By Daniel Silliman
As the City of College Park prepares to break ground on a $250 million hotel project, the plan is being bolstered by the city's financial strength.
College Park had its bond rating assessed and raised prior to taking out $34 million in taxable, revenue bonds to launch the project, according to Cynthia King, the city's financial director.
The rating agency responsible for assessing the financial health of borrowers, Standard and Poors, boosted the city's rating from A+ to AA- in August. The Gateway Hotel Project bond arrangements were signed off on by city officials in September.
"Receiving the upgrade enabled us to borrow money at a lower rate and get insurance at a lower rate," King said. "We were good before, but this is better; We're even more credit-worthy than we were."
The city is planning to break ground on Oct. 16, at the Georgia International Convention Center, where a Marriott hotel and Springhill Suites will be built, on top of one million square feet of mixed-use space. The entire complex will be connected to Hartsfield-Jackson Atlanta International Airport and the Consolidated Rental Car Facility by an automated people mover.
Mayor Jack Longino said he hopes the Gateway Hotel Project will be the "most wonderful project" in the area. He called the financial rating hike "a milestone, which leads to the groundbreaking."
To get the improved rating, King said, the city had to detail its financial policy, including its policies on debt management, outline its revenue streams and tax base, and demonstrate its economic strength.
The city's rating was already good, mostly due to its cash reserves. King said the city holds a one-year budget back-up, a reserve equal to College Park's annual expenditures.
The city also laid out its five-year, capital-improvements plan, to show would-be lenders the direction the city is going and how they plan to cover any debts.
"We were rated very good for a city our size," King said. "But it's a little more solidified than it was before, and all the funding sources are clear, and we're not trying to use a single revenue stream for two different debts."
The city has also benefited, according to King, from an recent increase in high-end homes, as home buyers respond to gas prices and economic fears by looking to live closer to Atlanta and closer to the airport, an economic "engine."
The strong economic base, the property-tax base and the detailed financial management and oversight plans have worked to give the city strong support for the latest project, and city spokesman, Gerald Walker, said, a clear economic road map for College Park.