The Salina City Commission approved different measures Monday to help finance the development of downtown Salina.
The Commission voted to approve the issuance of two sets of STAR bonds, which allow projects to be developed through the sale of bonds that can be repaid with sales tax revenue. The city had already secured state approval to issue the bonds.
Interim City Manager Mike Schrage said the city will sell the bonds with the assistance of specialized STAR bond underwriters. However, Schrage said the city will not be on the hook if the projects developed through the bonds fail to raise enough money to repay their creditors. Instead, private developers will be responsible for repaying their own loans.
“The city does not have to back either set of bonds,” he said. “The city is not at risk if the project does not generate enough revenue to meet the bond requirements.”
Schrage said the STAR bonds are a key piece of Salina’s downtown development plan.
The commission also voted to approve transferee agreements with the Steifel Theatre, Salina Education Automotive Museum of America and Barollo Grille that allow these businesses and organizations to receive some of the rights and responsibilities laid out in January 2017 in a development agreement between the city of Salina and Salina2020, the master developer of the downtown development project.
The original development agreement anticipated some rights and responsibilities would later be transferred to other developers. Old Chicago, Homewood Suites and The Alley already have received similar transferee agreements from the city.
The transferee agreements contain dates for when development projects will begin and end and grant developers access to STAR bonds, tax increment financing and community improvement district funds.
City officials have been working on the downtown development project since 2015, and Schrage said he is pleased with how much progress has been made.
“This is the culmination of a lot of hard work,” he said. “To have this level of investment from local businesses to this significant and transformative project for our downtown is exceptional. You don’t see many cities being able to put this kind of project together.”