Seguin Gazette: SEDC borrows $2M from city for land purchase
Sunday, June 23, 2019
Valerie Bustamante, The Seguin Gazette
Seguin, TX -A $2 million loan between the city of Seguin and the Seguin Economic Development Corporation could bring a new partnership between the SEDC and city utilities along with future growth.
Seguin City Council unanimously approved a promissory note between the city and the SEDC for $2 million for the purchase of 60.142 acres of an industrial greenfield site from the Blumberg Family Investment Partnership during a regular meeting on Tuesday.
“Staff has negotiated a purchase rate for the property of $31,500 per acre. The final purchase price will be determined on the completion of a survey of a property, which is currently being wrapped by Tri County (Surveying),” SEDC Executive Director Josh Schneuker said. “The seller was originally asking approximately $32,500 per acre ($1,950,000).”
Through the promissory note, the city would advance the SEDC the funds from the city’s Utility Fund, which the SEDC would pay back within eight years with no interest, Schneuker said.
“We also have a piece of property that the EDC owns under contract and upon closing of that deal we would use the proceeds from that sale and immediately put it towards this note,” he said. “We anticipate putting $850,000 towards the note upon closing that deal. That will enable us to pay off this note in about six years.”
Annually, the SEDC is expecting to pay around $250,000 toward the note — paying off the debt by 2025, a city memo said.
Schneuker said the SEDC anticipates some existing debit to come off the books by fiscal year 2020.
“If you look what we’re paying today in debt service to what we’re going to be paying with this note with the city of Seguin it’s pretty much watched through those years,” he said. “There’s real large increase in the amount of debt service the SEDC will undertake.”
While acquiring the land will help with economic development purposes, Schneuker added that it will also benefit the city utilities.
“Bringing in an industrial user to the site, our hope is to have that industrial user as a significant utility customer to the city,” he said. “A lot of other utilities, not only in the region, but throughout the country have economic development arms. So we kind of see this as an extension of the utility using this and also a partnership to carry out our goal of economic development.”
Mayor Don Keil agreed.“I think since we’re so constructed by our service area for utilities the only way we can grow is to get the industrial users in there and I think that will kind of make a wash of the situation,” he said.
Schneuker added that it’s a creative way to further work toward the common goal of growing Seguin.
“We’re not as flushed with cash as some of our neighboring EDCs so I think anyway we can get creative and work to come to that common goal is a good thing,” he said.
The promissory note was approved following a motion by councilman Mark Herbold and a second by councilwoman Fonda Mathis.
Valerie Bustamante is a staff writer for the Seguin Gazette. You can e-mail her at email@example.com.
To view the original story from Seguin Gazette, please click here.
Category: Real Estate