Fresh off a Mardi Gras high, Mobile city officials had reason to celebrate with a financial win on the new Civic Center arena.
The city secured a better-than-expected deal, selling $250 million in bonds to JP Morgan at a favorable 4 percent interest rate.
But the morning-after haze brought a headache: The Mobile County Commission’s support for the $300 million project is looking more elusive by the day.
“I don’t have a concern,” Mayor Sandy Stimpson said of the county’s reluctance. “I am disappointed, let’s say that.”
With construction set to begin soon, officials hope the 10,000-seat arena will be ready for its grand debut in time for the 2027 Carnival season. The venue will be the future hosts of the grandest Mardi Gras balls of the popular season in a city that bills itself as the “Birthplace” for the holiday.
It will also be the future home for minor league hockey, and for a variety of sports and entertainment attractions.
Financial win
The city secured a favorable deal on the bonds and council members applauded a report from Scott Collins, deputy finance director for the city who has overseen the project.
“We anticipated we would be successful,” he said. “We didn’t realize we’d be as successful as we were.”
Collins said there were eight financial companies bidding on the project’s bonds, with JP Morgan securing the lowest amount. The lower-than-expected interest will also lead to savings, though city officials could not provide an exact dollar amount on Wednesday.
“It’s an exceptional statement for the City of Mobile,” Collins said.
Stimpson said that in the next several days, the money will be transferred to the city allowing officials to sign construction contracts with Birmingham-based B.L. Harbert so work can start soon. A project groundbreaking has not been announced.
Stimpson said while the $250 million in borrowing for the project represents the “largest bond issue” Mobile has ever had, and that the payback should not disrupt city services. The city is planning to payback the bonds over the next 20 years, not 30 years on what is typical for a municipal bonded project.
“We’re very proud to say that the project is on time and on budget with this piece of information,” Stimpson said.
County reluctance
But it wasn’t all celebratory. The council, during its pre-conference meeting, questioned why they were voting on an intergovernmental agreement with the Mobile County Commission that was placed on their agenda, when the commission had not authorized financial support for the arena project.
Commissioners were asked initially to support up to $15 million for the arena project. A vote was then expected on a $10 million request. A report then surfaced that the number could drop down to $7.5 million.
James Barber, the chief of staff to Stimpson, said the last figure that was discussed was a $10 million appropriation during the first two years of the project.
“Let’s hope they are on board with it,” said Councilman Ben Reynolds. “They’ve always been good partners with us. I hope we can come to some arrangement where we jointly participate in this. It’s a tremendous endeavor we have here.”
The commission is not scheduled to vote on any amount, though the reasons remain unclear and Stimpson said he was uncertain as to what the sticking points might be.
Commissioner Randall Dueitt has expressed support for the appropriation, while Commissioner Merceria Ludgood has said she was concerned that the future arena project did not include a theater. Commissioner Connie Hudson, who is running for mayor in August, has not stated her position on an appropriation amount.
“I hope it’s not completely done,” Stimpson said about the talks with the county. “They have the opportunity to do something. It’s not unusual for us to not agree on what the exact amount is and the time frame. Typically, we can get to a ‘yes’ in some form or fashion. Until we get a definitive, ‘No,’ I’d say there is an opportunity out there and I hope they will participate.”
