Bonds sold for project subsidy
$48M step is latest in plan for improvements in downtown Columbia
Howard County officials took the next step in a historic public financing deal for downtown Columbia last week when they signed on the closing of more than $48 million in bond sales.
Thursday’s sale is the latest step in the process of enacting a $90 million public financing deal and affordable-housing plan, meant to revamp Columbia’s core.
The subsidy, called tax increment financing, or TIF, funds public infrastructure, including roadways, stormwater management and other projects in the Crescent, an undeveloped parcel between Merriweather Post Pavilion and Broken Land Parkway.
The closing on the bond sales comes a week after a bill attempting to repeal the TIF deal was killed in the County Council. Council members Jen Terrasa and Calvin Ball introduced the repeal bill in September after it was announced that funds from the TIF would no longer be used to finance a $51 million public parking garage, which instead would be paid for and managed by Columbia’s master developer, Howard Hughes Corp.
County Department of Finance director Stanley Milesky said Thursday’s bond closing is akin to “settling on your house” in a home sale, and that the county can now “get the keys and move in” and begin using money from the bond sales.
The bonds are being purchased by Baltimore investment banks Piper Jaffray and Stifel Nicolaus as underwriters, who will then sell the bonds to institutional investors such as pension funds and endowments, Milesky said.
Once the sale documents are signed, the $48 million will be wired to a trust for the county at M&T Bank, Milesky said. The county can then begin using the funds to repay itself for development costs already incurred, mostly road improvements.
Milesky said the county received a great deal of interest in the bonds, and had more parties looking to invest than it had bonds to sell, which helped drive up their price and drive down the interest rate for the county. The county was able to close with an interest rate of 4.4 percent instead of the projected 5.5 percent, according to Milesky. The lower interest rate will save the county $14.4 million over a 30-year period, according to an analysis from Stifel Nicolaus.
There are four types of bonds as part of the sale, Milesky said, with different terms set to expire in 2028, 2034, 2039 and 2047. The sale has no bearing on the county’s AAA bond rating, which is the highest rating given to an issuer’s bonds by credit rating agencies.
The next step is for the county to begin making monthly payments for the continued development in Columbia, Milesky said.
One piece of legislation is still pending in the County Council in relation to the See PROJECT, page 6
Thursday’s sale is the latest step in the process of enacting a $90 million public financing deal and affordable-housing plan, meant to revamp Columbia’s core.
The subsidy, called tax increment financing, or TIF, funds public infrastructure, including roadways, stormwater management and other projects in the Crescent, an undeveloped parcel between Merriweather Post Pavilion and Broken Land Parkway.
The closing on the bond sales comes a week after a bill attempting to repeal the TIF deal was killed in the County Council. Council members Jen Terrasa and Calvin Ball introduced the repeal bill in September after it was announced that funds from the TIF would no longer be used to finance a $51 million public parking garage, which instead would be paid for and managed by Columbia’s master developer, Howard Hughes Corp.
County Department of Finance director Stanley Milesky said Thursday’s bond closing is akin to “settling on your house” in a home sale, and that the county can now “get the keys and move in” and begin using money from the bond sales.
The bonds are being purchased by Baltimore investment banks Piper Jaffray and Stifel Nicolaus as underwriters, who will then sell the bonds to institutional investors such as pension funds and endowments, Milesky said.
Once the sale documents are signed, the $48 million will be wired to a trust for the county at M&T Bank, Milesky said. The county can then begin using the funds to repay itself for development costs already incurred, mostly road improvements.
Milesky said the county received a great deal of interest in the bonds, and had more parties looking to invest than it had bonds to sell, which helped drive up their price and drive down the interest rate for the county. The county was able to close with an interest rate of 4.4 percent instead of the projected 5.5 percent, according to Milesky. The lower interest rate will save the county $14.4 million over a 30-year period, according to an analysis from Stifel Nicolaus.
There are four types of bonds as part of the sale, Milesky said, with different terms set to expire in 2028, 2034, 2039 and 2047. The sale has no bearing on the county’s AAA bond rating, which is the highest rating given to an issuer’s bonds by credit rating agencies.
The next step is for the county to begin making monthly payments for the continued development in Columbia, Milesky said.
One piece of legislation is still pending in the County Council in relation to the See PROJECT, page 6
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