Bond rates rise: The ballpark stadium has a new, higher price tag
Updated On: Jan 15 2014 10:46:04 PM CST
Those who doubted the new Triple-A baseball stadium project and the process behind it's final approval are saying "I told you so."
"I'll be honest I did not agree with the ballpark," said Mayor Oscar Leeser at a City Council meeting Thursday.
"It started at $50 million without a voice of the people, it went to what, and what is that piece today?" said District 7 Rep. Lily Limon.
The cost is now $60.8 million, paid for through municipal bonds. But the interest on those bonds has to increase, according to the city's financial team, so they can be attractive enough to be sold in a volatile market, made worse by Detroit's bankruptcy.
The city says raising the interest rate by 1.5 percent, from 5 percent to 6.5 percent on tax-exempt bonds and 5.75 to 7.25 on taxable bonds, will get them sold as early as next week, and if they're not sold "we will basically stop construction on the project until we can finance the project," said City Manager Joyce Wilson.
Council members, once again handcuffed by a do or die situation, are frustrated. Increased interest rates would cause a projected $17 million more in debt. But unsold bonds and no stadium would result in costly legal fees.
"If we don't put our foot down I can't even say this will get out of control because it's already out of control," said District 6 Rep. Eddie Holguin.
"It's obvious that this is definitely something we didn't sign up for," said District 2 Rep. Larry Romero.
"We're knee-deep in the foxhole, so what are we going to do?" said District 8 Rep. Lily Limon.
"It's basically we either incur more debt, fight a multi-million dollar lawsuit, have a hole in the ground or we move forward," said District 3 Rep. Emma Acosta.
So with the exception of Reps. Holguin, Robinson and Limon, members voted to raise the bond interest rates.
"But it is very difficult for me to do this and I hope when you come back, I don't ever want to see this again," said District 1 Rep.Lilly Ann Morgan.
The funding to pay for the increased debt will come from the city's general fund.
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