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Lamar council approves city-paid interest on loan for 35-acre Key Avenue development
Summary
The Lamar City Council approved an agreement permitting the city to make interest payments on loans secured by the Lamar Valley Industrial Corporation to buy and develop 35 acres at Key Avenue and Fourth Street SW, allowing LVIC time to install infrastructure before Tax Increment Financing generates revenue.
The Lamar City Council voted to approve entering into an agreement that lets the city make interest payments on loans secured by the Lamar Valley Industrial Corporation (LVIC) for the purchase and initial development of 35 acres at the Key Avenue and Fourth Street SW intersection.
City and LVIC officials said the payment arrangement is intended to cover a short financing gap while infrastructure is installed and the first lots are sold. “The request is to allow LVIC to get it developed and sell those first lots, and use the proceeds to pay the city back,” Mark, representing LVIC, said during the meeting.
Council members and staff explained that the city plans to create a Tax Increment Financing (TIF) district for the property but that the district will not begin producing TIF revenue until new parcels are taxed. “I don't believe the interest, the loan to the LBIC will be paid through TIF…because we won't have generated TIF,” a city staff member, Joe, said, noting the timing mismatch between development costs and when TIF revenue begins.
Officials discussed site-readiness and annexation. Council members said infrastructure is already available at the site perimeter and that a voluntary annexation request by the property owner will be filed before major installation begins. Staff noted the sanitary sewer in the area flows through an existing lift station and said they will verify that current infrastructure is sufficient before proceeding.
Council debate was brief and supportive. One council member said the 24-month window included in the request was designed to reduce the city's financial burden while ensuring LVIC continues development activity. After a motion to approve the agreement and a second, the council held a voice vote; the motion carried.
Council members asked whether the agreement would be returned to the council for formal approval; staff responded that the finalized agreement will be brought back for council consideration and formal execution.
The council did not specify the names of the motion maker or seconder during the recorded discussion; the voice vote was recorded as "aye" and the motion carried.
