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Main Street Gets Phase 1 Funds
(posted 10.2.09)
The Speedway Redevelopment Authority approved bonding for the first phase
of Main Street's renovation project that could cost taxpayers about $26 million by the time it is paid for
in 2034.
The SRA voted 3-0 at its Sept 28 special session for initial amounts of
$1,450,000 in taxable bonds and $13,305,000 in tax exempt bonds. The taxable
bonds received an interest rate of 7% and exempt bonds 4.7%.The money will
be deposited with a trustee at US Bank in an interest bearing account.
Claims will be submitted to the trustee for payment.
Standard and Poors has rated the bonds at A+, while Moodys give them its A3 rating.
SRC Executive Director Scott Harris said some of the money will be used
to capitalize interest starting in 2010. The first principal payment begins
in 2011.
According to Barnes and Thornburg attorney Jim Gutting, $1,240,000 million
will be set aside for debt service. The average payment will be about one
million dollars until 2034. There is a prepayment option in 2019 to call
in the bonds at no penalty.
Most of the funds will be used to retire debt, not for new building. Harris
told the Speedway Town Council that the $8.75 million bond anticipation
note will be paid off from the bond issuance, leaving about $4 million
for the project fund.
The SRC currently relies on Allison Transmission's personal property abatement
roll off for the source of its TIF funds.
The commission may not have access to the full TIF amount of Praxair's
new building if the company files for its abatement that was granted in
2006. The abatement was granted based on Praxair's pledge to build a 25,000 square foot production facility and add 45 news jobs
in town.
The Marion County Assessor's Office reported that Praxair built an 11,108
square foot building, an 8,000 square foot concrete pad and two small storage
buildings. The concrete pad is assessed as personal property.
The town council approved the bond resolution and lease rental payment
agreement at its September 28 meeting.
The council's vote was 3-0. The council had to delay voting on the salary
ordinance because it related to Councilor Jeff Hartman's salary on the
fire department. Prior to the meeting, Hartman thought it was best to abstain
from the vote.
Councilor Lu Hillmer said "Oh, there is nothing wrong with that. You
can do anything you want to do... You can vote on that."
Councilors Gary Raikes and Bill Suffel were absent.
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