Cape Girardeau city government exploring more options for Commander building

Restructuring $2 million in city-issued bonds could "be the trigger" for a Plan B for the Commander Premier situation at the Cape Girardeau Regional Airport, city officials said Tuesday.

Plan A is still a possibility, however, with a Canadian private investor continuing to say -- as he has for more than a year -- that he is about to close a deal to buy the financially strapped aircraft manufacturer.

While nothing is definitive, city leaders are seriously considering refinancing the bonds, saying that would save $20,000 a year in bond payments as well as make the airport building more marketable in finding a replacement tenant for the aircraft company that has become a major debt liability.

"That's one of the things we're looking at," city manager Scott Meyer said. "The decision hasn't been made, but right now staff is looking at that option between now and April 1."

April 1 is when the city's next payment of $140,000 is due on the bond that paid for the 52,000-square-foot building that is home to Commander Premier, said city finance director John Richbourg. The city has paid $261,000 over the last year, he said, and Commander has made only eight of the 54 scheduled payments.

If the Cape Girardeau City Council decides to refinance the bonds, then new bonds would be sold to generate the $1.9 million balance to pay off the existing bonds, Richbourg said. Interest rates on the existing tax-exempt bonds is 5.86 percent, while rates on the new bonds -- which would not be tax exempt -- would be about 3.81 percent, which would save $220,000 over the 11-year life of the bonds.

New bonds that are taxable would also remove a federal stipulation that whatever company occupies the building has to be manufacturing in nature. That could generate more interest in the building from more diverse companies, said Mitch Robinson, executive director for Cape Girardeau Area Magnet, an economic development organization.

Restructuring the bonds, Robinson said, frees up the city and his organization as it tries to recruit.

"I think it does allow flexibility for other types of business," he said, listing aviation, distribution and air freight as possibilities. "I think it's an improvement over the limitations we were faced with before."

The debate could be made moot, if Canadian financier Ronald Strauss finds the financing to buy Commander. He's been saying for more than a year that a deal was imminent, which he reiterated again Tuesday. Strauss would only say Tuesday that he expects to have a deal in place by early next week.

But skeptical city officials are moving ahead with looking at options, in case that doesn't happen.

The suggestion of refinancing the bonds came from the city's airport advisory board. Chairman Craig Bohnsack said that right now, Strauss is at least someone who is interested.

"We don't want to jeopardize the deal with Mr. Strauss," Bohnsack said. "We're still very hopeful that will go through. But we need to have some other options available in case it doesn't. We want to be proactive."

Meyer presented the option to the city council at its meeting Monday night. He said that if the council chooses to refinance, it should be completed before April 1.

"We'd probably want to make a decision a month or so before," Meyer said. "We want to be able to give Commander notice that we were going to do something. But what we're interested in is having a viable tenant in that space."

smoyers@semissourian.com

388-3642

Pertinent address:

Cape Girardeau Regional Airport, Cape Girardeau, MO