DALLAS — The Dallas City Council approved up to $25.5 million of tax and revenue certificates of obligation Wednesday to finance improvements to the city-owned Cotton Bowl stadium in Fair Park.
Upgrades to the stadium were considered essential to keeping the annual football game between the University of Texas and the University of Oklahoma in Dallas, where it has been played since 1929.
Voters have approved $51.5 million of general obligation bonds for Cotton Bowl improvements at elections in 1995, 2003 and 2006.
The city opted to issue the debt as certificates of obligation rather than GO bonds — which would have required voter approval — to meet a tight construction schedule.
The work cannot begin until after the 2014 Cotton Bowl game in early January, and it must be completed before the State Fair of Texas opens in late September of that year.
The 10-year, non-callable notes are scheduled to be sold competitively on June 6.
The level annual debt service is around $2.8 million a year.
Briefing materials prepared for the City Council by Dallas chief financial officer Jeanne Chipperfield show the city will obtain total proceeds of $25.2 million with a par amount of $22.9 million of debt and a premium of $2.4 million.
Bracewell & Giuliani and West & Associates are co-bond counsels for the sale. Co-financial advisors are First Southwest Co. and Estrada Hinojosa & Co.
Issuing costs are estimated at $145,840. Bracewell & Giuliani's fee is estimated at $26,775, and West's at $20,825. First Southwest's fee is estimated at $19,170 and Estrada Hinojosa's is pegged at $12,780.
Chipperfield said the city expects to pay $21,000 to obtain a credit rating from Moody's Investors Service for the issue and $15,640 for a rating from Standard & Poor's.
Printing the official documents is expected to cost $10,000.
Dallas has $1.8 billion of outstanding GO debt rated AA-plus by S&P and Aa1 by Moody's.
The city expanded the stadium to 91,000 seats and added a large scoreboard using proceeds from bonds that were authorized in 2006, but the two universities said more had to be done to keep the rivalry game in Dallas.
The schools are obligated to play in the Cotton Bowl through 2015. State Fair officials told the City Council last week that upgrades financed with the new debt would ensure the game is in Dallas through 2020.
Cotton Bowl manager Roland Rainey said the improvements would include a glass-enclosed club seating area and new communications technology in the press box.