16 - Lionshead Development Agreement

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public line. As noted, the city would receive funding assistance to expand our publicly -owned water line westward, making more land in the industrial park site ready for future development. On June 2, 2021, Council Member Pankaj, Maureen Hammond, Chris Donnan, Michael Smith, Andrew Mack and I spoke with Gary Graham (owner of Lionshead) and other Lionshead representatives. We pitched to them our proposal and they were supportive. They agreed to have their engineers work with our engineers to design this. Over the next two years, the project progressed until recently becoming ready for this agreement to be finalized and brought before you. There has been a fair amount of discussion, clarification and negotiation along the way to get to this point. Last summer, when we thought the Lionshead project was ready to move forward, due to supply shortages and delivery delays, the decision was made to transfer approximately 3,000 linear feet of water lines from the project occurring at the Gene Stallings Industrial Park to the Lionshead Project in order to be ready to go when this agreement was finalized. The goal was then to utilize the reimbursement from Lionshead to replenish our lines and go back to working in the Gene Stallings Industrial Park. In addition, the PEDC was awarded a large EDA Grant whereby the City's proposed water improvements in the Northwest Park serves as critical match to the funding. STATUS OF ISSUE: The proposed agreement was originally written such that Lionshead would pay the City the net $250k figure upfront prior to work beginning on the water lines. It now provides that the city will begin construction upon signing the agreement, but Lionshead will make an installment payment of t/4 of their total financial obligation on or before July 1St, with the remaining installment of 3/4 being paid on or before October 1St. Lionshead has indeed started work on the site, the public improvements would still benefit the rest of the NW Industrial Park, and our public improvements are critical to the match for the EDA grant. At this point, I feel that we need to proceed; however we might consider adding language designed to protect the rate payers, such that if Lionshead, for whatever reason, were not to pay the initial installment in a timely manner, the city would not activate the water infrastructure to their facility, and if they miss the second installment, we would deactivate the line. The primary risk to the city in building the water line prior to receiving their full payment is that we do not collect payment and cannot replenish our water line stock for the work occurring at the Gene Stallings Industrial Park. BUDGET: Lionshead would compensate the City $250,574.08, with a first installment on July 1St of $62,500.00 and a second installment on October 1St of $188,074.08. The city would then turn