Request made by Preston Hollow LLC to refund bonds for portion of Farms of New Kent
A request to refund bonds and finance new money for a portion of the Farms of New Kent CDA was presented at New Kent’s Board of Supervisors’ Tuesday morning work session. And for a couple of county leaders, the proposal has more questions than answers.
Marc Armentrout of Preston Hollow LLC (PHLLC) made the pitch that would see a portion of 2021 bonds refunded. The proposal related to 2021B bonds that specifically design Land Bays IV and V.
“We are asking for this because commercial development in that area is accelerating faster than anticipated,” Armentrout commented. “We are receiving demand for residential homes higher than expected. PHLCC has been funding cash advances to Kent Farms Holding Company [who currently owns Farms of New Kent land] for development cost.”
PHLLC is proposing a bond up to $97 million, with $45 million being new money. The 2023B bonds will refund existing 2021B bonds and provide additional capital to fund future development for the Farms of New Kent according to Armentrout. Repayment will occur over a 13-year term, with those funds coming from lot sales revenue.
Armentrout commented that Land Bay III also has a lot of interest, as a letter of intent (LOI) has been agreed to with a grocer to bring a store to that area. Currently, Land Bay IV (area consisting of the Fire Station in Talleysville) and Land Bay V (area across the street where Buc-ees is scheduled to be built) is currently undergoing some sort of development.
After the presentation, at least two supervisors had comments on the proposal.
“What happens if interest rates go up on the commercial rates?” asked District 2 representative and board chairman Tommy Tiller.
“The B3 bonds are not funded on day one and are funded as needed,” responded Armentrout. “We believe it is mature enough that it won’t stop, even in the face of increased rates. It may slow down, especially in commercial, but it won’t grow. We already have three national property builders who have signed LOIs with us.”
“You all have been talking about LOI with a grocer for a long time?” chimed in District 1 supervisor
Thomas Evelyn. “For like five, six years? What if this one falls through?”
“The developer of that project didn’t get support from grocer itself,” said Arementrout. “They (the grocer) wanted to be the developer. We had conservations with the grocer six months ago and they approached us about an LOI and they are spending money on site plans to get it executed.”
But Evelyn still wasn’t convinced about the true intentions of the proposal from PHLLC.
“It seems like you’re doubling your debt with this,” he commented. “You have been dangling the letter of intent with the grocer like a carrot. I believe you’re saying this because you need the money for the residential area.”
Armentrout responded, saying that the reissuing of bonds will allow a pay-as-you-go basis.
“A denial would prohibit us to be ready for development,” he commented. “These are not new costs as they were embedded inside the development. All we are doing is accelerating the costs.”
PHLLC is looking for CDA approval in December, with a public hearing scheduled for November’s Board of Supervisors’ regular meeting.
In other action approved by the board of supervisors:
–Approved 4-0 (with District 3 representative Patricia Paige absent) the execution of an interim contract with David A. Nice Builders Inc. in the amount of $373,293 for the design of a new animal shelter.
–Approved 4-0 the awarding of a contract to Brinkmann Construction in the amount of $5,656,691 for the building of Fire Station 6 in Bottoms Bridge. The facility, which will be located across from Chickahominy Family Practice, will be two-stories and provide 12,900 square feet. According to New Kent County Administrator Rodney Hathaway, the company was selected due to the size of the building, the capability for expansion, and a floor plan that flowed better for the area. In addition, the county purchased the land where the firehouse will be built in the amount of $1 million.