City corp. secures new $24M loan for water park
8 Mar 2017
The city’s economic development corporation refinanced its $24 million loan for the water park once managed by Hawaiian Falls and now overseen by Katy-based Typhoon Texas.
The Pflugerville Community Development Corp. refinanced the loan due to a favorable market on interest rates, and in effect removes any city obligation on the loan, according to a news release.
“The PCDC has grasped favorable market conditions to refinance their $24 million waterpark loan,” Pflugerville Mayor Victor Gonzales said in the release. “The Pflugerville City Council has authorized the PCDC to refinance to a 15-year loan, which removes any City of Pflugerville loan obligations and responsibly locks in a competitive interest rate.”
Among four bids received on the loan among 30 banks, the PCDC chose Hancock Whitney Bank. Capital One Bank, which held the initial loan on the water park, did not make a bid.
The new 15-year loan locks in a 4.295 percent interest rate, the release says.
PCDC Executive Director Amy Madison said the city corporation faced a close to $22 million payment due this year on the initial loan with Capital One Bank. She said that, a favorable loan market and growth in local sales taxes led to refinancing the loan. The PCDC receives a half-cent of city sales taxes that fund incentives agreements and other city economic projects.
Madison said while the previous loan had provisions for the city to underwrite debt service as a third party, the new loan does not include any similar language.
“Our effort to remove the city’s obligation and restructure with a 15-year-long term was successful, not to mention anticipated savings in current interest rates over future years,” she said.
The refinanced loan comes after the PCDC dissolved its contract with Hawaiian Falls and created a new lease agreement with Typhoon Texas in early January.
The contract includes a two-year ground and operating lease for the water park located along Texas 130 and an option for Typhoon Texas to renew its lease in 10-year increments up to 2038.
The water park is set to open May 26 with renovations and new attractions, including a family-friendly “Gully Washer” play area.
Mike Parker, Austin Community Newspapers Staff, Austin Statesman, 3/8/17, statesman.com