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Northwestern shuffles bonds for sports fields funding
As part of its ongoing construction of new athletic fields and the acquisition of a nearby hotel for additional student housing, University of Northwestern, seeking additional funding, sought permission from the city of Arden Hills to refinance bonds the city issued it in 2010; the Arden Hills city council, at a May 12 meeting, voted 4-1 to grant that permission.
The city bonds, worth about $8 million, were issued near the end of 2010 and were used by the university to fund the building and outfitting of a new student center located within Arden Hills.
Northwestern is seeking about $25 million in bonds to be issued by the Wisconsin Public Finance Authority (PFA), some of which will be used to pay off the Arden Hills bonds and others to fund current projects, such as new athletic facilities including fields and tennis courts, bleachers and locker rooms, as well as the purchase of the nearby Country Inn & Suites.
Since the issuance of the bonds in 2010, Arden Hills has received roughly $10,000 annually from the university, a payment which was classified as the “city’s administrative fee.”
According to John Utley, a representative of Kennedy & Graven, a law firm which analyzed the proposed refinancing for Arden Hills, the city would leave about $85,000 on the table if it allowed the university to move forward with its plan.
In a letter submitted to the council, the university explained it was seeking bonds from an entity outside the state so as to appear neutral with respect to from whom it borrows money; Northwestern is located both in Arden Hills and Roseville, though the current construction is all taking place in Roseville.
Further, the school said it was seeking the refinancing sooner rather than later because new banking laws, set to take effect in a few years, would make the process more complicated and expensive.
Presented with the refinancing plan, the abiding attitude of the council was, “Why not?,” as expressed by councilmember Dave McClung.
“$85,000 would be a nice amount of money for the coffers,” council member Brenda Holden, in support of approving the refinancing, said. “But Northwestern wouldn’t go through the trouble [of asking to refinance] if it weren’t going to matter to them.”
Both Holden and council member Fran Holmes said they thought Northwestern had done its due diligence on the matter and that it would be best for the city to help the local university.
The lone holdout vote on the matter was Mayor David Grant, who wanted to hear more from Northwestern, which did not send a representative to the meeting.
The university will also approach Roseville seeking local consent to spend money from the PFA bonds in the city, according to Chris Miller, Roseville’s finance director. Miller said he knew of no reason why the city would say no, and that the matter would be taken up at either the June 9 or June 16 council meeting.
Mike Munzenrider can be reached at firstname.lastname@example.org or 651-748-7824. Follow him on Twitter @mmunzenrider.