A community authority that plans to borrow money through 2049 to aid the gigantic Spooky Nook indoor sports complex and convention center using its ownership of Hamilton’s city government building for revenues may pay it off well before that.
Without raising taxes on Hamilton residents, officials are considering placing an undetermined sales tax on items that are sold in the Spooky Nook sports complex, but not elsewhere in the city. They also are looking to create another tax, to be paid only by those who use Spooky Nook’s proposed hotels.
Officials associated with the proposed sale of the tower said Hamilton City Council insisted that city government have the option of paying off much of the estimated $26 million in borrowing by late 2026.
The building would be sold as a way to finance the assistance city officials in October promised to aid Spooky Nook at Champion Mill, which broke ground in October in the former paper mill on North B Street.
There are several ways Hamilton might accelerate a pay-off of the Spooky Nook debt, said city financial adviser Andy Brossart of Bradley Payne Advisors in Sharonville.
Those include a sales tax that would be levied only on businesses within the Spooky Nook complex, a hotel tax levied only on Spooky Nook’s hotels, and possibly a sale of some city property that officials have not named. The sales and hotel taxes would not affect non-Spooky Nook businesses.
Under a proposal the council is expected to vote on during its 6 p.m. meeting today, the building would be sold to the city-controlled Hamilton Community Authority. Using approximately $1.4 million in annual rent payments, the city would pledge to pay the authority, the authority would borrow about $26 million, about $10 million of which would go to pay off the city building, with other funds going toward Spooky Nook grants and loans, and some going toward a Gilmore Road roundabout.
“I’ve heard it loud and clear from (City Manager Joshua Smith) and City Council that they want that debt paid off as soon as possible,” Brossart said.
“I think that the city’s working on a plan to make sure they extinguish the building debt sooner,” he said. “They can’t, obviously, extinguish the whole $26 million, but whatever’s associated with the building …”
Smith said council demanded the early pay-off “for flexibility purposes.”
Another way city government could pay off the debt sooner is by renting out office space it controls, including at the 345 High St. city government building itself.
“In essence,” Smith said, “this would be similar to refinancing a private home to retain equity for spending it elsewhere.”
This media outlet in January asked City Council members for their thoughts about the proposed transactions. None responded to the email request. Council member Tim Naab and Mayor Pat Moeller spoke in favor of the plan during the Feb. 13 council meeting.
The 2026 year is targeted because, typically, payoffs after seven years are the minimum amount of time allowed, Brossart said. The city also will investigate whether a five-year payoff makes financial sense, he said.
City officials recently said the Spooky Nook groundbreaking has sparked significant interest in Hamilton from major developers.