Council Approves Bond Issue for Columbia Regional Airport

The Columbia City Council voted unanimously Monday to sell $14.5 million in tax-exempt airport bonds to finance the construction of a new terminal building at Columbia Regional Airport.

Regions Capital Advantage will purchase the 15-year bonds at a 1.9% interest rate for the project.

They will be repaid by the voter-approved hotel and lodging tax passed in August 2016, expected to finance $10 million of the project, and passenger facility charges, expected to finance $6.2 million.

Fourth Ward Councilman Ian Thomas questioned whether the city should be concerned with taking out millions of dollars in bonds to be repaid through revenues largely dependent on Columbia continuing a healthy tourism industry during a pandemic that's halted virtually all tourism for at least this quarter.

The airport experienced a 42.5 percent decline in passenger traffic in March, when the pandemic first began to impact travel. April numbers have not been released.

City Counselor Nancy Thompson said revenues are adequate to repay the debt. The hotel tax has already earned the city some $2 million and has just $8 million left to collect. The tax has a sunset period of 23 years.

"The 1.9% interest rate really makes this project very doable and makes the financing very attractive for this city to move forward with the project in a more expedited fashion," she said. "I think that's a really unheard of percentage rate in order to have this kind of funding."

City Manager John Glascock said he is confident the airport will be back to its normal activity by next year.

"We're going through a lot right now, but I fully expect it to be back within not probably this year, but next year it will pick back up and we'll be back to close to where we were before," he said.

Mayor Brian Treece said the airport is "obsolete" and will inevitably need to undergo improvements and construction. With such low interest rates, now is the best time to move forward.

"If we delay at all, we will only see the cost go up," Treece said. "If we're worried now about having sufficient revenues to pay the bonds, that cost only increases in six months through higher construction costs, higher interest rates, delay, and ... we have an obsolete airport that is not ADA compliant, not TSA compliant ... wasn't built for Homeland Security, and we're still going to need a new terminal."

The airport has received three bidders in response to the two-month request for proposals to design the new terminal, which expired Friday.

Stacey Button, Regional Economic Development Inc. president, said the airport will conduct a virtual open house through the next week and the team will take most of May to review and interview the bidders.

Chuck Graham, a member of the airport advisory board, told the Tribune the board has been told nothing about how CARES Act funding for the airport will be spent. Both last month's and this month's meetings were canceled due to the virus.

The city denied his requests to hold advisory board meetings via Zoom, he said, and he is concerned the board won't be able to meet to discuss the RFP before it's sent to council in June.

The council also agreed to take ownership of the 135-acre Boone County fairgrounds, a step that will be finalized at the next meeting.

The council approved a memorandum of understanding outlining guidelines that would allow Boone County to transfer the county fairgrounds property to the city of Columbia for "public recreation purposes" at a meeting in early January. The agreement still allows use of 23 acres of the property for the Boone County Fair at least 10 days per year, according to a council memo.

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