Tuesday, January 25, 2011

Council OKs loan for events pavilion

By Evan Belanger
The Decatur Daily

The Decatur City Council has approved a plan to borrow up to $1.6 million from the Morgan County Regional Landfill to help finance a 1,200-seat events pavilion at Ingalls Harbor.

The 4-1 decision Monday leaves final consideration of the loan to the Morgan County Commission, which will vote during its 9 a.m. meeting today.

If approved, the city is expected to enter a construction contract with low bidder Fite Building Co. of Decatur by 5 p.m. today, ahead of the Friday deadline.

"I expect we'll be moving with haste on this now," city purchasing agent Jeff Fussell said.

The impromptu financing plan comes after the project stalled in December when construction bids for the 26,000-square-foot pavilion exceeded cost projections by hundreds of thousands of dollars.

Decatur-Morgan County Convention and Visitors Bureau President Tami Reist said Monday that the latest cost estimate of $3.6 million — more than $800,000 over initial estimates — would be enough. The estimate, she said, includes $100,000 for landscaping, a $250,000 contingency for unforeseen expenses, and money to purchase furniture and sound equipment for the facility, which city officials hope to open in September.

In addition to providing a weigh-in space for the bass tournaments at Ingalls Harbor, the pavilion is intended to provide a large meeting space that the Convention and Visitors Bureau and the Decatur-Morgan County Hospitality Association will market to help attract large events.

"I know we have several industries that have to go into the Huntsville area because of a lack of space," Reist said. "Now, we kind of close that gap."

With seating for up to 700 tables, the pavilion would be more than twice the size of the largest meeting spaces available in Decatur.

Jackson against

Only Councilman Billy Jackson, who supported the project when officials estimated it would cost $2.8 million, opposed the plan Monday.

While he made no comment during discussion, he said after the meeting that the local economy did not justify the increased expense and that he would have preferred to reduce the scope of the project to meet the initial budget.

"In a time when our economic situation is what it is, I think it's more important to scale back," he said.

Jackson also said he did not want to further deplete the reserve funds of the city and the landfill.

Councilman Greg Reeves, who helped coordinate the project, said city officials had considered scaling down the pavilion to meet budget. But they decided a smaller pavilion would not meet the city's needs.

"The original vision was to have a facility that could seat a certain number of people and could be used to help promote certain events," he said. "There's only so much scaling and cutting you can do and still make the project worth doing."

Under the proposal, the city would loan up to $2 million from its $18 million reserve. The landfill would loan up to $1.6 million from $4 million held in certificates of deposit.

The Hospitality Association would repay the loans over 15 years using revenue from its $2-per-night tax on local hotel stays, which it uses to fund tourism-promoting projects.

During a pre-meeting work session Monday, City Attorney Herman Marks said the county has requested the city's guarantee that the landfill fees will not increase as a result of the loan.

He said they also want the city's assurance that the landfill loan will be repaid, even if the hospitality tax is not enough to cover the debt service.

"If the taxes are not enough, we'll have to take whatever steps are necessary to pay this back," Marks said.

Reist said the hospitality tax, which is projected to generate $450,000 this year, will be enough to cover the annual debt service.

Landfill Director Ricky Terry said the loan would not impact operations funding at the landfill, nor would it impact roughly $13 million the landfill is holding for capital projects and for the future closing of the landfill.

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