Urbana council approves up to $5.2 million general obligation bonds for Hotel Royer; amends placement agent to Raymond James

The Urbana City Council voted to authorize issuance of general obligation bonds not to exceed $5,200,000 to provide a development incentive tied to the Hotel Royer project and approved a late amendment to update the bond placement agent.

On behalf of the Committee of the Whole, Council member Mary Alice moved approval of an ordinance providing for issuance of not to exceed $5,200,000 in general obligation bonds, series 2025. The motion included the financing approach discussed in prior development agreements for the Hotel Royer project. Council discussion focused on whether Tax Increment Financing (TIF) resources might be used instead of issuing bonds and on how the project’s incremental tax revenue will relate to debt service.

Finance and city staff explained the development agreement contemplated issuing debt as part of the financing plan and that the city had not planned to use central TIF or TIF 4 as the primary source to fund the bond issuance. Staff said repayment is expected to rely on incremental revenues generated by the Hotel Royer project. Council members asked whether bonds could include call features that would permit early pay-off; staff said that feature depends on the terms bidders offer and that some bidders may provide callable bonds while others may not.

Late in the meeting, staff requested a small, specific amendment to the ordinance: replacing the named placement agent Robert W. Baird & Company (Naperville) with Raymond James Financial Inc. (or its affiliate) because the internal team that had been assigned to the Baird engagement had moved firms. Council member James moved the amendment and it was seconded and approved by roll call.

After amendment approval, the council called the final roll on the bond ordinance. The clerk recorded yes votes and the motion passed.

No changes to the underlying development agreement terms were recorded at the meeting. Council members expressed differing views in debate: some said the bond issuance was consistent with commitments made in prior council actions and development agreements; others questioned whether stronger community benefit conditions might have been included when incentives were negotiated.

Actions recorded at the meeting indicate the council approved the bond ordinance and the placement-agent amendment. Staff said they will present bidder responses and final bond terms at a later date before sale and that specifics about call features will depend on market responses.