Phoenix Urban Renewal Agency adopts $3.5 million supplemental budget to buy redevelopment properties

Valencia, a city staff member, told the Urban Renewal Agency on March 16 that staff expects to receive roughly $3.5 million in bond proceeds after a bond closing anticipated in mid-April and asked the board to adopt a supplemental budget to record the resources and related appropriations.

The supplemental budget — Resolution 26-04 — adds the $3.5 million to the capital projects fund and the FURAC debt service fund so the agency can purchase as many as eight properties listed in its urban renewal plan or use the funds on capital projects tied to those properties. Valencia said the loan includes a restriction requiring that proceeds from the resale of any acquired urban renewal property be applied to pay down the portion of the loan tied to that property rather than be placed in a general revenue fund; leasing revenue would be treated as program income and could be used for debt service.

Why it matters: the supplemental appropriation makes the anticipated bond proceeds available so staff can move forward with negotiated purchases and related project work. Valencia said the first interest payment on the loan would likely be due June 30 if the bond closing occurs on schedule and summarized existing FURAC debt obligations, noting two current loans and that the agency’s projected annual debt service after the new loan would be about $720,000. She also said the agency has a beginning fund balance of roughly $900,000 that could be applied toward debt.

Board members asked for clarification about the number of properties. Valencia said the urban renewal plan and earlier bond materials listed eight properties (with one site counted as two parcels at Blue Heron Park) and that staff had identified six properties to date, with one property still in active negotiations. She confirmed that proceeds from any property sale must be applied to pay down the related loan balance and that leasing revenue would reduce debt service costs over time.

A director moved to approve Resolution 26-04 adopting the supplemental budget and appropriations as presented; the motion was seconded and passed on a unanimous roll-call vote of directors present. The action records the agency’s intent to accept the bond proceeds and use them for acquisition or related capital spending, subject to the loan’s restrictions and later negotiation outcomes.

The board will receive further updates as bond closing details and property negotiations are finalized.