DENHAM SPRINGS — City officials voted Monday night to sell $46.5 million in bonds to pay off bonds sold earlier to finance the Bass Pro Shops project.
L. Gordon King, of Government Consultants of Louisiana Inc., told members of the City Council, meeting as the Denham Springs Economic District, that today’s interest rates offer “a great opportunity” for such a deal.
John B. Poche, of Morgan Keegan & Co. Inc., said the district is paying 8 percent interest on some of the bonds, which can be bought back when the district sells new bonds at a rate of less than 3.5 percent.
He said he expects the total fees for the change to be about $400,000.
By making the move, the district would reduce its interest costs and has the potential of saving $8.6 million, according to paperwork Morgan Keegan presented to the district.
With the revenue from a Sam’s Club store scheduled to open early next year in the Bass Pro shopping center, Chase Bank has agreed to refinance the bonds at a lower interest rate, the documents state.
“I think it is an unbelievable opportunity,” Mayor Jimmy Durbin told the board of the economic development district.
The board, which has the same makeup as the City Council, subsequently voted to move forward with the bond sale and the repurchase of the bonds.
In 2007, the district sold $50 million in bonds to be paid in 30 years by a portion of the sales taxes from Bass Pro and other stores that built in the 75-acre district off Range Avenue adjacent to Interstate 12.
About 72 percent of the 6 percent in local sales taxes collected in the Denham Springs Economic Development District goes to pay off the bonds.
Once the bonds are paid off, the entire amount will go to the taxing agencies.
The City Council, Parish Council, the parish School Board, Sheriff’s Office, Gravity Drainage District 1 and the state each agreed to give up a percentage of the sales taxes they would collect from businesses that open in the 75-acre project.
During the past fiscal year, the 18 stores that have opened in the economic district had sales of about $50 million, according to Livingston Parish sales tax records.
The average Sam’s Club produces sales tax revenue well above last year’s sales tax revenue generated by all the businesses combined, Durbin said.
The idea of wooing Bass Pro by using public money to partially finance the project was introduced in 2003, but was in litigation from summer 2004 until late in 2007.
During that period, the case made two trips to the Louisiana Supreme Court and was turned down by the court for a third hearing.
One of the court decisions resulted in local governments holding an election in which voters overwhelmingly supported rededicating portions of sales taxes within the district to fund the project.