CLEARFIELD -- City Council members have taken final action to solidify a $1.35 million revenue bond that will help revitalize a 13.4-acre section of Clearfield's aging downtown business district.
Meeting as the Clearfield Redevelopment Agency, the council agreed Tuesday night to ink an "annual contribution agreement" with Key Bank, which has agreed to buy the tax increment revenue bonds.The agreement indicates that if the tax increment revenue pledged to make the annual payments on the bond falls short of the required payment amount, the city will consider making up the difference.
City officials plan to freeze the property at its present value and capture the tax increment the difference in taxes stemming from the current taxable value of the property and its future value when redeveloped -- to repay the 20-year bond.
The $1.35 million in bond proceeds has been earmarked for infrastructure improvements such as water and sewer lines and road access for the Kier Corp.'s "Clearfield Town Square" project at about 160 S. State.
Kier is moving ahead with an $8.2 million redevelopment effort that includes exterior remodeling of three existing buildings, the construction of a new Master Muffler shop and development of a new two-story retail and office
building.
The company also is exploring the feasibility of developing a residential facility that caters to senior citizens capable of independent living.
Located a half block south of the city's new municipal and public safety complex, the Kier project is a key component of Clearfield's plans to upgrade and encourage new investment in its downtown business area.
Councilman Curtis Oda said the contribution agreement with Key Bank does not necessarily compel the city to make up any future shortfalls in tax increment revenue.
"The wording (of the agreement) says we will 'consider' it . . . it's not an absolute commitment," Oda noted.
But cash-flow projections for the Kier project conservatively calculate the tax increment will generate at least $2.9 million over the next 20 years, which should more than cover the debt service on the bond.