It’s not often that people are as giddy about taking on nearly $30 million in debt as Cullman’s elected leaders were Monday. Judging from the remarks of the market expert who helped cement the deal, though, mayor Woody Jacobs and the Cullman City Council had good reason to celebrate.
The city’s AA bond rating and well-orchestrated pitch to investors secured a 30-year interest rate of 2.56 percent for a new bond issue that will fund construction of Cullman’s planned new civic complex along with a major addition at the Cullman Wellness & Aquatic Center, which will be located at (and near) the site of the former Marvin’s hardware store along Main Avenue SW. At its regular meeting this week, the council signed off on the $29,085,000 bond issue, making it a 30-year debt holder before the bond matures.
In addition to what he described as “a very low interest rate environment,” Bob Young, president of Montgomery-based investment firm Frazer Lanier, told the council it was the city’s pristine sales pitch — as well as its sound financial reputation among similarly-sized municipalities — that made the low rate possible.
“There were absolutely no questions or requests for additional information” from bond investors,” said Young. “…[Bond] buyers were so enthusiastic about your excellent credit rating that they were willing to accept lower rates than they started with… They gave no indication that you could do anything better than you’re doing right now.”
Jacobs credited the city’s economic development team, as well as city clerk Wesley Moore, with putting together a persuasive presentation to municipal bond investors ahead of the issuance of the General Obligation warrants. “Wes worked hand in hand with these guys and provided them with the info, and it was pretty much flawless,” he said. “…We don’t want to be a 50,000 [population] city; we like being where we’re at — kind of growing little by little. That doesn’t ding us when we go to the [municipal bond] market. I was beyond thrilled at the ease of it.”
Moore noted that the civic complex is expected to draw many thousands of out-of-town visitors as well as local guests once it’s open for business, generating secondary tax revenues that, by statute, will benefit all of Cullman County as well as the city. “These projects are going to produce money in taxes for our schools; our county,” he said. “Everyone is going to benefit from this project.”
Construction on the new complex, previously estimated to house 100,000 square feet of interior space, is set to begin later this year. Birmingham-based Cohen, Carnaggio & Reynolds, Inc (CCR Architecture and Interiors) is developing construction documents for the project, with Cullman’s St. John & Associates, LLC handling civil engineering design.