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Council authorizes hotel‑occupancy revenue bond to help finish hotel/conference center
Summary
Council approved a hotel‑occupancy tax revenue bond (series 2025) to cover an estimated $4.6M portion of a $7.7M hotel/conference center project; advisers said the TIC was about 5.81% and insurance on the bond produced modest savings.
The town authorized issuance of hotel‑occupancy tax revenue bonds to finance part of a planned hotel/conference center. Staff said the total project cost is estimated at $7,700,000, with $1,800,000 already paid for land, $1,300,000 to come from hotel‑fund reserves, and $4,600,000 expected to be covered by the revenue bond; the transaction closing was described as a total issuance of $5,225,000 in the presentation.
Financial adviser Marty Hsu explained that revenue bonds are secured only by hotel‑occupancy tax revenues rather than the town’s full taxing power, which typically yields a higher interest cost. He reported the TIC on the hotel bonds was 5.81% and said the town qualified for insurance that provided net savings—Marty estimated savings of about $60,000 over the life of the bonds. S&P rated the issue at triple‑B and Fitch at A, which staff said is normal for revenue‑backed debt.
Councilor Fowler moved to approve the ordinance authorizing the issuance and sale of the hotel occupancy tax revenue bonds; the motion passed unanimously. Councilors noted the restricted use of hotel‑tax reserves and that the bond’s debt service will be supported by hotel‑occupancy tax receipts rather than general revenues.
