Orland Park sells first Main Street bonds
By Mike Nolan email@example.com November 19, 2012 11:54PM
Updated: December 24, 2012 6:42AM
Orland Park on Monday completed the first bond sale associated with the village’s Main Street redevelopment project.
Of the $20 million in bonds sold, $2 million will be available to local investors.
Village trustees in September approved a bond issue to finance the project, northwest of LaGrange Road and 143rd Street. The centerpiece of the redevelopment is Ninety 7 Fifty on the Park, an upscale apartment and retail building being built near the 143rd Street Metra station.
The results of Monday’s bond sale were discussed briefly by trustees at Monday night’s village board meeting.
Orland Park is loaning the developer, Flaherty & Collins, $38 million and providing another $24 million in gap financing incentives. The village is borrowing money from Fifth Third Bank to pay construction and other costs and will use the bond proceeds to repay the bank. The project is estimated to cost $65 million.
Most of the bonds sold Monday, $18 million, have an interest rate of 2.17 percent, according to the village. The balance of $2 million carries a rate of 1.16 percent.
Usually, when a municipality sells bonds to pay for public improvements such as sewers or street repairs, the bonds are tax-exempt, meaning that buyers don’t pay federal tax on the interest income. But because the Ninety 7 Fifty bonds involve a private development, they are not tax-exempt.
The village wanted to earmark some of the bond issue for purchase locally. The $2 million will be available for purchase through the Orland Park offices of Edward Jones Investments, Raymond James Investments and Stifel Nicolaus.
Although they’ll offer a return of just 1.16 percent and are taxable, the bonds could still be an attractive investment option to the average investor who’s seeing even lower rates on certificates of deposit and money market accounts, Annmarie Mampe, the village’s finance director, said.
The first apartments at Ninety 7 Fifty are scheduled to be available March 15. The building will ultimately have 295, but not all will be ready right away.