LARGO — Step by step, Largo has been moving forward in its mission to build a new mixed-use City Hall along West Bay Drive. On Dec. 21, the city took one of its most important steps yet.
After little discussion, city commissioners unanimously approved four resolutions that authorized the borrowing of $62,385,000 by issuing municipal bonds.
According to Finance Director Kim Adams, the majority of the borrowing — $58 million — will be for the new five-story municipal complex to be constructed on the north side of West Bay Drive between Fourth and Fifth streets. Another $4 million will be dedicated to the reconstruction of the Parks Division administrative facility, and the remainder will be the cost to issue the bonds.
City leaders are hopeful the new City Hall will be a catalyst for a downtown area that has struggled to attract and retain businesses.
Therefore, the facility will have 18,000 square feet of ground-floor commercial space and a separate parking garage with more than 300 parking spaces. It also will feature a public plaza, opportunities for outdoor dining space, and flexible indoor and outdoor event spaces.
The endeavor is the costliest in the city’s history, which is why it will be issuing bonds.
“We’ve never issued bonds in my 34 years with the city,” Adams said.
Because of improvements and rising material and labor costs, the total estimated cost of the project has now risen to $58 million, which includes about $3 million for the purchase of three parcels of land.
Despite the city being a rare issuer of bonds, Adams said lenders have faith in Largo.
“We received a AA bond rating from Standard & Poors, which is a really good bond rating,” he said. “It’s considered middle-high grade.”
Not too many cities receive a AAA rating, he added, and the AA is just two steps down from AAA at the top.
“S&P issues I think it’s 18 different ratings, so we are definitely near the top of the ratings scale, which means S&P feels we’re financially sound and we will be able to repay the debt,” he said.
The interest rate on the 30-year bond issue won’t be known until Jan. 6, when the underwriters purchase the bonds.
But he anticipates it to be a low rate around 2.5 percent.
There was no discussion amongst the commissioners about the bonds themselves, but Commissioner Jamie Robinson assured those listening that this has been a long process with plenty of thought put into it.
“It’s not just something that happened yesterday,” he said. “I want to make sure everybody feels comfortable that we’re not up here just rubber-stamping things.”
If all goes as planned, the city expects to break ground on the project in mid-2022.