A Pennsylvania state agency has cleared a 40-year parking lease deal that is one of two centerpiece transactions to Harrisburg’s financial recovery plan.
“The PEDFA board approved the plan as presented unanimously,” said Steven Kratz, communications director for the state Department of Community and Economic Development, of which the Pennsylvania Economic Development Financing Authority is a unit.
PEDFA’s board approved the roughly $287 million transaction in Harrisburg on Wednesday. The board had postponed a vote on the deal until after Thanksgiving to allow for finalizing of the documents.
State-appointed receiver William Lynch and his advisory team want to price bonds related to the lease of parking assets, as well as bonds financing the sale of the city’s incinerator to the Lancaster County Solid Waste Management Authority, at the same time.
Both are essential to a plan that would relieve Harrisburg of more than $600 million of crippling debt, according to Lynch’s so-called Harrisburg Strong plan, which the Commonwealth Court of Pennsylvania approved on Sept. 19.
Under the 40-year lease of parking garages, spaces and street meters to Harrisburg First, a consortium consisting of Guggenheim Securities, Piper Jaffray & Co., Standard Parking Corp. and Trimont Real Estate Advisors, PEDFA would issue $286.9 million of bonds, according to a preliminary official statement posted on the Roxbury News video website.
According to the statement, the bonds would consist of $116.9 million of Series A 2013 senior parking revenue bonds, $99 million of Series B junior guaranteed parking revenue bonds and $71 million of Series C junior insured/guaranteed parking revenue bonds.
Documents list Guggenheim Securities and Piper Jaffray & Co. as lead managers. Pepper Hamilton LLP is representing the Harrisburg Parking Authority in the asset transfer, while Dilworth Paxson LLP is bond counsel and Kutak Rock special tax counsel. Blank Rome LLP is representing the underwriters.
Lynch’s team wants to complete the bond sales by year’s end, while interest rates remain low and before the city encounters another expected cash crunch by December and January.
The Lancaster authority expects to price $132 million of tax-exempt revenue bonds on Dec. 9 and 10 to fund the purchase of the incinerator, which it will rename the Susquehanna Resource Management Complex.