CITY OKs AIRPORT, ARENA BONDS

The Cape Girardeau City Council voted unanimously Monday night to issue $2.8 million in bonds for improvements to Cape Girardeau Regional Airport and A.C. Brase Arena Building.

The bonds will help with renovation projects and water and sewer improvements at the airport in conjunction with the Zenair project. Zenair of Canada Ltd. will open an airplane manufacturing plant at the airport. It needed water and sewer improvements to be made before construction begins.

The plant is expected to bring 100 jobs to the area.

The city also received a $600,000 grant from the Missouri Department of Economic Development to help pay for the project costs.

Bonds for the airport project were divided into tax-exempt and taxable portions because part of the money came from the DED. The bonds will be repaid by lease payments from the airplane manufacturer.

If the company defaults on its payments, the city will be responsible for all payments until a new company is found to take over the lease. The payment amount is expected to be $230,000 annually, city officials said.

Part of the bonds needed for the airport project were included with the cost of renovations at the A.C. Brase Arena Building.

The city approved issuance of $2.3 million in tax-exempt bonds and $80,000 in taxable bonds for the airport project. Another $260,000 was issued to help pay tahe city's share of the project. That amount was combined with $230,000 for renovations at the Arena Building.

The city approved the Arena Building renovations in a 30-year lease-purchase agreement with a Sikeston bank. First National Bank of the Mid-South is funding the improvements for the Arena Building much like any other bank would for a home remodeling project.

The city will lease the building to the bank in exchange for the bond amount. In exchange for payments, the bank will lease the building back to the city.

The title never passes from the city to the bank. However, should the city default on the loan, the bank would retain ownership for the term of the lease.

In other business, the council approved three contracts for property demolition. Houses at 119 Mill, 105 S. Hanover and 1109 rear Merriwether will be demolished by the city.

"These are dangerous buildings that have deteriorated," said Mayor Al Spradling III.

The city will bill the owners for the cost of demolition.