Waterloo City Council supports firm's debt plan
Dec 11, 2012 (Waterloo-Cedar Falls Courier - McClatchy-Tribune Information Services via COMTEX) --
WATERLOO, Iowa -- The city has agreed to sponsor a $14 million bond issue for a local communications venture.
City Council members voted unanimously Monday to authorizes the issuance of bonds for New Empire LLC to install at least 138 route miles of fiber-optics cable and place buildings and equipment in the downtown Cedar Valley TechWorks campus, near Tower Park and in Hudson.
Dean Spina, New Empire's bonding attorney, said the Midwestern disaster area revenue bonds would carry better interest rates due to the city's tax-exempt status. But they carry no risk to the city itself.
"The city has no financial responsibility for the repayment of these bonds," Spina said. "This does not count toward your debt limit. No taxes are at risk."
Councilman David Jones had no issue with the bonds but questioned the viability of the project, noting Mediacom, Cedar Falls Utilities and other companies already had large fiber networks in the area.
"How does this add value to our community " Jones asked. "How is this going to be paid back "
New Empire manager Jim O'Regan said the project would improve the current situation, noting a lack of such service is holding back local economic development efforts. "We provide connectivity between other communication utilities," he said.
Council members approved a similar request for New Empire in 2010, but the issuance was delayed.
Congress earmarked up to $2.6 billion in Midwestern disaster area revenue bonds for Iowa to be used on commercial projects in areas affected by the 2008 floods.
In 2010, Waterloo agree to the sale of $5.23 million in revenue bonds for KNK Enterprise, which redeveloped the former EconoFoods site, 1411 Flammang Drive, for Dick's Sporting Goods and other retail tenants.
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