Monday, December 17, 2007

$10M in reserve funds to be considered for aiding research park

The City of Auburn is expected to consider an ordinance Tuesday night to allocate reserve funds to the Auburn Research Technology Foundation for further development of the Auburn Research Park.

February 17, 2007

The City of Auburn is expected to consider an ordinance Tuesday night to allocate reserve funds to the Auburn Research Technology Foundation for further development of the Auburn Research Park.

In a meeting Friday of the city’s Industrial Development Board, members indicated they were in support of the deal.

“This is what the board does,“ said Economic Development Director Phillip Dunlap in the action to support local industry. ARTF earned $10 million from the state Capital Improvements Trust Fund, but Auburn University officials say it can’t be paid out until it is spent. The ordinance would mean the IDB would allocate $10 million of city reserve funds as interim financing for the project.

“This is not a grant,“ Dunlap said. “This in effect is a loan.“ City Manager Charlie Duggan said the city’s cash reserve is about $15 million as of the 2006 fiscal year, $4.5 million of which is permanent.

He said the funds are used in case of instances like severe economic downturn, natural disasters and unexpected costs. Brian Keeter, AU director of public affairs, said the state requires that actual expenses must occur before they can be reimbursed. If the City Council approves the proposal between IDB and ARTF, the foundation would reimburse the IDB with state bond funds.

“As soon as the money comes back to the board, it will go to the city’s funds,“ Dunlap said.

Keeter said it won’t be a one-time $10 million payment, but rather paying IDB back as state funds come in.

Jon Waggoner, special counsel to the AU president, said the contract will stipulate full repayment of the remaining funds no later than two years from either 90 percent occupancy or from the date the certificate of occupancy is issued. Duggan said the city will also get back all the interest it would have earned had the money been in the city account.

Construction for the park started last April when the city hired Russo Corporation of Birmingham to develop the infrastructure, which was funded by the city for $5 million. The infrastructure is nearing completion. Keeter said ARTF will hire a contractor for building construction once interim financing is obtained.

“The Auburn Research Park holds great promise to fuel economic growth and bring new jobs to the region,“ Keeter said.