With its cost estimate at $165 million, the Savannah City Council will consider borrowing $45 million to cover a shortfall in the city’s new arena project.
The bulk of the construction costs for the upcoming Savannah arena will be paid for by a current Special Purpose Local Option Sales Tax (SPLOST). SPLOST revenue is projected to generate a maximum of $120 million for the arena project, leaving a $45 million shortfall under the current cost estimate.
In a proposal that will go before the Savannah City Council on Thursday, the city would borrow $45 million to cover the shortfall. Bonds would be paid off over a 30-year period, backed by proceeds from the city’s car rental tax. More from the Savannah Morning News:
About 75 percent of the vehicle tax revenue is currently used to help fund operations at the Civic Center, according to David Maxwell, Savannah’s chief financial officer.
Those operating expenses amounted to almost $3.8 million last year and about 42 percent of those costs — $1.6 million — were covered by the vehicle tax, Maxwell said.
“That’s going to be a big impact on how we fund the Civic Center,” he said. “That will have to be addressed when we move forward.”
The new arena is being planned as an anchor of the Canal District development project west of downtown Savannah. It has been pitched as a more modern event space in comparison to Savannah’s aging Civic Center, as well as a key feature in a broader development project that could better connect the area surrounding the venue to downtown Savannah. The arena is expected to break ground this fall, with a scheduled completion in December 2021.
Rendering courtesy Perkins+Will.
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