LEE COUNTY — Taxpayers will soon be paid back for their loan to the new Boston Red Sox spring training stadium.
Lee County Commissioners agreed 4-1 Tuesday to allow to go forward with a bond sale to fund the $75 million project, which will be used to return ad valorem taxes borrowed to pay for the project so far.
Commissioner Brian Bigelow voted no. He has consistently voiced his opposition to the project, saying the ball team has a perfectly good stadium in its current location, City of Palms Park in Fort Myers.
But other commissioners were pleased they were moving forward with one of the bigger steps in the process.
“Fantastic,” Commission Chairwoman Tammy Hall said, adding that the board had been split on how to approach funding. She thanked the consultants and staff. “We wanted to try to close this before the end of the fiscal year and we're right there.”
The county approved borrowing up to $89 million, though what will likely be two bond issues are expected to total $81 million with an interest rate of about 3.5 percent. That rate is not locked in until other requirements are met, but it's not expected to exceed 4 percent.
The loan will cover the $75 million project, which includes land, construction and design, the required $5. 2 million reserve, administrative costs and a $515,000 fee to the underwriters who sell the bonds.
Two federal American Recovery & Reinvestment Act of 2009 programs will discount the interest rates, and the sale is expected to close by the first week of October.
The county was lauded by its financial advisors for receiving a top-notch credit rating, AA, from companies who judged the county's creditworthiness.
“They talked about the strong management of the county,” said Craig Dunlap, president of Dunlap & Associates financial consultants, of the rating agencies, including Moody's, “including the fiscally conservative nature of the county and the debt service coverage from the (Tourist Development Tax), ... basically how well you are managing your county in difficult economic times.”
The 30-year loans will be paid back by the Tourist Development Tax, which includes the fee tourists pay to stay in hotels. That, and the lease and rent payments the ball teams pay the county, will likely raise an extra $1 million a year, Dunlap said.
That's the estimated cost of the stadium's ongoing maintenance.
“That to me provides tremendous relief,” said Commissioner Ray Judah, “that we can maintain our stadium.”
Commissioner Frank Mann had opposed the Red Sox contract but said now that “our northern visitors” will be picking up the tab, he supports the project.
“Not one penny of your local ad valorem tax is going to this,” Mann said as he explained his changed perspective.
Bigelow, who has criticized how county contracts are awarded, questioned how the firms, such as Merrill Lynch, were selected to underwrite the bonds.
Jim Lewin, the county's fiscal analyst, explained the county devised a matrix of all possible applicants and their qualifications in handling such a sale and came up with three underwriters: Banc of America Merrill Lynch as the lead agency, with Citigroup Global Markets and Morgan Keegan and Co.
“It's not just arbitrarily given to someone,” Lewin said.
A groundbreaking ceremony that had been scheduled for Friday was canceled, in part, because the bond issue had not been settled yet.
Last week, when the Daily News asked for a comment on the delayed groundbreaking, Jonathan Gilula, Red Sox Executive Vice President of Business Affairs said the team was encouraged to see progress at the site, which is on Daniels Parkway, just east of Interstate 75.
"We continue to appreciate the hard work and dedication of the Lee County leadership and staff, and look forward to continuing to work in partnership with them on this project,” Gilula said.
On Sept. 14, the county will hold a public hearing before updating the Tourist Development Tax ordinance to account for the bond.