By DAVID CLOUSTON

Salina Journal

A development agreement approved by Salina city commissioners Monday includes special assessment costs necessary to fund street, water, drainage and sewer improvements for the planned Grand Prairie housing subdivision in east Salina.

Lots in Phase 1 of the development will each be subject to an estimated special assessment cost of $34,531.52. Deputy City Manager Michael Schrage called the figure significant, but advisable, given the unique nature of the subdivision, as a golf course development.

"Staff and the developers have had detailed conversations about the price point, the special assessments, what they're paying for, and how (the money) is being allocated," Schrage told commissioners. "We feel (the assessments) are appropriate and the risks are accounted for."

Developer William "Cork" Umphrey, of Cornerstone Development Group, which is developing the property, said that $34,531.52 figure is an estimate from the city's engineering department.

"Our expectation is that they will be somewhat less than the estimate," Umphrey said. The 70-lot Grand Prairie Addition is being developed on private property between holes of the Salina Municipal Golf Course and will be comprsed of single-family homes. The development lies on the north side of Cedar Ridge Drive, east of the Mariposa Addition.

Phase 1: 30 lots

Phase 1 of the development includes about 30 lots. Lots in Phase 2 of the development are currently subject to special assessments of $12,334.01. That is the developers' share of the cost for water and sewer that will serve the entire subdivision. Those lots will be subject to additional improvement costs when the remaining improvements are installed later. In the interim, Cornerstone Development will be liable for the assessments applied to Phase 2.

The developers can choose to pay their share of the project costs as a lump sum, or as a special assessment tax over a 15-year period beginning on the date that general obligation bonds are issued by the city to finance the project.

The developers are paying for initial construction and they'll be reimbursed by the city with proceeds from the bonds.

The developer must provide a financial guarantee that includes either a letter of credit equal to 35 percent of the project costs or cash or financial securities equal to 20 percent of the project costs. Those financial securities would be released by the city when 35 percent of the development is complete or after five years, whichever occurs first.

The five-year time frame won't commence for Phase 2 until all of the necessary public improvements for that phase have been completed.

Construction on the development is scheduled to get under way soon, in light of the commission's approval.

Contracts awarded

In other business commissioners:

n Awarded a contract for $164,715 for rehabilitation of two wastewater pump stations to Smoky Hill LLC.

n Awarded a contract for rehabilitating and repainting of two water softening basins at the city's water treatment plant, 401 S. Fifth. The contract went to C2i Inc., of Hutchinson, for $176,687.

n Gave final approval on second reading to an ordinance levying annual service fees in 2010 for downtown businesses in the Business Improvement District.

n Reporter David Clouston can be reached at 822-1403 or by e-mail at dclouston@salina.com.

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