Mobile City finance panel hears construction progress and plans for $250 million bond to fund Civic Center Arena

The Finance Committee of the Mobile City Council received updates Thursday on the construction and financing plans for Mobile City’s Civic Center Arena, including a construction progress report, a timeline for bids and contract awards, and staff’s plan to seek a bond issue expected to be about $250 million.

Committee members heard that demolition, parking-deck work and arena deconstruction are on a modified schedule and that staff expect to present a bond-authorizing resolution in early February to begin the financing process.

Barber, the chief of staff, told the committee that construction work is advancing: “we're on time,” and that level 4 of the parking deck had been poured and contractors were forming level 5 of a six-level deck. Barber said crews were completing CMU walls for stairs and elevators, that the arena’s dome was being taken down on the south side, and that crews were lowering and storing the mosaics from the expo hall so they can be reinstalled in the new arena.

Barber said the pedestrian access between the core (arena) building and the parking deck was not included in the original core or parking-deck bids and will likely be bid separately as a concrete footpath on the southern elevation; he characterized that work as a “nominal cost” likely coverable within savings from value engineering on the parking deck.

Barber also reported an asbestos discovery during demolition that briefly extended the demo schedule but said the project remained on track for substantial completion of the demo work around mid-March. He cautioned that the expo hall will remain standing until the mosaics are ready to be reinstalled; staff expect the expo demolition to occur later in construction when the mosaics are ready.

On financing, Scott, a staff member running the financial briefing, said the total project estimate is $302,200,000. He said OVG Group has committed $15,000,000 toward the project (described as $7.5 million in each of two years), leaving a city share stated in the briefing as $287,200,000. Scott said about $20,000,000 has been expended to date and the remaining project cost on staff’s worksheet was $267,200,000; staff drilled those numbers down in consultation with financial advisors PFM Group and reported an estimated bond issue value of $250,000,000.

“The resolution on Feb. 4 is simply the authorization to start the process; it is not approving any financial activity,” Scott said, describing the bond-issue process approval resolution that staff plan to place on the committee agenda. He said PFM Group is drafting the preliminary-offering documentation and that bond-rating visits with S&P and Moody’s are scheduled the week of Jan. 27–29, which staff want completed before placing formal bond documents on the council agenda.

Key schedule items staff described: a pre-bid meeting for construction on Jan. 8 (three qualifying companies expected), public bid opening for the construction documents on Feb. 7 (to be held in the Atrium), a first read of the construction contract on Feb. 18, council contract approval planned for Feb. 25 and award of the construction contract on Feb. 26. Staff said the plan is to go to market with the bonds on or about Feb. 25, with a limited notice to proceed for preconstruction activities issued Feb. 26 and a full notice to proceed on March 12. Staff stated an internal target for project completion of January 2027 (ahead of Mardi Gras 2027).

Committee members pressed staff on sequencing if bids come back higher than expected and on options in the bid documents. Staff confirmed the bid includes alternates (items that can be added or removed) so the city can scale scope if necessary; examples discussed included add-on lighting to color-change the arena dome. Regarding the parking deck, staff said initial placeholder pricing had been roughly $30 million, bids had come in higher (above $38 million) but that value engineering reduced the price and that some of that savings can be applied to the separate access work.

Staff also discussed sponsorships and management: the new OVG management agreement for the arena was expected for a council first read Jan. 14 and Jan. 21, and OVG would be the sponsor-sales partner under the proposed agreement, with revenue-sharing to be spelled out in the contract.

On tax-exempt financing mechanics, staff said reimbursement authority exists for expenditures the city made in the 60 days before a reimbursement resolution is approved; that could allow reimbursement for some recent demolition costs if staff choose that route. Staff said they prefer to avoid issuing bonds early for simple reimbursement unless necessary to avoid arbitrage or cash-flow issues.

Committee members asked about public notice and time for review. Staff agreed to provide draft bond documents to committee members as early as possible (staff indicated PFM Group was drafting the documents that day) and discussed the committee’s plan to meet again on Feb. 11 at 1 p.m. to review bid results and bond materials.

The meeting also included operational clarifications: contractors will likely charge a remobilization fee to take down the remainder of the expo hall at a later date; some demo and mobilization costs are expected to be higher if done later, while fixed demolition line items remain as-specified in the current contract until final completion or additional mobilization is authorized.

Next steps identified by staff included completion of bond-rating visits the week of Jan. 27–29, distribution of preliminary-offering documents after the Feb. 4 resolution (if adopted), public bid opening on Feb. 7, council contract approval Feb. 25, anticipated bond market activity on or about Feb. 25, and a limited notice to proceed Feb. 26 followed by full notice to proceed March 12.

Committee chairmen and members said they wanted as much lead time as possible to review drafts and that the committee would reconvene Feb. 11 at 1 p.m. to consider bid results and bond materials.