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CDC approves using prior bond interest to fund theater renovation
Summary
Deer Park CDC approved using interest earnings from 2021 and 2022 certificates of obligation to finance renovations to a theater building, following bond counsel advice that the earnings are allowable for park and recreation facilities; the authorization passed by voice vote.
The Deer Park Community Development Committee voted to authorize using interest earnings generated by certificates of obligation issued in 2021 and 2022 to help renovate a theater building.
A CDC staff member told the committee that the city issued certificates of obligation in 2021 and 2022 and that, because interest rates rose substantially after issuance, the bond proceeds earned a significant amount of interest. “We entered into a high interest rate environment where interest rates soared, and those proceeds ended up earning a lot of interest, in the millions,” the staff member said. Staff said they consulted bond counsel and were advised the interest earnings may be used for projects consistent with the original use of proceeds—here, design, construction, improvement and equipment for parks and recreational facilities, including community or recreation centers.
Staff explained the planned renovation will repurpose space vacated by a municipal court to expand the theater. The authorization was presented as a staff request for CDC approval to apply the interest earnings to the renovation; a committee member moved the item, it received a second, and the motion passed by voice vote. The committee did not provide an exact dollar total for the interest earnings in the meeting record.
The committee’s approval is an internal step; staff noted the project will proceed through the city’s contracting and construction processes and any subsequent required council or procurement approvals.
