The plan to cover shortfalls for the city's new arena with bonds of $45 million and more bonds for the parking garage at Plant Riverside are on the city's agenda for first readings Thursday, Aug. 15.
The council voted to request the bond issues from the Downtown Savannah Authority, the entity the city uses to issue bonds. The city does not have bonding authority.
Bonds will be used to fund the shortfall between Special Purpose Local Option Sales Tax receipts and construction costs for the new arena, which is expected to cost $165 million.
Voters approved funding the arena project through SPLOST in two referendums. The current SPLOST6 is expected to generate a maximum of $120 million for the arena project. About $22 million was received in a previous SPLOST from 2008-14. The city has approved more than $21 million in arena-related contracts since that time.
The arena bond debt service of about $2 million annually will be paid using the city's auto rental tax. About 75% of the auto tax revenues are now used to partially fund operations at the Civic Center.
Auto rental tax revenues also help pay for maintenance and repairs to downtown monuments, squares and other historic features.
West River Street parking garage
About $10 million in bonds for the West River Street parking garage will be issued.
The parking garage construction is part of public-private deal with Plant Riverside developer Richard Kessler.
The riverfront project is a 670,000 square foot mixed-use development that will be anchored by a locally owned and operated 419-room JW Marriott hotel, which will be encompassed in the original Georgia Power Plant Riverside. The site will also include two other buildings: the Atlantic, located to the west of the power plant; and the Three Muses, which is east of the power plant building.
The development is expected to create upwards of 700 jobs and generate an estimated $30 million in taxes for the city of Savannah over the first 10 years of operation.
Kessler signed a guaranty in 2016 that personally commits him to complete the garage, as well as pay the bond payments. The city previously issued $33 million in bonds for the garage. Kessler requested additional funding in June when old timbers foundations were discovered during underground construction, raising the costs of construction.
The deal with Kessler provides his company build the 488 parking space garage with 237 spaces for public parking.
Kessler will be responsible for the operation and operating expenses of the garage, as well as paying the bond payments. He will pay the city $100,000 a year for 30 years, along with 1% of the gross revenues from the garage for future repairs.
