The Otsego County Industrial Development Agency approved a $100,000 loan Thursday for the town of Oneonta’s project that would extend public water service to Southside. The action is expected to significantly enhance the town’s chances of landing millions of dollars in state and federal support.
The goal is to lure new business to a region of the county that is already its nucleus for retail shops and big box stores.
The loan was granted at a rate of 4 percent. It would be repayable in three years, officials said.
However, the project cannot advance unless owners of Southside properties, both residential and businesses, agree to support the creation of two new water districts at a special referendum vote that has not yet been scheduled, Oneonta Town Supervisor Robert Wood said.
Wood said it is likely the question of forming two new water districts would be put to Southside property owners in the fall of 2014.
Securing the loan commitment is a key part of Wood’s strategy to convince the state Environmental Facilities Corp. and the U.S. Department of Agriculture to back the $8.8 million project.
The application for funding that will be sent to those two agencies will be looked on more favorably now that the IDA has joined forces with the town in attempting to move the water project forward, Wood said.
Wood had previously angled unsuccessfully to get the Otsego County Board of Representatives to commit financial support to the Southside project. Citing the county’s fiscal constraints, county lawmakers opted against offering any money for the water extension.
As for the new support from the IDA, Wood said: “We’ve been working toward this goal for a couple of years, and so we’re absolutely excited to get through this.”
Wood said he is optimistic that those eligible to vote in the referendum would be supportive of creating the water districts, because it would provide their property with new public water lines and ultimately increase the value and the marketability of the lots in question.
Wood said he expects the support from the IDA loan will negate the need for the town to partner with the city of Oneonta, which has been poised to sell water to the town as well as provide the town with a $90,000 loan.
“At this time it does not appear we would partner with the city, primarily because of the increased cost of obtaining water for them,” Wood said. He added that it would be cheaper for the town to tap into an aquifer under Fortin Park, and run the water line to the Southside from there. He said the town owns sufficient land around the site to create a required 200-foot buffer zone.
Engineering studies completed by the town suggest that connecting to a new water line would initially cost property owners $1,000 each for the hookup. The annual fee for the supply was estimated at $560.
County Rep. Betty Anne Schwerd, R-Burlington, the chairwoman of the county’s Intergovernmental Affairs Committee and a member of the IDA, said the loan money will only be released to the town “if they get through all the hoops” — including having a referendum where the Southside water project is supported by those who would use it.
The vote in support of the loan was unanimous, she noted. She pointed out that Wood advised the IDA that the water project could attract as many as five new businesses to Southside in a relatively short time.
Schwerd said it remains to be seen whether Southside voters will agree to back the project.
A 2010 survey of property owners along the main Southside corridor of state Route 23 and state Route 28 showed that about 75 percent of respondents favored creating a water district.
Wood said there is plenty of room on the Southside for new businesses, noting only about 40 percent of the land there has been developed. He said a similar public water extension plan in Cobleskill has stimulated commercial real estate activity in that area, with developers looking to acquire properties where they think businesses will choose to locate.
(This story has been modified to correct the name of Betty Anne Schwerd, which was incorrect in the original version of the story.)