Council approves permanent Kimber financing
Published 3:00 am Wednesday, June 27, 2018
The “final piece of the puzzle” in the recruitment of Kimber Manufacturing has been placed with the City of Troy securing permanent financing for the project.
“Once again, we’re happy to bring good news and a good outcome for Troy,” Rush Rice, the city’s financial advisor, told the council at their work session Monday. “This financing will complete Troy’s financial obligations to Kimber.”
Rice explained that the massive amount of money being given – up to $22.9 million – made it a more unusual project to finance.
“This doesn’t qualify for tax-exempt financing,” Rice said. “So we’re in the bond market competing with every corporate bond in America – including Apple computer and every A+ rated issuer out there. Because this is unusual, we thought the best way to do this rather than try to explain this to a portfolio manager in new York that knows nothing about Troy, is that this is something commercial banks would compete very vigorously for to finance this project. So we put together a bid package to about 30 banks with a presence in Alabama.”
Of those banks, the city received six total bids from five banks. One particular offer stuck out to Rice.
“Synovus out of Columbus, Georgia offered a 4.39 percent fixed rate for 10 years and then it will adjust to 1.43 percent above the U.S. 10-year treasury 10 years from now,” Rice said. “This is a very strong, aggressive bid. It gets Troy a fixed-rate percentage almost half a percent less than prime rate. We recommend approval of the ordinance wholeheartedly.”
The council promised the upscale firearms manufacturer the millions in incentives back in January to lure the company’s investment of over $38 million into the economy and the creation of 366 jobs in the city.
Of the money, $16 million is to go toward the design, renovation and construction of the facility while another $6 million will go toward capital expenses. The city also offered 20 years of tax abatements to the company to locate the new site in Troy.
The council – absent Wanda Moultry, District 5 – voted unanimously to accept the bid from Synovus and tie the bow on the project agreement. Moultry participated in a conference call during the work session to hear Rice’s explanation of the bid.
“This was a high-profile economic development project,” said Mayor Jason Reeves. “There’s been a lot of talk about Troy. This never could have been done without the existing fantastic industry already here. From individual entrepreneurs to corporations that come in and do well here, that makes it easy to bring jobs to the community. We’re appreciative for all the work that has gone into this.”
The Kimber project wasn’t the only economic development project worked on during the council meeting. The council also approved the annexation of 13.45 acres of land into the city limits.
The acreage is a portion of the 72-acre site that the City plans to purchase for Conecuh Ridge Distillery to bring the company into the city.
The distillery produces Clyde May’s whiskey, based on the recipe of the local moonshiner that lived in the area years ago.
The next step for the project will be to rezone the property to allow for the distillery to locate on the land.
The city also approved a land swap with East Central Mental Health for four acres of the city’s land near the old public works building for the lot adjacent to the mental health facility on Cherry Street.
They also approved a $675,000 purchase of three new automated garbage trucks for the Environmental Services Department and approved to fund the Pike Area Transit System for another year.
The Troy City Council will meet again on Tuesday, July 10 at City hall. The executive committee will meet upstairs at 4 p.m. and the council will convene downstairs at 5 p.m.