MEMORIAL HALL: Partnerships may be key for financing
Bundling the Memorial Hall restoration project with the Ro-Na Theatre and Ironton Lofts projects is the latest avenue the county wants to explore in its months-long effort to save the historic building.
By putting all three projects together, the combined total could make it attractive to a syndication that would be required if the county wants to use federal historic and new market tax credits to help finance the costs.
The city of Ironton is in the middle of two restoration projects where tax credits may be used: restoring the one-time downtown theater and turning an abandoned building into upscale apartments.
Since the first of the year the county commission has tried to come up with ways to turn the 19th Century structure into an emergency operations center.
Last week Commission President Les Boggs asked Ralph Kline of the Ironton-Lawrence County Community Action Organization to come up with proposals using federal and state historic tax credits and new market tax credits.
Restoration costs for Memorial Hall have been estimated to be at $3.7 million to gut the building and install a free-standing interior that would provide the required office space.
If the county were eligible for all three kinds of credits, the amount the county would have to finance would be approximately $1.2 million. Boggs had said earlier that financing that amount could be done if annual payments did not exceed $150,000.
However using federal and new market credits would require a for-profit syndication to be formed to avail itself of the tax advantage. Those types of syndicates are usually interested in projects that are at least $10 million, Kline told the commission.
“The project is too small for most folks,” he said. “The county or the port authority or a non-profit could not be the owner. It would have to be a taxable entity.”
At the county commission’s Tuesday work session Kline presented a financing option that would use state historic tax credits exclusively. State credits do not require a syndication to purchase the building. However that plan would mean the county would have to finance $2,793,700.
“The question is could we afford it?” Boggs said. “… $1.2 million is better than $2.7 million. We know we can do that.”
The monthly payment plan on the $2.7 million that Kline presented would be $19,698 over 15 years; $16,916 over 20 years; 13,688 for 25 years; $12,235 for 30 years and $10,490 for 40 years. Those plans would be dependent on the county getting 3.3 percent interest rate for only 15 years with a balloon payment for the remainder.
“Assuming we could get a 3.3 percent loan,” Kline said.
Commissioner Bill Pratt was concerned that the county would maintain its autonomy over the Memorial Hall project and not take on additional obligations from the other two.
“We wouldn’t want to be saddled with the Ro-Na,” he said. “What entity would own the buildings?”
The owner would have to be an entity created for tax purposes, Kline said.
“What is your gut reaction to this,” Pratt asked Kline.
“You have a good chance with state historic tax credits,” he said. “I think the other is one of those head scratchers.”
When it meets at 6 p.m. Thursday, Ironton City Council will consider a light agenda — exactly one item is... read more