City officials weigh in on bonds
Published 12:00 am Wednesday, December 2, 2009
By Joanie Morris
With news that self-financing bonds for the N.C. Research Campus may exceed $76 million, city officials agree the number is not what’s important.
“I’ve heard a lot of numbers,” said Assistant City Manager Eddie Smith, “$160 million shouldn’t be considered good or bad. It should be weighed as to whether or not that’s the number that is sufficient and responsible to fully maximize the investment in the community.”
Smith said the city, along with bond consultants and attorneys, continue to research the numbers and different types of securities to identify what the “safe yield number” can be.
“The city sees a way of continuing to partner with Castle & Cooke and Cabarrus County to maximize the investment necessary for the project to be successful,” Smith said.
It is unknown how the new amount suggested will impact the timeline for the bonds, Smith said. The city had initially wanted to complete the bond process by the end of the month, but that is impossible now. However, the sooner the better.
“I really don’t know what the conversations last week will have done with our timeline,” Smith said.
“The city has some expenses out there already related to the project that we need to get reimbursements for,” Smith said. The city has done utility improvements that were necessary for the N.C. Research Campus project to proceed on schedule. “We’d like to go ahead and wrap up this process within the next month.”
Mayor Bob Misenheimer said the number isn’t an actual figure yet.
“We’re waiting on our people to come back and tell us exactly what we can do before we make a commitment on it,” Misenheimer said. “We are very much interested in participating in this with Mr. Murdock.”
Misenheimer said no matter what the city does, he wants to make sure the public is fully involved.
“I’d like to have a session where we explain this to people,” Misenheimer said. I don’t want anybody to be having any doubt or whatever. We want to keep everything open and above board …
“I always believe the best thing you can do is keep everybody informed,” Misenheimer said. He added that if the bond issue is increased, he definitely wants to have a session to make sure citizens can get involved and give their input.
Councilman Roger Haas pointed out that Murdock has put $160 million of his own money to equip the Core Lab building. In addition, initial speculation is that infrastructure improvements around Kannapolis related to the campus will cost in excess of $320 million, Haas said.
“It appears to me that they are looking for the city and the county to partner somewhere in the neighborhood of half,” Haas said. “Not knowing what is part of that proposal … I would certainly want to take a look at it and investigate.”
Haas pointed out that a lot of the infrastructure costs associated with the campus went into parking decks, which the city has not wanted to invest heavily in in the past.
“We as a city want to (invest the money) for the greater good for what will be best for everyone out there,” Haas said. “Our original involvement was more off-site rather than on-site.”
Haas said another issue the city needs to look at is a way to increase the amount of the bond without increasing the debt repayment.
“With some negotiation with (Castle & Cooke), we can actually lower the interest rate on what the bonds could be,” Haas said. “You could actually increase the amount of dollars you could invest.”
For example, Haas said, if you have to pay 5 percent on debt repayment, the amount you can borrow would be less than if you had to pay 4 percent.
“You could borrow more” but pay the same, Haas said. “To me, that’s win-win. It accomplishes for us what we are looking for and gives more money to the project.”
Assistant City Manager Smith said regardless of the amount of the bond, the tax increment financing district will not be affected and could even be voted on prior to the bond amount being known.
“We’d like to do it all together,” Smith said. “We don’t plan on changing the boundaries of the district. They’ll stay the same no matter what the bond amount ends up being.”
Contact Joanie Morris at 704-932-3336 or firstname.lastname@example.org.