Although not requesting more money, officials of the Edmonds Public Facility District will ask the Edmonds City Council for a little help on getting a loan.
“We’ll go to the city council April 26,” said Kjristine Lund, manager of the project that is aiming to build the Edmonds Center for the Performing Arts. “They’ll have time to do some research and we’d hope for a final decision by May.”
Edmonds has committed $2 million to arts center project, which has an expected construction budget of $16.8 million.
Lund said the proposal will ask the city to guarantee a loan that would be taken out by the PFD. “This is not a grant or funding,” Lund said. “We would repay the loan with fund-raising.”
Lund said that with construction costs rising rapidly, the loan is needed to get moving on the building as soon as possible.
Lund said it is difficult to get a loan approved based on the fund-raising pledges. For example, she said that when Boeing pledged $50,000, half of that came at the time of the pledge and half will come later. “We can’t sign a contract with pledges,” she said.
The loan to be guaranteed by the city would likely be a five-year term with a balloon payment at the end, Lund said. The amount of the loan won’t be known until other funding sources, including state grants, are solidified (see related story below).
Lund added that PFD officials are also talking to private investors who would be able to guarantee such a loan.
In the worst-case scenario of a PFD default, Lund said the value of the property would be the city’s guarantee. Another option would be to extend the terms of the loan, she said.
The strategy is similar to that used by the Lynnwood PFD, which built the Lynnwood Convention Center. The Lynnwood City Council agreed to guarantee a PFD loan.
“The key thing on the loan is that this is not seeking a new city contribution,” Lund said. “We’re just looking get ahead of construction costs.”
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