Last week, a surprised metro council discovered that $45 million in bonds issued by the city of Louisville would be required for the privately financed Museum Plaza project.
According to reports, the $45 million bond issue would cover part of the $139 million in public improvements, such as floodwalls, lighting and a public plaza. This is in addition to the earlier announced $130 million bond issue for the project to be supported by the TIF (tax increment financing) district created to support the project.
The reason for the additional bond issue is that not all of the $130 million will be available for improvements, since the bonds and expenses associated with the bonds will need to be paid in the intervening years before the TIF begins to generate revenue, expected to occur upon completion of the project in 2010. Therefore, only about $75 million of the $130 million will be available for the public improvements at Museum Plaza. The $130 million bond issue will only be covered by tax revenue from the TIF and the city’s credit rating will not be impacted nor will the city be liable for the debt.
The $45 million bond issue, to be paid by the city, along with $25 million from the developers will cover the remaining costs for public improvements.
Several members of the council and community at large were surprised, not by the cost, but by the timing and seemingly secretive way in which this extra money was secured. Until this report, most of the community believed the only support the Museum Plaza project would receive was to be generated by the TIF. Moreover, the need for an additional bond issue was only floated after the ground-breaking ceremony.
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