Lubbock City Council approves LEDA's request for $32.5M in bonds

Lubbock Avalanche Journal
Alana Edgin - Lubbock Avalanche-Journal
December 28, 2022

The Lubbock Economic Development Alliance recently sought and received permission from the Lubbock City Council to start selling up to $32.5 million worth of bonds to help fund a variety of business development projects in the city.

During a Dec. 6 regular City Council meeting, LEDA received approval to sell up to $32.5 million in sales tax revenue bonds through private sales. Bonds typically represent a loan made by an investor to a borrower at a fixed income. In this instance, banks had voiced their support in buying bonds so LEDA could finance bigger projects.

"We’ve been primarily able to cash fund all (prior projects) through our sales tax revenue," said John Osborne, LEDA president. "We’re having a lot more opportunities than we ever actually dreamed we could possibly have."

The bonds will be paid by LEDA's 1/8-cent sales tax over an estimated 22 years.

"The one thing I want to be very clear about is, while we are before you today for your approval … there's no claim on the city's ad valorem tax, general sales tax, or any other revenues," said LEDA's financial advisor Jason Hughes of Hilltop Securities, who presented the information.

Funds from the bonds could hit LEDA's accounts as early as February 2023. The LEDA board approved the bond parameters at a meeting in late November.

How will LEDA spend $32.5 million?

LEDA has big plans for the funds, though they only expect to need $28.7 million of the bond revenue. Those plans include:

• Financing land purchases "for the promotion and development of new and expanded business enterprises."
• Financing costs for designs, construction, acquisition and improvements to infrastructure within the city. This includes "streets and roads, storm sewer, sanitary sewer and water utilities, detention and drainage improvements, site improvements, and related improvements to promote or develop new or expanded business enterprises."
• Paying for the costs of issuing the bonds.

Osborne told local media after the meeting that some of the funds would be used for pre-existing projects, like infrastructure for the new Leprino Foods facility in east Lubbock and the expansion of WL Plastics.