A rough outline of the combined properties the city bought for a future public space are marked in black.
MONROE — The city will ultimately be financing its recent purchases of a city block to be used for public use.
On Dec. 17, the city purchased the former Union Bank building at 201 W. Main St., a chiropractor’s office at 110 N Blakeley St., and the bank’s associated parking lot to create a downtown public park.
When the opportunity became suddenly available, Monroe pulled aside $2 million of its budget to make the purchases. Using debt financing will refill what the city took from its coffers.
It’s looking at a package that uses both municipal bonds and corporate bonds, under a council finance subcommittee’s recommendation. The recommendation will go to the full City Council for approval.
The package of financing $1.74 million will cost approximately $290,137 in interest over that time.
In three years’ time, it will look at refinancing at lower interest rates. Rates are expected to drop.
Using financing was always the plan, city officials said.
Monroe bought the properties to follow through on a vision to create a downtown public park. The idea was first mapped out in the 1970s.
“The city made a strategic decision here to purchase the land,” Mayor Geoffrey Thomas said.
The city does not have money set aside quite yet for redeveloping them, city administrator Deborah Knight said.
The city offered $1.1 million for the former bank and $500,000 for the former chiropractor’s office property.
Under a plan still to be approved at City Council, Monroe would issue a taxable general bond for the cost of buying the bank building, and a tax-exempt municipal bond for the cost of buying the chiropractor’s office.
Going with a taxable bond lets the city use the building for private uses, such as allowing a nonprofit to use part of it.
The chiropractor’s office will likely need to be torn down to be used for city uses, Knight said, so the city would go with a tax-exempt bond for it.
The average rates for taxable bonds are 6% and for tax-exempt bonds it’s 4.75%.
Federal officials have indicated these bond rates are expected to drop in the coming year, and the city could move to refinance at lower rates later.
