Dallas, Texas, issued $214 million in bonds to finance improvements to a convention center and a cultural complex.
The city sold the bonds in two series. The larger series, consisting of $170.6 million, yield 5.5%, and the smaller series, consisting of $43.4 million, yield 6%. All of the bonds mature on August 15, 2053, with a mandatory tender date in 2028. S&P Global Ratings assigned a rating of A- to the larger series and BBB to the smaller series.
The larger series of bonds will finance a plan to replace the Kay Bailey Hutchinson Convention Center with an even larger facility. The two million-square-foot convention center opened in 1973, but has developed a deferred maintenance bill as high as $700 million in recent years. Rather than pay that maintenance, the Dallas City Council began steps to demolish the center last year and replace it with a 2.5 million-square-foot facility, at a cost of almost $2 billion.
City officials say the new convention center will attract more business to Dallas, raising tax revenue that will secure the bonds used to pay for its construction.
The smaller series of bonds will fund renovation and improvements to Fair Park, a cultural complex containing museums and performance venues, including the Cotton Bowl Stadium. Fair Park is the most visited attraction in Texas, with more than 5 million people visiting annually. The bond proceeds will finance upgrades to the Fair Park Bandshell and expansion of the Cotton Bowl Stadium, among other projects.
The bonds are special obligations of the city, payable by an increase in the hotel occupancy tax.
Ramirez & Co, Inc served as underwriter on the issuance.