BANKS WILL SHARE IN FINANCING OF PROJECT

Local banks in Cape Girardeau have agreed to share in the financing of the city's Convention and Visitors Bureau recreation project.

At tonight's meeting, the city council will consider action authorizing the financing plan that will generate $3.73 million toward the project.

Assistant City Manager Al Stoverink said all seven local banks have agreed to finance the project through the purchase of "certificates of participation" at an average annual interest rate of 5.25 percent.

Capital Bank has been named the trustee for the transactions; other banks participating include Boatmen's National, Mercantile, Commerce, First National, AmeriFirst and Southeast Missouri.

The parks and recreation proposal will include construction of softball and soccer fields at Shawnee Park; acquisition of a 90-acre tract of land at Mount Auburn and Kingshighway for development as a "general-use community park;" construction of a 32,000-square-foot, multiuse building on the site; and completion of a fitness trail through Arena Park and the new park site.

The project will be funded by bonding excess tourism funds, which are financed by a quarter-cent tax on motel and restaurant receipts.

Stoverink said late last year that the city hoped local banks could finance the project at a lower rate of interest.

Part of the $4 million project will be funded through donations to the city's Parks Development Foundation. City officials initially expected to issue bonds for about $3.5 million of the cost of the project. But by securing local financing, an additional $230,000 will be generated by bonding the excess tourism funds.

Stoverink said that the local financing arrangement is "fairly extraordinary today." By buying bonds directly from the city at a lower rate of interest, the banks get less return than if they would invest the bonds on the open market, he said.

In a letter to the council, Stoverink said, "The cooperative effort of all the local banks in reaching this agreement has created a partnership with the city that not only helps move this project ahead, but also will have positive benefits for the community in the future.

"A total local financing of such a sizable project is very unique today with the changes in the banking industry that have taken place over the past 10 to 15 years, particularly with this many banks participating."

If the council approves the agreement tonight, the closing of the transactions would be scheduled for mid-March, Stoverink said.

Other city staff members have solicited proposals from architects and engineers for the design work for the project.

The design process for the proposal is expected to take three to six months once a contract is granted. The total project is expected to be finished by 1995.