DALLAS — Louisiana’s State Bond Commission declined Tuesday to approve a tax-exempt option for $75 million of bonds for a grocery distribution facility in St. Tammany Parish.
The commission endorsed taxable debt for the project, but rejected requests by Associated Wholesale Grocers Inc. and the St. Tammany Parish Development District to include an option for tax-exempt bonds to finance the distribution center at Pearl River.
The commission also gave its go-ahead to proceed with the refunding of $200 million of variable-rate general obligation bonds issued in 2008 for debt service relief to hurricane-battered local issuers.
The floating-rate refinancing bonds will be tied to a percentage of the London Interbank Offered Rate.
Foley & Juddell LLC is bond counsel on the transaction.
Proceeds from the 2008 bonds refunded $200 million of GO Zone tax-credit bonds issued in 2006 for local government debt service relief following the hurricanes of 2005.
The refunding bonds are to be issued by June 1 because of the July 17 expiration of a letter of credit provided by BNP Paribas on the 2008 bonds.
State Treasurer John Kennedy, who chairs the Bond Commission, said approval of tax-exempt debt for the St. Tammany project could be interpreted as approval of the request by project sponsors for GO Zone bonds.
“I don’t want any confusion about this,” Kennedy said. “We’re not putting this project at the top of the list to receive any of the unused GO Zone bond capacity.”
The project is one of four applicants in line for tax-exempt Gulf Opportunity Zone bonds if any unissued GO Zone bond capacity is returned to the state.
Whit Kling Jr., director of the Bond Commission, said the proposal was first submitted as a request for GO Zone bonds.
The application was amended to include taxable debt because the request for GO Zone bonds came in after the state’s allocation of $7.8 billion of the tax-exempt private activity bonds was exhausted.
Kling said it was “highly unlikely” that significant amounts of capacity would become available. He said holders of GO Zone bond allocations have to issue the debt by June 15 or the capacity will revert to the state for re-distribution.
“There is only $687 of capacity remaining,” Kling said. “I do not expect any more capacity to be returned.”
The Associated Wholesale Grocers project is currently considered the first of four pending applications for the remaining bonds, Kling said, but only because sponsors were the first to submit completed paperwork.
If more bond capacity becomes available, Kling said, the four projects would be assessed and ranked by the Louisiana Department of Economic Development.
“The department could make a recommendation that a project jump over others to be first in line, but ultimately the final decision is up to the commission,” Kling said. “It is not a first-come, first-serve process.”
The commission ratified Adams & Reese LLP as bond counsel for the state’s next general obligation bond issue.