CEDAR POINT — Commissioners voted 4-0 Tuesday night to adopt a resolution to approve a $2.25 million bank loan to pay most of the cost of a $2.8 million purchase of 56 acres of land along the White Oak River for the town’s first park.
The historic action by the small western Carteret County town came during the panel’s monthly meeting in town hall off Sherwood Avenue.
According to the resolution, Sterling National Bank of Montebello, N.Y., will buy $2.25 million in general obligation bonds, approved by voters in a Nov. 5, 2018, referendum.
The payback interest rate, according to the resolution, is not to exceed 3.45 percent per year, with quarterly payments due Feb. 1, May 1, Aug. 1 and Nov. 1, beginning this August. The total annual payment is $180,000, including interest, for 20 years.
Town Administrator Chris Seaberg said during the meeting that Sterling National was not the low bidder for the bond purchase and the $2.25 million loan, $750,000 lower than $2.5 million bond sale overwhelmingly approved by voters, was made possible by negotiating a lower price through a loan rather than through a traditional bond sale.
The actual low bidder for the loan, in terms of interest rate, was BB&T, the only other bidder, at 3.44 percent.
However, Mr. Seaberg said after the meeting, BB&T offered only a 15-year payback period for the loan.
“Our preference was 20 years,” he said, because of the lower payments the extended payback period makes possible.
In addition, he said, the New York bank’s offer was preferable because “it gives us the opportunity to pay off the loan early without penalty. That was very important to us.”
The town already received a $250,000 grant for the purchase from the N.C. Coastal Land Trust, and that’s another reason for the lower total loan versus the bond sale.
“We’re better off paying that now” rather than financing the whole amount, Mr. Seaberg said during the meeting.
However, the town is also seeking grants of $500,000 and $1 million, respectively, from the N.C. Parks and Recreation Trust Fund and the N.C. Clean Water Management Trust Fund.
Town officials don’t expect to know the results of those grant applications for a few months, but Mr. Seaberg said he’s optimistic they’ll be approved and can be used to help pay off the loan early; that’s the reason he sought a “no penalty” clause for early payoff.
“We have had a good relationship with BB&T,” he said after the meeting. But in this case, Sterling’s bid more closely met the town’s needs, he added.
Commissioner Pam Castellano made the motion to adopt the necessary resolution to award the bid to Sterling National, and there was no debate or discussion.
Town officials are expected to close on the $2.8 million purchase of land along the White Oak River by the end of April.
The town has committed $300,000 to round off the purchase, but are seeking the grants funds to reduce or eliminate the 3-cent property tax increase needed to pay off the borrowing.
The intent is to leave the land as natural as possible, with hiking trails through the woods to the water, and, eventually, a kayak launch and a rebuilt existing dock for fishing and observation.
The whole goal, officials have said, is to keep the land from being developed – it was zoned for residential units – and to help preserve or even improve water quality in the river.
Once the town has closed on the property, it will likely be a while longer before the land will be safe for the public to use because tree damage from Hurricane Florence in mid-September must be addressed.
Contact Brad Rich at 252-864-1532; email Brad@thenewstimes.com; or follow on Twitter @brichccnt.