Commission approves up to $5 million taxable bonds to support Nexogen project in downtown Newport

Commissioners on Monday approved an order authorizing the issuance of taxable industrial building revenue bonds of up to $5,000,000 to finance improvements to an industrial building facility to be leased to NXG Holdings, LLC (the Nexogen project). The board voted unanimously by roll call.

City officials said the financing will support renovation and outfitting of two vacant downtown properties — the former U.S. Bank building on Monmouth Street and the former Molenkamp (funeral home) property on York Street — and that the project includes plans for some residential use at the funeral-home site and community space in the bank building’s large lobby area.

The bond authorization is an inducement and will be conditioned on compliance with a negotiated pilot agreement and related financing documents. City staff told the board that the industrial revenue bonds (IRBs) are not obligations of the city and do not affect the city’s credit; the project and Nexogen would be responsible for the debt. The city also has received approval from the state local debt officer as part of the procedural requirements that followed an earlier inducement action.

Why it matters: The project reuses prominent, long-vacant downtown buildings and is presented as an employer and neighborhood-activation effort. City staff discussed potential public benefits — pilot payments under a negotiated agreement and community programming space in the bank building — and said the developer also plans some housing tied to employee needs.

Details and timeline: City staff described a minimum job target of roughly 75 new positions tied to the project. Officials said the parties expect to close the construction financing and bond issuance in November and that renovation of the bank building could be a roughly nine-month construction program after closing. The city was told the bank lobby is intended to host presentations and events tied to technology and university partnerships, subject to security and access arrangements.

Officials also said the project had already purchased the two properties and used separate financing for that acquisition; the IRB financing will support construction and improvements. The board was told the pilot agreement includes payments to the city, county and local school district.

Board reaction: Commissioners and the mayor expressed support for activating the structures and for the project’s potential to create jobs and technology-focused programming in Newport. Several commissioners noted the buildings’ prominence and said the reuse could spur additional downtown activity.

What was approved: The order authorizes issuance of taxable industrial building revenue bonds not to exceed $5,000,000; execution of a lease and bond purchase agreement; and other customary documents needed to close the financing, with the issuance conditioned on compliance with the pilot agreement.

Votes at the meeting: The roll-call vote returned all affirmative votes on the order.

Next steps: City staff will continue to work with the developer on closing the bonds and on conditions required by the pilot agreement. The developer’s stated timeline anticipates closing in November and active renovations to follow.