WHEELING - In May 2006, Ohio County Commissioners issued $99 million worth of tax increment financing bonds through West Virginia's first and only sales tax TIF.
Commissioners now want Standard & Poor's to declare those bonds - issued to fund development at The Highlands - worthy of investment grade ratings.
"This would be a stamp of approval from the investment market," county Administrator Greg Stewart said following the special Thursday commission meeting, during which commissioners approved an order seeking the ratings.
"This could help us get a lower interest rate for any future development we do," Stewart added.
"It would look good to any potential investor if we could get the bonds rated," Commissioner David Sims added. "We believe our track record gives us a good chance to get them rated."
TIF is a tool that permits governments to use anticipated gains to finance improvements that are expected to create those gains. Through the county's TIF, the sales tax collected by businesses at The Highlands goes toward paying off the $99 million. Stewart said roughly 60 businesses at The Highlands collect the sales tax used to pay off these bonds.
Stewart said a company known as ORIX USA, based in Dallas, Texas, holds $81 million worth of the bonds. These bonds are of the taxable variety. The remaining $18 million, Stewart said, are non-taxable. These are held by several entities, though Stewart said a "big piece" of them originally went to Wells Fargo.
According to Standard & Poor's, bond ratings can range from the highest rating of "AAA," down to "D," which reflects a default. The company bases bond ratings on three major factors:
"In this economy, it is significant that we have a chance at this," Stewart said, noting he has been in contact with S&P officials. Stewart said they should know if the bonds will be rated "sometime next week."
Commissioners also said the bonds allow them to develop The Highlands without putting the county's taxpayers at risk.
"If every store closed, the bondholders would lose their investments," Commissioner Randy Wharton said in emphasizing the action poses no risk to taxpayers.
The $99 million sales tax TIF, commissioners said, is unrelated to $26 million property tax TIF they received permission to issue in 2004. Commissioners are currently awaiting for approval from the West Virginia Development Office to issue $30 million in additional property tax TIF.
Stewart and commissioners previously said the $6 million of this $30 million would go to the West Virginia Economic Development Authority to repurchase the 32 acres of land the county sold to the authority last year.
Though commissioners have to this point declined to pinpoint exactly how they propose to use the additional $30 million, the planned Wild Escape Theme Park could be one area of emphasis. Other plans have included construction of hotels, additional retailers and restaurants, and even a sports stadium.