Title
Ordinance in the Amount of $917,000 Amending the Performing Arts Center Fund
Body
Department: Coliseum
Council District: 3
Public Hearing:
Advertising Date/By:
Contact 1 and Phone: Rick Lusk, Finance Director, 373-2077
Contact 2 and Phone: Matt Brown, Managing Director, 373-7400
PURPOSE:
Consider adoption of a budget ordinance amendment in the amount of $917,000 to appropriate funds to pay costs associated with property management, development and construction of the Steven B. Tanger Center for the Performing Arts ("Center"), including interest expense on loans that finance property acquisition and construction costs, related financing costs and expenses of temporarily leasing and managing properties that were acquired for the Center.
BACKGROUND:
The City has acquired various downtown properties for the Center and is responsible for leasing and maintaining those properties and subsequently demolishing them. It is also responsible for managing design and construction contracts funded from $35 million in private donations and $30 million contributed by the City to the project.
The City proposes to finance its $30 million contribution to the project through an installment financing agreement with PNC Bank and expects to close the financing on or before December 19, 2014 in order to take advantage of favorable financing costs available this calendar year. $11.5 million of the loan proceeds will be used to pay off an existing loan on property acquired for the Center. The Agreement has a term of 3 years (Dec. 2014 to Dec. 2017) and a variable interest rate on the construction loan estimated at 1.0%. Interest will only be paid on amounts drawn and will be due monthly with principal repayment due at maturity. The Agreement may be prepaid without penalty upon 30 days written notice to the Bank. The City intends to pay off the loan prior to the maturity date and convert the construction loan to permanent financing in early 2017 through the issuance of limited obligation bonds.
BUDGET IMPACT:
The Performing Arts Center Fund budget is being increased by $917,000, which will be funded from hotel/motel tax revenue of $248,000 (City Capital account maintained by the Greensboro CVB) and Coliseum premium parking revenue of $669,000. (See attached budget information.)
RECOMMENDATION / ACTION REQUESTED:
The Coliseum and Finance Departments recommend that City Council approve the attached budget ordinance amending the Performing Arts Center Fund in the amount of $917,000 to fund costs associated with property management and construction of the Center.