For county commissioners to follow the Utah County Courthouse Committee's recommendation to remodel the old courthouse for use as a cultural and government center, the county likely will have to find new financing.
Commissioners say their intention is to follow the committee's recommendation and they would like remodeling to begin soon. However, Deputy County Attorney Guy Burningham told commissioners in a Utah County Building Authority meeting that if they intend to follow the committee's recommendations, they likely cannot use the $1.8 million already earmarked for the project.The $1.8 million is tied to the $13 million bond that was issued in 1986 when the county built the new Utah County Administration Building. The bond agreement says that the $1.8 million must be used to remodel the old building for use as a court. Burningham said that before the county can use the money to remodel the building for any purpose other than a court it must get consent from the bond's insurer and trustees.
But because of the bond's tax-free status, Burningham said, the county would probably not be able to lease space to any federal government agency or to the United Way. He is unsure whether space could be leased to the Provo/Orem Chamber of Commerce. All tenants would probably have to be county, state or local quasi-governmental agencies, he said.
Commissioners, acting as the Building Authority, said they want the building to be a benefit to the citizens and don't want the bond to limit their ability to find tenants. The United Way and the Provo/Orem Chamber of Commerce are both being considered as possible tenants.
"If our commitment is to create a community government center, then we ought to look at our options before we make any decisions," Commissioner Sid Sandberg said.
Burningham told commissioners that they may want to redeem the bond and find other financing, either through a new bond or a bank loan. It may cost the county more to have a taxable bond issued and the interest rate may be higher, but it would give the county more flexibility and control over the building. The current bond's interest rate is 7.2 percent.
Commissioners instructed Burningham to find out if the lien on the courthouse would be released if the county redeemed the $1.8 million outstanding balance. Burningham is also checking on other possible financing methods.
"We're not going to get as good financing, but I don't know if that should be the sole basis of our decision," Sandberg said. "But to preclude ourselves because we're hostage to a tax-exempt bond is not in our best interest."
Commissioners said that if the courthouse lien cannot be released by redeeming the $1.8 million, then the county could still find enough tenants - it would just take more time. However, commissioners do not want to use county funds to subsidize the building. They want to generate enough money from lease payments to cover the building's remodeling costs.