City Manager Joseph Scherer said at this evening’s city council meeting he, Finance Director MeLinda Hite and City Attorney Gilbert Chichester discussed the theater debt with the Local Government Commission. “The Local Government Commission recommended we move forward with the proposal.”

Scherer said the city would be soliciting proposals from banks other than Bank of America, which crafted the original financing package on the venue. He said the city was looking for, “Other institutions willing to give us what we are asking for.”

Answering a question by Councilwoman Suetta Scarbrough, Scherer explained there would still be a refinancing penalty from Bank of America but the city would try to negotiate that fee.

What council is looking for was discussed in depth during a May meeting and the governing panel learned it could gain more control should it decide to refinance theater debt.

While refinancing the theater debt would essentially mean the same $1.9 million annual payments on the venue, which is being leased to HSV Entertainment LLC, it would end a confusing variable interest rate included n the original 2007 bond issue to finance the building, Davenport and Company told council during that meeting.

Davenport at the time explained refinancing the theater at what then was a 3.5 percent taxable private bank placement would also unencumber the theater to secure a loan. That means rather than the building being used as a collateral, the collateral is assumed to be a pledge of sales tax revenue, tax incremental financing revenue and the debt service reserve fund.

The big concern going into the solicitation, Scherer said this evening is, “Rates are starting to inch up a little bit.”

Mayor Emery Doughtie said following the meeting, “With the rates like they are, we don’t want to sit back and miss an opportunity. We want to get the most cost efficient benefit to the budget and finances.”