By Bridget Levitz, Truth Staff
ELKHART -- Members of the 400 Block Study Group say when it comes to the Elco Theatre, time is money.
That's what Diana Lawson told Elkhart's Board of Park and Recreation Tuesday, as she thanked board members for taking the first step toward funding the $13.5 million renovation plan to bring new life to the aging theater.
Lawson, executive director of Elkhart County Convention & Visitors Bureau, chaired the 400 Block Study Group that came up with the plan. Mayor Dave Miller put the group together about a year ago to determine the Elco's fate.
The park board passed an initial resolution Tuesday to sell bonds in the amount of $10.5 million to pay for a theater makeover that includes expanding the Elco lobby, reducing seating capacity and creating banquet and event space in the adjacent Sorg property.
Because the Elco is under the control of the Department of Parks and Cultural Resources, it fell to the park board to start the bonding process. A public hearing is set for May 29 to gather public input on the bond.
"We have the momentum now and interest in the private sector," Lawson said. "If we wait, we not only lose momentum but face all the unknowns with rising construction costs or interest rates."
Based on the proposed timetable -- assuming there is no public outcry against the bonds, and that Elkhart City Council and state approval are granted -- bonds could be issued at the end of the year.
To save money, however, financial adviser H.J. Umbaugh and Associates suggests holding off on issuing the bonds until 2010. To cover construction costs prior to that, the city would issue bond anticipatory notes, Curt Pletcher told the board. Pletcher is a CPA with H.J. Umbaugh and Associates.
"As funds are needed during construction you can draw on that B.A.N.," Pletcher said. "Once you're near completion, we would issue the bond and pay back that B.A.N."
Bond anticipatory notes, he explained, reduce the overall cost of interest. The city would only pay interest on the money it has used, not the total amount of the bond.
"This way, you're only utilizing the funds as needed," he said.
Umbaugh would monitor the bond market and if interest rates start to go up, the bonds would be issued sooner.
Repayment begins in 2010 through 2029. The estimated average annual debt service over that 20-year period would be $890,000, compared with the $1.5 million the city's carrying now.
"You'll actually see a decrease in overall debt service," Pletcher said.
Resident Andy Carter called the plan the best he'd ever seen for the Elco, but said he still has concerns over cost to the taxpayers and total cost of the project.
To cover the total $13.5 million price tag, the 400 Block group suggested $2 million in private donations and $1 million in grants in addition to the bond.
And by essentially replacing three bonds rolling off city books soon, city officials and 400 Block group members say it can be done with no anticipated tax increase.
The city would roll over the 2006 $1.99 million city, the 2005 $1.8 million park and 2006 $1.85 million park general obligation bonds -- to be paid off in 2010, 2009 and 2012, respectively.
City Bond Counsel Randy Rompola of Baker and Daniels has described it as "replacing old debt with new debt."
Because the bonds exceed $2 million, a remonstrance similar to the 2004 opposition of the $10.9 million bond to pay for the RiverWalk could be seen. 400 Block Study Group members, however, say the public is behind this project.
Residents can voice their concerns or support at the 3 p.m. May 29 hearing in the municipal annex at 201 S. Second St. Public input also can be offered when the Elkhart City Council hears the initial bond request at its June 18 meeting and votes at its July 2 meeting.
Assuming the council passes the ordinance, parks officials would seek approval of their plan at an August hearing with the Indiana Department of Local Government Finance.