MASON CITY – As the layers are peeled back on the $36 million downtown development project, the costs to the people of Mason City start to become exposed.
Last week, NIT reported that the city will pay $8 million in interest over the life of the $18.75 million in bonds the city council and mayor approved on November 3 for the possible $36 million downtown development. The project – which is still in limbo – includes a hotel (first promised in 2013); a parking ramp; an arena and a pavilion (upgraded additions Southbridge Mall, owned by US Bank); and a mixed-use building.
City officials have repeatedly claimed that taxpayers will never pay for this project, even as city leaders anxiously await a possible $7.1 million in state funding and $18.75 in general obligation bonds have been purchased.
However, one question to the city’s finance department revealed this additional $8 million interest cost to be shouldered over 20 years.
One former Mason City elected official told NIT, “the whole city is “TIFF-ed out. There’s hardly anything left. Once this deal goes through, there won’t be any TIFF (tax increment financing) left for anything else. Just look at a map of the TIF districts.”
Today, NIT asked a second question: In regards to the $18.75 million bonds for the downtown development, “what is the cost to the city to actually do the bonding? We are paying a bonding company to create/sell/manage the bonds … what is the cost to the city to do that?”
According to our award-winning city finance department, the answer is $20,000.
“The cost for bonding varies slightly for the Financial Advisor and the Attorney,” Finance Director Kevin Jacobson said, “but our last issue for approximately $1.3 million cost a little over $20,000. It should be in that range as well for this possible issue.”
Following up, NIT asked Mr. Jacobson, “where does the $20,000 come from? Is that paid right away or over time?”
“That would be included as part of the bond issue. My report shows the cost of the project, and then includes bonding costs and potential contingencies. We normally pay that after bond proceeds come to the city,” he explained. “Speer is our Financial Advisor and Ahlers does our bond legal work.”
Mr. Jacobson said “it usually takes 30 days to get the money”; in this case, $18.75 million. He is waiting for City Administrator Brent Trout to give him the go-ahead.
He said that as soon as the money arrives, the city “would start paying on the parking ramp and pavilion as that is what is expected to be the first projects started.”
PEANUTS ! You dummies paying $400,000.00 per year interest on the loan to BA or the bank holding the paper – plus – plus they own 50% of the property when all is said and done. This should make a dozen or so people very comfy – could say the words kickback – under the table or grease my palm BUT I WILL NOT – because this is America.
$20,000 IS peanuts, especially in this case. BUT… it will all go on the side of the ledger PAID by the people. I think everyone can now admit the fallacy of “no cost to the people”. That was not a true statement, but it was a statement made by Mr. Kuhn who truly believes this project BETTERS Mason City and will pay off in the end. This is what we must examine. What is the potential pay off here, if everything goes “right”? Will the people of MC come out ahead? Or are there too many landmines over the next 20 years to de-rail the payoff?
Its all really very simple, shut up and pay your ever increasing taxes, or move? More and more people choosing the second option!
Almost every council meeting has something related to this project on the agenda. If you have concerns or question about the project, come to a council meeting and speak up. Spouting off here will get you no where.
Spouting off there will get you nowhere too. It could get you arrested as the drunken mayor doesn’t like people who don’t agree with his schemes.
Speak up? You mean walk to the public podium and talk to 7 granite sculptures who are only programmed to stare back? Pointless.
Good Point, I never understood what good the public form is when the Mayor does allow the council to answer any questions!!
*Doesn’t allow. He’s tried very hard to stifle the voice of the common person here in our small town, so that he and his masters at the Chamber of Commerce could run roughshod over the will of the people. Forcing council members to sit there like total and complete lobotomized silent idiots while earnest citizens plead for answers is just one of his pathetic gimmicks.
Yes, “Doesn’t allow” is what I meant to say. Thanks for the correction.
The sad thing is, in my opinion, this city has just elected another yes-man in the third ward for the mayor to control and tell what to do! I wish more people would vote in city elections so we could change this pattern of city government we are stuck with!
Matt – any chance this and ice rink will go to a vote so we can at least have voice on this issue?
@Anonymous-we voted the damn thing down once but they just ignore that and do what they want.
A referendum, you speak of. Doubt it. The $18.75 million is on the way and earmarked for use on the project, as the story says; the people are dumbed out and fast asleep. Just as the mayor likes. But, the one big vote is still hanging out there in space: Marriott Hotels. If they don’t build, there will be a major problem. For without a hotel, the state money won’t come. But why wouldn’t Marriott want to build downtown? I’m sure they know that you drive by at least 12 hotels between I-35 in Clear Lake until you reach the parking lot next to city hall.
I am pretty sure that I warned about using TIF for every project. Sooner or later it catches up with you. In other words, nothing else will be done in the city until the debt is paid in full. This is BULLSH##. The mayor and all of his henchmen should be impeached immediately. If this isn’t stopped it could be the end of the city. You just can’t raise taxes enough to cover this type of mismanagement.
$20,000 is nothing compared to what the future brings. got a vacation planned for next summer, you might want to cancel it, as all your money is going to be poured into this rat hole
Hold on, this is just the beginning.