BY TED GRIGGS
Advocate business writer
October 10, 2012
The Louisiana Public Facilities Authority board of trustees has given preliminary approval for $130 million in tax-exempt bonds that will help Impala Warehousing LLC turn its Burnside terminal into one of the country’s top coal export sites.
The board also gave final approval to issue up to $142.8 million in bonds for the new Heart and Vascular Tower at Our Lady of the Lake Regional Medical Center.
“They (Impala) have already got about $70 million into the project so all told it’s going to be about $200 million,” said Martin Walke, vice president of economic development for the LPFA.
The state Bond Commission must also approve the bonds, a one-step process for economic development and industrial development bond issues, and then the LPFA must give its final approval, Walke said. So it will be some time before the bonds are priced, but in general, the interest rate on tax-exempt financing is 1.5 percent to 2 percent lower than on taxable bonds.
Although Impala is a for-profit company, port projects qualify for tax-exempt bonds under state law, Walke said.
Impala bought the Burnside terminal in June 2011 for $28 million. The improvements will give the terminal the capacity to ship 10 million tons of coal, primarily to international markets. Impala is also expected to create 100 permanent jobs at the terminal.
“Sometimes financing is all that stands between a company locating in Louisiana and creating jobs here or taking its business elsewhere. That’s one of the reasons why the LPFA exists, and it’s where we feel we can really make a difference for Louisiana’s long-term economic prosperity,” LPFA board Chairman Guy Campbell III said in a news release.
Meanwhile, the Franciscan Missionary of Our Lady Health System expects to price the bonds Oct. 18 for the Lake’s nine-story Heart and Vascular Tower, said Bob Ramsey, senior vice president and chief financial officer of the health system.
The bonds will probably carry an interest rate of around 5 percent, Ramsey said. The bonds will be paid off over 30-plus years, although the exact length of time has not been determined.
The tower will have 330,000 square feet of space that includes new patient rooms, intensive care units, operating rooms and catheterization labs. Work on the project began in mid-2011 and is expected to be complete in November 2013.
On Monday, the health system priced $43 million in revenue refunding bonds, with most of that work done years ago at the Lake, he said.
Those bonds, privately placed with Capital One, will be paid off over 10 years and carried a 2.74 percent interest rate.
The interest rate for the new bond issue will be higher because it must be sold on the open market, Ramsey said. Banks typically won’t go out beyond 10 years, and these are 20- and 30-year bonds.