LIDA will issue note for public safety facility
City officials have designated the financial institution that will issue the $31 million revenue note to fund construction of the new public safety facility.
The City Council accepted a decision from the Lawton Industrial Development Authority (LIDA) last week naming Bank of Oklahoma, which set a 2.2 percent interest rate on the Sales Tax Revenue Note Series 2017 that will be payable in 8.5 years, or the length of the sales tax extension program that is funding the note. That $31 million note will provide the revenue to cover construction of the 100,000-square-foot public safety facility that is expected to begin by late summer on Railroad Street, just south of East Gore Boulevard.
Using the revenue vote will provide the entire cost of the project immediately, meaning construction can begin this year while the 2015 Sales Tax Extension Program provides the revenue to pay off the note, something specifically authorized in the ordinance that created the sales tax program approved by voters. Otherwise, the city would have to wait until it accumulated the entire cost of the public safety facility project before it could advertise for bids, city officials said.
Council members agreed earlier this year to use LIDA as the entity to issue the revenue note. City staff members said while LIDA originally was created with the primary purpose of promoting industrial development within Lawton, its powers were expanded over the years to include activities and facilities in furtherance of public safety, governmental operational efficiency, transportation, recreation and other activities.
LIDA met an hour before the council meeting last week to make its recommendation on the revenue note after reviewing bids from three financial institutions and receiving a recommendation from the city's bond counsel.
LIDA received bids from Bank of Oklahoma, Chase and Arvest Bank. Chase and Bank of Oklahoma both presented options that included the ability to pay off the note early, but their interest rates were higher than the 2.21 percent rate presented on the non-payable option. But Chase's proposal also included a provision that the bank had to approve the construction contract before it would commit to that 2.21 percent interest rate, a stipulation LIDA and council members rejected.
Arvest set an interest rate of 2.98 percent and offered an option of redeeming the note at any time, but that higher interest rate would cost the city an additional $1.2 million over the life of the program, bond advisers said.