County commissioners will then decide whether to release the money from its general fund on Sept. 12. A vote to do so would bring the county’s financial contribution to the project to $95 million, or 43 percent of the project’s $219.5 million price tag.
Kent County also might support a $5 million bond package approved last week by the Downtown Development Authority. That money would also go toward the construction of the new DeVos Place.
DDA Executive Director Jim Knack said the board has enough revenue to meet the annual debt payments of a 20-year bond, estimated at $400,000 per year. But he said if the DDA could find an entity with a strong bond rating to back the package, its cost would be reduced. The City/County Building Authority is the likely backer.
Kent County Commission Chairman Steven Heacock told the Business Journal last week that the county would be open to backing the DDA bond, if it was asked to do so. Heacock added that it wouldn’t be a burden for the county to do that, as Kent used its fiscal clout to sponsor the $86 million bond package — the core piece of the project’s financial puzzle.
“There is not a whole lot of risk to the county. In fact, I would argue there is none,” said Heacock.
The action taken by the DDA, along with the expected action from the county, are likely to close a $12.7 million funding gap for the renovation of the Welsh Auditorium, work that will turn the nearly 70-year-old building into a convention center ballroom and dining hall.
DDA Chairman Verne Barry and Heacock created the funding plan last month after the Convention and Arena Authority asked the DDA to give another $5 million to the project, a donation that would bring the downtown board’s investment in the venture to $10 million.
“I think this was a fair compromise,” said Barry.
After speaking with county leaders, Heacock said he felt there was enough support to back the additional funding request that came from the compromise.
“I have not heard negatives,” he said. “This decision clearly has to be made by November to keep on track. The timing of this is perfect. With this commitment and if we can get the county’s commitment by mid-September, it won’t negatively affect the project.”
CAA Vice Chairman David Frey agreed with Heacock on the timing issue, as the bids for this construction phase will be let this fall. The work will renovate the Grand Center, which will be used by the city’s performing arts groups, along with the Welsh lobby and ballroom.
“I think phase three is about $60 million. I think $51 (million) of that is construction,” said Frey, also co-chairman of the Grand Action Committee, which raised $32 million for the project in a private fundraising drive.
“So we do need that last $10 (million). We’ve got $50 of the $60 (million), if my numbers are right,” he added. “So we’re almost there. This gets us locked in this fall, and I would suggest there will be no further asks of the DDA or county for this project.”
The CAA may still cut about $3 million in contingencies from the construction budget. City commissioners have to approve the DDA bond package before it can be issued.They are expected to do so by the middle of next month.