MORGANTOWN, W.Va. — The first steps of funding construction for the Morgantown Ice Arena is being given the green light by Morgantown City Council.
A resolution approving the issuance of up to $29 million in lease revenue bonds from the Morgantown Building Commission is being approved unanimously and will help provide funds to help with a complete rebuilding of the arena, now estimated at $12.7 million on two separate proposals. Bonds would be issued with the help of Steptoe and Johnson and would be repaid through agreements with the Morgantown Building Commission and funding from the city’s sales tax. Cruz and Associates will also work with the city in selling the bonds.
“So we got the base bid of $10.3 million, and we got the WVU lockers for $745,000,” said Bond Counsel Tom Aman of Steptoe and Johnson, describing what the bonds will purchase according to the bid. “The separate bid, which included the chiller ($814,000), the slab (approximately $500,000), and the dehumidification unit ($714,000),” he said.
To repay the bonds, a lease agreement, bond purchasing agreement, and continuing disclosure agreement will be made with the Morgantown Building Commission. This will allow for a lien to be placed on the Morgantown Ice Arena and help lower interest rates. Bonds will also be repaid with the assistance of the city sales tax approved by council via ordinance in 2022. Once the bonds are put up for purchase in early 2023, a fund opened and operated by Wes Banco would then allow for funds to be used by the city to move construction on the arena forward.
“We’ll have that lease arrangement between the building commission and the city, which is what gets the bonds repaid,” said Aman on the process of bond repayment. “A deed of trust, or a lease on the actual ice arena, to secure repayment, and then the assignment of those lease payments to the bond trustee, to actually get the bonds repaid,” he said.
The schedule of repayment and the interest rates of the bonds are currently pending an official credit rating. According to Rob Steptoe of Cruz and Associates, the City of Morgantown’s history of repayment of past bonds, the running of a balanced budget, and decisions to assist in repayment will be helpful ahead of a meeting scheduled with Mooney’s. The credit rating meeting for the bonds is scheduled for next week.
“Based on the city’s sound fiscal position, we’re optimistic we’re going to receive a favorable rating,” said Steptoe. “Which will lower debt service by lowering the interest rate and therefore the interest cost pretty substantially,” he said.
Pending any changes to the agreement, bonds are expected to be priced and placed for sale by the end of February, with construction on the Morgantown Ice Arena expected to begin in March at the $12.7 million price tag, not including closing costs. According to Deputy Mayor Danielle Trumble, who’s also a member of the BOPARC board, only one company has taken up the invitation to bid and is over budget by BOAPRC’s $11.5 million threshold for construction. Despite the resolution moving forward, there’s an expectation that BOPARC will discuss the lack of bids and the overbudget before bonds are placed for sale.
“I’m in favor of moving funding forward, but I think that’s something we as a BOAPRC board need to look at,” said Trumble ahead of the unanimous vote. “Especially considering we had set what I understood to be a very strict project cost limit,” she said.
The Morgantown BOPARC board is scheduled to meet to discuss the bonds and capital projects on Wednesday.