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New Port Richey to buy city gateway land

City Council members agreed to borrow money from the city’s water and sewer utility fund to make the purchase.
 
ALICE HERDEN | Special to the Times
New Port Richey City Hall
ALICE HERDEN | Special to the Times New Port Richey City Hall
Published Jan. 8, 2020

NEW PORT RICHEY — There is not enough money in the New Port Richey Community Redevelopment Agency’s property acquisition budget to purchase the former Walgreen’s property at the city’s gateway on U.S. 19.

The deal is not dead, however. The plan is for the agency to borrow from the city’s own water and sewer utility fund.

The idea pitched by city staffers led to a process Tuesday night in which the New Port Richey City Council, sitting as directors of the city’s CRA, voted for the $1.7-million inter-fund loan. Later in the evening, they put on their hats as council members to bless loaning the water and sewer funds to the agency.

New Port Richey is closing on its purchase of the former Walgreen’s property, a 1.4-acre piece of prime real estate at U.S. 19 and Main Street, with hopes of gaining control over the key gateway into the city’s downtown.

In October, the City Council approved buying the property using CRA funds. On Tuesday, City Manager Debbie Manns said that the CRA is short $900,000 for the property acquisition and that advisers suggested the inter-fund loan instead. The inter-fund loan would be more cost effective than going through a bank, Manns said, and would provide more control over use of the property.

State law allows for inter-fund loans under certain criteria, including establishing a time-frame for payback and an interest rate based on offers from external lenders, according to city documents. The City Council agreed to a 3-year loan at an interest rate of 1.8 percent, but the loan can be paid back more quickly.

A majority of council members expressed excitement over the impending purchase, but there was some trepidation, given the city’s history of losing money in real estate speculation.

Deputy Mayor Jeff Starkey voted against the inter-fund loan deal twice on Tuesday, not because he doesn’t believe it is the right funding , but because he is against the purchase itself. During the October vote, Starkey also voted against the purchase, citing the city’s purchase history.

He pointed to the city’s purchase of the former First Baptist Church site on Circle Boulevard for $3.1 million in 2005, and later selling it for $300,000 to help spur a downtown residential project. Also, the city still owns the historic Hacienda Hotel, which is under renovation, after buying it for $2 million in 2004.

Starkey said he remains “nervous” over the Walgreen’s property purchase without a plan in place for exactly how the city will use it.

“I am still trying to figure out why some of us are so very excited to spend so much money without having any kind of security as to how long we are going to be holding that parcel of land, or parcels of land,” he said. “I pray it works out, but I am just trying to understand the excitement, I guess.”