Milton Town Council is set to formally begin the process of issuing general obligation bonds as part of the special development district for the Granary at Draper Farm development.

Approval for releasing the bonds is expected to happen at council’s 6:30 p.m., Monday, May 6 meeting at Milton library. The process for releasing the bonds is primarily laid out in the form of an executive order from Mayor John Collier, but the specifics have long been hashed out by the full council, which approved a resolution creating the special development district and the terms of its funding in October.

“This is a little more than just sealing the deal,” Collier said. “The council still needs to declare exactly what project will be funded with bond proceeds.”

The first phase of the Granary project, proposed as a 1,350-unit development on a 450-acre parcel on Sand Hill Road, is set to break ground this summer and will include 175 units. The build-out is scheduled to take place over 20 years in 10 sections. 

A special development district is new for Milton. Others have been set up in Delaware, most notably Bridgeville. A special development district is a special tax levy to be paid by Granary residents. The town would agree to issue special obligation bonds – bonds the developer says are backed by Granary residents, not the town – up to $42 million. The proceeds from that tax will be put into a special fund to be used for public infrastructure improvements within and potentially outside the Granary. 

The special tax does not preclude developer Convergence Communities from paying town-required performance bonds, which set aside money to ensure roads and other infrastructure are completed. 

The developer would use the money from the bonds to pay for infrastructure projects benefiting the public, which could include streets, sidewalks, and parks and recreation facilities. Convergence has pledged to designate up to 55 acres of the parcel as public open space, create a biking and walking trail connecting to the town’s Rails to Trails, and install an amphitheater for public use within the development.

Convergence has agreed to give the town up to $5 million from proceeds raised by the special development district to use on other infrastructure projects in three tranches, the first in 2024, another in 2030 and the last one in 2035. That money comes with strings attached. First, only projects built inside the Granary that benefit its residents will be covered 100%. Projects outside the development or located within but benefiting people outside the development would be covered 33%, with the town required to cover the remaining costs. The town has three years to spend the money or it reverts to Convergence. 

Council has narrowed its list of potential projects to use the money to replace radio read-style water meters throughout town, land acquisition, a basketball court and the shared-use path between Cannery Village and Heritage Creek. The town will have about $1.5 million to spend on projects from the first tranche of money from the Granary project.