The home-building company approached the city late last year about getting economic assistance to help lower the sales price of new homes.

 

Company owner Denny Nelson said lowering the fees would make Clearwater  competitive with other cities. He was in the process of purchasing 30 lots in the Cedar South development.

 

At the time, the council agreed to entertain offering an economic assistance package, and discussed possibly lowering the water and sewer access fees (WAC & SAC) by up to $5,000 per lot.

 

Last month, Administrator Kevin Kress suggested entering into a development agreement with Progressive that outlined each party’s responsibilities. Since that time, he spoke with Nelson about some of the terms in such an agreement.

 

Monday the council reviewed the agreement language.

 

It states the city would waive $5,000 of WAC & SAC upon construction of up to 30 homes. 

 

The first item of discussion was the home value. Originally, the council wanted the market value to be at least $215,000 to prevent lower income properties being built. 

 

Nelson wanted the  amount set at $180,000 based on his construction cost. The council agreed to lower the amount to $180,000 but also included language that it doesn’t include the cost of the lot.

 

The parties also discussed the number of homes built each year and the payback criteria.

 

Originally, the agreement required a minimum of five homes built per year, with Progressive being refunded the WAC & SAC only after the fifth home was built.

 

But Nelson said it shouldn’t be worded that way.

 

“I might build 10 in a year,” he said. “But there might be a year when the market turns and I might build four.”

 

He said in order to keep the construction process moving, he should be refunded the money whenever a home is completed.

 

“Pay me back with the Certificate of Occupancy (CO). Give me the $5,000 once the house is finished. I’ve done what I said I was going to do. I built it. It’s completed. I paid for the permit in full up front. I shouldn’t wait the full year to be paid back,” he said. “I need to keep cash flow moving in this business. The more money I get back, the more houses I start.”

 

The council agreed to reimburse Progressive once each home receives the CO. They also agreed to lower the minimum number of homes per year to two, with a stipulation that if it falls below that number, the agreement is terminated and a new agreement has to be negotiated.

 

The final term was a requirement for the builder to install a second water meter. It allows homeowners to water their lawns without being charged sewer fees. Kress said about 90% of homes already have the meter, and although it’s not currently a requirement, it would make any new home more marketable.

 

“We felt it was something nice to pass along to anyone coming to town,” he said.

 

Councilman Rollie Lange agreed.

 

“Your buyers are going to be disappointed if they have to pay for sewer for their sprinkling system,” he said. “You’re better off putting them in now.”

 

Nelson said he didn’t have an issue with the requirement. He even suggested making it a requirement in the building permit.

 

Kress said he would amend the language in the agreement and have it ready for final approval at the March council meeting.