by Mark Ruff, Financial Advisor
|
St. Michael and Norwood Young America are both constructing new city halls and libraries, spurred by grants and Federal stimulus bill help. St. Michael and Norwood Young America are using long-term planning, intergovernmental cooperation, good construction bid environments, grants from state and local agencies, and Recovery Zone/Build America Bonds to lower the project costs.
The City of St. Michael 170-Acre Town Centre Development
The City of St. Michael is constructing a $7.5 million building in its new 170-acre Town Centre development along Highway 241.
The multi-purpose structure will house a new library, community center, and city hall. It is scheduled to open later in 2010.
The City estimates it saved 14% in construction costs in the current bid environment.
The library is to be operated by the Great River Regional Library system and paid, in part, with funding from the cities of Hanover and Albertville. St. Michael paid $2.75 million in cash for a portion of the building and received a $400,000 grant from the State Department of Education. Financing included a $2.1 million Build America Bond secured by a lease from St. Michael and a $1.985 million G.O. Library Bond issued as a Recovery Zone Economic Development Bond. The interest rate on the 25-year G.O. Library Bond was just over 3.25% after the 45% interest rate rebate.
St. Michael planned for the building for nearly a decade. The combination of low construction bids and low interest costs enabled the City to meet its goal of no additional annual tax impact beyond its current capital budget.
A New City Hall/Library/Sheriff's Station for Norwood Young America
The City of Norwood Young America is constructing a new city hall, library and sheriff's station in conjunction with the Carver
County Community Development Agency (CDA). Norwood Young America and the CDA jointly purchased the former Oak Grove Dairy site
and demolished the building years ago. In its place will be 50 units of CDA-owned senior rental housing on the top three floors
with the municipal offices and library on the first floor.
The $10 million joint City-CDA project benefited from grants totaling more than $1.5 million from the Metropolitan Council, Department of Employment and Economic Development and the Department of Education. The City and CDA benefited from the economies of scale in the site improvements and construction. Carver County allocated its recovery zone authority for municipal bonds to the City. Norwood Young America financed its costs with two bond issues: a $1.42 million G.O. Library Bond issued as a Recovery Zone Economic Development Bond and a $2.1 million Lease Revenue Bond issued as a Build America Bond.
We at Ehlers commend both of these communities for their commitment to expand their libraries, an important resource to all citizens and for working with multiple governmental entities to wisely use taxpayer dollars.