Plans for Del Mar’s civic center complex took a major leap forward on April 26 when the California Infrastructure and Economic Development Bank (IBank) Board approved financing the majority of the project.
“The Del Mar City Hall-Town Hall is the type of project IBank was created to support,” said Teveia Barnes, executive director of IBank, which was founded in 1994 to finance public infrastructure and private development that promote jobs, contribute to the economy and improve the quality of life in California communities. “The new facility provides economic expansion and serves the common good of the community.”
Located on the site of the city’s current facilities at 1050 Camino del Mar, the project includes an 8,722-square-foot city hall, 3,172-square-foot town hall and 15,000-square-foot public plaza.
Following the council’s direction in November, city staff initially submitted an application to IBank for a 30-year loan for the total project budget of $17.845 million plus a 1 percent financing fee for a total request of $18.024 million.
Along with staff, the city’s Finance Committee concluded that an IBank loan was the most cost effective and flexible option for the project. The committee, however, recommended the city borrow $16 million and use roughly $2 million in cash to cover the remainder of the project. The council agreed.
With no questions, the IBank Board quickly came to a unanimous decision, approving $16.16 million in financing for the project.
“We demonstrated that we had sufficient financial resources to easily accommodate this loan,” said Assistant City Manager Mark Delin, who attended the board meeting in Sacramento. IBank is located within the Governor’s Office of Business and Economic Development and is governed by a five-member board of directors.
“We’ve locked in low-interest rate financing for a 30-year loan of $16 million,” he added.
The IBank loan is a lease revenue bond, Delin explained. It is the most common type of municipal financing. In fact, the city used such financing to refinance Del Mar Shores Park.
The civic center project will be used as the primary leased asset for the loan. To avoid capitalized interest, the Powerhouse Community Center will be used as the leased asset during construction. Because it is valued at more than the loan amount, the city will only be leasing about half, Delin previously explained during a council meeting.
At the council’s request and as part of the IBank Board’s decision, Del Mar can substitute the Powerhouse back after construction without having to go back to the IBank Board for approval, Delin said after the board meeting. All the city has to do is take a few small steps such as updating the title reports.
“That’s a big step that we were able to get accomplished,” Delin said.
City Manager Scott Huth recently said that the civic center project is on schedule, with staff expected to move to interim facilities in May and demolition of the existing city hall to take place in June and July. The design team, he said, is working on construction drawings, which should be available in August, with a construction contract awarded in early fall.
Estimated construction of the civic center project is between 18 and 24 months.