As Mayor Dane Haygood and the Industrial Development Board (IDB) make a public relations push for the Daphne Innovation and Science Complex (DISC), some city councilmembers are raising more questions about the project’s funding, location and infrastructure.
In the last two weeks, the city held meetings with property owners associations from Lake Forest, Sehoy, Tiawassee, Canterbury Place and Bristol Creek. The city also heard public comments from citizens who addressed their concerns about DISC at the Aug. 3 City Council meeting and will hold another public hearing Aug. 17 on the merits of annexing the property, located at the southwest corner of State Highway 181 and Champions Way, and the Planned Unit Development (PUD) designation.
On Monday, members of the City Council grilled the mayor on a wide range of DISC issues, including the use of $426,000 in early BP funds that were given to the city following the 2010 Deepwater Horizon oil spill. At the time, the state disbursed some early BP funds to municipalities for economic development purposes. The city of Fairhope was allowed to use its $429,000 allocation to reconstruct Fairhopers Community Park and splash pad. Daphne received $426,000, which it has not used.
The IDB plans to use the funds for part of the $760,000 initial purchase of the land, currently owned by The Bills LLC No. 2. The remaining balance will be paid with existing IDB funds, which amounted to $439,579.63, according to approved minutes from the IDB’s June 22 meeting. The IDB aims to close on the property in December.
City Attorney Jay Ross said after conversations with the Bentley administration the city would not be allowed to use the $426,000 for recreation projects, splash pads, tennis courts or sewer projects.
“Some other neighboring communities have used their funds for things like splash pads and other recreational purposes, and I think we are being held to a different litmus test than the other communities are held to,” Councilman John Lake said. “I think the governor needs to understand that is not appropriate.”
Haygood told Lagniappe he could not speak to why Fairhope was allowed to use its BP funds for a splash pad and park, but said Daphne would follow the guidelines set forth by the governor’s office.
Lake asked the mayor why the Council was not alerted to a reallocation agreement, signed by Haygood, which allows the mayor to transfer city funds to the IDB without council approval. Ross said a previous council passed the agreement in 2010.
“These funds have been sitting there for five years and no one on the Council, to my knowledge, has made an attempt to use them,” Haygood said. “I’m just trying to make sure we spend the money in a responsible way that will provide the city some benefit.”
Ross said councilors are welcome to try to fight the ordinance if they so choose.
“That’s debatable, certainly, and if the Council wants to pursue that, the Council as a group can try to force the money back out of the reallocation grant,” Ross said. “But before we do that we need to know what other projects the state will approve. The DISC project is allowed but as I understood it, splash pads, sewer and recreation were not allowed.”
Ross said the money was allocated to the city in the form of a grant and has to be used in a state-approved way. Attorney Kevin Boucher said because the money was given to the city as a grant, the state could require the city to repay the money if it’s improperly spent.
Councilman Randy Fry questioned the mayor about how the estimated $1.6 million in infrastructure costs will be funded after the initial land purchase. The mayor said there are three possible funding options: selling outparcels, applying for grants through the U.S. Economic Development Administration (EDA) and using future funds allocated to the IDB, which receives 13 percent of the city’s lodging tax revenues. The EDA grant would provide 50 percent funding, or approximately $800,000, for the infrastructure.
During a presentation to the Council, Haygood said tenants at DISC would be charged a user’s fee of approximately 60 cents per square foot. Thus, a 5,000-square-foot office would be charged a $3,000 per year user’s fee; at full occupancy, an 80,000-square-foot office building at DISC would bring in $45,000 per year in users’ fees.
The mayor listed roadbeds, utilities, water retention and grading as some of the infrastructure that needs to be in place. Fry asked whether the city would require the use of Daphne Utilities to construct infrastructure at the DISC site, which will also include electricity, fiber optics and other technical amenities.
Typically, Fry said, the owner and developer provides infrastructure before the utilities company takes over maintenance. According to the PUD document, the project will receive water service from Belforest Water and sewer from Daphne Utilities.
“I’m not anti-business in any way,” Fry said in a subsequent interview Tuesday. “I just don’t have assurances from the mayor or the IDB they are going to come back and ask for more city funds. The city and its utilities are well funded with a high bond rating. As a citizen, I think it is prudent to protect the financial status of the city.”
Haygood said there were no current plans to ask Daphne Utilities to provide the infrastructure, but he would not take the option off the table. Following the Aug. 17 public hearing, the council will consider the annexation and PUD zoning for the property at a regular meeting in September. If approved, the land would go from RSF-1, single-family residential in the county to a PUD designation within Daphne’s city limits.
“This is currently a bean field in the county, adjacent to Daphne High School, over which the city has no control,” Haygood said.