Columbia City Council is to cast its first vote Tuesday on the loan for the construction of a year-round stadium on the Bull Street site.
Language in the loan documents that council will vote on during its 6 p.m. meeting has caused consternation among skeptics who oppose a publicly funded minor-league stadium. The concern is that the documents posted on the city’s website include a public loan amount not to exceed $35 million.
The city has pledged to use $29 million in taxes paid by restaurant and bar patrons to repay the loan. The minor-league team owner/ballpark operator has promised to contribute $6 million for a total of $35 million for the facility.
The fact that the $35 million construction price tag and a $35 million loan are the same is a coincidence, said Jeff Palen, Columbia’s chief financial officer. The loan figure is a “not to exceed” amount, which routinely appears in municipal loan documents, he said Monday.
“You never know how much you’re going to have to issue (borrow) to get that ($29 million) number,” Palen said in an interview. “It’s put there (in the documents) at a higher number ... (so that) you prepare for the higher number in case the market forces you to (pay higher interest rates or other loan expenses),” Palen said.
The coincidental numbers were worrisome enough that Palen asked the city’s bond adviser, Brent Robertson, to explain to a member of council why the figure is higher than the amount council has been discussing for several months.
Robertson wrote in a May 1 email – which Palen sent to council – that the adviser arrived at the $35 million maximum figure after calculating construction costs, any deposits that would be made into reserve accounts and expenses incurred in issuing the loan. Robertson estimates the issuance cost alone will be $708,110.
“Unless otherwise directed by the city prior to the time of (bond) sale, the hospitality bonds will be sold to fund no more than $29 million into the project account for the multiuse entertainment venue with the balance of project funding coming from Hardball Capital,” Robertson wrote.
Hospitality bonds is the legal name for loans that are repaid from the 2 percent tax that customers pay for prepared meals and beverages each time they eat or drink in the city. Hardball Capital is the Atlanta-based company that is to sign a contract to bring a minor-league team to town and to run the stadium 12 months per year.
Council also is scheduled to vote on refinancing loans used to build city parking garages.
The refinanced loan, not to exceed $23.5 million, would save the city about $500,000 in interest payments over 10 years, Palen said. Most of the savings would occur during the early years of the refinanced loan, he said.
The refinancing method would be on parking garage loans first issued in 2005, according to the loan documents.
Other items on council’s agendas Tuesday include discussions of: