by Clayton Black, Chief Strategy and Business Development Officer
and Darren Willis, Division Manager
If you’re like most retail developers, making infrastructure improvements to accommodate your new development can be a financial burden. Sometimes it can be a deal breaker. But it doesn’t have to be. Whether you’re considering a one-acre retail development or a multi-thousand-acre master planned community, there are ways to recoup your costs through reimbursement dollars available from public entities. These funds can be put towards public utilities such as water lines, storm sewer improvements, sanitary sewer improvements and roadway improvements. Some entities even have the authority to reimburse left turn lane bays or a signal improvement.
The funds are there. But if you don’t ask, you won’t get them.
Here are the questions you need to ask when you know you need to make a public infrastructure improvement:
1) Is the development inside the boundaries of a public entity that has reimbursement powers, such as a management district, a TIRZ or a water district?
2) Is the infrastructure you need to build ultimately going to serve more than one user?
3) If your development is located in a City, is your development something that will be an economic driver for the area? Will it result in more jobs in the area, and bring in sales tax? Also, is the jurisdiction with public-private partnership authority excited about the project? If so, the City may be interested in entering into an interlocal agreement or Chapter 380/381 agreement as a way to contribute public dollars to the project.
Taking five minutes with your engineering firm to ask these questions can save you significant dollars.
Bottom line benefits
Typically, reimbursement dollars are negotiable and often are reimbursed 100% for the public infrastructure costs. There is even public money available for amenities you don’t have to implement but may make your project look better, including pedestrian and bicycle access, building facades and landscaping where permanent maintenance can be deferred to a Management District. In addition to the money savings, there are functional and aesthetic benefits to reimbursement dollars. Public infrastructure improvements may improve storm drainage to reduce flooding, streets can be improved as a way to create a more visually appealing entrance to your project and ease vehicle access, and landscaping can be enhanced to make your property more attractive and attract tenants and customers.
Being in the know can help you seal the deal
A lot of detail developers aren’t aware that funds are available for public infrastructure improvements. The downside is these public improvements will need to be constructed whether the developer can secure public funds or not. Even worse, some developers will disqualify a project in the due diligence stage because of public infrastructure costs, without looking at the potential public funds available for reimbursement. Hopefully the information above describes a strategy for turning public infrastructure improvements from a development cost into an opportunity to partner with a local entity to accomplish their public infrastructure requirements while also improving the quality of your development
What’s the best way to get started?
Make sure you hire an engineering firm that understands how to secure private-public partnership dollars when they’re available in the jurisdiction you’re working in, and has the relationships to get it done. Do this in the Due Diligence phase before you buy the property. The earlier you can start the process the better because the time it takes to secure public reimbursement funds does affect your project schedule.
As a proven engineering firm for water districts and special districts in the State of Texas, we understand the public side and where those dollars come from and leverage our expertise on the private side to help you find those dollars. At Jones|Carter, we look at public reimbursements as a team to see if the public infrastructure reimbursement dollars are worth the schedule impacts, and provide guidance to help you make an informed decision regarding public infrastructure reimbursement for your development.