Bonds for Evansville’s Downtown Convention Hotel Receive ‘A’ Rating
From Mayor Winnecke's office
Standard & Poor’s Ratings Services has assigned an “A” rating with “stable outlook” on the City of Evansville Economic Development Revenue Bonds for the Downtown Convention Hotel Project. The “A” rating means the city has “very strong capacity to meet financial commitments,” according to Standard & Poor’s, an international financial marketing intelligence company.
The city plans to issue $14.59 million in economic development revenue bonds and $5.41 million in taxable economic development revenue bonds related to the new $74 million downtown hotel and convention center to finance a parking garage and provide additional improvements and incentives to the developer.
“The rating from Standard & Poor’s is confirmation that the city remains financially stable and has the financial strength to meet its debt obligations,” said Mayor Lloyd Winnecke. “That bodes well for the city as our administration seeks to fund other economic development projects in the future, such as the IU Medical School expansion.”
The city secured the revenue bonds using a portion of its share of future Food and Beverage tax revenues and a pledge to use the city’s share of Vanderburgh County Option Income Tax (COIT) revenues. Standard & Poor’s stated the “A” rating reflects the city’s large and diverse employment and income tax base serving as the regional economic center, declining unemployment rate, and the strength of the city’s county option income tax pledge.
City Controller Russell Lloyd, Jr., CPA, said in practice the city does not plan to use COIT revenues to cover debt service on the hotel project. Instead, he said the city has identified a combination of Food and Beverage taxes, riverboat gaming revenues and tax increment financing property tax funds.
“Standard & Poor’s indicates the proposed Downtown Convention Hotel bonds have the same financial strength as the Ford Center arena bonds,” Lloyd said. “It’s a good rating.”