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Council approves $15M Star Center infrastructure bonds and design-build sewer work; approves Ernst & Young contract to pursue energy credit
Summary
Council unanimously approved a $15 million taxable bond issuance to fund Star Center infrastructure, moved urgent sewer improvements into the design-build contract (6–1 vote) and authorized up to $95,000 for Ernst & Young to pursue a federal direct-pay energy credit for the facility (6–1 vote), with the NHL/StARS committing to reimburse at least half of that fee.
The NorthlakeTown Council on June 13 adopted financing and contracting measures to keep the Star Center project on schedule and pursue a potential federal energy credit tied to an innovative energy-capture system.
Bond issuance: staff and financial adviser Marty Hsu reported the town conducted a competitive sale for taxable surplus-revenue obligations sized to net $15,000,000 for public infrastructure (parking, water, sewer and drainage) to support the Star Center. Samco Capital Markets won the competitive bid with a true interest cost of 5.21%. Standard & Poor—s affirmed the town—s AA credit rating, which Hsu said supported investor interest and helped secure competitive bids. The council adopted the ordinance authorizing the issuance; Hsu noted a 10-year prepayment option and recommended reviewing the full S&P report in the sale booklet.
Design-build sewer work: staff asked the council to move necessary sewer capacity upgrades — now identified as required sooner than previously expected — into the Star Center design-build contract so a single contractor coordinates vertical construction and public-infrastructure timing. Staff estimated the public-infrastructure portion of the work at approximately $2.2 million and said the change will minimize scheduling conflicts and reduce the risk of multi-contractor delays. After discussion, the council approved the design-build change order authority (vote 6–1).
Energy-capture grant pursuit: the council also authorized the town manager to execute a professional-services agreement with Ernst & Young (up to $95,000) to pursue a Direct Pay Energy Credit available under federal tax-credit rules for energy-capture systems. Staff described the proposed system cost at roughly $8.6 million and explained the credit could amount to about 30% of that investment; staff estimated a potential $12,000,000 to $2,000,000 benefit depending on final numbers. The council was told the NHL/StARS have committed to reimburse at least 50% of the Ernst & Young fee and possibly all of it. Staff warned the credit is not guaranteed and the town would pay the consultant fee upfront regardless of outcome. The council approved contracting Ernst & Young (vote 6–1).
Council discussion focused on balancing risk and reward: several councilors supported pursuing the energy credit given the potential savings and external partners— financial support, while others raised concerns about spending consultant fees without a guaranteed outcome. On the design-build sewer move, proponents called it a practical step to "build it right the first time" and avoid staging issues; dissenting members cited cost and timing questions.
What happens next: the town will proceed with bond closing and receipt of funds on July 11, begin coordinated design-build work for sewer capacity, and retain Ernst & Young to pursue the direct-pay energy credit; staff will return to council with further financial and schedule updates.
