BV Considering Establishing Line Of Credit

Move Would Help City With Upfront Economic Development Costs

Buena Vista is looking into establishing a $500,000 revolving line of credit to help with expenditures associated with economic development projects.

City officials have been in discussions with CornerStone Bank to get a line of credit that would be secured with the remaining land in the city’s industrial park and the Carilion Clinic property, both of which are owned by the city’s Economic Development Authority.

City Council held a joint meeting Thursday with the EDA, which would serve as the conduit for the financial transaction. The EDA would have to approve the loan while City Council would be responsible for approving payments on the loan.

The industrial park, located off of U.S. 501 at the south end of the city, is currently under construction with its first tenant, Columbia Gas of Virginia’s district service office, a $3 million project. The investment in this facility allowed the city to qualify for a $357,000 Economic Development Access Grant for road construction into the park. The city is also utilizing $438,000 in reserve funds from the Dickinson Well project to pay for water and sewer construction. Another source of funding for the project was the sale of the land for $120,000 to the Pagura Group, the company that is developing the facility for Columbia Gas.

Buena Vista is also slated to receive $898,658 in Virginia Department of Transportation grant funds for repaving a section of U.S. 501 south near the industrial park as well as a section of U.S. 60 east. The city is also paving a separate section of U.S. 501 south at an expected cost to the city of $225,000.

Doing all of these projects will have substantial economic development benefits for the city, said City Manager Jay Scudder Scudder, but could create cash flow issues because state funding is reimbursed after the city makes the expenditures. Therefore, it would be helpful to have a line of credit so that the city doesn’t have to go into its general fund balance.

Scudder alluded to a separate potential economic development initiative, the details of which have not yet been disclosed, that could also require the city incurring additional up-front costs. “A lot is going on in the economic development arena and with road paving,” the city manager noted.

Having access to a line of credit, remarked Scudder, “Allows the city to strike quickly [when it has an economic development prospect].”

EDA members had questions about the details of how the line of credit would work and what their responsibilities would be. “You’re the financial conduit,” Scudder emphasized.

“We want to do something strategic,” commented City Council member Steve Baldridge.

Thursday’s joint meeting was for informational purposes only. Any action will require another meeting.

The News-Gazette

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