By MELINDA WILLIAMS
Pulaski County Board of Supervisors voted unanimously Monday night to take the lead among its partnering jurisdictions in a moral obligation that will serve as collateral for a refinancing of New River Valley Commerce Park.
Both County Administrator Peter Huber and Massie District Supervisor Andy McCready, who made the motion, say the $5 million debt needs to be refinanced to free up the property for negotiations with potential investors.
Huber said the property is financed through U.S. Department of Agriculture’s Rural Development (RD) program. As a result, if the park’s owner, Virginia’s First Regional Industrial Facility Authority, decides to give property to a prospective industry in exchange for locating in the park, the assessed value of the property has to be paid to RD by the Authority.
The Authority is made up of Bland, Craig, Giles, Montgomery, Pulaski, Roanoke and Wythe counties, the towns of Christiansburg, Dublin, Pearisburg and Pulaski, and the cities of Radford and Roanoke. The park is off Route 100, adjacent to New River Valley Regional Airport.
Huber said that “jams up” the Authority’s ability to work with prospective industries in either giving or making other arrangements than the straight sale of property at its assessed value.
By using an obligation bond as collateral rather than the land itself, Huber said, the land would be unencumbered by liens from the lender.
“This is a golden opportunity for the Commerce Park to take a look at restructuring the financing and it not result in any increased debt service,” said McCready, who is on the board of the Authority. “It will give the park some much-needed flexibility when it comes to enticing companies to come to Pulaski County.”
McCready and Huber said it has become clear the current financing is hindering marketing of the property. McCready said refinancing will “make Commerce Park stronger and more viable.”
“As we’ve had some prospects look at Commerce Park, this clearly has become an issue that encumbers marketability, said McCready.
He explained that Pulaski County is taking the lead on the obligation because it has the best bond rating of all the counties in the Authority and because the park is in Pulaski County.
McCready called the county’s superior bond rating “a real testament to the staff and the previous boards that have served here.”
Huber said refinancing will not lower the annual payments on the loan, but the length and number of payments will be reduced some.
The proposal is to refinance about $5 million of the park debt using a bond or some other lender besides Rural Development, Huber said. He noted interest rates are relatively low so there shouldn’t be a major difference in the old and new rates.
Giles County has already voted to back the county on the moral obligation.