Council Approves Special Assessment for Quarterpath Development

By Amber Lester Kennedy Monday, November 14, 2011

The Williamsburg City Council established a special assessment on Thursday that will enable Riverside to finance infrastructure projects at its Quarterpath development.

Riverside Health Systems plans to develop more than 350 acres into a residential and business community called The Quarterpath at Williamsburg. In May 2005, the city created Quarterpath Community Development Authority to finance the construction of roads, water lines, stormwater drainage, landscaping and other infrastructure projects.

On Thursday, Council adopted an ordinance to establish a special assessment for the Quarterpath Community Development District and authorized a special assessment agreement between the city, Riverside and the Quarterpath Community Development Authority. The authority proposed borrowing up to $15 million by issuing a tax-exempt municipal bond for a term of up to 30 years.

The debt will be repaid by the property owner or owners in the district through annual assessments paid at the same time as city property tax payments. At a work session Monday, City Manager Jack Tuttle explained the city will not be responsible to bondholders for paying back the borrowed sum. The assessment method allows the city to act as an administrator; only the City Council could approve the special assessment.

Riverside will pay the assessment fees on the property until parcels are individually sold, at which point the new owners will pay the assessment. The full amount of the assessment will be collected at the time of transaction. The money will be paid to Wells Fargo, which will purchase the entire $15 million bond issue, Tuttle said.

The majority of the $15 million bond issue will be spent on public improvements, but $1.7 million will go toward the costs of issuance, bank fees and capitalized interest. “Issuance costs” include legal, administrative and consulting fees. Capitalized interest will be used to pay the interest cost for the first three years of the repayment period. Wells Fargo has set the interest rate for the first three years at 3 percent; after three years, the rate will be adjusted to reflect market rates.

Riverside broke ground on its Doctor’s Hospital in July. One of the projects to be funded by the bond issuance will be the construction of Battery Boulevard, the main thoroughfare of the development, which will connect Route 199 with Route 60.