Improvement deals buy time for developers

In a soft economy, developers are finding subdivision improvement agreements to be a valuable tool for extending time to make infrastructure improvements after a final plat has been granted.

“SIAs are becoming a popular technique for buying some time,” Assistant Planning Director BJ Grieve told the county commissioners on Wednesday while delivering a year-end report on the agreements.

Subdivision improvement agreements are approved by the commissioners with final-plat approval and give developers up to 12 extra months to finish road or utility projects in a subdivision. Normally, all the infrastructure is completed and lots are ready for sale when a final plat is approved.

To get the extension, the developer has to provide collateral at 125 percent of an engineer’s estimate, so that if the work isn’t completed the county can step in and make the necessary improvements.

If a subdivision improvement agreement expires after a 30-day grace period, the Planning Office works with the commissioners to seize the collateral, which is held and returned when the work is complete. If not, the county goes to bid for engineers and contractors for the necessary improvements.

“We’ve had really good luck with developers in 2008 and 2009,” Grieve said.

In March this year there were 15 expired agreements on the books. All of those have been resolved and closed out, Grieve said. The Planning Office also resolved eight agreements that were to expire this year.

Currently there are six outstanding agreements, five of which expire next year. The sixth agreement, at Harvest View subdivision north of Church Drive, has expired and the county is holding $48,000 from the developer until the water system is finished.

The commissioners on Wednesday agreed to set an April 1, 2010, deadline for the Harvest View project. After that, the county will use the money to hire someone to finish the job.

Looking ahead to next year, Grieve said there are 13 preliminary-plat approvals granted in 2006 that have not received final-plat approval but have been extended. All will expire in 2010. Beyond that there are 72 other preliminary-plat approvals from 2007 to 2009 that have not yet gotten final-plat approval.

For preliminary plats approved before Aug. 1, 2007, subdivision improvement deals can buy an extra 18 months. The timeline was shortened to 12 months in 2007, so those approved after Aug. 1, 2007, can buy only 12 months.

 Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com