DALLAS - The Little Rock Board of Directors has established a public facilities board with authority to issue up to $20 million of revenue bonds to finance facilities for an international hunger-relief agency based in the city.
Heifer International will use bond proceeds to refinance $7.5 million remaining on a $19.5 million loan on its headquarters near the Clinton Presidential Center in downtown Little Rock. Remaining proceeds could be used to complete unfinished offices at the headquarters, and to complete financing for a $13.5 million addition to the complex.
City directors voted to set up the Heifer Project International Public Facilities Board at their regular meeting on Tuesday night. The board can issue up to $20 million of tax-exempt revenue bonds for the charity, but not more than $10 million of bonds in a year.
"We sure appreciate everything that Heifer means, not only to the world but to Little Rock," Mayor Mark Stodola said at Tuesday's meeting. Stodola stressed that debt service on the bonds is the responsibility of Heifer International, and not the city.
"It will be the obligation of the Heifer project or the Heifer International organization and will not affect the tax base," Stodola said. "It won't affect the credit worthiness of the city of Little Rock whatsoever."
The hunger-relief group opted for the public financing so it could devote more of its charitable resources to the fight against world hunger, said Ray White, public relations director for Heifer International.
"The primary purpose of the bonds is to refinance the mortgage on the headquarters buildings," White said. "We're paying 5.5% on the $7.5 million remaining on a $19.5 million construction loan. We expect to get below-market rates with the tax-exempt bonds, and any savings from that difference will be dedicated to our programs."
The loan from Regions Bank NA on the two-year-old building will mature next month, White said.
"The bond sale could happen pretty soon," he said.
White said bond proceeds can only be used for capital assets, enabling the charity to use more of the contributions it receives for its mission to wipe out hunger in poor areas around the world
"This is actually a funding mechanism that the IRS offers to help organizations like ours that do public good, to have a low cost way, the most financially responsible way, to fund capital expenditures," he said.
The 97,000-square-foot headquarters opened in 2006, and has been recognized for its environmentally friendly design and use of recycled and energy-saving materials.
White said in addition to the loan refinancing, proceeds could be used to complete office space in the headquarters facility that had been left unfinished, and to provide the remaining $4 million needed to complete a $13.5 million conference and education center at the complex.
Heifer International operates in 125 countries and 38 U.S. states. It provides farmers with animals ranging from cows to alpacas to honey bees, along with training on how to care for them. Recipients are required to contribute a number of the offspring to other impoverished farmers.
White said the group raised more than $120 million in charitable contributions in 2007, including a $42 million grant from the Bill & Melinda Gates Foundation.
