Study says plan could repay bonds

• By SCOTT DYER
• Advocate staff writer
• Published: Oct 26, 2008 - UPDATED: 12:05 a.m.

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When East Baton Rouge Parish voters go to the polls Nov. 4, they’ll be asked to approve two new 30-year taxes to fund Mayor-President Kip Holden’s proposed $989-million bond issue.

But an economic impact study commissioned to help sell the mayor’s proposal is based on a 20-year bond issue.

Economist Jim Richardson, who authored the study with real estate researcher Wade Ragas, said there was initial talk about financing the bond issue for 20 years, but officials later decided to go with a 30-year term with higher interest.

“But if it can work for a 20-year term, it can work for 30 years,” Richardson said.

Richardson said the economic development driven mainly by the Audubon Nature Institute’s proposed Alive attraction — a combination high-tech museum, zoo and aquarium — will generate enough new revenue to pay off the 30-year bonds in 17.5 years.

The study estimates that Alive would draw 600,000 visitors a year in 2012, a number that would increase to more than 700,000 by 2016.

Over that same time, the study estimates, local tax collections will rise from almost $11 million to about $30 million.

The study noted that Baton Rouge lacks a major tourist attraction. Audubon’s Alive project not only will attract tourists, but also will enhance qualify of life for local residents, its proponents say.

“In many ways, the quality-of-life improvement will be the most-transformative and most-meaningful return on investments and, in the end, it will also mean even more economic development, including new jobs, earnings, and state and local tax collections,” Rugas and Richardson said in the study.

Alive accounts for only $247 million of the proposed $989-million bond issue but is the major economic driver to generate the money needed to pay off the entire debt in 17 1/2  years, according to Mayor-President Kip Holden.

To fund the program, Holden is asking voters to approve a half-cent sales tax and a 9.9-mill property tax for the next 30 years.
Other projects included in the bond issue are drainage improvements, traffic signal synchronization, a new jail and juvenile justice center, new law enforcement and firefighting facilities, the replacement of 38 structurally deficient bridges and the conversion of the Governmental Building into City Hall.

The drainage programs and bridge replacements total $208 million but would trigger an additional $137 million in funding from the U.S. Army Corps of Engineers.

Also in Holden’s package is $144 million to expand the River Center and its parking. If the bond issue is approved, Virginia-based developer Armada-Hoffler has committed to spending $100 million in private money to build two new hotels next to the River Center.
In their study, Richardson and Rugas said the River Center improvements, including the two new hotels, would create about 1,000 new jobs in East Baton Rouge Parish and new local tax collections of about $2 million per year.