As I marvel at the daily progress of the City Center Plaza/Boise Centre construction, I tip my hat to the many leaders in our community who have been champions of expanding the Boise Centre and growing the economic impact of meetings and conventions here for nearly 20 years.
During last year’s 25th anniversary of Boise Centre, we recognized the elected, business and civic leaders who envisioned an economy-boosting, downtown convention center, funded entirely by hotel room taxes. These leaders overcame many obstacles to make that vision a reality.
Some 4.3 million visitors, 1,400 conventions, and nearly $873 million of total economic impact have clearly proved those visionaries were on to something. And yet, we learned early on that we were limiting ourselves to a fraction of the overall convention market due to the size of Boise Centre. Expansion discussions began as early as the mid-1990s.
Various ideas and plans emerged over the next 20 years but it wasn’t until 2013 that a viable solution emerged — one that would preserve the existing facility and add adjacent facilities on the Grove Plaza. The Greater Boise Auditorium District had conservatively invested millions of dollars from hotel room tax collections, such that it had enough cash on hand to pay for substantial portions of an expansion. Nevertheless, we looked at financing options that would allow us to complete the entire expansion in one fell swoop.
After careful review, we decided to pursue a financing option that was in keeping with constitutional public debt requirements. The Capital City Development Corporation issued bonds to finance a portion of the expansion project and the district entered into a lease with CCDC to support payment of the bonds. The lease is annually renewable and subject to an annual appropriation at the discretion of the district board of directors.
This type of financing has precedent, and given the district’s history of good fiscal management, the bond markets regarded it as low-risk. There were some who disagreed, and they engaged us in a protracted legal battle. Last October, the Idaho Supreme Court settled the matter, validating our position: a lease that requires an annual appropriation meets the strict constitutional requirements and allows us to put the district’s money to work in a way that places no burden or risk on taxpayers.
To our delight (and to the surprise of skeptics), the bonds were sold on the fixed-income market this spring and demand was extremely high. Some $83 million in investment was ready and willing to buy $23 million in bonds. In fact, the high demand (and an “A” rating from Standard & Poor’s) drove the interest rate down even lower than anticipated.
More than just a financial transaction, nonappropriation lease-financing represents a significant step forward for Idaho public entities needing a sound, conservative approach to financing large capital projects. For this reason, we persistently asserted our claim until we were granted the use of a valuable tool that helps spur economic activity, job creation, and in our case, many more convention-goers in the Boise Valley.
Peter Oliver is vice chairman of the Greater Boise Auditorium District. Fellow board members joining this opinion are chairman Jim Walker, Judy Peavey-Derr, Hy Kloc and Steve Berch.