The Landmark Square Project (LSP) received its go-ahead for final funding in the form of lease revenue bonds, as the Clovis City Council authorized the issuance and sale of the bonds at the Monday, March 15 meeting.
In two 3-1 rulings, the council and the financing authority allowed for the issuance and sale of bonds by the Clovis Public Financing Authority to help fund the $20 million project.
For the LSP, the expected cost consists of $4 million from transit funding, $2 million from library impact fees and the rest of the $14 million from bond proceeds.
Approximately $13.7 million will go toward the project fund deposit. The bond amount for sale to the public is around $12.3 million, with interest rates that bring that figure to the fund deposit amount mentioned above.
Financing will aid in the construction of the senior center located at the square.
The 35,000-square-foot senior center is one of three buildings being constructed, along with a 22,670-square-foot public library and an 11,000-square-foot transit building. The building will sit on 5.7 acres of land in downtown Clovis.
According to Finance Director Jay Schengel, the advantages of allowing the bonds are to endure a reasonably quick financing process and the utilization of a lease program could provide more budgetary flexibility in the future.
A disadvantage of the financing is that it will compete with other general fund priorities.
For investors, the bonds received AA- rating for Standards & Poor’s (S&P). The bond has 30-year amortization with the final maturity date being Nov. 1, 2050, and includes a 10-year optional redemption.
Councilmember Bob Whalen, the lone no vote on both rulings, raised a few concerns with the lease bonds.
Whalen proposed that the city use funding from the federal government, which is a potential $18 million. He argued that this would save money in the long run instead of issuing bonds that will cost the city $715 thousand annually and $21 million over the next 30 years.
“I don’t know what the other options are that we’re considering for the $18 million,” Whalen said. “If this one [LSP]…is an option for us to spend it on…to save the $700 thousand a year by not issuing these bonds, it can really have some significant long-term benefit.”
The counterpoint regarding the use of federal funding on the project was that due to timing issues and a two-part disbursement structure of funds from the government, it would be best to pay with the bonds. Paying with bonds would allow for future projects to be paid in full with federal funding.
The city is tasked with funding construction costs in the range of $9 million for Clovis Fire Station Two in the next year.
Mayor Pro Tem Jose Flores recused himself from the voting on the bonds due to financial interest in properties within the project’s limits.