Town of Chapel Hill seeking installment financing plan for three municipal projects


By Adam Powell

CHAPEL HILL—As the Town of Chapel Hill moves forward with its much-needed downtown parking solution—a large deck along East Rosemary Street—town leaders approved an installment package to complete the financing portion of the project in mid-May. 

If voters approve in November, the measure will add $12.5 million in installment financing that the town will slowly pay off over the next several years before the parking deck becomes fully profitable. 

The East Rosemary parking deck financing approval was part of a series of three actions taken by town leaders to address ongoing municipal needs, including requests from Chapel Hill’s Police and Fire Departments. 

According to Chapel Hill Director of Business Management Amy Oland, the town has $50.5 million in available debt capacity, and originally built an additional $10 million in proposed debt financing for the East Rosemary deck into its calculations, when coming up with its final estimated debt capacity for the November bond referendum. But due to cost overruns and additional expenses coming out of the COVID-19 pandemic, the amount of financing necessary for the parking deck needed to be increased to $12.5 million. 

“We knew that there were additional costs tied to the parking deck,” Oland explained. “In order to incorporate the additional $12 million in unanticipated and escalated costs, plus the cost of actually doing the financing, an additional $12.5 million dollars is needed to borrow for this project.”

Oland presented a slide to the town council displaying the town’s current major financing project needs, including the new parking deck ($12.5 million), a new ladder truck for the Chapel Hill Fire Department ($2.3 million), and an upfit for the Chapel Hill Police Station ($1.7 million), which is being relocated to the former Blue Cross and Blue Shield Building along Fordham Drive. 

Those three projects total $16.5 million, for which town leaders have put together a bond referendum to be presented to local voters in November. 

According to Oland, the town borrowed $39 million in limited obligation bonds in August 2021 to start the East Rosemary Parking Deck project. However, a series of setbacks related to the foundation severely restricted the deck’s initial construction, and the project’s total cost began to escalate. 

“After finding bedrock in the ground, we found ourselves having to redesign the foundation of the project in the middle of the pandemic,” she explained. “With the aftereffects of inflation, we experienced escalated costs for materials, labor design fees, and other costs necessary to complete construction on the deck.”

Chapel Hill’s Fire vehicle 14002 is a 2014 seven-ladder truck that is used primarily for fire suppression operations. It responds from Fire Station 4, located along Weaver Dairy Road. 

“This truck is ten years old, which is the maximum age that is recommended for frontline use under national best practices,” Oland explained. “The current vehicle is facing an increase in frequency and costs for maintenance to remain a daily use vehicle. As the cost of maintaining the vehicle continues to increase – and the time available for it when it’s out-of-use – we are at a junction where replacing the vehicle is necessary.” 

According to Oland, the sum total cost for the ladder truck and the upfit with the equipment that’s necessary to bring the vehicle into service is $2.3 million. 

Oland added that Chapel Hill is currently seeking to lease space to house its Police Station Emergency Operations Center and Technology staff. The estimated cost of the upfits is $1.7 million.

“Once the space is under contract, there will be some upfitting costs of the new sites that includes furniture and fixtures, a backup generator inside, and signage,” Oland explained. 

After bringing a final financing resolution to the council in time for their Wednesday, June 5 meeting, town leaders anticipate closing the financing of the three projects on June 18.

Adam Powell is a reporter on local news and sports and an education communications professional. A 2001 graduate of UNC-Chapel Hill, Powell has served as managing editor of multiple local publications, including the Mebane Enterprise, News of Orange County and The public information officer for Rockingham County Schools in Eden, N.C., Powell is the author of four books and lives in Mebane with his wife and two children.
This reporter can be reached at Info@TheLocal

Share This Article

Scroll down to make a comment.

Be the first to comment on "Town of Chapel Hill seeking installment financing plan for three municipal projects"

Leave a comment

Your email address will not be published.