Friday afternoon, Amarillo Mayor Ginger Nelson addressed the city council’s decision to issue tax and revenue notes to finance $260 million for the Amarillo Civic Center Project, to renovate the outdated facility to attract more vendors and entertainment to the venue.
Passing 4-1 at the May 24 Amarillo Council meeting, the ordinance authorizes the issuance of funds for the project, locking in the current interest rate. Nelson said that based on the Garfield Report, she and three other council members saw the urgency to lock in current interest rates, especially with the Federal Reserve planning several rate hikes over the next two years.
More: Amarillo City Council vote to fund Civic Center; challenged in court
According to the report, continued delay would cost the city upward of $50 million on the project. Currently the city pays about $2 million per year in subsidies to the Civic Center, and the goal of the renovation is to make the Civic Center self-sufficient and to increase sales tax brought into the city. Over the length of the debt issuance in just subsidies alone, the city could possibly save $60 million.
In reference to residents who may feel that voters made their feelings known on taxpayer money being used to fund the project, Nelson said that circumstances at this point are vastly different from when the bond proposition was voted on. She said at this point, the council’s hands were tied and they had to make a decision, which is what she said the council is elected to do.
“A lot has changed in the last 18 months; a lot of information has come about that I think presents a different environment than what was there,” Nelson said. “When we last voted on this, we had a lot of uncertainty about COVID. We did not know if we would be able to have large meeting events, you know. Now we have a vaccine, and we are meeting in person, and we are meeting in big groups. So that uncertainty is taken away.”
Nelson spoke about the current economic environment with interest rates still being relatively low, and waiting more time to approve funding for the project was not an option.
Councilmember Cole Stanley during the City Council meeting May 24 asked to wait two more weeks to hold the vote, saying that he had not had time to go over the ordinance. During the meeting, he said that to his understanding, revenue notes issued in this manner were only for certain types of needs.
“The longer we wait, the more that it costs; that is undeniable,” Nelson said. “I know there was a request for two more weeks,” she added. “What does two more weeks benefit us toward the project? We know what the need is. We know the project needs to be done. Two more weeks just puts us at risk that our interest rate will go up. If it goes up one point, that is $15 million.”
Nelson said that rising costs affecting taxpayers long-term that were projected were the major impetus that meant that a decision for funding had to made at this time. She also stated that while the city will always have needs, this project unlike many would create needed revenue for the city.
“This is just the environment that we are in, and I do not see another way to to do it that does not end up costing us a lot more money,” Nelson said. “The bottom line is, that I hear from taxpayers that we need the project, and we want to pay as little as possible for it, and seeing the urgency of the situation with the Garfield Report, we took action as needed.”
Speaking on what funding the Civic Center project will do for the city and its taxpayers, Nelson said it will reduce the dependence on subsidies from the city to operate the facility and it will attract more tourism to the community, which will generate more sales tax collected by the city. She said the increase in hotel occupancy and the versatility of having more and bigger events would be a boon to business, therefore giving taxpayers a return on their investment, which can pay off the issued debt sooner. Getting more people to lease, rent and use the facility would take the burden off the taxpayers.
Nelson said that with all the repairs and renovation needing to be made, this project needed to happen to stay competitive in the convention market. She said this has been a lingering problem and was not going to get better on its own without financial commitment.
“The process always involved some type of debt issuance by the city; the urgency involved drove what mechanism we chose to issue that debt,” Nelson said. “As soon as we voted at the last council meeting, that locked in the interest rate. It’s just like any consumer wanting to lock in the best rate possible; if they wait, they are risking a higher rate.”
She said the city had been studying plans to renovate the Amarillo Civic Center for over the last decade. The current plan is a scaled back option, to do a smaller project that will still fit the city’s needs, according to Nelson. Both Nelson and Councilmember Howard Smith have been on the subcommittee working to address the issue. Nelson emphasized that it was not just some plan laid at the council’s feet last minute, and the council worked with one-on-one meetings to move in an expeditious manner as required. Stressing that time was not a luxury to keep putting off a decision, Nelson said the Garfield Report on the project made it clear that action had to be taken by the council.
Addressing detractors of the council’s decision on issuing debt, Nelson was resolute that the council’s decision was carefully considered and was done in line with state law. She said the council is very confident that the Attorney General will see this as a proper use of debt issuance.
“I can state very clearly that the option we chose to issue the notes was a lawful option, and we would not consider it if we did not think it was a lawful option,” Nelson said.
Asked about when the project could go forward with the renovations, Nelson said that while the project is in its design phase and once the city has a design chosen, they will move forward with the bid process for the project. She said in total, the project will take about three years to completion.
For those who think it should have been brought back to another bond vote, Nelson said that she and the rest of council are elected to make good decisions for the city and its residents.
“They have elected leaders to run the city, and that means that leaders need to study and invest the time it takes to understand complicated issues,” Nelson said. “Much of this council has spent five years studying the Civic Center issue. So, we chose a method of funding that is needed to accomplish what we have known needs to be done for a long time.”