MORGANTOWN, W.Va. — A lack of timely development around the Morgantown Waterfront that has affected the repayment of bondholders has prompted an adjustment to the TIF scheduling to be submitted to the West Virginia Division of Economic Development.

The Morgantown City Council voted in favor 5-1, with Councilor Danielle Trumble being the lone dissenting vote and Mayor M. Joe Abu-Ghannam unable to attend the council’s regular meeting Tuesday, to approve a resolution that would submit an application to adjust the life of the City of Morgantown Riverfront Development District Number Two TIF by 15 years while refinancing bonds issued almost two decades ago. The proposal to extend the life of the TIF, which encompasses the majority of the Morgantown Wharf District and portions of property along the Monongahela River around downtown, was presented to the council by Kay, Casto, and Cheney Attorney representing the City of Morgantown, as well as Steptoe and Johnson attorney representing the city as bond counsel.

“This is part of an effort to restructure the outstanding debt in the district, a collaborative effort with the bondholders to put the district finances on a better footing,” said Simonton.

Rob Steptoe of Cruze and Associates was also on hand for the meeting to represent his role as part of the city’s bond counsel.

According to both Simonton and Aman, the need to extend the bond repayment by 15 years stems from the lack of generated revenues from properties around the Wharf District that are encompassed by the TIF. This is despite the original bonds associated with the TIF originally being issued in 2007 to support the construction of the Morgantown Events Center and the Wharf District Parking Lot, with other developments around the TIF district also benefiting through the financing. While several multi-story properties have been occupied for nearly a decade or more, the lack of efficient bond payments as part of the original issuing due to several other buildings not being fully occupied over several years has prompted the need to adjust the timing of the life of the TIF to prevent the city from defaulting on the bonds. This is despite the bonds being scheduled to be fully repaid by 2033.

“There are amounts that they are owed under the current bonds that can not be repaid, so they’re forgiving that debt, and then this new financing will set the terms of the payment,” said Simonton. “They will be expected to get a certain amount of funds under those bond terms and have some revenue share with the city.”

The agreement, now pending state approval with the green light granted by the council, also includes parameters on the timing in which bondholders of the original issuance are repaid. In turn, the bondholders will forgive any past debts incurred as part of lowered repayments over the past several years, with repayments of the bonds either being satisfied through agreed-upon cash sums or financial interest in the TIF district itself as part of a portion where the City of Morgantown is listed as a developer. According to both Aman and Simonton, this was agreed upon with bondholders ahead of the presentation of the resolution to the council.

“The amendment and the extension of the district allow for the bonds to be extended and amortized over a longer period,” said Aman. “Which will create an opportunity to get more of the investment repaid.”

With changes to the Morgantown Redevelopment District No. 2 now set to be submitted to the West Virginia Division of Economic Development, the City of Morgantown has now formally submitted applications to adjust two TIF districts within city limits. This includes a request made earlier in the spring to adjust both the size and the life of the Sunnyside UP TIF District, which would remove the Beechurst Power Plant from the TIF while extending the life by 15 years. With city administrators taking steps to avoid a default on a TIF focused on a major development while also allowing funds to be allocated for other future projects, according to Aman, plans are in place to avoid having the city pay for any long-term consequences related to the slowed development of parts of the Wharf District.

“We’re taking advantage of the further we get towards the end, the shorter the overall amateurization is shrinking,” said Aman. “Which limits our ability more and more to accomplish a successful restructuring.”

The application is still subject to a public hearing before it moves forward to the West Virginia Division of Economic Development.

Morgantown City Council also voted 6-0 to approve the land transfer of 19 city-owned properties over to the Morgantown Land Reuse and Preservation Agency as part of the consent agenda of Tuesday’s meeting.