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Celebrate Va. hits hard times page 3
The Silver Cos. and its investment partners owe about $5 million in back taxes and special assessment payments.

Date published: 4/22/2011

continued

The Silver entities still owe about $1 million from 2009 levies (there are no delinquencies before that). If those 2009 payments aren’t made before July 1, 2012, the city would be able to start the tax sale of the delinquent parcels.

The process takes about a year, however, so it likely wouldn’t be until 2013 when an auction would occur, said City Treasurer G.M. Haney. Proceeds would cover overdue taxes and any missed bond payments.

RESERVES DWINDLING

The city bills the special assessments at the same time as the regular real-estate taxes and passes collections to trustee U.S. Bank, which pays the bondholders.

Of late, much of the money that has gone to pay the bondholders each March 1 and Sept. 1 has come from reserves in the Celebrate Virginia South CDA account.

According to MuniCap, the reserve balance is now down to about $456,875, about a quarter of the amount required in the bond agreement and about $300,000 short of the amount owed for the Sept. 1 debt service payment.

MuniCap says Celebrate Virginia South property owners not related to the developer—including the three hotels, Wegmans, PNC Bank, the Virginia Credit Union and more—owe about $77,660 for the May 15 special assessment.

In other words, there’s not enough money to cover the next payment for the Celebrate Virginia South CDA bonds unless other funds become available.

There is about $1.8 million in the CDA construction fund for the Celebrate Virginia South project, but according to MuniCap, those funds, which are for infrastructure, cannot be used to pay debt service without bondholder approval.

IN THE PIPELINE

It’s possible that the project will generate additional revenue before Sept. 1. Johnson Development Associates is under contract to buy another 14.6 acres from Silver and its partners for the 250-unit second phase of its Haven apartment complex in Celebrate Virginia South.

The land is adjacent to a 13.5-acre parcel off Gordon W. Shelton Boulevard that Johnson bought in July 2010 for the first phase for about $4 million. Johnson has had initial leasing success, which led the company to pursue the second phase.

The contract for the additional land is contingent on Johnson receiving a special-use permit for the project, which is a residential use within land zoned planned development commercial.


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