Kenner — The old saying is “If you build it, they will come,” but Kenner Mayor Michael Yenni is making the case that the saying should be “If you build it beautiful, they will come” as he tries get approval for nearly $43 million in debt to improve the city’s aesthetics and attract new residents.
That was the focus of Yenni’s presentation to residents this week about the merits of refinancing sales tax bonds to pay for landscaping and streetscaping projects along the city’s major thoroughfares. Yenni held a town hall meeting to sell the debt to residents after getting approval from the Kenner City Council to start the process earlier this month. Another meeting is planned for Tuesday at Kenner City Hall. Yenni has presented the plan as a mandatory move for the city, if it wants to stay relevant.
“One option I will not entertain is the option to do nothing,” Yenni told the crowd.
Most of the more than 100 residents who turned out to hear Yenni’s proposal seemed to support his plan, which some of them likened to refinancing a home to build an addition. Under Yenni’s plan, Kenner would refinance the remaining $14 million it owes on its sales tax bonds and then borrow an additional $29 million. The debt would be at a lower interest rate, and for a longer term, which would keep the city’s annual debt service payments at about $3.2 million.
Finance Director Duke McConnell told the city’s residents that with the current low interest rates, the city will never have a better opportunity to borrow money. He noted that the bonds the city is considering refinancing were the result of another refinancing that allowed the city to make a rash of capital improvements in the ’90s and early 2000s. Yenni said that any time the city has made improvements, it has involved taking on debt.
“Refinancing bonds is how you do major capital improvements. … What we’re looking to do is some major capital improvements,” Yenni said.
Several residents used the meeting to get clarity about how Kenner’s budget works and what type of strain the new debt would place on the city’s finances. McConnell said that the city already dedicates about a third of the roughly $30 million it receives in sales tax revenue to debt repayment, and that wouldn’t change. He also stressed that the debt would not impact residents’ property tax rates after a woman in the crowd expressed concerns.
However, McConnell acknowledged that the city’s sales tax revenue has been flat for years and that Kenner receives less in sales tax now than it did before Hurricane Katrina. Joe Sunseri, a city resident, noted that if he was refinancing his home, he’d want to feel confident that his income was going to increase, and city officials don’t seem to have that confidence with sales tax revenues. Kenner is already obligated to repay about $60 million in loans dedicated to revamping its sewer infrastructure.
“I’m not so sure it’s a fiscally responsible thing to do,” Sunseri said.
Yenni and several Kenner City Council members responded that Kenner has always managed its money conservatively and that the city will only see sales tax revenues continue to decrease if it doesn’t take action. The city needs to upgrade its image to attract young professionals who officials say care about a community’s aesthetics as much as they do its schools and police department.
Real estate developer Henry Shane said Kenner’s population has been on a steady decline for decades, and if that continues, it will be impossible to draw retailers or companies. One resident likened the projects to fixing an illness at the outset or waiting to take action.
“I think we have to do surgery now,” said resident Nick Impastato, who supports the plan.
In addition, city officials argued that Kenner has a solid economic base to count on to pay off the debt. Councilwoman Maria Defrancesch said that Macy’s at Esplanade Mall is enjoying great success, and there are plans in the works to do an $8 million redevelopment at the Pavilion Mall in North Kenner.
“We’re working hard to make these things happen,” she told the crowd.
Councilman Kent Denapolis said the fear that Kenner will be stuck with a crippling debt it can’t repay isn’t realistic.
“The volatility of not being able to pay off this debt really is not there,” he said.
Yenni held the town hall meeting after Councilmen Joe Stagni and Gregory Carroll asked for more time to consider the plan before they gave the mayor approval to present the plan to the state Bond Commission. Their request was denied by the council, but Stagni said that this week’s meeting, and the one he scheduled for Tuesday, will do a lot to give residents important information.
“This was all I was really looking for,” Stagni said about the meeting.