Cape leaders defend decision to spend casino money on airport bonds

Wednesday, March 9, 2011

Cape Girardeau leaders, past and present, defended the city's decision Tuesday to spend most of the $2 million it received from Isle of Capri to pay off bonds that funded the construction of an airport manufacturing facility that has been a drain on taxpayers for nearly a decade.

That decision came despite the Cape Girardeau City Council's pledge last September to pay for amenities to Broadway and to fund 11 other community projects with the casino money it received for 11 acres of municipally owned property.

Some have asserted the change in course comes as a broken promise.

"Not in any way," Mayor Harry Rediger said Tuesday. He said those projects will get done, albeit from a different funding source and perhaps at a slightly slower pace.

"This is just a shuffling of funds," Rediger said.

Furthermore, he said, the council only had a narrow window of opportunity to decide to pay off the bonds. General obligation bonds can only be paid off on payment dates, one of which is April 1. The next one wouldn't come around until October, he said.

"We did not want to wait until October," he said.

The decision will really provide a savings to taxpayers, he said, and safeguards have been put in place to make sure that the Broadway amenities and projects -- such as accelerating the city's tree program -- will still take place.

Paying off the $1.69 million in bonds allows the city to better market the 52,000-square-foot Commander Premier Aircraft Corp. building. The city has notified Commander, which owes $1.2 million in back lease payments, that if it can't come up with the money within 60 days, it will have to vacate the premises.

The previous occupant of the facility, Renaissance Aircraft, also went under after it struggled to make payments after the building was constructed in 2001.

Former mayor Al Sprad­ling, who was part of the council that promoted the bond issue for the facility, said he understood what the council is doing to get out from under the semiannual payments. Repaying the bond holders now will save the taxpayers years of interest payments, he said.

"And once the bond issue is gone, the manufacturing only restriction is gone, and that facility can be used for any number of things," Spradling said. "That really unties the city's hands. To me, it really makes sense."

Council member Mark Lanzotti said the money the city was using to make bond payments, about $260,000 annually out of general revenue, will now be set aside each year to go toward the projects.

"We can cash flow those improvements as they come up," Lanzotti said. "Plus, if we refinanced with new bonds, it would cost us $45,000 to reissue new bonds. Now we don't have to pay that. So there is some real savings for taxpayers. I want people to be aware that we have not abandoned those projects."

Lanzotti said there can be more money coming into the city once Commander has vacated the building. There is demand for renting aircraft hangar space, which could generate money until a new permanent tenant could be found. Or the building could be sold. If it is sold for about $1.5 million, that would fund those projects immediately.

City manager Scott Meyer said they were aware the public could see this as a dubious venture, considering what the council said in September.

"Of course we considered that," Meyer said. "That's why we wanted to have this discussion and do it all in the open. We knew there might be some potential concern about that. So we wanted to make it clear that we are still going to do these projects, just in a different way."

smoyers@semissourian.com

388-3642

Pertinent address:

Cape Girardeau Regional Airport, Cape Girardeau, MO

Map of pertinent addresses

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