UKIAH 4/7/2017 — The Ukiah City Council authorized city staff to take the next step in applying for a $4 million loan from a state financing authority to improve the Redwood Business Park at the south end of Ukiah, using the civic center as collateral. The city expects to pay back the loan using the city’s general fund.
In January, the council authorized staff to apply for a low-interest loan from the California State Infrastructure and Development Bank (I-Bank), to develop the 40-acre business park property, which is the proposed site for the long-awaited Costco. Shannon Riley, senior management analyst with the City of Ukiah, said on Thursday that, while she was not at liberty to divulge the names of prospective tenants, a number of businesses have made inquiries about setting up shop in the business park. The owner of a Holiday Inn Express recently appeared at a Sanitation District meeting to discuss the cost of hookups for the business, which is within city limits as well as the Sanitation District. “It appears that everyone’s waiting for Costco,” Riley remarked, adding that “Costco will likely not open until the buildout is done.” She said that the application for the loan, which has been through “numerous levels of staff review,” will come before the bank’s board on April 25. Provided it meets with the bank board’s approval, the city hopes to put projects out to bid in the next few months. After that, construction could start as early as this summer.
According to a staff report accompanying the agenda item, the former Redevelopment Agency obtained financing for the buildout of the business park through bond sales in 2011. However, when the state of California shut down redevelopment agencies, the bonds were frozen. Riley reported that the city of Ukiah is in the process of negotiating with the state to recoup the money from the bond sales. The I-Bank, founded in 1994, is the “alternate mechanism” to fund the development of the business park. “We just found another way,” Riley said.
The plan for the buildout includes installing several traffic lights and making median improvements on Airport Park Boulevard. Hastings Street would also be widened to include a turn lane onto State Street. The freeway interchange at Talmage would be improved to include a second turn lane onto Airport Park Boulevard. Street reconstruction is also part of the plan.
The total projected cost of the improvements is $5,799,999. The city expects to rely on a number of sources to cover the remainder of the costs, including the city’s general fund and Measure Y, a sales tax initiative to improve city streets, which Ukiah voters approved by a slim majority last November. The Howard Jarvis Taxpayers Association has challenged the measure in court. Until the matter is settled, the city is collecting the tax and placing the revenue in an escrow account.
Another source of funds for the park buildout is the Redwood Business Park Capital Infrastructure Fund, which Riley described as similar to a homeowners’ association fund. Each of the businesses in the park pays into a fund that was specifically designated for traffic improvements to complete the buildout.
The city staff report states that “Preliminary conversations with I-Bank staff indicate that the approximate interest rate could be 3.25%” on the thirty year loan. Additional fees include .85% of loan amount or $10,000, whichever is greater, due at closing, plus a yearly fee of .3% of the outstanding principal balance.
Sarah Reith [email protected]