Title
Refunding of Outstanding Certificates of Participation
Action
Action:
Adopt resolution authorizing and approving refunding of outstanding arena certificates of participation, series 2025A, up to $140,000,000 and calling for the execution and delivery of various documents necessary to complete the financing, and
Adopt a budget ordinance appropriating $140,000,000 to Tourism Debt Service Fund.
Body
Staff Resource(s):
Matthew Hastedt, Finance
Mitali Shah, Finance
Shahid Rana, Economic Development
Explanation
On June 13, 2022, City Council authorized the City Manager to negotiate and execute an agreement between Hornets Sports Entertainment and the City of Charlotte in amount not to exceed $215,000,000 for arena improvements and repairs and $60,000,000 for a new Performance Enhancement Center.
On March 25, 2024, City Council approved an amended proposal to update the city’s investment for arena improvements and repairs in an amount not to exceed $245,000,0000 and $30,000,000 for a new Performance Enhancement Center. The total city investment remained $275,000,000.
The Spectrum Center Upgrades debt issuance was done in two tranches.
In 2023, $110,000,000 in certificates of participation (COPs) were issued at a variable rate, and in 2025, converted into permanent fixed-rate financing.
In 2025, the city entered into a construction period financing in the form of a drawdown program for $136,500,000, allowing the city to reimburse expense on a monthly basis during construction and eliminating interest expense on funds not yet expended on the project.
The city will now convert the second tranche into permanent fixed-rate financing.
The projects funded with the two tranches met contractual obligations of the city to provide capital repairs and improvements, and also finance other renovations and upgrades to meet the National Basketball Association requirements, keep the arena competitive, make it more environmentally friendly, and help attract additional event...
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