04/03/14 — City refinancing buildings

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City refinancing buildings

By Matt Caulder
Published in News on April 3, 2014 1:46 PM

The city of Goldsboro will refinance loans on the Paramount Theatre and City Hall annex in order to borrow $4 million needed as a local match for a U.S. Department of Transportation grant.

The city has applied for a $16.5 million grant to complete construction of the new GATEWAY bus transfer facility, renovate Goldsboro Union Station and finish three more blocks of Center Street Streetscape as well as connect Union Station to Center Street through Walnut Street with Streetscape.

The city is receiving $10 million in grant funding and will use the $4 million as the local match for the grant, giving the city the money needed to complete all of the projects, barring the completion of Union Station and the two most southern blocks of Center Street Streetscape, City Manager Scott Stevens said.

The $10 million grant is part of the fifth round of the Transportation Investment Generating Economic Recovery grant administered through the Federal Transit Authority. The TIGER grant is awarded for projects that improve transportation in a community.

The city built the 32,000-square-foot City Hall annex in 2007 at a cost of $4.5 million. Renovations to rebuild the Paramount Theatre following a 2005 fire cost $5 million.

By refinancing those loans, the city would be able to come up with the needed money to pursue the other projects.

"There is enough equity to handle the $4 million," city Finance Director Kaye Scott said. "We financed City Hall in April of 2007 and we have half of that paid and we did the Paramount in September 2008 at a higher interest rate."

The Paramount Theatre was financed at 4 percent because the loan taken on the renovations was not a bank qualified loan.

"We thought we were going to have to sell sewer bonds at the time so we didn't get that at a bank qualified rate," Mrs. Scott said. "Once we re-finance we hope to get a better rate."

The city plans to package the buildings together to be bid out to get the best rate possible.

The new loan would be bid for a 15-year term and both bank qualified and non-qualified bids will be sought.

Mrs. Scott said the risk in putting the buildings up as collateral is minimal in relation to the city's track record on debt payments.

"We haven't ever missed any payments," she said.