Seguin EDC, council approve 20-year sales-tax-backed financing to support planned education campus

The Seguin Economic Development Corporation and the Seguin City Council approved a sales-tax-backed financing structure to fund land acquisition for a proposed education campus in Seguin. The financing plan presented to the council would use a 20-year sales-tax-backed note arranged through Government Capital Corporation, with an estimated interest rate of 4.7 percent, quarterly payments and optional early refinancing beginning in year five.

SEDC and city staff said the structure pledges future sales tax receipts as the repayment source and does not place an interest in the land itself; the arrangement is intended to leave SEDC flexibility to negotiate land terms with the education partner while guaranteeing financing for acquisition.

Matt Sullivan of Government Capital Corporation described the proposed structure as a 20-year note callable at a premium in the first years (described as callable at a 101 premium years 5–10 and at par year 10 onward) and subject to quarterly payments. Josh (city/SEDC staff) told council the total payout (principal plus interest) over the 20-year term was estimated at about $11.5 million (approximate) with quarterly payments of about $144,825 and an annualized amount of roughly $579,300. Council members were told SEDC’s sales tax receipts are trending upward and staff believe the schedule will not unduly constrain other EDC projects.

The SEDC board approved a resolution earlier the same day to move forward with Government Capital; city council then approved the city resolution authorizing mayoral signature on related documents. Staff said the first payment obligations will include two payments due in the current fiscal year and that the city will bring a budget amendment at the first April meeting to allocate funding for those near-term payments.

Why it matters Staff and the EDC framed the financing as the first substantive step required to allow the EDC to acquire the property for the proposed campus (city staff referenced a planned campus site at Highway 46 and Cordova Road). Using a sales-tax-backed note instead of immediate bond issuance or private lending was presented as a way to lower borrowing costs for the EDC and preserve flexibility for land negotiations.

What the meeting record shows - Financing structure: proposed 20-year sales-tax-backed note through Government Capital Corporation (presented by Matt Sullivan). - Estimated terms given in the meeting: 4.7% interest rate; estimated total payout over 20 years roughly $11.5 million (principal and interest, approximate); estimated quarterly payment ~$144,825; estimated annual equivalence ~$579,300. Those figures were presented as estimates; final terms depend on market conditions and final documents. - SEDC board action: SEDC approved the resolution earlier the same day; council approved the city resolution and authorized the mayor to execute related documents. - Near-term funding: staff said two payments are due this fiscal year and that a budget amendment will be presented at the first April meeting to allocate funds for those payments.

Quotes from the meeting "So this is a proposed 20 year, sales tax backed note...Quarterly payments, they would be able to refinance starting in year 5 forward," Matt Sullivan, Government Capital Corporation (presented to council).

"We will be bringing, at the first meeting in April, a budget amendment to allocate funding for, for those payments there," Josh (city/SEDC staff).

Next steps Staff and SEDC will finalize financing documents with Government Capital, file the related city resolution and present the April budget amendment addressing the near-term payments. Final interest rate and structure will be set at closing and are subject to market conditions; council and SEDC must approve final documents as required.