City starts searching for dollars
By Kenneth Fine
Published in News on October 19, 2006 1:51 PM
While Goldsboro officials continue to look into various funding options for the Paramount Theater and Community Building reconstruction efforts -- projects they estimate could cost a combined $14 million -- City Manager Joe Huffman told City Council members he needs some help.
At their mini-retreat earlier this month, they gave it to him, as councilmen viewed a presentation prepared by representatives from First Southwest Company, a privately held, fully diversified investment banking firm based out of Texas.
The presentation, titled "Tax Increment Financing 101," aimed to give city officials an overview of the TIF program, which allows governments to borrow money for development projects based on projected increases in property value over time.
Janice Burke, the bank's senior vice president, said she wasn't sure if TIF was the right way to finance the facilities. There are risks involved, she said.
"One of the risks is whether the area will truly be developed or not," Mrs. Burke said. "I think you're going to have to have a private developer involved. It's just too risky if you don't have somebody there."
To date, the city has not brought a major developer on board for the projects.
Council member Chuck Allen said there are other questions, too -- like whether the erection of the new facilities will in fact increase the value of property around Center Street.
"The whole gamble is, the Paramount and Community Building aren't adding value to downtown Goldsboro," he said. "None of these government buildings are. You're trying to find a fancy way to finance."
Huffman said ultimately, TIF might not be the option to use. As such, he requested that the council consider hiring the bank to assist with the research of various funding options not yet discussed.
"We really don't know. We think the value is going to increase in this area significantly as a result of these projects, but it might not," Huffman said. "I think they will help us find the answers."
Council members agreed they needed to discuss the issue further before spending money on consulting fees. They requested that the group send a contract to City Attorney Tim Finan for review.
Huffman said bringing the bank in would make the job of securing a viable funding plan more likely.
"The sooner I bring them in, the sooner we can figure this out," he said. "If we still want to do these projects, which we do, we need to find out how to do them. I need some help. I want to get this thing going ... so that we're moving forward with these projects."
Council members plan to discuss the issue more in the coming weeks and make a decision on potential hire of the First Southwest Company sometime in the near future.