Financing plan for proposed Elk Grove Zoo reveal noteworthy details

The 14-page financing plan for the proposed Elk Grove Zoo released last week contains some interesting details.

Here are a few items.
  • The zoo will be constructed and opened in four phases. Before Phase 1 a preview phase will feature a giraffe paddock.
  • The estimated cost of Phase 1 is $302 million
  • Phases  2, 3 and 4 will require further additional undetermined funding
  • Before construction starts on Phase 1 the preview phase for the giraffe paddock will be used to "showcase the opportunity to potential community partners" 
  • During the giraffe preview phase, the Sacramento Zoo in Land Park will continue operating
  • The Sacramento Zoological Society (SXS) will be required to pay $50 million towards Phase 1
  • Not until Phase 3 would a permanent administration building be constructed. A modular office will be initially used
  • Parking fees will be built into the price of admission
  • Elk Grove taxpayer will pay $93 million towards construction. The money will come from several sources. Some of those funds to be used include Mello Roos fees, general reserve fund, capital reserve fund, opportunity reserve, and Sky River Casino MOU payments 
  • Measure E funds will not be used toward the construction
  • The city of Elk Grove will issue bonds totaling $114 million.
  • The city will pay $5.4 million and the SZS $2.5 million in annual bond interest payments, based on a 4.25 percent interest rate and the city's AA credit rating 
  • The SZS is responsible for raising $50 million towards Phase 1 construction 
  • Of the $50 million, the SZS must show by the anticipated spring 2024 Elk Grove City Council approval that it raised $12.5 million, and $50 million by the start of construction 
  • "The City will not issue the bonds and proceed with on-site facility construction unless then-current bond rates and/or the amount needed to finance are at a level that allows the City to afford the annual payment."
  • Unidentified and unsecured funding partners will contribute $30 million. These partners are based on $10 million from energy efficiency partners and $20 million for large animal care opportunities
  • The reports states that zoo will not require an annual taxpayer subsidy 

Although the financial report portrays approval of the project as inevitable, it does add the following qualification:

"However, this phasing approach does open the possibility that a significant delay could occur between the completion of the Preview Phase and the full Phase 1A and 1B improvements, leading some to wonder about the ability of the City and Society to deliver the Project. To manage this risk, the City and Society will need to consider the timing of community partnership funding and the remaining required commitments before initiating construction of the Preview Phase."

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1 comment

Deejay Blutarsky said...

"Measure E funds will not be used towards the construction". 

Excuse me, but about 20% of the Measure E sales tax revenue was siphoned off into the Reserves for "economic development" purposes. So I guess when Measure E money goes into another pot it changes identity and is no longer known as Measure E money!

Reminds me of a three-card monty!

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