WATERLOO, Iowa --- A local company is hoping to beef up the Cedar Valley's ability to move large chunks of information more quickly.
And the city has agreed to lend its tax-exempt status to help New Empire LLC borrow up to $14 million for a project that includes installing 138 route miles of fiber-optics cable and placing buildings and equipment in downtown Waterloo, near Tower Park and in Hudson.
"Imagine a wagon wheel," said Jim O'Regan, New Empire president. "That's what we're trying to do."
O'Regan said that enhanced fiber network would provide data transport speeds for customers needing large bandwidth at speeds either not available or too pricey in the current local market. The capability could be a major economic development tool, he added.
"This would be for 10 (gigabit) and above transport systems," said O'Regan.
City Council members voted 6-0 Monday to authorize selling $14 million in Midwestern disaster area revenue bonds, which New Empire would use to finance the project. The city would have no obligation to repay the bonds, which would not count against the city's general obligation bond debt limit.
"There is zero liability to the city," O'Regan said, noting the tax-exempt status would save the company more than $300,000 in annual interest costs.
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Councilman Steve Schmitt said he was concerned about the government bonds being used to help New Empire compete against other local telecommunication companies, including Mediacom, which had a representative at the meeting. Schmitt abstained from voting saying he might have a business relationship with one of those potential competitors.
Councilman David Jones had numerous questions about New Empire's financial abilities but voted in favor of the project.
"In the end, we're not liable for any of the bonds," emphasized Mayor Buck Clark. "We're a pass-through on this."
O'Regan's current business already provides data services to a number of customers. He said potential customers and partners are on board once the financing is approved. And he hopes some construction can begin in the spring.
The city has issued industrial revenue bonds in the past, though they were typically used for manufacturing plants, affordable housing projects and capital improvements for nonprofit organizations. Following Hurricane Katrina, Congress extended industrial revenue bond uses to cover commercial projects in areas affected by a disaster, including Black Hawk County, as a result of the 2008 floods.
Earlier this month the council approved the sale of $5.23 million in Midwestern disaster area revenue bonds for KNK Enterprise, which is using the money to redevelop the former EconoFoods site, 1411 Flammang Drive, for Dick's Sporting Goods and future retail tenants.