The Ogden City Redevelopment Agency issued $64.2 million in bonds to transform a former snack factory into a mixed-use development including housing, retail, hotel, and office space.
The bonds mature between 2028 and 2058, yielding between 2.57% and 4.16%. They received a rating of AAA from S&P Global Ratings and AA+ from Fitch Ratings.
The rating “reflects the city’s superior gap closing capacity, which is supported by ample reserves, solid expenditure flexibility, and a high level of revenue raising ability,” Fitch analysts wrote.
The bond proceeds will finance the so-called WonderBlock project, which includes the redevelopment of a location previously used as a factory and bakery by Hostess Brands, the manufacturer of products such as Twinkies and Ding Dongs. Ogden aims to replace the factory with 356 residential units, more than 100,000 feet of office space, 32,000 feet of retail space, a 90-room hotel, and a parking garage. The city expects the development to increase its tax base and spur growth in tax revenues, according to the official statement accompanying the sale of the bonds.
“The City has placed significant importance on the WonderBlock Development and views the development as a catalyst to revitalize a key area of the City’s downtown,” the bond documents read.
Ogden is a city of almost 90,000 about 40 miles north of Salt Lake City. The bonds are special, limited obligations of the agency, payable by WonderBlock revenue and a 1% local sales and use tax.
Citigroup Global Markets Inc and KeyBanc Capital Markets Inc served as underwriters on the issuance, purchasing the bonds for $69.7 million. The price reflected a premium of $5.6 million. LRB Public Finance Advisors, Inc acted as municipal advisor.