City, county hash out infrastructure payments

When Dodge City's casino and events center open, they will both need water lines, sewer service and roads.
    Because the two buildings are part of the same complex, Dodge City and Ford County are splitting the cost of making those improvements with the casino developer, BHC Development.
    The list of improvements needed for the complex includes:
    • Providing water and sewer service.
    • Widening U.S. Highway 50 at the entrance to the complex and putting up signs.
    • Extending Comanche Street to the complex.
    Earlier this week, the Dodge City and Ford County commissions approved a plan to cover the expense of those projects. The plan calls for cash payments from the city, the county and the developer, combined with the issuance of special assessment bonds.
    The city and county will cover their share of the cost with money from the "Why Not Dodge?" sales tax reserve fund, according to City Manager Ken Strobel.
    The casino's share will be partially financed by issuing $4.56 million in special assessment bonds. Of that amount, $4.18 million would be assessed against the casino and $375,667 against the special events center.
    The assessment against the events center would be paid in cash, leaving $4.18 million to be financed over 20 years through issuing the bonds, Strobel said.
    The bonds would be paid by a special assessment tax against the casino, which would be collected as part of the facility's real estate taxes.
    Strobel said special assessment bonds are a common tool for financing street upgrades and other projects required for new developments. He noted that in most cases, bonds are issued before construction begins.
    Since bond payments are assessed against the property under development, the bondholders aren't at risk unless the developer fails to complete the project and doesn't pay the real estate taxes.
    "In the case of the casino project, however, BHC is in the final stages of completion of the casino on the property that will be assessed," Strobel told the Globe. "Although the special assessment bonds are general obligation bonds, in light of the amount of the cash investment made by BHC and their financial lending institution in the casino project, any possible risk to the bondholders or the city is virtually nonexistent."

Reach Eric Swanson at (620) 408-9917 or e-mail him at eric.swanson@dodgeglobe.com.