The Cumming City Council and the city’s Downtown Development Authority, or DDA, have approved an agreement for paying for future projects at the Cumming City Center.
At a pair of meetings on Tuesday, May 10, members of both bodies approved agreements that would allow the DDA to issue revenue bonds for the property and will have the city pay for any gaps in funding before revenues start coming in.
City Attorney Kevin Tallant described revenue bonds as “bonds that are paid by the revenues that are generated by the product for which they were issued,”
Tallant said the bond funds would include a taxable bond going toward construction of restaurants and other businesses for $9.5 million and a tax-free bond for projects like the city center’s amphitheater, green space, parks and roads for $12.5 million.
At the city council meeting, members voted 3-1, with Councilman Chad Crane absent and Councilwoman Linda Ledbetter opposed, to approve the agreement.
When asked by Ledbetter why the city could not issue the bonds instead of the DDA, Tallant said the property-owner had to be the one to issue bonds and property had been transferred to the DDA because the group could sign longer leases, whereas the city can only make one-year agreements under state law.
“The downtown development authority can have the longer-term leases, so they are the owner of the property,” Tallant said. “The owner of the property is the one that needs to issue the bonds, and because the downtown development authority is the owner of the project, done to encourage investment in the city center, which has been fairly successful, and encourage people to invest for that longer period of time, they’re the ones who are issuing the revenue bonds, and they’re doing it because state law allows it.”
In April, members of the council approved an agreement with the DDA to transfer the city center deed to the authority, allow the authority to finance construction and issue a promissory note for $10 million to fund construction from United Community Bank.
The $10 million from the promissory note will be used to finish construction of the city center, and when the amount is paid, the authority will transfer the property back to the city for $1.
Some bond funds will go toward the promissory note.
City Administrator Phil Higgins previously said having the DDA – a group appointed by the city council that includes Councilman Jason Evans, landowners and business owners in the city – over the city center would create a layer of protection for the city from lawsuits and the authority would supervise, direct and execute leases, manage personnel, perform maintenance as needed, execute contracts for goods and services and collect and remit funds, including rent, to the city in exchange for the transfer of property.
The Cumming City Center, which is undergoing construction as tenants sign contracts for the space, is a planned development that will feature more than a dozen restaurants, more than 120,000 square feet of commercial uses and amenities including a miniature golf course, a boardwalk, trails, a fountain, an amphitheater and more on 75 acres on Canton Highway.