St. Clair Shores City Council approves issuance of bonds to pay for Blossom Heath project

By: Kristyne E. Demske | St. Clair Shores Sentinel | Published April 8, 2021

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ST. CLAIR SHORES — As the final design engineering phase of the project wraps up, City Council took a step to pay for new improvements at Blossom Heath Park by approving the resolution to issue capital improvement bonds for the project up to $6.6 million.

Although the project to improve the Blossom Heath pier, which includes seawall, walkway and pier improvements, will be paid for by the Tax-Increment Finance Authority, or TIFA, the city is pledging its full faith and credit for the support of the bonds.

This will allow TIFA to use the city’s credit rating for the sale of the bonds, said Patrick McGow, bond counsel for St. Clair Shores. A 45-day referendum period expired before the March 15 City Council meeting without any petition filed by any city resident.

The authorization, McGow explained, “will allow us to get started on the financing so once the construction bids are in, the final bond sizing can be determined.”

TIFA will use an average of $400,000 of its revenue annually to repay the bond over 20 years if the city were to sell the full $6.6 million in bonds. The $6.6 million is a not-to-exceed number, said City Manager Matthew Coppler, so if bids for the project come in lower, the city will sell less in bonds.

“If the bids come in where we want, in the $5 (million)-$6 million range,” the annual debt payment may be lower, he said. “We’re entering some interesting times right now, in terms of what bids are coming in at, so I’m a little anxious about that.

“Hopefully, we won’t have to make any changes.”

Councilman John Caron said there are items in the plan that could be adjusted, if needed.

“If some things came in higher that we really wanted, other things that weren’t that important, we could pull out,” he said.

The $400,000 annual payment isn’t the entire annual revenue of the TIFA, he explained.

“Their revenues are more than that. They’ve gone through their budget. They’re still going to support the same programming they’ve been doing the last several years and still have the same cushion in there, as well,” Caron said.

He said TIFA repaid bonds issued by the city for the improvements on Jefferson Avenue.

“They have a track record of keeping up,” he said.

Councilwoman Candice Rusie said the project will be a nice addition to the park when it is complete.

“I just want to say thank you to TIFA for taking this project on,” she said. “It’s amazing the work that’s been done and the improvements that have been made in just a few years’ time.”

A motion to approve the resolution authorizing the issuance of bonds passed unanimously. Work on the pier expansion project is expected to begin in July.