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| "I don't care if the voters rejected this bailout, I did it! Heh heh heh" |
From The McAllen Monitor
HIDALGO — Five years ago, with interest on State Farm Arena’s debt mounting, Hidalgo Mayor John David Franz went to U.S. Rep. Henry Cuellar, D-Laredo, for help.
Just like many American homeowners, the city’s Texas Municipal Facilities Corp. had borrowed money at a variable rate and now found the payments uncomfortably high. To build the arena, the corporation — a nonprofit local government corporation overseen by city leaders — borrowed $9 million from Texas State Bank.
While the arena transformed Hidalgo into a destination, the loan became a headache. The interest rate, which started at 6.25 percent in June 2002, had slowly climbed to 9.75 percent by September 2006.
As a result, Hidalgo still owed nearly $8.4 million to Texas State Bank in September 2006, despite four years of payments, according to city financial records. In 2007, during one of their first conversations, Franz asked Cuellar for help.
“Quite honestly, sometimes things don’t work out the way you expect them,” Cuellar said, recalling the conversation. “And he said, ‘We need some help with the interest rate, is there something that’s available?’ And we kept pushing through USDA. Pushing and pushing. And they kept saying no.”
Eventually, under President Barack Obama’s administration and with help from Cuellar, the U.S. Department of Agriculture came around. On Tuesday, Cuellar and the department’s Rural Development state director, Paco Valentin, presented Franz with a nearly $11.5 million, low-interest federal loan designed to solve the problem.
Voters narrowly rejected a previous attempt to refinance the debt, defeating the proposition 787-664. ("Heh, heh heh! who cares")
Welcome to 'USDA-DHS-CPB-POTUS-REP28.GOV' Arena
ReplyDeleteWhoever gets the contract for that sign is gonna make big bucks.
ReplyDeleteSee, Laredo did something right, well at least the voters did. They built an arena that was funded by a 1/4% sales tax. Which by the way has already generated enough money to pay off the arena. And the arena provides a good revenue stream to several city accounts.
ReplyDelete(Long story as to why the city has rat holed over $20 million. It would make a great Laredo Morning Times article, or KGNS story.....but opps I forget there is no real press in Laredo.)
And the Laredo voters did the same with the new ballpark. They are letting the Mexican shoppers help finance the ballpark.
Tom, the original Arena cost would have already been paid off. Now with the new ball park being rolled into the existing debt, there is no chance for 4a,4b to happen for at least 6-8 years.
ReplyDeleteMaximiliano
Max, there is a way they can get to 4a/4b, but it will take some creative financing and approval by the legislature.
ReplyDeleteHowever, my point is that we did it right and financed via a sales tax, which on the border is an effictive tool as there are lots of shoppers from across. I am suprised Hildalgo did not go this route.
OK, I see what you mean- in that respect, yes it appears "we" did it the right way. Although, I admit I voted against the arena AND against the baseball park.
ReplyDeleteMaximiliano
Ain't America great.....
ReplyDelete