Century Approves $55 Million Bond Issue For UWF Expansion
July 16, 2013
The Town of Century voted Monday night to approve bond issue up to $55 million to fund expansions at the University of West Florida.
Acting as a second signature for the Capital Trust Agency, a bond conduit partnership between Century and Gulf Breeze, Century approved the up to $55 million bond issue with a Provident Resources Group, a Georgia non-profit. The project must now be presented to Gulf Breeze on July 31 with a projected closing date of August 1.
Provident Resources is still considering the proposal and has not signed a formal contract, said Matt Dannheisser, attorney for both Gulf Breeze and Century, but going ahead and obtaining Century’s approval for the project will speed the process along.
If Provident backs out of the project, Century’s early approval will basically be “no harm, no foul”, Dannheisser said. If all $55 million is issued, Century will receive a fee of $19,250.
The up to $55 million UWF project will include 356 student housing beds plus 54 beds dedicated to guest housing, a conference and academic center and parking amenities — although Provident is said to be considering dropping the conference center from the plan. The 18 acres at the east entrance of the campus on Davis Highway will also include space for retail development. The expansion has a target opening date of August 2014.
$40 Million A No-Go
A previous $40 million bond issue for the project essentially collapsed late last month to due to unfavorable changes in the bond market.
The $40 million was to come from the Capital Trust Agency, a bond conduit partnership between Century and Gulf Breeze, for a hotel, conference center, new student housing and more at the Davis Highway entrance to UWF. The college’s development arm, University of West Florida Business Enterprises, Inc., had previously entered into an affiliation agreement with Vieste, LLC, for the project.
Dannheisser said he learned that project financing was failing the day after Century gave its seal of approval in a special meeting.
“I was very disturbed to learn that because it made me appear disingenuous to you when I cam the day before and said otherwise,” he said.
The increased financed amount — from $40 to $55 million — is due to a different planned relationship between the developer and the university. He said that while the project bottom line may come in at $48 million, $55 million was requested. Vieste was to have contributed about $7 million to the project and shared in the profits for the next 50 years, while Provident will not. The bond issued for Provident will be tax-free.
Capital Trust Agency
Century entered into the Capital Trust Agency with Gulf Breeze in 1999 with Century essentially serving as the “second signature” for CTA. Century has received over $650,000 in fees since the inception of CTA. The approval of a $40 million bond issue for UWF would have earned Century about $14,000 in fees upon closing.
The CTA is structured in such a way to indemnify Century from any financial risk, whether it be from a company that defaults on repayment or any other legal liabilities, according to Dannheisser. The funds used for the bonds are from the CTA’s coffers, not from Century or Gulf Breeze.
Picture below: Century’s attorney, Matt Dannheisser, explains a $55 million bond issue to Town Clerk Leslie Gonzalez and council member Gary Riley Monday night. NorthEscambia.com photo, click to enlarge.