After sharp debate, Winchester council approves $15.5 million bond package tied to Wards Plaza redevelopment; developer says financing secured

On May 26 the Winchester City Council approved the second reading of an ordinance authorizing the issuance and sale of general obligation public improvement bonds not to exceed $15,500,000 to finance capital improvement projects tied to the Wards Plaza redevelopment, including a planned parking garage.

During the public hearing, resident Jeff Milburn urged council to delay issuing bonds until the private financing and commitments for the apartment buildings and grocery store were certain. Milburn said issuing bonds before private funding is secured is “speculative and possibly reckless” given the city's repayment obligations.

Developer John W. Gray Jr., identifying himself as managing partner of Winchester Acquisition Partners, responded with an on-site update: "I have a fully ratified purchase and sale agreement for the land bay constituting the Publix grocery store," he said, and added that he had "secured a loan commitment from an institutional lender to finance everything that we need to construct that Publix grocery store." He said construction would begin no later than the week after the July 4 holiday and that financing discussions for the multifamily buildings were continuing.

Councilors pressed staff and finance advisers on the shift from an initial conceptual $8 million garage estimate to the current $15.5 million bond authorization. City staff and the city's financial advisers said the bond package includes capitalized interest and other costs and that lenders (including VRA and private lenders) have vetted the project. Staff told council the plan is for the parking garage to be an enterprise that pays debt service from user revenue (parking rents and special tax-district revenues), and that historically the city's garages have been self-sustaining.

Councilors expressed a range of views: some called the project a necessary step to spur economic development and provide infrastructure for the new neighborhood design district; others warned the cost increases and lingering trust issues merit caution. After debate, a motion to approve the ordinance and associated resolution to facilitate the bond sale passed on the council vote and the companion resolution authorizing bond sale procedures was approved later in the meeting.

The action authorizes bond proceeds up to $15.5 million; staff said the guaranteed maximum price for the garage construction is set at $12,000,000 and that capitalized interest is included in the bond sizing. Council members said they expect the garage to operate as an enterprise fund and to be repaid from parking and special-district revenues rather than from the general fund.