Tax-exempt bonds over two years would help university cover cost of new building
By Kim Walter
MT. JACKSON -- The town's Economic Development Authority voted to approve the issuance of tax-exempt bonds totaling $16 million over the next two years to Shenandoah University, as the school looks to add a new building to the main campus.
The EDA met in Mt. Jackson on Monday afternoon to discuss the topic, and heard from Shenandoah University officials as well as Carolyn Perry, Shenandoah County's bond counsel.
SU Vice President of Administration and Finance Richard Shickle said the school had started looking for bonds from closer localities, like Winchester and Frederick and Clarke counties. However, those places had either reached or were close to reaching the $10 million tax-exempt bond limit for the 2012 fiscal year.
"We were basically calling around to different bond counsels and found out that you had the $10 million to give," he told authority members. "We don't consider you all as foreign to us, and we really aren't that far away."
The tax-exempt bonds can be issued by the EDA to either government or nonprofit entities.
Authority member Rod Shepherd asked Perry to make it clear that there would be no financial impact to the citizens of Mt. Jackson because of the issuance.
"Shenandoah University will pay BB&T directly," Perry said. "At the EDA level, you don't have anything to worry about."
The EDA approved two resolutions that would issue one bond for $10 million to SU before the end of the year, and another for $6 million in 2013.
"So, that means we will only have $4 million for our own agencies next year?" asked authority member Donald Albright.
Perry explained that the type of bond being discussed only concerns certain agencies, and finance officials felt that there wouldn't be a need for the full $10 million of tax-exempt bonds in 2013.
"Manufacturers and things like that are outside of the limitations of this type of bond," she said. "We're in good shape ... Mt. Jackson is very well situated for this type of financial situation."
Perry also encouraged the authority to put together some kind of policy to check in with SU and make sure they "not only understand the rules that go with this bond, but are also playing by the rules."
"That way you will have a paper trail that proves you're doing everything you should," she said.
The resolutions were approved unanimously.
Shickle said the funds will go toward a 55,000-square-foot health sciences building on the Winchester campus. The building will allow space for undergraduate and graduate nursing students who currently use facilities off campus. He said the hope is that the building will be completed and ready to open for the Fall 2014 semester.
The bonds could also help cover two other buildings -- a new dorm and an athletic field house -- but Shickle said they were only included in case there was a good deal of leftover money from the main project. He said there's no official start date on the other two facilities.
SU still has to get approval from the Winchester City Council and the Frederick County Board of Supervisors because all the projects listed in bond documents are on either city or county land, and the school is required to get permission from the city before the transaction with Mt. Jackson can take place.
"We're just really pushing and trying to get everything taken care of as quickly as possible," said Shickle. "But it's exciting, and I'm glad that Mt. Jackson is willing to work with us."
Contact staff writer Kim Walter at 540-465-5137 ext. 191, or firstname.lastname@example.org