Holly Gilvary
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City of Racine Common Council voted March 4 to approve borrowing $17 million in the form of a short-term bond that the city will cover with grant funding in order to fund the new Lincoln King Community Center and Health Clinic. |
RACINE — The City of Racine will borrow $17 million for the construction of the Lincoln King Community Center and Health Clinic.
The Racine Common Council at its March 4 meeting approved promissory notes for the bridge loan with an 8-4 vote. Alders Jeff Coe, Melissa Kaprelian, Renee Kelly and Sandy Weidner voted against the motion.
City of Racine Finance Director Kathleen Fischer said the $17 million will be a short-term bond the city intends to cover with grant funding over the next two years.
Baird Managing Director Bradley Viegut said the final interest rate, locked in by the council’s vote to approve the borrowing, is 3.89%.
The city will refinance the bond in 2027 to pay the money back, with the option of prepaying the bond in 2026, if some grants come in early, as a way to reduce interest costs, Fischer said.
The city will put the grant funds into a separate bank account earning a high rate of interest in order to offset the interest costs associated with the bond.
Fischer added that tax credits also will help offset interest.
Kaprelian said she was concerned what might happen if “even one” of the major grants pending for the city fails to materialize, and asked Fischer what the city’s contingency plan is to meet the 2027 repayment obligation.
According to Fischer, if any of the grants fall through and the city is unable to meet the 2027 repayment obligation, the $17 million would be amortized over a 20-year period and the principal and interest would be paid from debt service tax levy.
Prior to the vote, Weidner said she’d be voting against the motion because the payback is coming from grants, and if the grants fail to materialize, property taxpayers should not have to fund the project.
“I’m afraid that, should these grants not come through, which is a very big possibility, that property taxpayers are going to be paying for perpetuity for a health clinic that they did not ask for,” Weidner said.
She also said that for most of the years she’s served on Common Council, the city’s public safety building has been in need of upgrades.
“If we commit ourselves to almost $20 million in loans for a community center/health clinic, we will have no room to replace a building that’s been needing to be replaced for the last two decades,” Weidner said.
Common Council approved the development and construction of the Lincoln King Community Center and Health Clinic project in August with a 12-3 vote. Alders Coe, Kaprelian and Weidner voted against the motion.
More than 20 people spoke in support of the Lincoln King Center during the Aug. 20 meeting’s public comment period.
The city broke ground on the project in November, and completion is estimated for 2026.
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