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Commission approves notice of intent for amphitheater bonds; county to pledge hotel-motel tax revenue
Summary
The commission authorized publication of a notice of intent to issue capital-improvement bonds not to exceed $27,500,000 to support the Acroshare Amphitheatre and accepted a county pledge of a 3% hotel-motel tax increase to secure bond payments; staff reported higher-than-expected local participation by MBEs and local hires on early construction.
The city commission on Sept. 24 approved two connected steps to advance financing for the Acroshare Amphitheatre: an agreement with Kent County to pledge a 3% hotel-motel tax increase to support bond repayment, and a notice of intent to issue capital improvement bonds under Act 34 of 2001 not to exceed $27,500,000.
Staff briefing: City staff explained that the county's pledge dedicates lodging-tax revenue toward repayment of bonds issued by the city, establishes a debt-reserve account (1.5 times annual debt service) to buffer revenue shortfalls, and includes mechanics for replenishing the debt reserve if funds are used. Staff also reported inclusion metrics from ongoing construction: contractors have achieved roughly 13.75% participation by MBE/WBE/DBE firms (above the plan target of less than 10%), at least 50% of on-site employees are Kent County residents, and about 62% of payroll has gone to traditionally underrepresented workers. Staff said they expect bond closing in April and will coordinate with contractors and the community benefits process.
Commission action: Commissioners voted to approve the county agreement and to publish the notice of intent to issue the bonds. The published notice is the next procedural step required before bond issuance under state law; the vote does not itself finalize borrowing. Several commissioners acknowledged constituent concerns about public money for the project and staff emphasized that debt service is expected to be paid from amphitheater revenues, not the general fund.
Transcript discrepancy flagged: during the discussion a staff speaker read a figure of $227,500,000 when describing bond proceeds; the formal agenda language and subsequent motion reference $27,500,000. The commission vote and published item specify $27,500,000; the earlier larger figure appears to be an outlier in the spoken remarks (see audit). The article uses the resolution language ($27,500,000) as the authoritative action approved by the commission.
Why it matters: The action advances a major downtown capital project with long-term debt implications. The county pledge and debt-reserve provisions are designed to insulate the city's general fund, but the project will move forward only if market conditions and construction plans remain on schedule.
What comes next: Staff indicated bond closing is expected in April; the city will publish formal notices and continue working with community-benefit partners and contractors as construction continues.
