GBAD financing pitch goes before judge Aug. 4

sberg@idahostatesman.comJune 24, 2014 

— Fourth District Judge Melissa Moody's courtroom is the first — and, perhaps, only — stop in the Greater Boise Auditorium District's quest to finance an expansion of its convention center through bonds.

Starting Aug. 4, the district will ask Moody to allow Boise's urban renewal agency, Capital City Development Corporation, to act as a pass-through for as much as $23 million to finance the auditorium district's piece of City Center Plaza.

The Gardner Co., which early this year opened 8th & Main, Idaho's tallest building, plans to start construction next month on $70 million - $80 million City Center Plaza. The project would have retail, meeting and office space in one building just west of the U.S. Bank tower on the southwest corner of Capitol Boulevard and Main Street. A second building, just south of the tower, would have two levels of parking, as well as a ballroom, commercial kitchen and pre-function space for the auditorium district.

The district would own the ballroom, kitchen, pre-function space and some of the meeting space in City Center Plaza. But the doesn't have enough cash to pay for the new project in addition to a renovation of Boise Centre, its almost 20-year-old convention center across the Grove from the U.S. Bank building. The district wants to finish the renovation and new construction at the same time.

Most public agencies, including the auditorium district, need supermajority voter approval to borrow money long-term. The urban renewal agency does not need that level of approval. The auditorium district wants Moody to allow it to use money from its 5-percent tax on hotel-room rentals throughout Boise to make payments on bonds the renewal agency sells. That money would pay for construction of the district's space in City Center Plaza. The renewal agency would not own the project and would not be on the hook if the district can't — or won't — make its yearly payments of $1.5 million to $1.6 million.

Instead, bondholders — the companies that lend money for the project — would own the auditorium district's portion of the building and lease it to the district on a series of one-year, renewable contracts. When the district pays off the bonds after 20 to 25 years, it would own the property. If the district didn't pay, the bondholders would retain ownership.

Boise watchblogger David Frazier said Tuesday that he'll fight the auditorium district's request to Moody. He wants the district to hold an election before borrowing money.

The district, meanwhile, believes it has a strong case.

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