On July 27 the El Dorado County Supervisors discussed a request from developer Leonard Grado to receive early reimbursement of road improvement costs necessary to support the Crossings at El Dorado commercial development, located north of the Prospector Plaza shopping center (Save Mart, Target, Ross, etc).
The Crossings project is located within the Missouri Flat Master Circulation and Funding Plan (“Plan”) Phase I area. Under the Plan approved in 1998, 85 percent of the new sales and property tax revenue from projects in the Phase I area is dedicated to local transportation improvements. For instance, if a new store generates $1 million in sales tax, $850,000 is dedicated to transportation projects in the area. Without this funding arrangement, commercial development on the Missouri Flat corridor would not be possible because of pre-existing road capacity limitations (these limitations could not be fixed using impact fees because they were not caused by the new developments).
Because of other projects in the Missouri Flat area it is not currently anticipated the county would have enough funds to complete the Crossings-related road improvements until Fiscal Year 2026-27. However, Mr. Grado’s company is offering to construct the improvements themselves with reimbursement from the county. However instead of waiting several years for reimbursements, the developer’s lender is requesting that the county provide the reimbursement in advance.
Initially, county staff proposed using Transient Occupancy Tax (TOT) reserves for the reimbursement, with backfill from Plan funds when they become available. However, Supervisors expressed concerns that such a move could limit opportunities to expand broadband access in the county, as TOT reserves have also been used as a local match for broadband grant opportunities. Chief Administrative Officer Don Ashton suggested that instead the county could use funds in reserve to finance transportation improvements for a potential new county courthouse. Ashton said that it does not appear the state will be ready to proceed on a new courthouse within the next five years, thus while not no-risk a loan from the courthouse road fund reserve would be lower risk than TOT reserves.
The Board voted 4-1 to conceptually approve up to $1 million from the courthouse road fund reserve to satisfy Mr. Grado’s request for early reimbursement, with eventual backfill from sales and property tax revenue in the Plan area. District 4 Supervisor Lori Parlin voted No on the item, citing concerns about the risk to the county and lack of a guarantee the project would generate the expected tax revenue. The topic will need to return to the Board for final approval.
Image: Crossings project and surrounding area from CBRE
