| Financing
Discrepancy Slows Downtown Project |
By Erin E. Fogg 
Observer Staff Writer |
| Two competing proposals to redevelop the downtown are dramatically
different in their financing plans and the Town Council is
requesting help from consultants to evaluate how the costs
were determined. |
| Clark Ventures' unsolicited proposal, which features a major
residential component, shows a financing option that will
save the town $11 million by completing projects listed in
its capital improvement plan. Herndon Station LLC, a more
mixed use plan, is proposing the town issue an approximate
$34 million bond to pay for its portion of the development. |
| Although town staff had recommended both proposals advance
to the detailed stage to allow for a more in-depth financial
analysis, Town Council members at the Nov. 15 work session
expressed confusion in the financial discrepancy. |
| Mayor Michael O'Reilly said the staff should work cooperatively
with the consultants hired to work on the project, as well
as the respective proposers, to conduct a "scrubbing
at the numbers" to bring a better understanding of how
both teams came up with its figures. |
| "The numbers don't match," O'Reilly said. "I'm
not sure if they make sense at this stage or if they will
at a later stage." |
| Councilwoman Carol Bruce said although her initial reaction
is favorable toward the mixed use in the Herndon Station plan,
the difference in finances is the primary issue at hand. |
| "We need help from the consultants understanding what
the real costs are," Bruce said. "And it goes without
saying that there's still a lot of public input that needs
to be heard." |
| Councilman Steve Mitchell said the Herndon Station plan
incorporates every feature that the town envisioned for an
ideal conceptual design of a redeveloped downtown. The plan
is a rude awakening that the town's wish list comes with a
price tag, he said. |
| Mitchell also said a major reason for the cost discrepancy
is that Herndon Station listed structured parking as a public
expense, although the parking will ultimately be shared with
private entities. He said he expects some of the costs to
be accounted for after more detailed work is done. |
| Councilman Dennis Husch said he realizes that the proposals
are only in the conceptual phase and that much cannot be understood
without entering the detailed stage. However, he said the
town must be sensitive to the developers' costs associated
with moving forward. |
| "Clark is proposing $11 million off the CIP and Herndon
Station LLC is proposing $34 million in debt," Husch
said. "I wonder if it's really intellectually honest
to move forward to the detailed stage because it appears to
me that they're starting with a pretty big hole." |
| Husch described the essence of the two proposals as one
proposing a higher density and no debt, and the other proposing
low density and some longterm debt. The challenge before the
council is to balance density and cost to do what is best
for the community, he said. |
| Further discussion on the downtown proposals is expected
at the Dec. 6 council work session. A decision on moving one,
both or neither proposal to the detailed stage is slated for
the Dec. 13 public hearing. |
