Earlier this week, the Centre City Development Corp. gave preliminary approval to two agreements to pay down debt.
In the first, the downtown redevelopment agency would use its share of property tax money to pay the city’s annual $11.3 million bond payments on Petco Park for five years. That would make up nearly $57 million of the $153 million the city still owes.
CCDC’s annual share of the Petco bonds was recently hiked to $7.5 million. The agreement to pay the full annual debt service, starting this year, is surfacing in part because of the city’s projected budget gap, said Frank Alessi, vice president and chief financial officer of CCDC.
The agency also agreed to pay off the city for money lent to the agency over the prior decades, mostly federal Community Development Block Grants and the interest that’s accumulated on that money over the past decades. Those grants were recently the subject of a federal audit finding the city misused the grants.
CCDC also approved to a payment schedule for the $116 million it owes the city. But it’s looking to have the interest frozen and doesn’t want to start payments until 2014. Alessi said the agency’s cash flow can only handle so many payments “without doing additional collateral damage to the projects.”
Exactly what projects might be delayed — or axed altogether — because of the debt payments will be discussed during the upcoming budget process.
The agreements will go to the Centre City Advisory Commission on Wednesday and to a CCDC board vote on Jan. 21 before the City Council takes them up in February.
Some in the city have long called for the agency to pay off both debts, saying the agency’s refusal to pay the money was squeezing the city’s budget. I’ll have a bit more on this issue in a story this weekend.