FAQ Friday: Will Phase One Revenues Generate Enough Income to Cover Yearly Bond Payments?
Can you demonstrate that phase one (3-4 stories tall with a transfer floor for the future addition of 1-2 additional stories) revenues alone can generate enough income to cover the yearly bond payments with interest? Would a four-story deck require the sale of two additional floors and perhaps even the air rights above in order to meet yearly bond payments?
With the mixed-use development, the City’s intention is to use bond funding to support costs associated with building four levels of parking (390 parking spaces), street-level retail space, rear alley beautification, and streetscape improvements for W. Troy Street. A cast-in-place structure provides the flexibility to build a transfer floor to accommodate two additional floors of commercial development. If future commercial growth is desired, the City could explore a variety of avenues to accommodate this, possibly including selling the air rights for private development, providing an extended lease of the air rights to a private developer, or other public-private partnership models. Sale, leasing, or future new tax revenues from any commercial development are intended to be committed toward debt service on the bond.
On Fridays, the City of Ferndale and the Ferndale DDA answer common questions by residents and business owners. Have a question you’d like answered? Contact us at email@example.com.