BRISTOL, Va. (WJHL) – A financial advisor told Bristol, Va. city leaders Tuesday that the city is on track to pay back millions of dollars in debt.
The city borrowed more than $50 million to build a retail development along Interstate 81 at Exit 5.
The City of Bristol, Va. depended on future financial success to pay for the construction of The Falls retail development. Since then, the project has faced several setbacks including a major retailer closing its doors.
“The Bass Pro Shop owns the Cabela’s building so we can’t control necessarily what they do with it,” Bristol, Va. Mayor Neal Osborne told News Channel 11’s Anslee Daniel.
Representatives for the city’s financial advisor said the city was on the right track to paying back its debt.
“It’s a combination of what you’ve done as a council over the last several years to be structurally balanced and more than structurally balanced to be putting dollars away in the unassigned fund balance,” said financial advisor David Rose with Davenport and co.
Moving forward, financial advisors say the city should refinance some higher interest bonds and use available cash to pay off higher interest rate debt. The city council also learned Bristol, Virginia’s credit rating actually improved in the fall of last year. That improvement was listed as A-3, which is considered a strong investment-grade.
“Collectively what we’re talking about here is positive- refinance while rates are good and also pay down upwards of 5 million dollars of debt over what would be the next defectively 18 months or so,” Rose added.
During the Tuesday meeting, a clear separation was made between debt that the City of Bristol is obligated to pay, that debt totaling more than $6.3 million, and debt that’s the obligation of the city’s industrial development authority. That amount, $27.5 million.
“The city does have an obligation to cover any shortfall on the 2014 A bonds, beyond that the city is not obligated to cover shortfalls in the revenues for that bond payment,” City Manager Randy Eads said.
City leaders say the mandate is the same, The Falls needs more businesses, not just retail stores.
PREVIOUS STORY: Cabela’s closure could set back The Falls, impact city budget
“You will see some growth there in the next 12 to 18 months which I think will be positive,” Mayor Osborne said.
Osborne added that the city’s ability to pay off debt related to the Falls will be improved if a plan to build a resort and casino in the old Bristol Mall wins state approval.
“It’s important to push for the casino because its a large economic development project that will generate a whole lot of tax revenue for us,” Osborne added.
State lawmakers in Richmond, Va. will get a say on that project that is now in competition with a rival casino project in Washington Co, Va.