The bonds to finance rebuilding after Hurricanes Katrina and Rita must be sold by Dec. 31 or lost
Louisiana is expected to close the books on the $7.8 billion Gulf Opportunity Zone Bond program next month with all but $181 used, State Bond Commission officials said Thursday. Commission Executive Director Whit Kling said that all of the projects that have applied for the bonds through the program, designed by Congress to help rebuild the Gulf Coast after Hurricanes Katrina and Rita, have gobbled up most of the state's allocation.
View full sizeGulf Opportunity Zone bonds are paying for construction at the B.W. Cooper site, where these unfinished foundations were photographed in October 2010. The bonds must be sold by Dec. 31 or lost.
GO Zone bonds are low-interest borrowing tools made available to developers and manufacturers to expand existing projects or build new ones in the areas hit by the 2005 storms in an attempt to help them recover and rebuild.
Kling said that $7.839 billion was made available to Louisiana after the 2005 hurricanes, and as of Thursday $7.817 billion has been committed to various construction projects, raging from expansion of petrochemical plants to building hotels.
He said that Centane Renewable Energy, an alternative-fuels plant in St. Gabriel, has been approved for $10 million in GO Zone bonds and Exxon's plant in Baton Rouge has $12.56 million in bonds pending. Both are expected to sell their issues by the Dec. 31 deadline, Kling said.
"Lightning would have to strike for them not to close," Kling said.
He said with those two projects, the state has just $181 in capacity left in the program.
That means that more than 99.999 percent of the state's allocation has been used, he said. "That's pretty darn precise."
The state has until the end of 2012 to award bonds in the GO Zone program for the 22 parishes affected by Hurricane Ike that hit the Louisiana-Texas area in 2008, Kling said. The original Ike allocation for Louisiana was $383.85 million, and $4.45 million in bonds remain unused.
The commission also gave preliminary approval to the issuance of up to $60 million in bonds for expansion and improvements to Lambeth House, a retirement community at 150 Broadway in New Orleans.
Commission analyst Cassie Berthelot said the bond issue is expected to cover the construction of a three-story building that will house a "wellness center," a casual dining area and a 56-bed skilled nursing facility. Some of the bond proceeds will go to refinancing an existing issue that dates to 1998.
Berthelot said the project will provide 73 temporary construction jobs, create 48 new permanent jobs and retain another 48.
The issue must return to the commission for final approval when more details are available.
The bond panel also approved a request by the Orleans Parish School Board to borrow up to $50 million to meet current expenses. The board will issue revenue anticipation notes based on the expected yield from local taxes and other sources.
Kling said the debt must be paid off by June 30. "This is their annual budgetary borrowing" to get the board through slow tax-collection periods, Kling said.
The board received budgetary loans of $40 million in 2009 and $50 million last year and in both years only $35 million was used, officials said.
Ed Anderson can be reached at eanderson@timespicayune.com or 225.342.5810.