Bonds to pay off SunTrust loan for King papers
By Maria Saporta
City of Atlanta bonds already allocated to the proposed Center for Civil and Human Rights will pay off the balance of a $32 million loan used to buy a premier collection of Martin Luther King Jr.’s papers.
The finance/executive committee of the Atlanta City Council just approved the plan this afternoon in a 4-0 vote. The plan still needs to be approved by the full council and the Atlanta Development Authority.
Three years ago, Atlanta leaders came together to buy the King papers on the eve before they were to be sold at a Sotheby’s auction. Atlanta Mayor Shirley Franklin had been able to secure donations, pledges and loan guarantees enabling the Community Foundation for Greater Atlanta to buy the papers for $32 million.
SunTrust Banks provided a two-year loan to cover that cost, and last year, the city was able to get a one-year extension. The loan, however, came due at the end of June.
With interest payments, the total cost of the loan ended up being about $35 million, and the city along with its community partners, was about $11.5 million short in repaying the loan.
Meanwhile, the city had issued $40 million in bonds to go towards the building of the new Center for Civil and Human Rights. Because of the economic downturn, it was difficult to raise the remaining money to buy the King papers.
So city leaders agreed on a plan to use the Tax Allocation District bonds to pay off the balance on the loan.
“We felt it would benefit the center in the longrun,” said Doug Shipman, executive director of the Center for Civil and Human Rights. “Securing the rights to the papers allows us from a design perspective in being able to design around the King papers. It’s a real anchor, and it will help us in our overall fundraising for the center. We feel like this is going to lead us to finalizing some significant gifts.”
Shipman said it was difficult to go out to raise money for the center while there was still an outstanding loan on the King papers.
By using $11.5 million to finalize the acquisition, Shipman said the center has about $50 million in hand (rather than $60 million) to build the $125 million center.
“We need to have $85 million in commitments before we start construction,” Shipman said. “We need to raise about $35 million.”
The center is hoping to break ground on the new facility next year and open to the public in 2012. It will be built on the same downtown block as the Georgia Aquarium and the new World of Coca-Cola.