The Council approved a resolution authorizing the issuance of special tax bonds for Community Facilities District No. 3, The Pines at Sunrise Village, completing a financing process that began in 2022.

Staff explained that the project was first approved by the Planning Commission in December 2022, with CFD formation approved on August 15, 2023, with the stated intent to issue bonds financing public facilities and infrastructure. Brandon Kaffouri of Urban Futures, serving as municipal advisor and fiduciary to the city, presented the details. Scott Ferguson of Jones Hall served as special bond counsel and Tom Jacob of Stifel Nicolaus as underwriter.

The 12.5-acre district is at the corner of Euclid and Rosecrans in the northwest part of the city. Lennar Homes is developing the project, which will have 113 homes: 49 single-family homes and 64 townhomes.

As of June 25, 59 homes had been finished and sold to individual buyers. Lennar owned 25 completed homes, while 29 were still being built. Since then, Lennar has sold 11 more homes, bringing the total number of homes owned by individual buyers to 70. The remaining homes are expected to be sold by the end of the year.

The district was approved to issue up to $9.5 million in bonds. Because of current market conditions, the 2026 bonds are expected to total about $8.25 million, which is less than the approved maximum. The bonds will be paid back using special taxes charged to property owners in the district. The city’s general fund will not be responsible for paying them.

The money from the bonds will pay for improvements to streets, underground utility lines, parks, and sewer systems.

For 2027, the special taxes are expected to range from about $3,800 to just under $5,500 per year, depending on the size of the home. The taxes will increase by 2% each year. The bonds are expected to have an interest cost of about 5.26% over 30 years.

One Council member asked why the project needed another public hearing after receiving several approvals over the years. The city staff and bond lawyers explained that state law requires a separate approval for the bond issue and its interest rate. That approval was not included when the district was first created.

No members of the public spoke during the hearing. The City Council approved the measure unanimously.

If everything goes according to schedule, information about the bonds will be sent to investors next week, and the bonds are expected to be priced by the end of the month.