By Tony Davis for Arizona Daily Star
Benson officials are in the early stages of creating an improvement district to pay for roads and other infrastructure for the Villages at Vigneto project.
What’s known as a Community Facilities District, it is planned for the 28,000-home development that would straddle State Route 90 along the Whetstone Mountains, south of Interstate 10.
The district would sell bonds to pay for infrastructure, to be repaid by future homeowners and businesses, so existing residents won’t foot the bill.
It would be formed by the city government and could be run by the City Council or an independent board — a decision the council must make.
Mike Reinbold, a partner for the project’s Phoenix-based developer, El Dorado Holdings Inc., told the council in the spring that a project of this scale won’t be financially attractive without a district because building infrastructure requires so much investment capital.
In the coming months, the council must vote to create the district, appoint a board to run it and name other staffers to help form the district and to structure and market bonds.
The City’s Liability
In his June 22 pitch to the council, Phoenix attorney Michael Cafiso urged the council to make sure the city is protected against liability if a development or a facilities district collapses.
Representing the Greenberg Traurig law firm, he said he helped create Arizona’s first district in Phoenix in 1991 and has recently helped create one in Peoria west of Phoenix.
He has been involved in districts that took two years to form, but “that would be a long time, in my opinion,” he said. The Peoria district took six to eight months, maybe a year, he added.
What takes the most time in setting one up is, first, deciding if the city wants formal policies and procedures for them, he said. Second, it’s preparing a development agreement to decide a project’s appearance, what the district will do, how much debt will it incur and how it will be repaid, he said.
The council also needs to consider the advantages to the developers, he said.
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