NEW ALBANY —
The TIF bond will be backed by property taxes, which administration-hired financial advisers said will get the city a better deal in terms of an interest rate.
In addition to stating his worries about how the debt could affect future projects, Zurschmiede said backing the bond up with property taxes is a risk.
“This is about whether this council wants to put the citizens of New Albany’s property taxes on the line,” he said.
The bond agreement that was approved by the city council to fund the construction of the Floyd County branch of the YMCA of Southern Indiana also included a property tax backup.
Councilman Scott Blair amended the resolution so that the projects will have to be approved by the council before construction can begin. He said the city has about a $3 million unencumbered TIF cash flow which wouldn’t be greatly hampered by $1.2 million payments on the bond.
“I think the financing is very solid and very secure,” he said.
David Duggins, economic development and redevelopment director for the city, added that only five of New Albany’s seven TIF districts will be tapped for the bond payments.
Gahan addressed the council prior to the vote and said the recreational amenities proposed should already be in place in New Albany.
“These efforts are all about making the City of New Albany competitive,” he said.
If approved by the redevelopment commission, the bond note is for 21 years, and total expenses including interest would be $24.4 million if the maximum amount is borrowed.
Gahan said the administration will hold several public meetings about the projects before construction begins.
The administration announced a change in the plans for the Silver Street project this week after New Albany Little League officials confirmed the organization plans to build a new facility off Charlestown Road near the Interstate 265 interchange.