Convention expansion plans tabled for more research

Published 12:14 am Wednesday, December 17, 2014

NATCHEZ — The expansion of the Natchez Convention Center — and a subsequent tax adjustment to pay for the works — will have to wait a little longer.

The Natchez Board of Aldermen decided Tuesday to meet with their financial advisor before voting on the expansion of the convention center.

Alderwoman Joyce Arceneux-Mathis said she and the board members support the expansion, but would like to see where they stand with the current convention center first in response to convention center director Walter Tipton’s exploration of how the city will pay for the expansion.

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“(Tipton) said some things that the board needs to look at,” Arceneux-Mathis said. “Our financial advisor will explain the whole restructuring process.”

Under the current structure bond, the debt should be paid in full by 2024.

The $12 million bond was issued in 1999 to build and furnish the convention center, as well as renovate the Natchez Community Center and Natchez City Auditorium.

The city refinanced a portion of the bond through an interest rate swap transaction executed in 2006 with Malachi Financial Products in an effort to save a projected $1.5 million over the subsequent 18 years.

The payment for the refinanced bonds will increase to nearly $1 million this year and average approximately that until the bond retires in 2024.

Mayer Butch Brown said the idea is to restructure the current bond on the convention center to add 10 years and nearly $4.5 million to pay for an expansion of the convention center and fees associated with the project.

“We are setting ourselves up to have enough income through the vehicles that are going to bring this money in, which are hotels and restaurants,” Arceneux-Mathis said.

To fund the expansion, the city is proposing an adjustment to the 3-percent lodging tax, which will be increased by 1 percent to a total of 4 percent, and the 1.5-percent restaurant tax, which will be increased by 0.5 percent to a total of 2 percent.

A 1 percent increase to room tax would bring $166,000 to the project, while a 0.5 percent increase to the restaurant tax would bring $243,000 — granting a total of $400,000 where the additional revenue would come from to support the expansion of the convention center.

The increased taxes would eventually require legislative action, but would first need approval by the aldermen.

“The hotel people, the food and beverage people have spoken favorably to adding on to the convention center,” Brown said. “That increase, with the restructuring plan, will pay and serve the debt service for the new restructured money.”

Alderman Ricky Gray said he would like to see where the city stands on their financial situation before going along with the expansion.

City officials didn’t set a date to meet with the financial advisor, but Arceneux-Mathis said she hoped it was as soon as possible.

The Board of Aldermen will meet at 11 a.m. on Jan. 13th in the City Council Chambers.