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Published Wednesday, November 04, 2009 in Local

Waivers granted for Southern Living Idea House in Senoia

By Sarah Fay Campbell

The Times-Herald

Senoia City Council waived a variety of water, sewer, and building fees for the Southern Living Idea House at Monday night's council meeting.

The council had been asked to waive certain fees for the townhouse and for the other four units attached to it by developer Scott Tigchelaar of Historic Development Ventures.

Mayor Robert Belisle warned that waiving fees for the other four units would set a dangerous precedent and instead made a motion to waive additional fees only for the Idea House.

A brownstone unit in the Gin Property development in downtown Senoia has been chosen to be a Southern Living magazine Idea House in 2010.

Tigchelaar said the magazine estimates that "anywhere from 30,000 to 40,000-plus people" will come to Senoia and tour the home.

"The effect of that on local merchants is significant," Tigchelaar said.

Hopes are the exposure will "act as a catalyst to sell more homes" and increase sales tax revenue for the city, as well as income for local businesses.

Of course, with the economic downturn, now is an odd time to be building homes.

So "we were hoping you would consider waiving the allowable fees," Tigchelaar said.

He asked for waiving of the sewer and water tap fees, the building permit, and plan review fees for the Idea House. And because the other four units have to be built, he asked for consideration on those fees as well.

The city's water and sewer tap fees are $750 and $1,500, respectively, but the "capital recover fees," calculated to pay off the city's debt service on the water and sewer systems, are $1,304 and $2,520. In the past, the city has waived some of the tap fees, but capital recovery fees were off limits.

The building permit fee is based on the value of the project. City Administrator Richard Ferry said each of the structures is valued at "$360,000 for construction costs."

"I caution council greatly," said Belisle. With the Southern Living house itself, "there is something there that sets it apart, that makes it unique. If you look at waiving" fees on "any other residential part, there is no uniqueness to it and you may be setting a precedent" that could be bad for the city.

"It's not a standalone structure," said Councilman Larry Owens.

But "when the day is done, they are titled separately," Belisle said.

"I think you might have D.R. Horton in here next week saying we'll pull more permits if you'll waive fees," said City Attorney Drew Whalen, referring to a local builder.

Belisle made a motion to waive the tap and capital recovery fees for water and sewer, the permitting fee, the plan review fee, and the trade fee, totaling roughly $8,600, for the idea house.

"I don't want the city to put itself in a position that would open it up to future requests," Tigchelaar said.

Because of the current economic climate, Tigchelaar also had to reach an agreement with the council about a maintenance bond for the infrastructure of the former Gin site.

No companies are writing residential maintenance bonds in this market, Tigchelaar said. "We've talked with some of the other developers" and "none of them" have been able to get residential maintenance bonds.

The city requires a bond in the amount of 20 percent of the total cost of what is being bonded.

"The alternative would be to post a $140,000 CD," Tigchelaar said. "Since we are pouring everything we've got into the Gin property," he was hoping the city would consider something better for cash flow.

The only infrastructure work remaining is the top coat of asphalt on the streets, Tigchelaar said, which will cost $40,000 to $50,000.

He proposed putting $50,000 in a CD and giving the city a non-revocable letter of credit, and "given the extent of our investment in Senoia, give the city a personal guarantee on the balance and then continue to revisit getting a bond with our insurance company when they become available."

"In a normal business environment, we could purchase a bond between $3,000 and $3,500," Tigchelaar said. "We'll be pursuing that constantly."

Belisle made a motion to allow Historic Development Ventures to post the $50,000 cash bond and personal guarantee with the requirement that "you attempt on a quarterly basis to secure a bond for the full amount."

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