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August 27, 2010 – Nebraska’s Senator Ben Nelson said today that Recovery Act Build America Bonds sold this week to help construct the new Lincoln Haymarket Arena will provide $41.3 million in federal financing for the sports and events facility in Nebraska’s capital city.
“By taking advantage of the federal Recovery Act’s ‘Build America Bonds,’ Lincoln is coming out a big winner,” said Senator Nelson. “This week, Lincoln city leaders used the special bonds to lock in a very low interest rate. That cut the arena project’s cost and saved Lincoln taxpayers millions of dollars. The project will receive a $41.3 million federal subsidy, funding that will help protect Lincoln taxpayers from property tax hikes down the road to pay for the arena.”
“Not only that, Recovery Act bonds require the money to be spent, so we’re likely to see new jobs created soon in Lincoln as construction gets underway. Also, because the bonds are taxable, the federal government should recoup much of the $41 million through income tax revenues paid by those buying the bonds.”
“Taken together, this Recovery Act financing is helping pave the way for new jobs, a new sports and events arena that many Nebraskans will enjoy for decades and laying a foundation for our nation’s economy to recover, and even thrive again,” said Senator Nelson.
Earlier this week, Lincoln Mayor Beutler announced that the West Haymarket Joint Public Agency sold the first $100 million in bonds for the new arena at an interest rate of 3.2 percent. The city had estimated a 5 percent interest rate in planning documents for the arena. The bonds were Build America Bonds.
An analysis of the financing by Ameritas Investment Corp. shows that over the life of the 35-year bonds, the project will receive $41.3 million in interest payments from the federal government.
Build America Bonds, created by the 2009 American Recovery and Reinvestment Act, provide funding for state and local governments at lower borrowing costs. According to the U.S. Treasury Department, this will enable them to pursue necessary capital projects, such as work on public buildings, courthouses, schools, roads, transportation infrastructure, government hospitals, public safety facilities and equipment, water and sewer projects, environmental projects, energy projects, governmental housing projects and public utilities.
Senator Nelson played a key role in the passage of the $787 billion Recovery Act. He worked with a bipartisan group of nearly 20 Senators to better focus The American Recovery and Reinvestment Act on tax cuts for the middle class and job creation for millions of Americans. Senator Nelson led the group through the initial bill line by line, dollar by dollar, to reduce spending and cut out $108 billion of inefficient or less-stimulative spending. The bipartisan group helped the improved bill win congressional approval. President Obama signed it into law February 17, 2009.
Senator Nelson is posting information about the release of Recovery Act funds on his website as it becomes available. Visit http://bennelson.senate.gov for more information.
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