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Board of Finance approves refinancing authorization for Burlington Square public improvements
Summary
The Burlington City Board of Finance voted unanimously to authorize refinancing up to $18,840,000 for Waterfront District public improvements associated with Burlington Square (formerly City Place). City staff said the interim loan has been held in an interest-bearing trust and permanent financing awaits clearer tax increment and grant outcomes.
The Burlington City Board of Finance voted unanimously to recommend that City Council authorize refinancing of $18,840,000 in interim financing tied to public improvements for Burlington Square, the development formerly called City Place.
City economic development director Brian Pahn and consultant David White told the board the $18,840,000 figure matches the interim borrowing the city previously placed in an interest-bearing trust. "The approved amount of debt actual approved amount of debt is $18,840,000," White said, explaining why the board was asked tonight to authorize a refinancing vehicle rather than permanent bonds.
Why it matters: staff said the city is delaying permanent financing until the full incremental tax revenue from the North Building and any pending grant awards can be projected. White said the amended and restated development agreement (referred to in the meeting as ARDA 2) limits the city's permanent borrowing to the debt the projected incremental tax revenues can support.
City staff described safeguards in the agreement that prioritize the city’s costs before developer reimbursement and said the developer, Safe Place Partners, is contractually obligated to complete required infrastructure regardless of TIF reimbursements. White said in a hypothetical worst-case scenario the South Building alone would support roughly $6,000,000 of debt, and that additional development in the district would increase available tax increment.
Board members asked few questions; a councilor moved approval and the motion carried unanimously. The board was told the interim account has earned interest to date that roughly offset the interest paid on the interim borrowing, and staff said the city hopes to move to permanent financing when tax and grant outcomes are clearer and (ideally) interest rates are lower.
The board's action tonight authorizes a refinancing mechanism; permanent bond sizing and timing remain dependent on the completion and financing of the North Building and on pending or anticipated grant awards that could reduce the TIF-funded amount.
