The Douglas County Board of Commissioners is set to take up an agreement this week that would set the stage for a major development at the Foxhall Resort & Sporting Club in the southeastern part of the county.
An Intergovernmental Agreement (IGA) between the BOC and the Development Authority of Douglas County for the Foxhall project is on the agenda for the commissioners’ work session Monday morning.
Barring a last-minute effort to table the deal, the BOC will discuss the agreement Monday and vote on whether to approve it at Tuesday’s legislative meeting.
Both meetings start at 10 a.m. and are open to the public. Those wishing to speak to commissioners should arrive by 9:45 a.m. and sign up to speak with County Clerk Lisa Watson.
Monday’s meeting will be held in the third floor boardroom at the courthouse and Tuesday’s meeting will be in Citizens’ Hall on the second floor of the courthouse.
If the BOC approves the agreement, the development authority and Foxhall would move forward with building a large-scale resort at the property on Capps Ferry Road that would include a 200-room Westin Hotel, 250 villas, a conference center, spa and other amenities.
The total project is estimated to cost around $150 million.
Foxhall would raise $89 million of the total through the EB-5 program authorized by Congress that allows immigrant investors to get U.S. visas by investing in commercial enterprises approved by the federal government.
The IGA would give the development authority the go-ahead to issue $40 million in revenue bonds that would be used to build the conference center, complete infrastructure improvements and reimburse transaction costs.
The developer is contributing the land for the hotel, conference center, villas and other amenities.
The 95 acres of the 1,100 total acres at Foxhall being used for the project would be exempt from property taxes until the $40 million in bonds is paid off. A payment in lieu of taxes (PILOT) and hotel/motel taxes generated by the project would be used to pay off those bonds over a maximum of 30 years.
The IGA, posted on the county’s website Friday at www.celebratedouglascounty.com, shows that the development authority bonds would not be issued until all of the EB-5 funding is raised. If the funds aren’t raised, the bonds would not be issued at all.
It is also noteworthy that it will be spelled out clearly on the cover of the bond offering that the county and taxpayers have no liability if the project isn’t successful.
Additionally, the bonds are in the senior position, meaning the bonds would be paid with revenue from the project before any other debt, including the EB-5 funds, are repaid. Or, put another way, if there is only enough money to pay either the bonds or the EB-5 debt, the development authority bonds would be paid.
There has been a question of how much demand there is for the resort being proposed, and two previous reports by municipal advisor Public Financial Management (PFM) have questioned comparisons to more established resorts in gauging expected average room rates and occupancy levels at the Westin Hotel and villas proposed at Foxhall.
The most recent financial update, issued last week and prepared by Charlotte, N.C.-based First Tryon Advisors, notes that “Within the county there are no comparable resort or hotel properties that allow us to ascertain a reliable local demand function for lodging at the project …”
The report continues by saying that a feasibility report “will need to be updated prior to the issuance of Development Authority Bonds, as investors will require an updated third party assessment of the project and its ability to deliver revenues sufficient to fund debt service payments when due.”
- New York
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