The Abilene City Council will vote Thursday night to publish a notice of intent to issue up to $23.1 million in certificates of obligation to fund what is considered the public portion of a downtown hotel project.

The funds specifically are the for Abilene Convention Center portion of the hotel project, improvements that will “integrate” into the planned 200-key, full service hotel, according to city documents.

State law requires the city to publish a notice of intent to issue bonds at least 45 days prior to approving a bond issue, Assistant City Manger Michael Rice said Monday.  

The resolution would direct staff to publish the notice of intent.

If final approval is granted at the council’s Aug. 12 meeting, the bonds would be used to design, construct and equip facilities at the Convention Center, including conference and meeting rooms, ballrooms and related infrastructure and parking.

Those will tie into the planned DoubleTree by Hilton hotel.

Rice said the non-hotel facilities will include 17,600 square feet of public conference space and meeting rooms, a 12,000-square-foot ballroom, three breakout rooms totaling just under 4,800 square feet and a 723-square-foot boardroom.

No tax impact?

The $23.1 million figure is the maximum ask for the Convention Center portion of the project, said Mike Rains, the city’s director of finance. 

“We expect it to be substantially less, but that gives us some room,” he said, adding “this is the issuance of the city portion, not the main portion for the actual hotel.

“This is just the Convention Center facility, the common areas.

Rains said he expects debt issued for the project will not negatively  affect residents’ tax rates.

“We think our tax rate at this point is going to be slightly less than last year, even with the issuance of the debt,” he said. “… We’re doing our best to try to keep it down.”

Another step

In related business, the council will vote whether to allow City Manager Robert Hanna to expend project funds up to $450,000 for early release packages and other pre-development expenses related to the hotel project.

“The hotel itself is just specifically the footprint of the property,” Rice said. “In addition to that, there are going to be some other expenses.”

If approved, the council will grant Hanna the authority to enter such agreements, Rice said.

A look ahead

According to city documents, the roughly $81.2 million hotel project is to be funded through a series of 2021 bonds and a variety of other sources, including the $23.1 million in certificates of obligation and about $41.98 million in first-lien and second-lien bonds.

The funding model also includes a $16.1 million equity contribution from the Abilene Improvement Corporation.

The AIC is a local nonprofit started in the 1980s. In 2019, it helped the city to buy the nearby Civic Plaza hotel, whichsubsequently was demolished.

The downtown hotel itself will be owned by the Abilene Convention Center Hotel Development Corporation, with all revenues used to repay bonds, according to city documents.

Revenue from the hotel in excess of operations and debt service will be returned to a surplus reserve fund, which will be transferred to the city and used — along with tax revenues — to fully retire debt service for the city facilities as soon as possible.

Once the city debt is retired, revenues from the surplus fund will be available to retire the hotel revenue-supported debt.

The city is not responsible for debt issued by the hotel development corporation.

Other business:

Among other items, the council will vote on raising raise rates on stormwater services by 5% per month.

Greg McCaffery, director of public works, said the rate increase would help cover general operations and provide startup money for projects in the stormwater master plan.

“The master storm management plan …. has a number of major improvements that are recommended over a 25-year period,” he said, with roughly $25 million in total improvements documented.

Residential customers, depending on usage tier, would see a per-month increase in Fiscal Year 2021-22 of 13 cents at the lowest level of usage, 24 cents at the highest.

Commercial stormwater rates would increase from $6.18 to $6.48 at minimum and from $61.75 to $64.84 at maximum. 

Improvements should not only provide improved flow but also storage, McCaffery said, with targeted areas including Lake Abilene, Lake Kirby, Catclaw Creek and Elm Creek.

Other rate increases might be sought in coming fiscal years, McCaffery said. 

Brian Bethel covers city and county government and general news for the Abilene Reporter-News.  If you appreciate locally driven news, you can support local journalists with a digital subscription to ReporterNews.com

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