CHICAGO - Omaha has launched a selection process for underwriters on adeal that would be its largest ever -- a $198 million general obligation issue to fund construction of a convention center and sports arena.
Firms competing for the business will not only have to prove their financial acumen to serve on the deal, but in a nod to the city s longstanding financial relationship with a local firm, they are also being asked to accept Kirkpatrick Pettis as one of the senior managers.
The debt issue surpasses past borrowings by a wide margin. Most of the triple-A rated city s prior issues have been in the range of $10 million to $36 million.
Omaha voters overwhelmingly approved the convention center debt last May. The city plans to construct the complex by the fall of 2003. It will consist of an approximately 500,000 square foot convention center and a sports arena capable of holding up to 17,000 spectators.
Omaha expects to begin receiving responses to a request-for-proposal process Aug. 9. The proposal leaves open the possibility that the city may decide to issue part of the debt through a competitive underwriting.
The RFP states that due to the city s relationship with Kirkpatrick Pettis, officials prefer that the Omaha firm occupy one of the senior manager positions. If Kirkpatrick is not included in the proposal, prospective underwriters are asked to indicate an alternate local firm. The firm has worked on most the city s past negotiated sales.
The convention center is the centerpiece of Mayor Hal Daub s plan to turn Omaha into a world-class city. The city hopes the center will attract budget-conscious conventioneers, who may prefer Omaha, with its central location and lower hotel and local transportation prices, to more expensive venues like New York.
City officials also hope the convention center will expose the nation to the new Omaha, and attract high-tech workers to a city that badly needs them. Omaha has become a telecommunications player, as home of First Data Resources and other technology-driven companies. But the city has almost zero-unemployment, and has had some difficulty finding all the workers it needs.
In May, Omaha voters also approved the creation of the Metropolitan Entertainment and Convention Authority, which will oversee the construction and operation of the facility.
The convention center debt will be partly financed through a unique turnback law that will allow the state to turn back new sales tax revenue to Omaha and other cities to fund capital projects. The amendment is expected to amortize up to $37 million worth of bonds. The rest will be paid off with other city revenues.
Private donors have pledged $75 million towards the construction costs. Daub has pledged that the bonds will require no new taxes. The city has not yet decided whether to sell the bonds in one big issue or in several tranches.
