Kannapolis awaits decision on TIF

By Emily Ford

eford@salisburypost.com

KANNAPOLIS — Perhaps no news is good news.

That’s what Kannapolis city officials are hoping as they await word on whether an agency will rate unique bonds designed to pay for improvements at the N.C. Research Campus.

Standard & Poor’s visited the Research Campus July 6 to consider assigning an investment grade rating to $30 million in tax increment bonds, or TIF bonds.

City officials expected an answer within two weeks.

They’re still waiting.

“Actually I doubt it has much to do with us,” City Manager Mike Legg said in an e-mail. “I just think they were too optimistic with us about time frame...Our TIF is a more complex decision than most they encounter.”

While agencies regularly rate other instruments like general obligation bonds, rating a TIF bond would be unprecedented. They are considered among the riskiest types of municipal debt, risk that Legg says in Kannapolis’ case has been mitigated.

The city will hold a conference call today with Standard & Poor’s.

Legg said he does not expect a decision today but perhaps by next week.

If the city can’t obtain at least a triple-B rating, the interest rate would be too high to issue the bonds.

The Research Campus is the brainchild of Dole Food Co. chairman David Murdock. The stalled bonds would reimburse Murdock’s development company, Castle & Cooke, and the city for millions of dollars in upfront expenses, as well as pay for infrastructure improvements and a new public health department.

In an unusual arrangement, Kannapolis received the state’s blessing to tout North Carolina’s obligation to the Research Campus as a way to earn a TIF bond rating.

The state leases from Murdock two large public university research buildings at the campus, as well as a biotech training center for Rowan-Cabarrus Community College.

Contact Emily Ford at 704-797-4264.