With infusion of $6.2M loan from Boone County, several major home development projects back on track

Toebben, Drees, others benefit, along with county
Posted at 7:00 AM, Jan 30, 2017
and last updated 2017-01-30 07:00:06-05

HEBRON, Ky. -- It's not just developers who are happy about the final OK from Boone County and Sanitation District No. 1 of Northern Kentucky that opened up 2,700 home lots in Hebron for construction.

Officials in Boone County, which agreed to loan $6.2 million to the utility company to help restart home building as it was rolling to a complete standstill, said the county would have suffered without the deal to share the $9.4 million project. 

Only 12 lots were left near the end of 2016, said Brian Miller, executive director of the Northern Kentucky Homebuilders Association. The county, developers and SD1 were well aware that without an infusion of cash there would be a long-term impact on the county, and it wouldn't be good.

Jeff Earlywine, Boone County administrator, said while it’s unusual for a county to get involved with a regional utility, officials recognized the "exceptional challenge."

"We didn't have to do it, but we knew what the outcome would be if we didn't do it," Earlywine said. 

That outcome likely would have included no new growth, new taxes or new jobs to build homes, he said.

"Losing out on that (growth) over 15 to 20 years far outweighs the investment," Earlywine said. 

It's all good for developers who couldn't continue to build in existing subdivisions or create new ones.

Toebben Builders, for example, will add 900 lots to its menu.

John Toebben, president of Toebben Builders, is excited about continuing the development of the 460 acres his company has owned for more than 24 years.

An equestrian facility is already up and running at Rivers Pointe, a development planned as a master community with a mix of homes (single-family, apartments and condominiums) along  with a village center to include a general store, small restaurants and service businesses such as a salon.

Toebben expects it will take a year for infrastructure to be in place. Single-family homes likely will start at $350,000.

The Reserve at Rivers Pointe, already under construction, will feature homes $750,000 and up. Those eight homes will be featured in the Northern Kentucky Homebuilders Association Homefest in 2018. One home is under construction now, he said.

For Drees, it means more than 200 new homes are possible.

Michael Conklin, Drees Homes Northern Kentucky Division president, said two sections of the Thornwilde neighborhood in Hebron had been engineered and ready for development. He called it "shovel-ready."

Developers can tap into the lines as homes are developed, according to an SD1 spokesperson, since final buildout in the area could take 10 to 20 years. The project will upgrade the Sand Run Pump Station, construct a force main (which forces sewage to move) and update gravity pipes (where gravity takes sewage downhill). SD1 estimates construction to start in spring 2018, with completion in summer 2019.

Earlywine said Boone got involved because of SD1's limited discretionary funds — its cash flow helps to upgrade sewer issues that must meet clean water standards as part of a federal consent decree, he said.

"The sewer system was not up to task," Earlywine said, adding that the county had been working with SD1 for about three years to find the most cost-effective action that would allow building to move forward.

The loan will be paid back with interest from each tap into the sewer system, usually paid by developers, at $3,421 per tap, he said. Tap money will be paid directly to Boone County until the loan is paid in full, according to Earlywine and an SD1 spokesperson.

"The terms were very competitive on the loan," Earlywine said.

He emphasized that it was a loan, "not a gift or a grant," likely to assuage taxpayers' concerns.

The interest, he said, is pegged to the one-year Treasury bill rate and adjusts every three years. Payback might take 15 to 16 years, but it's with the framework of a normal loan payback schedule.