Bloomington council OKs $46.8M bond issuance to help fund $70M convention center project
At its regular Wednesday meeting (March 5), the Bloomington city council approved the issuance of $46,825,000 in lease rental revenue bonds, to finance the cost of expanding the Bloomington Convention Center.
The interest rate for the bonds is 5.0 percent. The term of the bond issuance is 20 years, ending in 2045. In advance of the bond sale, the annual debt service estimated by Krohn and Associates, the city’s financial consultant, is about $3.85 million.
The vote on the resolution was 6-0 on the nine-member council.
Absent from the meeting were: Matt Flaherty, Kate Rosenbarger, and Andy Ruff. Voting yes were: Dave Rollo, Isabelle Piedmont-Smith, Hopi Stosberg, Courtney Daily, Sydney Zulich, and Isak Asare.
The expansion of the convention center is planned for the lot to the east of the current convention center, across College Avenue. The expansion will add about 60,000 square feet to the 40,000 square feet of the existing facility, for a total of around 100,000 square feet of convention space.
The planned start of construction is June of 2025. The completion of the convention center expansion is expected by February 2027.
The roughly $46.8 million that the city will borrow—along with a net premium of $3,663,880, and $20,027,676 in the current balance of the food and beverage tax fund—will finance the total estimated cost of the project, which is $70,516,556.
The bonds are called lease rental revenue bonds, because the arrangement involves a lease between the city of Bloomington, as the lessee of the property and the project, and the City of Bloomington Public Building Corporation, as the lessor. The BPBC is holding the real estate for the purpose of the expansion.
The board members of the BPBC are listed in the articles of incorporation filed by Bloomington’s corporation counsel Margie Rice on Feb. 3, 2025 as: Sue West; Larry Allen; and Sue Sgambelluri. West is a former city of Bloomington controller. Until the end of 2024, Allen was Bloomington’s city attorney. Sgambelluri is a former city councilmember and current member of Bloomington’s redevelopment commission.
The resolution passed by the council at its Wednesday (March 5) meeting included approval of the transfer of the real estate from the Monroe County capital improvement board (CIB) to the city of Bloomington. But the BPBC will be holding the property for the purpose of the expansion.
The terms and details of the bond issuance compared to the lease are not a perfect match, because some of the details won’t be pinned down until the bonds are actually sold. The term of the bond issuance is 20 years. The lease extends for up to 25 years.
The amount of the annual lease payment that is specified in the text of the lease is $4.5 million, which is well above the estimated $3.85 million debt service. But under the terms of the lease, that amount is to be reduced after the sale of the bonds to an amount that’s just about $5,000 more than what the actual debt service turns out to be.
The debt service is supposed to be funded by the city of Bloomington’s share of the county’s food and beverage tax revenues. Based on the numbers provided in the Wednesday meeting information packet, the city’s share of the tax revenue in 2024 was $4,171,247. In 2023, it was $4,107,387.
The annual debt service payments, estimated before the sale are $3,849,875, are set to conclude in 2045.
In addition to the food and beverage tax revenue, the city is pledging revenue from the city’s portion of the economic development local income tax (EDLIT) as a backup source of revenue to pay the debt service.
Until last month, the convention center was called the Monroe Convention Center, after its home county. The renaming was approved by the Monroe County capital improvement board, which had responsibility for naming the facility under the terms of the interlocal agreement between the city of Bloomington and Monroe County government.
