CHICAGO - The public district managing the $380 million renovation of the St. Louis Gateway Arch grounds is selling $56 million of sales tax appropriation bonds for the makeover project.
Stifel Nicolaus & Co. is underwriter on the bonds being sold Wednesday by the Great Rivers Greenway Metro Park and Recreation District. JAC Consulting is advising the district and Gilmore & Bell PC and White Coleman & Associates LLC are co-bond counsel.
The district approved the sale earlier this month. Proceeds will finance various projects slated for spring construction bids including landscape work, walks, and trails on the Arch grounds.
The sale marks the second tranche of borrowing for the project. The district sold $30 million last year. Voters last year approved a sales tax increase to fund various trail and park improvements and the Gateway Arch renovations.
The tax is projected to generate an additional $31 million in annual revenue for designated projects. About $9 million annually will go to the Arch work. Private donations will also cover a significant portion of the costs.
Ahead of the sale, Moody's Investors Service affirmed its A1 rating on the new borrowing and bonds sold last year, and affirmed the Aa2 rating on debt the district issued in 2007.
The Arch bonds are secured by revenues from the district's dedicated portion of the sales tax approved last year on most retail sales within the city and St. Louis County subject to the district's annual appropriation.
The district's 2007 bonds are secured by the district's annual appropriation pledge of its portion of revenues from a separate voter approved sales tax collected in the city, county, and St. Charles County.
The A1 rating reflects a strong sales tax base and broad collections, adequate legal structure, sound financial trends, and satisfactory debt service coverage projections. Credit weaknesses include the lack of a debt service reserve fund. The higher rating on the 2007 bonds reflects the broader sales tax base because the tax is levied in an additional county.
Officials once hoped to complete by the renovations by the Arch's 50th anniversary in October 2015. The latest construction estimates from the National Park Service push the completion date back to late 2016, about 14 months behind the original projections.
A new museum to be located under the iconic stainless steel Arch is to open in August 2016. The involvement of several public agencies in the project complicated negotiations on various project agreements resulting in some of the delays.