Little Rock sold $31.2 million in hotel-tax revenue bonds Monday to pay for the Arkansas Arts Center makeover, enough to cover less than a third of the public-private project's $98.8 million projected cost.
Proceeds from the sale are the extent of the public money dedicated to expansion and renovation of the Arts Center. Officials will rely on private money raised by the nonprofit Arkansas Arts Center Foundation to pay for the remainder.
Construction is scheduled to begin a year from now. Museum officials have declined to disclose fundraising numbers, though Arts Center board President Merritt Dyke has said he is "cautiously optimistic" the necessary private money will be collected.
The plan to expand and renovate the downtown Little Rock museum has been in the works since late 2015. Architects unveiled a high-level mock-up earlier this year and are now developing a detailed design. The estimated cost is subject to change.
Voters in February 2016 authorized borrowing up to $37.5 million. Monday's sale was for $32.2 million -- the extra $1 million for the neighboring MacArthur Museum of Arkansas Military History. A 2 percent increase to the city's tax on hotel stays will pay down the debt over 30 years.
Bonds were sold at a 4.1 percent interest rate, according to Jack Truemper, senior vice president in Stephens Inc.'s public finance department. Interest payments will total $25 million, he said.
The actual borrowed sum was less than what voters allowed mostly because interest rates have climbed since 2016, Truemper said.
Little Rock city directors authorized the bond sale by ordinance in March. Directors, without discussion, voted 8-0 Monday night to confirm the sale and amend the original ordinance to include details such as the price and interest rate.
City Hall owns the Arts Center building and spends a minimum of $700,000 each year to maintain it. City directors appoint its board members. The foundation owns the museum's artwork and controls its endowment.
Harriet and Warren Stephens, chairman and chief executive of Stephens Inc., are leading the ongoing "silent phase" of the capital campaign. A broader, public appeal will follow.
The military museum recently finished $1.5 million in upgrades, which included remodeled front porches, new lighting and the replacement of its heating and air-conditioning system, executive director Stephan McAteer said.
Metro on 11/06/2018