City sells North of South bonds, locks in 5.2-percent rate

The city went to the bond market last month to sell $97 million in debt for the $155 million North of South hotel and retail project near the Eli Lilly and Co. campus.

Indianapolis Bond Bank Executive Director Deron Kintner said the city locked in a 5.2-percent interest rate for the bonds, most of which are tax-exempt. That’s a relatively solid rate, given the recent turmoil in the municipal bond market, Kintner said. The city sold during the brightest period in the market since October.

“We wanted to get it done as quickly as we could to increase the likelihood that we were getting in the market during that window,” Kintner said.

The city is providing the loan—guaranteed with property-tax revenue from a downtown development district—to Indianapolis developer Buckingham Cos., which will pay off the debt and interest with project revenue. The project includes a boutique hotel, retail, apartments and a YMCA.

The $97 million includes $86 million for the project, plus issuance costs and capitalized interest so bondholders can be paid before the project generates revenue.

Kintner said the city expects to close on the sale April 7.