM, AND SO, UH, STUFF LIKE THAT, AND THEY WOULD V-R-A-V-R-A, YOUR PLEDGING YOUR CREDIT WHEN YOU GO, IN YOUR CASE, YOU'D BE PLEDGING PROBABLY A MORAL OBLIGATION, WHICH, YOU KNOW, YOUR MORAL OBLIGATION IS GOOD.
UH, YOU COULD PLEDGE, PLEDGE A REVENUE STREAM, BUT WITHOUT THE OTHER SIDE OF IT, THERE'S PROBABLY NOT THE REVENUE THERE.
SO, UM, BUT IT'S, YEAH, I WOULD JUST SAY IT'S PART OF THE OVERALL VISION OF WHAT THAT, UM, INDUSTRIAL PARK YOU'RE TRYING TO DO AND HOW IT'S GONNA DRIVE FUTURE DEVELOPMENT.
WHAT I'VE SEEN, UH, SOME OF THE THINGS THAT WE RUN INTO IS THAT WE'RE MISSING OUT ON COMPANIES COMING TO THIS COUNTY THAT, YOU KNOW, WOULD PROVIDE A GREAT TAX BASE AND JOBS, ET CETERA, BECAUSE WE DON'T HAVE THE INFRASTRUCTURE.
SO WE'RE, YOU KNOW, IT'S LIKE IT'S CHICKEN AND EGG EGG.
SO WE DISCUSSED THIS YESTERDAY AND, UM, SO, YOU KNOW, WHAT DID WE DO? YOU KNOW, IT, IT, THERE ISN'T A GREAT ANSWER.
HONEST, IT, IT IS A DIFFICULT SITUATION BECAUSE, I MEAN, YOU, YOU PROBABLY KNOW BETTER THAN I DO, BUT THERE'S ALL SORTS OF LIKE COMPANY OR COUNTIES OUT WEST THAT, YOU KNOW, THROWN THERE, BUILT A BUILDING, IT'S STILL SITTING THERE OR THROWN IN A MAJOR INCENTIVE TO SOMEBODY THAT DIDN'T YIELD WHAT THEY THOUGHT IT WOULD BE.
UM, SO YOU, YOU KNOW, THE COUNTY'S SO STRONG THAT YOU DON'T NEED THESE HAIL MARY'S, BUT WHAT YOU'RE TRYING TO DO IS BE THAT ATTRACTIVE BUSINESS PARTNER.
SO I THINK IT'S, YOU KNOW, MY PERSONAL ADVICE IS JUST BE PATIENT, FIND THE RIGHT DEVELOPER, AND THERE'S GONNA BE OPPORTUNITIES THAT PEOPLE ARE GONNA HAVE POSITIONED THEMSELVES FOR OR JUST IN THE RIGHT PLACE.
BUT, YOU KNOW, TO ME, THE COUNTY JUST DOESN'T NEED THE HAIL MARY OF LIKE, I'M BUILDING SOMETHING, SITTING ON 64 AND HOPING, AND THEN IF WE'RE WRONG, WE'RE COVERING $2 MILLION WORTH OF DEBT SERVICE EVERY YEAR.
AND LOOKING AT THE BUILDING GOING, I THOUGHT SOMEBODY WOULD COME.
AND YOU KNOW, I, I THINK THAT, YOU KNOW, DATA CENTERS ARE HERE TO STAY, BUT IT'S JUST THAT IT HAS JUST GOTTEN TO BE SUCH A HUGE FOOD FIGHT FOR 'EM AND EVERYBODY'S, YOU KNOW, LOWERING THEIR TAXES AND, AND FIGHTING OVER A, A LOT OF THINGS.
AND SO, YOU KNOW, IT'S, IT'S, YOU SEE SUCCESS EVERYWHERE ELSE, BUT IT'S HARD TO BE, IT'S HARD TO BE PATIENT AND I THINK Y'ALL ARE DOING RIGHT.
I THINKING THROUGH IT, BUT THERE'S JUST NO, YOU KNOW, EASY ANSWER.
WE WERE DISCUSSING WITH, WITH OUR COUNTY TO THE SOUTH ABOUT, THEY JUST ANNOUNCED THE DATA CENTER COUNTY TO THE NORTH JUST AT, UH, SIX MONTHS AGO, MAJOR ANNOUNCEMENT ABOUT DATA CENTERS WERE RIGHT IN BETWEEN THE TWO LARGE SPACE LOAD AND, UH, PLANTS IN THE UNITED STATES, EVERY COMMONWEALTH VIRGINIA.
AND IT SEEMS LIKE WE'RE A LOGICAL FIT, OR ESPECIALLY WITH THE TCSD OR WATER, BUT GETTING THE JUICE RIGHT TO THE TC, EXCUSE ME, TO THERY, RIGHT? IT IS A PROBLEM.
SO THEREFORE, ONE QUESTION WOULD BE, UM, HAVE YOU SEEN ANY OF THE VEHICLES BEING USED FOR ANY TYPE OF POWER GENERATION SUPPORT? UM, WHETHER IT BE SOLAR OR LET'S A GAS IT, IT, IT COULD, I HAVEN'T SEEN IT, BUT IT COULD, IN PART OF LIKE THESE RECENT LEGISLATIVE THINGS, THERE'S, YOU KNOW, THINGS IN THERE THINK MOST OF 'EM HAVE EXPIRATION DATES AND YOU KIND OF NEEDED TO BE RUNNING.
UM, SO IT'S STILL, IT'S A LITTLE UNFORTUNATE, UH, THAT, YOU KNOW, IF YOU, IT SEEMS LIKE THEY, A LOT OF PEOPLE WERE DOING, IF YOU WERE DOING SOMETHING THEN THE LEGISLATION PASSED, YOU'VE GOT A CHEAPER COST OF FUNDS, IT WASN'T WHY YOU DID IT, AND SO YOU JUST BENEFITED BY, YOU KNOW, JUST BEING THERE IN THE RIGHT PLACE AT THE RIGHT TIME.
[00:55:01]
UM, I HAVEN'T SEEN MUCH OF THAT YET.UM, BUT IT IS, THE WHOLE DATA CENTER THING IS, IS REALLY INTERESTING.
JUST HOW, BECAUSE I MEAN, YOU KNOW, IT USED TO BE LOUD AND THEN PRINCE WILLIE, AND THEN IT'S, YOU KNOW, THAT POWER GRIDS DOESN'T HAVE ENOUGH CAPACITY, SO THEY'RE SLIDING DOWN AND THEY'RE, THEY'RE GETTING MORE CREATIVE, BUT IT DOESN'T SEEM LIKE THEY'RE, YOU KNOW, NECESSARILY GOING AWAY EITHER.
DO YOU KNOW ANYTHING ABOUT THE SIRI, UH, TECHNOLOGY PART RIGHT, AT THE, AT THE PLAN IN TERMS OF IF THE COUNTY'S DOING ANY CDAS OR ANY TYPE OF, I, I DOUBT.
BECAUSE I KNOW THEY'RE TALKING ABOUT SMRS AND OTHER THINGS AS FOR PASSIVE DATA CENTER EXPANSION DOWN THERE.
BUT, UM, WERE YOU, FROM A DISCLAIMER STANDPOINT WHERE I'M HEADED WITH THIS, WERE YOU INVOLVED IN THE SHORT PUMP, UH, CDA AT ALL? I WAS AT, I WAS, UM, I WAS AT MORGAN KEEGAN AT THE TIME, AND WE WERE A CO-MANAGING UNDERWRITER, SO I WAS NOT REALLY INVOLVED WITH IT, VERY AWARE OF IT.
SO WHERE I'M GOING WITH THAT IS, UM, PARTICIPANTS IN THAT ARE INVOLVED IN WEST CREEK AND WEST CREEK ASSOCIATES.
UM, WOULD YOU HAVE ANY THOUGHTS ON HOW THE EDA AND OR THE COUNTY AND THE EDA CAN SUPPORT, UM, ACTIONS THROUGH ANY VEHICLES WITHIN THAT AREA THAT WOULD HELP THEM HELP THE COUNTY, ET CETERA? ANY, ANY CDAS OR, RIGHT, RIGHT.
I, I WILL GIVE IT SOME THOUGHT.
NOT OFF THE TOP OF MY HEAD, BUT IT'S A, IT'S A GREAT QUESTION BECAUSE THEY'VE OBVIOUSLY GOT, GOT THE RESOURCES.
I MEAN, IT'S, IT'S A MATTER OF THE RESOURCES AND THE PLAN AND, AND YOU KNOW, HAVING THAT DEVELOPER, YOU KNOW, WHICH PRU ITS WERE FOR SHORT BUMP, I MEAN, IT JUST WAS, YOU KNOW, RIGHT PLACE, RIGHT VEHICLE.
UM, SO I'M ASSUMING THEY'RE FULLY AWARE OF WHAT VEHICLES ARE AVAILABLE.
I WOULD SAY YES, BUT I WOULD SAY IT'S MORE, AND, AND I DON'T, I DON'T KNOW THEM, WHAT THEY'RE TRYING TO DO, WHAT VISION THEY HAVE, YOU KNOW, IT REALLY IS, IT'S LIKE DEVELOPERS THAT COME AND THEY'RE LIKE, YOU KNOW, AND IT'S WEEDING THROUGH A LITTLE BIT, BUT IT'S LIKE, YOU KNOW, THEY'VE GOT THE RESOURCES, BUT WE WANT TO DO THIS DEVELOPMENT.
HOW CAN WE DO IT CHEAPER VERSUS, YOU KNOW, BECAUSE THIS IS, THIS IS JUST, YOU KNOW, HELPING THEM DO IT SLIGHTLY CHEAPER.
BUT THE DEVELOPMENT IS OBVIOUSLY THE WHOLE THING IS, IS THE GREATER PART OF IT.
I THINK WE GIVE THAT, I THINK THAT WOULD BE OF INTEREST NOT ONLY TO THE EDA, BUT ALSO TO THE BOARD.
BECAUSE IF WE WANNA MAXIMIZE ANY BUSINESS RIGHT.
TERMS, BUT AT THE SAME TIME, UH, IF WE CAN SPEAK HOPEFULLY FOR A BOARD OR EIGHT 40, BUT WE ALSO WANT TO GET A HIGHER TAX BASE, UH, YOU KNOW, WE'VE TALKED ABOUT THIS.
UH, WHEREAS PALTON COUNTY IS 92% RESIDENTIAL REVENUE BASED AND 8% COMMERCIAL.
BUT THERE'S BEEN A LITTLE TENDENCY TO BACKTRACK WHERE WE'RE MAYBE GOING DOWN A LITTLE BIT, WE'D LIKE TO, I'LL SUGGEST GET UP HIGHER MM-HMM.
'CAUSE UH, YOU KNOW, KIND OF GOING BACK TO TCSD, I'LL SUGGEST THAT WE HAD SOME INFRASTRUCTURE PROBLEMS THAT, UH, BOARD REALLY ADDRESSED, IN PARTICULAR THE NINETIES THAT ARE COMING FROM IN SCHOOLS, COURTHOUSE, ET CETERA.
AND OTHER, UM, SOME WOULD SAY OTHERS IN TERMS OF, UH, ACQUISITION OF PERSONNEL RESOURCES FOR THE COUNTY AND SO FORTH, SO ON.
SO YEAH, IF YOU, IF YOU WOULD THINK OF IT, UH, YEAH.
'CAUSE UH, UM, I, I, I SEE THE OPPORTUNITY IN DATA CENTERS IS, I, I DON'T SEE IT GOING AWAY IN THE NEAR TERM.
AND WHEN I SEE, UH, THE AMOUNT OF MONIES THAT ARE BEING INVESTED BY THE TOP 7, 8, 9, 10 FIRMS, RIGHT? IT'S NOT BILLIONS.
SO I, I FIND THAT I SAYING, AND YOU KNOW, MAY EAST WAS, UH, UP NORTH AND IT'S SEEMS LIKE THE WHOLE PROPAGATION OF THE DISTANCE FOR A LOT OF REASONS IS STILL IN VIRGINIA, RIGHT? SO I, YEAH.
AND I, I DON'T SEE THAT ENDING.
AND ESPECIALLY WITH THE WAY THE CURRENT TECHNOLOGY IS AND THE WAY THINGS ARE SCALING, I DON'T SEE
[01:00:01]
RIGHT, RIGHT.THAT'S JUST YOUR INFRASTRUCTURE'S SET UP FOR, I MEAN, YOU'VE GOT, YOU GOT WHAT YOU NEED.
AND A LOT OF THESE ARE SCRAMBLING TO GET IT, BUT IT IS A LITTLE BIT OF THE CHICKEN AND THE BAG.
WE'VE GOT POWER LINING 500 KVS, TWO 30, EVERYTHING, BUT JUST NOT THE EXACT RIGHT.
SO IT'S, WE'RE WE'RE BLESSED IN HAVING THE WATER AND HAVING THAT POWER, NOT LET'S SAY THE LAST MILE OR TWO MILES OR WHATEVER, RIGHT? MM-HMM,
BUT, UH, SO, SO THAT'S, THAT'S AN ISSUE WHICH WE REALLY DON'T HAVE MUCH SAY OR CONTROL, UNFORTUNATELY.
THAT'S, UH, BUT, YOU KNOW, INDEPENDENT POWER GENERATION AND OTHER THINGS WOULD SOLVE THAT PROBLEM TOO.
YOU HAVE A BETTER HISTORY OF THE CAN THAN I DO, MR. LAU, I DON'T WANNA PUT YOU ON THE SPOT, BUT YOU COULD GIVE US, GIVEN US A NUMBER IN ONE OF OUR MEETINGS TO, UH, REGARDING THE AMOUNT OF, UH, TAX REVENUE INCREASE THAT THE COUNTY WOULD REQUIRE OVER A CERTAIN PERIOD OF TIME.
WAS IT LIKE 2 BILLION OVER THE NEXT 10 YEARS? UH, REQUIRE IS THE WRONG WORD OR ME? ME.
I HAVE PERSONALLY SET JUST, AND, AND, AND TALK WITH THE PARENTS AND THE AUTHORITY, $2 BILLION IN, UH, WEST CREEK AND THAT WE GENERATED APPROXIMATELY ABOUT TO THIS DEPENDING ON WHAT KIND OF BUSINESS WENT IN THERE.
IF IT WERE A DATA CENTER, OUR, OUR TAX RATE IS 40 CENTS, UH, PER A HUNDRED AS OPPOSED TO 53.
WHERE, WHERE, I'M SORRY, I SAID 40, IT'S $4.
TELL ME THAT IT IS, UH, 40 CENTS, BUT IT'S FOR THE MACHINERY AND TOOLS THAT ARE IN THE DATA CENTER.
SO THEY STILL WOULD PAY THE BASE REAL ESTATE TAX, BUT IT WOULD BE 40 CENTS PER A HUNDRED OF ASSESSED VALUE FOR MACHINERY AND TOOLS, WHICH VERSUS A DOLLAR.
AND THE MACHINERY TOOLS, AS I UNDERSTAND, ARE THE SERVERS AND ALL THE THINGS ON THAT.
SO, SO IT, MY BACK
AND SO AT SOME POINT, UH, IT, IT IS A CALCULATED RISK, UH, AS TO DO, DOES A GOVERNMENT ENTITY, A CREATURE OF SOME SORT, WHETHER ONE OF MY QUESTIONS TO WROTE DOWN IS, IS WHETHER A TECHNOLOGY OVERLAY DISTRICT WOULD, WOULD QUALIFY FOR THIS TYPE OF FINANCIAL, UH, PURSUIT.
I UNDERSTAND LOUISA COUNTY CREATED A TECHNOLOGY OVERLAYING DISTRICT SPECIFICALLY TO ATTACK, ATTRACT, UH, UH, DATA CENTERS.
UM, BUT THE COST OF PULLING A SIGNIFICANT POWER LINE FROM THE CURRENT TWO 30 OR 500 TO AN OUR ARENA OR AREA, UH, IN WEST CREEK, I HAVE NOT HEARD ANYBODY ESTIMATE WHAT THE COST WOULD BE.
IT MIGHT HAVE BEEN SOMEBODY THROUGHOUT $17 MILLION ONE PLACE.
AND THAT MAY HAVE BEEN FOR ACTUALLY BUILDING A SUBSTATION.
I DO KNOW THAT THE PRIVATELY OWNED, UH, UTILITIES DON'T SPECULATE.
THEY NEED TO HAVE, SOMEBODY SAYS, I'M GONNA USE THIS, AND THEN THEY BILL IT.
UH, SOME OF THE QUESTIONS I WROTE, BUT I'M SORRY.
DOLLARS WORKS FOR ME BECAUSE I DON'T THINK YOU BILL WITH THAT, SET IT FOR LESS THAN A BILLION.
MAYBE YOU DO, BUT I ABSOLUTELY, THAT'S A BIG NUMBER.
NOW YOU DON'T SAY AGAIN, RIGHT NOW, YOU DON'T BILL IT FOR LESS THAN A BILLION.
ALRIGHT? SO IT IS VERY DIFFICULT BECAUSE OF THE COMPONENTS AND THEY OVERNIGHT.
SO I'M LOOKING DOWN THE ROAD, UH, WHICH IS, UM, MY PERSONAL, UH, GOAL WHEN I WAS ON WAS IN THE IDA IN RIKER BACK IN THE EIGHTIES WITH JACK FERGUSON, SOME OF THOSE COWBOYS BACK IN THE BERNIE KE, I DON'T KNOW IF ANY OF THOSE GUYS, I'M OLD, I'M
BUT THE POINT I GUESS IS THAT THE SALE CYCLE AND DEVELOPMENT
[01:05:01]
TIME DOESN'T HAPPEN OVERNIGHT.I MEAN, UNFORTUNATELY WE CAN BUILD RESIDENTIAL WITHIN A NINE MONTH PERIOD, RIGHT? AND THAT JUST SUCKS SERVICES, RIGHT? AND UNDER CONTRIBUTES RIGHT? DOLLAR 25 IN SERVICE, THE DOLLAR IN REVENUE, IT'S LIKE, HMM, HOLES GETTING DEEPER.
SO HOW DO WE GET THAT COMMERCIAL BASE UP TO 73RD.
I THINK EVERYBODY HAS DISTRICT OR COUNTY ENVY OF HENRICO, WHICH, YOU KNOW, HAS AN AIRPORT, HAS THE INTERSTATES, HAS THE BELT.
I MEAN, IT'S GOT A LOT OF NEAT THINGS GOING AND IT'S BEEN WELL MANAGED AND IT HAS A CONTROL OF ITS OWN ROADS AND IT HAS A COUNTY MANAGER SYSTEM AS IT COMES TO A COUNTY ADMINISTRATOR.
IT'S JUST A LOT OF THINGS DIFFERENT, BUT THAT'S OKAY.
'CAUSE WE'RE NOT TRYING TO BE HENRICO, WE'RE JUST TRYING TO GET 2 BILLION, $4 BILLION IN GAS CENTERS IN
UH, AND, AND SO CLEAR A TECHNOLOGY DISTRICT UTILIZE SOME OF THESE TOOLS.
I WOULD LOOK INTO THAT FOR YOU AND GET BACK TO YOU ON THAT.
I, I JUST DON'T HAVE MY HANDS AROUND HOW DATA CENTERS LOCATE.
THEY SEEM TO BE, I DON'T KNOW.
SO, YEAH, SO BASICALLY THEY WILL LOOK FOR POWER FIRST.
SO THEY WANNA BE CLOSE TO A TRANSMISSION LAB WHERE THEY CAN GET THEIR POWER FROM.
AND THEN THEY'RE LOOKING FOR WATER BECAUSE THEY USE WATER.
UM, THERE ARE SOME THINGS THAT THEY CAN DO, UM, REUSE SOME WATER AND THINGS LIKE THAT, BUT THEY'RE STILL HEAVY WATER USERS.
UM, AND THEN THEY DON'T LIKE TO BE IN NORTHERN VIRGINIA.
THEY'RE SHYING AWAY FROM BEING CLOSE TO RESIDENTIAL BECAUSE OF ALL THE OUTCRY THAT THEY'VE HAD, UM, SINCE THEN.
SO I'VE SEEN SOME OF 'EM SAY, YOU KNOW, I DON'T WANNA BE, UM, RIGHT, BUT RIGHT UP NEXT TO AGAINST RESIDENTIAL SUBDIVISIONS.
UM, THE OTHER THINGS THAT SOME OF 'EM LOOK FOR ARE, THEY DON'T MAKE A LOT OF LIKE, UH, PARTICULATE IN THE AIR BECAUSE IT GETS IN THEIR, UM, HVAC AND THEIR COOLING AND THINGS LIKE THAT.
AND IT MESSES WITH THEIR, UM, YOU KNOW, THE, THEIR ABILITY TO OPERATE.
UM, SO THEY CAN FIND CLEAN AIR NEXT TO, UH, TRANSMISSION LINE WITH WATER.
AND SO THAT'S WHAT THEY'RE REALLY LOOKING FOR.
UM, THOSE AREAS ARE COMING SHORT.
SO THEY ARE, THAT'S WHY THEY'RE KIND OF COMING OUT LOOKING INTO SOME OTHER AREAS.
THE TECHNOLOGY OVERLAY DISTRICT IS BASICALLY, UM, TECHNOLOGY ZONE.
IT, IT'S, UH, IT'S ALLOWED IN STATE CODE FOR A LOCALITY TO ADOPT.
IT PROVIDES THE LOCALITY OF THE ABILITY TO GRANT INCENTIVES WITHOUT HAVING TO GO THROUGH PERFORMANCE AGREEMENTS.
SO THEY'RE ALMOST BY RIGHT INCENTIVES IN A CERTAIN AREA FOR A TECHNOLOGY BUSINESS.
AND I'M GONNA BE BRINGING A PROPOSAL FORWARD TO, TO THE BOARD DURING OUR JOINT B-O-S-E-D-A WORKSHOP THAT WE'RE GONNA HAVE, UM, COMING UP.
SO I WOULD BE HAPPY IF IT DIDN'T WAIT UNTIL AUGUST.
I MEAN, I KNOW, I MEAN, AUGUST, I WAS FOUR MONTHS AWAY.
AND, AND, AND, UH, SO I'VE GOT, I HAVE A DRAFT OF IT.
I'VE BEEN WORKING DILIGENTLY ON IT, BUT SO, SO IT IT'S NOT, BUT FOR ME, I WORKED THROUGH VIC.
I DO NOT, I TRULY DO NOT WANT TO VIOLATE THE CHAIN OF COMMAND.
AND, AND SO I I, I'M HERE AS A CITIZEN SOMEWHAT.
I MEAN, I APPRECIATE I WAS ASKED A QUESTION 'CAUSE I WASN'T GONNA SAY ANYTHING.
UH, BUT NOW THAT IT WAS, IT'S THEIR REGRET.
SO I DON'T THINK THAT TECHNOLOGY EXEMPT DOES ANYTHING FROM A FINANCING PERSPECTIVE.
IT'S MORE OF A, IT WILL ALLOW, UM, SOME CUSTOMIZERS INCENTIVES THAT COULD BE GIVEN IN A SPECIFIC AREA FOR SPECIFIC TYPE BUSINESS.
WELL MUCH IS WHAT KEVIN'S DOING TONIGHT.
HE'S, HE'S MAKING A SPECULATIVE PITCH IN A VERY REAL SENSE.
I DON'T KNOW, MAYBE YOU ARE GONNA SELL THE AUTHORITY.
BUT IN MY ARE MARKETING ADVERTISING, WE WOULD GO IN AND WE WOULD PICK CLIENTS AND WE WOULD SHOW THEM IDEAS AND WHAT WE CALL SPECULATIVE ARTWORK AND, AND AND CONCEPTS.
AND WHAT WE FOUND IS OUR CLOSE RATE WENT FROM MAYBE 20% TO 60% WHEN WE SHOWED SOMETHING TANGIBLE.
SO I HAVE A BIAS TOWARDS PUT SOME SKIN IN THE GAME.
I DON'T HAVE A BIAS TO PUT 17 MILLION IN FOR THE GAME, UH, TO CREATE A BUILD, BUILD SUBSTATION.
BUT THERE'S A NUMBER, AND I HAVEN'T HEARD IT AND I'M NOT COMFORTABLE WITH IT 'CAUSE I DON'T KNOW QUITE HOW TO PROJECT IT.
YOU KNOW, SEVEN 11, YOU KNOW, WHAT, WHAT NUMBER I WOULD HAVE TO ROLL, BUT IN ORDER TO EITHER ACQUIRE SOME RIGHT OF WAYS OR TO INVEST SOME MONEY OR FIGURE SOME KIND OF OUTSIDE THE BOX DEAL WITH A POWER PROVIDER, UH, WHETHER IT'S
[01:10:01]
ACTUAL DOMINION OR WHETHER THEIR RESELLERS THAT ARE STARTING TO KIND OF BECOME A THING OUT THERE, I DON'T KNOW.BUT, YOU KNOW, I JUST LISTENED TO SARAH.
I MEAN, WHY DO WE GOT NO CLO NOT CLOSE TO, TO RESIDENTIAL? GOT THAT.
THE PARTICULATE STUFF, UH, WE GOT A QUARRY CLOSE BY, IT THROWS SOME DUST IN THE AIR.
WE GOT AN INTERSTATE THAT HAS GREENHOUSE GAS.
I DON'T KNOW WHAT DEFINES PARTICULATE, BUT IF THEY'RE UP IN NORTHERN VIRGINIA, WE DON'T HAVE NEAR THE TRAFFIC DOWN DOWN HERE THAT THEY'VE GOT UP THERE.
SO I DON'T THINK THAT'S AN ISSUE.
UH, SO, SO I THINK THERE'S SO MANY THINGS AND IT'S A MISSING LINK IS THE POWER.
AND SO WHAT COULD THE COUNTY DO OR VIA, UH, UH, AN INDEPENDENT POLITICAL SUBDIVISION OF THE COMMONWEALTH VIRGINIA THAT IS THE ECONOMIC DEVELOPMENT AUTHORITY DO TO GET THE POWER BACK THERE.
BECAUSE TO SARAH'S POINT, WE'RE, WE'RE GONNA GET ONE AND WE'RE GONNA GET MORE THAN ONE.
YOU KNOW, YOU CAN SCREW UP A MARATHON IN THE FIRST MILE, BUT YOU CAN'T WIN IT IN THE FIRST MILE.
SO I WANT TO FINISH 22, 26 0.2, BUT I'D CERTAINLY LIKE TO DO IT IN LESS THAN 10 HOURS.
YOU KNOW, SUB FOUR IS ALWAYS MY GOAL.
SO HOW DO WE GET THERE? AND IT MAY BE THAT WE NEED TO PUT SOME MONEY ON THE TABLE AND SAY WE'RE GONNA DO SOMETHING.
ARE WE LOOKING AT THE FEASIBILITY STUDY FOR THE YES.
DID THE COUNTY SAID, ALREADY MENTIONED WHAT BE GOING TO PAY FOR? WE HAVE NOT.
AT THE COUNTY WE ARE CONTRACTING WITH BERRY.
SO COUNTY, OH, WE'RE DOING THE STUDY.
I THOUGHT YOU MEANT PULLED THE POWER BACK PAID FOR BY THE COUNTY.
AND THEN I ALSO PROVIDED YOU ALL WITH, UM, SOME ADDITIONAL INFORMATION.
UM, ONE OF THEM IS THROUGH THE VIRGINIA DEPARTMENT OF SMALL BUSINESS AND SUPPLIER DIVERSITY.
THEY, THEY HAVE A VIRGINIA SMALL BUSINESS FINANCING AUTHORITY THAT I CAN ACTUALLY LOAN MONEY TO ADAS.
SO AS AN OPTION, IF WE DID HAVE A, SOMEONE COME IN AND, AND WANTED TO DO SOMETHING KIND OF OUT OF THE BOX, THAT IS AN OPTION.
SO THAT INFORMATION IS PROVIDED TO YOU, UH, THE APPLICATION.
SO YOU CAN KIND OF SEE THE INFORMATION THAT THEY'LL BE ASKING FOR.
BUT THEY'RE GONNA TREAT YOU LIKE THEY WOULD TREAT, UH, YOU KNOW, ANY OTHER, UH, PERSON COMING TO THEM.
THEY'RE GONNA LOOK AT YOUR FINANCES, THEY'RE GONNA LOOK AT WHAT THE COUNTY'S GONNA BACK YOU AND THOSE KIND OF THINGS.
UM, I WANNA SAY IT WAS LIKE A MILLION OR 2 MILLION OR SOMETHING LIKE THAT.
LESS THAN A MILLION STAFF MAKES A DECISION MORE THAN A MILLION.
THE BOARD
IT SAYS, HAVE ONE THOSE ANNUAL REVENUE, BLAH, BLAH, BLAH.
SO THERE'S, THERE'S SOME SPECIFICS AROUND THAT.
OH, THE MAXIMUM LOAN AMOUNT, 2.5 MILLION.
UM, AND THEN ALSO, UM, A COUPLE PAGES ON SOME RENT PROGRAMS LIKE THE USDA GIVES OUT, UM, A LOT OF MONEY, UH, TO EDS TO DO THINGS.
AND THEN ALSO THROUGH THE FEDERAL, UM, FEDERAL EDA.
UH, SO THERE'S A LOT OF, A LOT OF, UM, OPTIONS THAT YOU GUYS DO HAVE.
SO YOU CAN DIG INTO IT IF YOU SEE SOMETHING THAT LOOKS INTERESTING.
THE ONE THAT I LOOKED INTERESTING TO ME WAS THE, UM, USDA REVOLVING LOAN CAPITALIZATION.
SO YOU CAN GET A LOAN FROM THE USDA TO ACTUALLY FUND A REVOLVING LOAN PROGRAM THAT WE CAN USE.
UM, SO, UM, I FELT THAT THAT MIGHT BE, UH, A GOOD OPTION TO LOOK AT INSTEAD OF USING YOUR OWN FUNDS TO CAPITALIZE THAT.
SO, UH, ARE THERE CAPS ON THESE GRANTS? YES.
YEAH, THERE'S, UM, I DON'T KNOW IF WE, I THINK I JUST KIND OF LAID OUT LIKE WHAT THEY WOULD, UNLESS WHAT THEY COULD BE USED FOR, UM, UNDER ONE B, A TECHNOLOGY BASED ECONOMIC DEVELOPMENT.
AND, UH, ANY WAY I SLICE AT THE DATA CENTER WOULD BE A TECHNOLOGY BASED ECONOMIC DEVELOPMENT.
I THINK YOU PROBABLY GET A BETTER RATE, UM, LENDING WISE THROUGH THIS GUY HERE AND THEN ME
WELL, I, I MEAN, IN ALL CANDOR KEVIN, I UNDERSTAND THAT YOU DO EAT AT LEAST ONCE A DAY.
SO SOMETHING HAS TO PUT BEANS ON THE TABLE.
HOW DO YOU GUYS MAKE YOUR MONEY? WE DO, WE, OUR CONTRACT WITH Y'ALL'S, EITHER, IT'S EITHER ON AN HOURLY BASIS, UM, WHEN WE'RE DOING, LIKE WE DO FINANCIAL MODELING AND STUFF FOR YOU OR WHEN THERE'S BOND TRANSACTION.
SO THAT'S, THAT'S TYPICALLY OUR ONGOING AGREEMENT WITH THE, WITH OUR CLIENTS.
[01:15:02]
WERE YOU INVOLVED IN THE CHILDREN HOUSE? NO.BUT YOU WERE INVOLVED IN THE REFINANCING OF THE, UH, TUCKO CREEK SERVICE HISTORY AND UH, AND THE GEO AND OBTAINING THE BOND RATINGS AND ALL THE DOING FINANCIAL MODELING.
SO THE, UM, THE EDA, UH, DID A BOND
IT'S LIKE THE, UM, SO IT WOULD BE LIKE YOU, YOU WOULD BE THE CONDUIT ISSUER.
AND YOU WOULD SEE SOMEBODY CHARGE LIKE AN EIGHTH OF THE BASIS POINT.
SO, BUT WHAT THEY WOULD DO IS THEY BASICALLY DO EVERYTHING THEY, YOU KNOW, I WOULD ASSUME SHELTERING ARMS, YOU KNOW, HAD THEIR TEAM HAD THEIR BANK, THEY DID THE WORK, HAD THEIR LAWYERS, AND THEY NEEDED AN ISSUER, WHICH WAS, UH, THE EDA TO DO IT.
AND THEN I DON'T KNOW WHETHER Y'ALL CHARGE A FEE OR DIDN'T CHARGE A FEE.
UM, AND SO YOU'RE SERVING AS THAT CONDUIT ISSUER YES.
IF THEY DON'T PAY, IT'S YOU REALLY? YES.
YOU DON'T HAVE THE RESOURCES TO PAY.
SO YOU JUST, THEY STARTED DEFAULTING YOU WOULDN'T GET YOUR A, UM, BUT THAT'S, YEAH.
YOU KNOW, AND THAT IT, THAT'S HOW IT WAS DONE.
IS THERE, IS THERE AN OPPORTUNITY TO FIND MORE PROJECTS LIKE THAT? ARE THEY OUT THERE ON THE MARKET OR ARE THEY, IS THAT LIKE A SPECIFIC, LIKE THEY HAVE TO COME TO CLASS? UM, YOU KNOW, THERE'S, THERE'S GOTTA BE, THE LAWYERS WOULD TELL YOU THERE'S GOTTA BE LIKE A, A LOGICAL NEXUS CONNECTION.
YEAH, BUT I MEAN LIKE, YOU KNOW, LIKE ST.
SO, YOU KNOW, THEY HAD THE BALL FIELDS, RIGHT? THEY WOULD PROBABLY ARGUE YES, YOU COULD DO THAT.
COULD YOU DO IT FOR ODU? PROBABLY NOT.
YOU KNOW, SO IT'S JUST, YOU KNOW, SO IT IS GOTTA BE SOMEWHAT LOGICAL TO TO, TO THE BE THE ENTITY THAT ISSUES.
WHICH DISTRICT, WHICH DISTRICT DO YOU LIVE IN? UH, I AM IN, IN, UH, AT FOUR.
AND THEN I DIDN'T EVEN KNOW WHO WAS, WHO WAS MINE.
AND THEN HE UNFORTUNATELY PASSED AWAY AND THEN THEY SO UNDERSTOOD.
UH, WHAT ONE OTHER CHAIR, UH, HOW LONG DOES IT TAKE TO CREATE A-A-C-E-A AND AND WHAT KIND OF COSTS TYPICALLY ARE, ARE INVOLVED? IS IT LIKE SETTING UP AN LLC 50 BUCKS TO THE STATE CORPORATION COMMISSION WITH, YOU KNOW, TWO OR THREE SIGNATURES IN YOUR GOOD? OR IS THERE, YOU KNOW, IT SHOULD, IT SHOULDN'T BE PROBABLY A LITTLE BIT MORE, BUT SHOULDN'T BE.
THERE'S, YOU KNOW, BYLAWS AND YOU KNOW, WHICH YOUR LAWYER, YOU KNOW, WHOEVER YOU USED OR BOND COUNSEL, YOU KNOW, SHOULD HAVE SHELF DOCUMENTS THAT THEY USE.
YOU'D SET UP BYLAWS, YOU, YOU KNOW, ELECT THE BOARD, YOU'D PASS THE RESOLUTION.
SO SHOULDN'T, SHOULDN'T BE A LOT, SHOULDN'T BE A LOT OF TIME.
I'D TAKE A COUPLE MONTHS, A COUPLE MONTH OR TWO FREE.
IT JUST, IT SHOULDN'T, IT SHOULDN'T, IT SHOULDN'T TAKE LONG.
THERE ARE A LOT OF SHOULDN'TS IN MY LIFE, RIGHT.
THAT'S THE, THAT'S THE, OF THOSE DEALS.
THAT'S THE EASIEST PART OF THOSE DEALS.
'CAUSE THEY JUST SEEM TO, BUT YOU DID SAY THAT TYPICALLY THE RECIPIENT, OR I'M GONNA USE THE WORD REVENUE SHARE, LIKES TO BE ON THOSE CDA BOARDS.
IS THAT CORRECT? YEAH, SO YOU CAN CREATE ONE AND ADD PEOPLE LATER.
YOU'RE, YOU'RE TYPICALLY, LIKE IN MOST OF THE SITUATIONS THAT I'M THINKING OF, THE DEVELOPER COMES TO YOU, THEY OWN THE LAND, AND THEY COME TO YOU AND PETITION YOU TO CREATE THE CDA.
AND SO THE DEVELOPER IS FROM THE GET GO THERE AND THEY'RE SAYING, I WANT A CDA AND I WANT YOU TO, YOU KNOW, GIVE ME INCREMENTAL TAX REVENUES FOR 10 YEARS AND THEY'RE DOING THEIR MATH AND THEY'RE SITTING ACROSS FROM YOU.
IT, IT WOULDN'T BE, YOU KNOW, THREE CITIZENS THAT OWN A LOT OF LAND THAT JUST SAY, HEY, I WANT
[01:20:01]
TO FORM A CBA AND, YOU KNOW, THEN TRY TO GO OUT AND DEVELOP THE PROPERTY ON THEIR OWN.I JUST HAVEN'T, I JUST HAVEN'T SEEN THAT.
IT'S, IT'S MORE LIKE, YOU KNOW, PRU EXAMPLE OF HE'S BUILDING SHORT A MALL.
HE IS WORKING WITH THE COUNTY AND THEN AT THE TIME, YOU KNOW, IN OH THREE CDAS WERE RELATIVELY NEW AND THEY'RE LIKE, HEY, WHAT ABOUT THIS FINANCING VEHICLE? IT'S GONNA SAVE YOUR MONEY.
SO THAT'S BEEN MORE OF THE MORE, MORE OF THE CASES OF HOW THE, THOSE GET HAVE BEEN RUNNING.
AND I PUBLISH TUNNEL VISION FOCUSED ON WHAT DO WE NEED TO DO AS A CONDUIT TO GET POWER TO WHAT I'LL CALL CENTRAL
AND, AND SO IF PUTTING EITHER A TECHNOLOGY ZONE AS SARAH HAS MENTIONED, OR PROVIDING RESOURCES EITHER THROUGH SOMETHING SUCH AS THIS OR GOD FORBID, YOU KNOW, THE COUNTY, UH, NOT GOD FORBID, BUT, BUT AS A PRACTICALITY, THE COUNTY PUTTING SKIN IN THE GAME AND SAY, EDA, WE'RE FINANCING THIS.
CAN YOU? BUT WE DON'T HAVE NUMBERS.
I MEAN, BARRY'S GONNA BE BACK ANOTHER THREE DAYS, I GUESS THREE DAYS.
SHOULD, I MEAN, DO WE HAVE A DO BARRY? IT'S ONE OF THOSE SHOULDN'T
WE WERE JUST TALKING ABOUT, I TRY NOT TO SHUT OFF MYSELF.
WE HAVE A KICKOFF MEETING IN JUNE, SO YES, THE KICKOFF IS THE KICKOFF.
THERE'S A, THERE'S A LOT OF PEOPLE THAT NEED TO BE AT THE TABLE, INCLUDING DOMINION ENERGY.
AND SO THAT'S WHAT I, I'M SORRY, I'M JUST GONNA ASK WHY DOES THERE NEED TO BE A LOT OF PEOPLE TO DO A STUDY? UH, WELL YOU HAVE LANDOWNERS.
AND THEN YOU HAVE THE BERRY FOLKS AND THEN YOU HAVE DOMINION ENERGY FOLKS.
I, I DID NOT SEE THE RRP OR YEAH, ENGAGEMENT.
IT, IT'S, UH, OKAY, THAT'S FINE.
I, I AGAIN BE VERY SINGULAR IN TRYING TO, HOW DO WE MOVE THIS ELEPHANT THROUGH THE BOAT CONSTRICTOR? I MEAN, WE JUST GOTTA MOVE IT ALONG.
HOW'S IT GONNA BE EVERY BIT OF, UNTIL AUGUST WE MEET AND HAVE OUR RIGHT GET TOGETHER BEFORE WE'LL HAVE ENOUGH INFORMATION TO SOME, SOME, MY UNDERSTANDING DORA IS GONNA SAY, HERE, HERE'S THE LINE, HERE'S, HERE'S LIKE AN IMAGINED SPACE.
AND, AND SO HERE ARE THE LANDOWNERS IN BETWEEN.
I THINK IT'S MORE COMPLICATED THAN THAT.
WELL, OBVIOUSLY
AND I, I'M JUST, I'M PART OF GOVERNMENT.
I'M PART OF, I AM THE MAN NOW.
I GUESS IT GETS OVERLY COMPLICATED WHEN IT DOESN'T HAVE TO BE.
AND SO I DID SO MUCH SECONDARY RESEARCH WHERE I JUST WENT OUT AND LOOKED AT THINGS THAT ALREADY EXIST IN SAYING, HERE'S WHO OWNS THE LAND, HERE'S WHERE THE, THE, THE POWER LINE IS.
HERE'S WHAT SOMEBODY IN LOUIS WE DID WHEN THEY WERE TRYING TO PULL A LINE FROM HERE TO THERE AND JUST KIND OF ASSEMBLE IT WITH COLLECTING.
I CALL IT, JUST KIND OF PULL IT TOGETHER.
AND AT LEAST THEN I'VE GOT A CONCEPT OF WHERE I'M TRYING TO GO.
BY GOLLY, YOU KNOW, WE'RE PITCHING CLIENTS.
WE HAVE TO PUT SOMETHING TOGETHER THREE OR FOUR WEEKS 'CAUSE THEY'RE GONNA MAKE A DECISION AT FIVE.
AND SO I DON'T A PRIVATE SECTOR IN HERE.
I AGREE, I AGREE NOT TO TRY TO REINVENT THE WHEEL, BUT HEAVEN FORBID, FORBID WE FORGET SOMETHING, RIGHT? OH, WE MISS SOMETHING.
SO IT'S KIND OF LIKE, UH, IT IS, BUT I'M, I AGAIN, JUST THE CONCEPT GOT, HOW MUCH DO YOU, ARE WE TALKING 17 MILLION OR ARE WE TALKING 1.7 MILLION? ARE WE TALKING 700,000? I I DON'T KNOW WHAT IT COST TO PULL ON FROM 0.8 TO 0.8.
WELL, AS FAR AS I KNOW, THE MOST EXPENSIVE THING IS ACTUALLY THE EQUIPMENT, THE LEAD TIME AND PARTICULAR AROUND TRANSFORMERS AND THE SIZE OF TRANSFORMERS TO STEP DOWN TO GO FROM 502 30 TO THAT, THAT TENDS TO BE A LITTLE BIT PROBLEMATIC IN TERMS OF, UH, I I I HAVE TO TAKE IT ON FAITH.
I I HAVE A RED FIRING PROCESS SOMETIMES AND THAT'S NOT ALWAYS HELPFUL.
I, I SEE, I, I AGREE WITH YOU.
I, THERE'S A YES THERE, THERE'S SEVERAL SPEEDS IN BUSINESS AND GOVERNMENT AND I THINK, I THINK THAT'S ACTUALLY SLOW STOPPING FIRST
I THINK THERE ARE THINGS THAT CAN BE, UH, ACCELERATED AT MID TIMES, BUT YES.
THERE, AND SO THEREFORE, YOU KNOW, KIND OF COMING AROUND TO, IF, IF YOU COULD THINK ABOUT HOW WE APPROACH, HOW WE COULD WORK WITH THAT WOULD PERHAPS PRESENT SOME VEHICLES TO THE LANDOWNERS.
UM, I MEAN ONE OF THE THINGS THAT SIR, OF BROUGHT TO THE, TO THE DDA THAT WE'VE, UH, WORKED WITH IS, UH, MIGRATING UP THROUGH THIS SHOVEL READY CONCEPT IN, IN TERMS OF LAND FOR STUDIES AND, AND, UH, PARTIALLY FINANCING THOSE
[01:25:01]
STUDIES SO THAT IT ENABLES THE LANDOWNER, THE LAND IN PARTICULAR BEING A HIGHER VALUE RATE AND GO TO THE NEXT LEVEL.UM, SO WE ARE TRYING TO BE AGGRESSIVE AS MUCH AS WE CAN WITHIN OBVIOUSLY THE CONSTRAINTS OF WHAT ARE ALLOWED TO DO BY, BY OUR OWN ORDINANCES.
AND, AND THEN IF THERE IS, I'LL SAY IN ADDITION, WELL, LET ME GO BACK TO ENERGY GENERATION IF THERE'S ANYTHING THAT FITS WITHIN THAT.
I THINK MUNICIPALITIES, AND I DON'T KNOW ABOUT THE COMMONWEALTH AS WELL, BUT OTHER AREAS ALLOW MUNICIPALITIES A LOT MORE LEEWAY IN TERMS OF GENERATION RIGHTS AND, AND CERTAIN CONNECTIVITY AND SO FORTH WITH, UH, UTILITIES AND PROVIDING POWER INDEPENDENTLY THROUGH INDEPENDENT CONTRACTORS OR THROUGH THE ENTITY OF THE COUNTY, CITY ITSELF.
MUNICIPALITIES PROBABLY MORE GENERAL.
AND THEN IF THERE'S ANY VEHICLES THAT, THAT MAKE SENSE FOR TECHNOLOGY, UM, PARTS, AREAS, UM, AND THE IN CENTERS BE A
IS ANYBODY AWARE OR ANY SUBMARINES GONNA BE DECOMMISSIONED IF WE JUST BUY ONE OF THEIR NUCLEAR SUB AND HAUL IT UP THERE AND SLAP IT DOWN THE ZERO WEST CREEK AND JUST USE THAT? WELL, I CAN TALK ABOUT WHY THAT CAN'T BE DONE, BUT
WELL, ONE OF THE PROBLEMS IS THAT THE FUEL IN, UH, LET'S SAY A SUBMARINE IS NOT THE SAME AS THE FUEL IN EITHER
UH, IT'D BE GREAT, BUT IT, IT JUST, WELL, CAN'T, NOT TO MENTION YEAH.
I'M SAYING WE HAVE MISSES IN THAT.
I JUST WANT THE REACTOR, UM, THE REACTORS INVOLVED.
DO WE KNOW IF THERE'S ANY STATE MONEY THAT HAS BEEN SET ASIDE FOR ANYTHING LIKE THIS?
UM, THAT'S A COMPETITIVE PROGRAM THAT, UM, YOU APPLY TO AND YOU, UM, YOU HAVE SITES AND YOU BASICALLY, UM, YOU KNOW, TELL 'EM WHICH, WHICH DUE DILIGENCE OR INFRASTRUCTURE THAT YOU WANNA PUT IN AND HOW MUCH IS BEING MATCHED AND WHAT THE POTENTIAL RETURN ON COULD IT BE FOR THE STATE.
AND THEN IT GETS EVALUATED AND THEN MONEY GETS GRANTED OUT, UM, ON AN ANNUAL BASIS.
UM, AND THEN OBVIOUSLY THERE'S INCENTIVES WHEN PROJECTS DO COME, UM, THAT COME FROM THE STATE.
BUT THOSE ARE THE ONLY TWO THAT I'M AWARE OF.
BESIDES THE OTHER, THESE PROGRAMS. BUT THESE ARE MORE FEDERAL PROGRAMS, WOULD THAT BE AN OPTION? THE STATE PROGRAM, THE BUSINESS READY SITES PROGRAM? UM, IT WOULD BE IF THE LANDOWNERS WERE WILLING TO PARTICIPATE.
SO IT'S A, SINCE WE DON'T OWN ANY OF OUR OWN LAND, UM, IT, IT'S, IT WOULD BE A PARTNERSHIP WITH THE LANDOWNERS.
IS THAT PART OF WHAT WE'RE TAKING ADVANTAGE OF? YES, IT IS.
UM, SO YOU HAVE TO HAVE YOUR SITE CHARACTERIZED BEFORE YOU ARE EVEN QUALIFIED TO APPLY FOR THE GRANTS.
UM, AND WE WERE ABLE TO GET TWO SITES CHARACTERIZED OVER THE LAST YEAR.
UM, SO THOSE TWO SITES COULD POTENTIALLY GO INTO THE, THE GRANT PROGRAM POOL.
UM, SO THERE IS OPTIONS THERE.
KEVIN, HAVE YOU SEEN SITUATIONS OUT THERE THAT HAVE BEEN IN HOT PURSUIT OF A DATA CENTER AND YOU KNOW, THAT WAS COMMENTED NOT REINVENT IN THE WHEEL, THAT IS IN THE PUBLIC DOMAIN OF, I, I'VE TALKED WITH DWAYNE ADAMS, WHO'S ON THE BOARD OF SUPERVISORS IN
HE SAYS THEY ACTUALLY HAVE A PROCESS THEY PUT TOGETHER THAT THE AMAZON WEB SERVICE PEOPLE CALL US TO THE LITTLE LOUISA MODEL THAT WHEN YOU WALK THINGS THROUGH, AND HE ALSO SUGGESTED JOSH KNOWS ALL ABOUT IT, DATA HELP.
SO TAKE HIM TO LUNCH TOMORROW.
UH, OUR NEW ACCOUNT DEPUTY COUNTY ADMINISTRATOR CAME FROM
UM, AND, AND, AND SO OUT THERE, HAVE YOU WORKED WITH ANYBODY WHO'VE DONE ANY KIND OF FINANCING IN ORDER TO FACILITATE A DATA CENTER THAT WE COULD SAY, WOW, THAT'S NEAT.
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AT THAT.NORMALLY WE HEAR ON THE OTHER SIDE THAT THEY GOT IT, THAT THEY, WE WE'RE TYPICALLY NOT INVOLVED IN THAT.
SO THEY'RE, THEY'RE SAYING, YOU KNOW, WE JUST, YOU KNOW, IT'S, IT'S OBVIOUSLY CONFIDENTIAL AND THEN ALL OF A SUDDEN AN ANNOUNCEMENT COMES OUT AND THEY SAY, YEAH, THERE, THERE'S THE PROJECT THAT WE WERE TALKING ABOUT.
SO IT'S NOT, BUT THEY, YOU KNOW, IN MOST SITUATIONS, THE ONES THAT I'M FAMILIAR WITH, THEY, AMAZON HAS ACQUIRED THE LAND AND THEY'RE JUST WORKING THROUGH THE ZONING AND, AND HOW, YOU KNOW, TIME SCHEDULE AND EVERYTHING ELSE.
AND THEY'RE STILL PRETTY, PRETTY FAR OFF.
BUT THEY'RE, THEY HAVE ACQUIRED THE LAND BY THE TIME THE COUNTY EVEN REALLY UNDERSTANDS NECESSARILY WHAT'S GOING ON BECAUSE THEY DON'T, YOU KNOW, AS SOON AS THE, AS SOON AS CITIZENS GET A HOLD OF IT, THEN YOU KNOW, THE PROPERTY, IT'S JUST, YOU KNOW, SEE YEAH.
THAT'S WHAT, THAT'S WHAT I'VE HEARD A COUPLE COUNTIES SAY.
IT'S JUST THEY, THEY HAVE THEIR WAYS OF GOING IN AND VERY UNDER THE RADAR AND JUST COMPILING.
WELL, OUR, OUR PROPERTY IN WEST CREEK IS, IS RIGHT.
FAIRLY SMALL NUMBER OF LAND MEMBERS.
WOULD THAT BE A FAIR COMMENT? YEAH.
UH, AND SO AGAIN, I'M LIKE A DOG ON THE BONE, JUST WORRIED DEATH AND 30 YEARS WE'VE HAD THIS ECONOMIC DEVELOPMENT PARK CENTER.
AND IT'S TIME TO GIVE BIRTH AND IT'S TIME TO CUT THE FISH.
I DUNNO WHICH ONE WE'RE GONNA DO, BUT WE NEED TO DO ONE OR THE OTHER.
THE PRICE, PRICE BREAKER THERE VERSUS PEAN AND LOUISA.
THAT'S ANOTHER ISSUE DIFFERENCE WE HAVE TO CONTINUE WITH.
BUT THEY'RE BUILDING 'EM UP IN NORTHERN VIRGINIA.
SO YES, WE DON'T WANT 'EM ALL, WE JUST WANT TWO.
WELL I GUESS THE CHEAP LAND'S GOING RIGHT? SO HOPEFULLY WE'RE NEXT.
ANY FURTHER QUESTIONS? COMMENTS, SIR? MONEY? YEAH, WE'VE GOT SURPLUSES DOWN THERE.
THEY HAVE A TRANSMISSION LINE GOING THROUGH THE SITE.
IT'S A, IT'S A GREAT MAP PIECE OF PROPERTY.
AND THEN THERE'S 500 KI THINK IT'S 500 K LINE DON RIGHT THROUGH IT.
THIS IS
BUT THE, THE PROBLEM IS GETTING IT FROM WHERE THEY'RE AT.
TRANSIT, TRANSPORTATION, THE RIVER IS, IS A PRETTY GOOD DISTANCE FROM WHERE THEY'RE AT.
SO I DON'T KNOW WHAT THEY'VE GOT ON THE BACK, LET'S SAY THE BACK END OR EAST END THAT WILL SUPPLY IT.
I'M NOT AWARE OF THEM HAVING ANY KIND OF MUNICIPAL ANYTHING.
YEAH, I THINK THEY DO HAVE WATER, BUT I'M NOT, BUT I THINK IT'S DOWN TOWARDS THE JUST AVAIL BORDER.
I DON'T IF, I'M NOT SURE, I DUNNO IF YOU HEARD THEM, BUT THEY SAID THAT, UM, THERE IS MORE EFFICIENT WAY BY USING MORE POWER FOR WATER HOLDING.
SO THEY DON'T USE AS MUCH WATER.
I THINK THEY'LL REPURPOSE OR WE USE RECYCLE THE WATER SO THAT IT'S MORE EXPENSIVE, BUT THEY MORE ADVANCED REASONS.
SO LESS WATER, YOU USE OTHER, OTHER, OTHER CHEMICALS THAT CAN DO THAT, BUT IT'S, YOU'RE STILL ELIMINATING THE SIZE ALSO.
IT'S THAT I DON'T UNDERSTAND ABOUT THAT SIDE, THAT THE ONE YEAH, IT DOESN'T QUITE FIT.
I DO HAVE ONE ITEM FOR OTHER BUSINESS WHEN YOU'RE READY.
UH, WE HAVE BEEN OFFERED SINCE, UH, THE EDA IS A SPONSOR FOR GLAND DAY, UH, TICKETS TO THE FRIDAY NIGHT CONCERT.
SO, UM, IF YOU'LL LET ME KNOW, UH, HOW MANY TICKETS THAT YOU MAY NEED IT.
WE BE PLANNING ON ATTENDING THE FRIDAY NIGHT CONCERT.
UM, YOU CAN SHOOT ME AN EMAIL OR TEXT TOMORROW OR SOMETHING LIKE THAT.
I'LL GET BACK TO YOU BOTH WEEKS.
ANY OTHER MATTERS TO COME FIRST? AGAIN, THANK YOU VERY MUCH.
PRESENTATION, ENTERTAINING ALL THE QUESTIONS.
AND, UH, PROBABLY, HOPEFULLY YOU'LL BE IN TOUCH PRETTY SOON.
UM, BUT UM, IS THERE ANY FURTHER BUSINESS COMING BEFORE THE EDA HEARING TO ENTERTAIN A MOTION FOR ADJOURNMENT? I MOTION TO ADJOURN.
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WE HAVE A MOTION ADJOURN.SO ALL IN FAVOR, PLEASE STATE AYE.