The city’s Finance Committee on Tuesday heard potential funding options to fill a gap in the cost of constructing a conference center downtown.
The city has about $3 million in special-purpose, local-option sales taxes to build the 20,000-square-foot Oglethrope Conference Center in the 1700 block of Newcastle Street. The building, however, is expected to cost around $8.1 million to construct and furnish.
Representatives from the financial firm Davenport & Co. of Atlanta told city commissioners they could use either the Urban Redevelopment Agency or the Downtown Development Authority as conduits to issue an intergovernmental contract revenue bond, or direct bank loan.
Courtney Rogers, a Davenport & Co. advisor, told commissioners the bank loan option would likely be the most suitable because it would take less time and could be paid back immediately if the project was under-budget.
“We could (borrow) an ‘up to’ number amount, and then if the process comes in lower, we just pay that back,” Rogers said.
With a bond, there are minimum terms and repayments cannot begin until sometimes years after the issuance, he explained.
Davenport & Co. advisors showed an example to commissioners in which $4.4 million is borrowed through a direct bank loan. Over a 20-year term at 4.5 percent interest, the total repayment cost would be about $6.76 million.
The full city commission will hear an updated version of Davenport’s potential borrowing plans at its Nov. 7 meeting. If the city decides to go the direct bank loan route, it’s possible commissioners could approve a request for proposals to ask banks for financing. If that occurs, Davenport & Co. would return to the commission’s Dec. 5 meeting and the city could approve any potentially responsive bank proposals.
The city could close on the loan before the end of the year, Rogers said.
In other conference center news, the committee reviewed a proposal by the Elkins Construction company of Jacksonville to act as the project’s construction manager. On reviewing the proposal, city attorney Brian Corry asked if the contract could be split in two: one for pre-construction and one for construction. That way, the city could approve the pre-construction contact at its next meeting Nov. 7. During pre-construction, Elkins would work with the architect to review the plans and come up with a finalized cost to build the conference center. That process could take about three months, said LaRon Bennett, chairman of the Urban Redevelopment Agency, which is overseeing the conference center’s build out.
Once the final cost is set, the city would execute a construction contract with Elkins. Elkins, if approved by commissioners, would be paid $35,000 for the three-month pre-construction period. After that, the company would be paid $39,000 per month to construct the building. The total cost paid to Elkins for the duration of the construction would be slightly more than $500,000.
Already, the city has paid out $325,639.20 for architectural work and engineering to build the center as of Oct. 18, according to the city’s finance director. Glynn County has reimbursed the city for half of that cost. The money was spent out of SPLOST accounts. The lion’s share, $309,369.20, was paid to the Savannah-based architectural firm Gunn Meyerhoff Shay. Architectural drawings are about 75 percent finished, Bennett told the finance committee Tuesday. The next meeting of the Brunswick City Commission will be at 6 p.m. Nov. 7 at Old City Hall, 1229 Newcastle St.