City residents have been upset from time to time by UVA’s massive real estate projects.
Things like 1,200-car parking garages come to mind. So how will this news from City Council (www.charlottesville.org) last week sit with them: The UVA Foundation (www.uvafoundation.com) won approval from Council to issue $170 million in tax-exempt 30-year revenue bonds through the City’s Industrial Development Authority (IDA) to finance upcoming and existing real estate projects.
The projects that will get administrative help from Charlottesville include additional student housing, another building and road at the Fontaine Research Park and, yes, a new parking garage on W. Main Street. These projects have all been previously announced by UVA.
The bonds represent “no risk at all to the City, the IDA or the citizens of Charlottesville,” says the City’s Director of the Office of Economic Development Aubrey Watts, who adds that this is the first time the IDA has issued bonds on behalf of the UVA Foundation.
 Auto-matic for the people: UVA Foundation CEO Tim Rose says a new parking garage, aided by City and County bonds, "helps keep cars off side streets and more importantly, it will make room for the Emily Couric Clinical Cancer Center." |
The bonds, which also got the approval of the Albemarle County Board of Supervisors, are guaranteed by a bank letter of credit written for the foundation and are expected to be sold by the middle of this month.
The advantage of the bonds over other forms of financing? “They are not subject to federal taxation on the interest and as a result they carry a lower interest rate,” says attorney James Bowling IV, speaking on behalf of the IDA of Albemarle County.
The IDA has been put to this kind of use before. Similar revenue bonds were previously issued for nonprofits such as Region Ten, Martha Jefferson Hospital and Westminster Canterbury.
According to a fiscal impact statement prepared for the county’s IDA, which recommended approving the issuance, the UVA projects could generate an estimated $61,000 per year in tax revenue. The IDA foresees 250 new jobs and goods and services expenditures of about $311,000 within the county.
