The Richmond Hill City Center could be paid off sooner than expected and the city could save nearly $800,000 if the Richmond Hill City Council decides to refinance the meeting and event facility.
Though the council took no action on the matter during its regular meeting Tuesday, City Manager Chris Lovell told the council it could have an option to reduce the length of the loan for the City Center and save money at the same time.
Lovell said the city received a letter of commitment from a bank agreeing to refinance the center’s nearly $3 million balance for 12 years, reducing by five years the city’s current 17-year loan. Lovell did not specify the bank because all details are not final, he said.
“So we’ll reduce the time of the loan by five years and total savings is almost $800,000 in interest savings over the life of the loan,” Lovell said.
“Your payments go up a little bit, but you save a lot of interest over the life of the loan,” added city Finance Director Bob Whitmarsh.
Lovell noted the bank also is willing to pay all closing costs for the loan —about $40,000. Because of that, the city would be under a pre-payment penalty for seven years, he said.
Additionally, refinancing the loan would bring it more in line with the city’s special purpose local option sales tax cycle, Lovell said. The city uses SPLOST dollars to make payments on the building.
There are five years left in the city’s current SPLOST cycle, Whitmarsh added. If another SPLOST cycle is approved in 2017, he said, the center could be paid off a year after that cycle ends.
In other business:
• The council approved to allow operation of the Richmond Hill Farmer’s Market again for 2013. The market will open April 2 and run through mid-October.