Bonds Stimulate Neb. Arena

Two bond sales to finance construction of the new Lincoln Haymark Arena in Nebraska are getting an extra boost from the federal stimulus package approved by Congress last year, in the form of subsidies and lower-than-anticipated interest rates.

A $100 million sale of Build America Bonds to Wells Fargo Bank Aug. 24 carried an effective interest rate of 3.2 percent, which will produce anticipated savings of $50 million from the city’s budgeted interest rate of 5 percent, according to the Lincoln Journal Star.

Wells Fargo, in turn, was to resell the bonds to customers and deliver $100 million to the Joint Public Agency formed to finance and build the arena. A second bond sale, of Economic Recovery Zone bonds, later this year is expected to yield $41.3 million in interest payments from the federal government over the life of the bonds.

The bonds were created as part of the 2009 federal stimulus program, and the subsidy helps lock in lower interest rates. According to the U.S. Treasury Department, this enables state and local governments to “pursue necessary capital projects.”

Nebraska’s Sen. Ben Nelson praised the program that is helping to build the state capital’s newest sports and entertainment facility.

“By taking advantage of the federal Recovery Act’s ‘Build America Bonds,’ Lincoln is coming out a big winner. … Lincoln city leaders used the special bonds to lock in a very low interest rate. That cut the arena project’s cost and saved Lincoln taxpayers millions of dollars … [and] will help protect Lincoln taxpayers from property tax hikes down the road to pay for the arena.”

Nelson added that the Recovery Act requires the money to be spent, which will aid job creation in the area.