Council approves $8M-plus reimbursement deal to let Olympia development move forward in phases

Herriman City Council on Wednesday approved a reimbursement agreement with Olympia Land LLC and a related amendment to the city's water-availability map to allow phased development in the Olympia area while critical infrastructure is completed.

Justin, a city staff presenter, told the council the package covers "upsize" costs for pipelines and storage the developer must build to serve Olympia and the city. The draft agreement allocates about 45% of overall infrastructure costs to the city and about 55% to Olympia; the developer's buy-in to existing pressure-zone 4 infrastructure is roughly $1.88 million, and the total reimbursement package is just over $8 million. The city also used a $1 million legislative grant to reduce near-term city costs.

The agreement sets construction milestones the council cited in discussion. The developer is to construct a zone-3 water tank and dedicate completed infrastructure within 90 days of completion; the contract contains dates for completion of the tank and transmission lines. The agreement excludes a future zone-4 pump station, which the city will design and place on a separate reimbursement schedule; councilors were told the pump station must be in place before Olympia can use more than 650 equivalent residential connections (ERCs) in zone 4.

Councilors pressed staff on system capacity and risks. Justin said hydraulic modeling based on 2025 peak data shows the city has capacity for roughly 1,700 additional ERCs above current service, leaving an estimated buffer of about 232 units after accounting for already-platted projects and the units the developer requested to build before the pump station is complete. Staff cautioned the buffer depends on 2026 water use and on other entitled developments moving forward.

Council also heard that the agreement includes standard protections: a one-year warranty holdback (a completion assurance bond equal to 10% of the developer's portion), developer incentives to finish on schedule, and a requirement that the developer dedicate constructed infrastructure to the city within 90 days of completion. Land for the city's share of the tank site will be appraised; the agreement uses a $1 million-per-acre placeholder pending an appraisal.

Mayor and council voted to approve the reimbursement agreement and the map amendment. Staff said they will implement a tracking system to ensure buildout does not exceed the units authorized in the agreement and will provide regular updates to the council on construction progress.

Next steps: the developer will proceed with construction per the contract dates; the city will continue design work on the zone-4 pump station and will consider future reimbursement for that facility.