Union City Council voted unaimously Tuesday to approve first reading of an ordinance authorizing the issuance of a tax increment bond not exceeding $1.1 million.
The revenue raised through the bond will be used to pay for half of the projected $2 million cost of building a community arts center on the site of the old Teritex building at the corner of North Pinckney Street and Sharpe Avenue. The balance would be paid for with the $940,000 left over from the insurance settlement the city received for the fire that destroyed the old Union High School on Main Street.
Margaret Pope, an attorney with the legal firm of Pope Zeigler LLC, the firm which is counseling the city on the bond issuance, said the city will not have to raise taxes to pay for the project. Instead, the bond will be paid off over 14 years with revenue generated by the city’s downtown tax increment district.
“This means no new taxes, no new millage, no new fees will be required,” Mrs. Pope said. “Just revenue from the tax increment district.”
Though $2 million is the current projected cost of the project, Mrs. Pope said that a final cost will not be known until the architect designing the center, David Langley of Langley & Associates Architects, LLC, finishes the design. Mrs. Pope said the final design of the building will be used by Mayor Harold Thompson and Finance Director Walker Gallman to determine the size of the bond issuance.
Council also voted unanimously to accept BB&T’s offer to finance the bond issuance at a fixed rate of 4.58 percent.
At its August meeting, Mrs. Pope urged council to move forward as quickly as possible in securing a fixed rate for the bond issue. She pointed out that most financial advisors work in the public markets believe that interest rates are going to rise in the future and that as quickly as possible the city needed to get a fixed rate locked in.
Council authorized Pope Zeigler to seek a fixed rate from the banks, but only BB&T responded to the firm’s request. Thompson said he would schedule a meeting of a second reading of the bond ordinance in the near-future.
“This is an excellent project, the arts center is part of our long-range plans,” Thompson said. “It will help beautify the downtown and help bring in visitors. This will be another leg in our efforts to revitalized the downtown of Union.”
The proposed arts center would be 10,000-12,000 square feet in size and include a 4,500 square-foot theater area that would be used by Boogaloo Folklife Productions. The center could be used for other plays, for concerts, recitals, festivals, business training sessions and multi-media presentations. The theater will also have a screen that could be used for showing movies.