This is a resolution authorizing $12.5 million from the Water and Sewer Fund be made available to fund the acquisition and construction of public improvements on Hutchinson Island pursuant to a development agreement between the Mayor and Aldermen of the City of Savannah and Savannah Harbor Partners, LLC. The agreement was effective on November 7, 2019, and obligates the developer to design and construct certain public improvements including sidewalks and roadway improvements, park improvements, and riverwalk improvements. The City, in turn, is obligated to purchase the public improvements upon their completion, in an amount not to exceed $12.5 million, as incremental taxes from the private development adjacent to the public improvements are realized. 

The $12.5 million in funding will be made available to the capital improvement fund to purchase the public improvements as the developer meets the terms of the development agreement over the next 12 to 36 months. The water and sewer fund will be repaid with interest by the additional City tax revenues (inclusive of ad valorem taxes, sales tax and hotel/motel taxes) resulting from the private investment within the mixed use development and other development projects to be located within the Savannah Harbor Subdivision located on Hutchinson Island. These incremental tax revenues will be recognized in the General Fund and the General Fund will transfer cash to the Water and Sewer Fund to repay the $12.5 million along with interest. 

By making the $12.5 million available and not borrowing from credit markets, the City will avoid issuance costs and the higher than usual interest rates prevailing at this time. In addition, by making the funds available internally, the City will have access to the capital when needed, as the development agreement allows the developer to draw down the $12.5 million in multiple increments over time. 

Approval