Luzerne County infrastructure loan still advancing

A closing delay for a new gambling-funded infrastructure loan does not mean the resulting funding for Luzerne County-owned projects is in jeopardy, officials said Wednesday.

In the interest of transparency, county Redevelopment Authority staff and legal counsel decided to halt the closing scheduled for Thursday because some authority members wanted more information about the loan terms and conditions before closing, authority Executive Director Andrew Reilly told county council in an email Wednesday.

Under new state legislation, the redevelopment authority must borrow to create the infrastructure fund and then repay the loan with $3 million provided annually for 25 years from the casino-gambling Local Share Account (LSA).

A county council majority voted last month to adopt an ordinance formally accepting a county loan guarantee, in the unlikely event casino revenue ceases, because the authority agreed to limit use of the borrowed funds to county-owned infrastructure.

Reilly said the authority will hold a special meeting next week to discuss the loan terms, and rescheduling of the loan closing would follow. The special meeting will be at noon Dec. 3, with attendance instructions posted at luzernecountyredevelopment.org.

Unless council rescinds the loan guarantee in the interim, the closing will be held, Reilly said.

Council Vice Chairman John Lombardo said Wednesday he is fine with more clarification on the loan details but does not believe a majority of council is willing to reject a pledge of tens of millions of dollars for infrastructure that is the county’s responsibility.

“I have no intention of changing my vote, and it’s my belief a majority of council will continue to guarantee the loan because this funding is important for public safety and economic development,” Lombardo said.

As it stands, replacement of the county-owned Nanticoke/West Nanticoke Bridge over the Susquehanna River, currently estimated at $51 million, is stated as the main project to be funded, although county officials will have flexibility if they deem other projects a higher priority, officials have said.

The county was projected to receive up to $55 million, with the rest going to borrowing costs, but the latest bank estimates are millions of dollars less due to rising interest rates, officials said.

Eight of 11 council members had approved the ordinance, with no votes from Kevin Lescavage, Brian Thornton and Stephen J. Urban.

An authority majority followed last month with a vote to award financing of the new fund to Fidelity Bank after publicly seeking proposals. Proposals were requested a second time after council agreed to provide the guarantee, and Fidelity was the lone entity to submit a complete proposal, officials said. Fidelity has teamed up with Peoples Security Bank & Trust and Wayne Bank in the package, officials said.

Authority board members Nina DeCosmo, John Pekarovsky and Stephen E. Phillips supported the financing selection.

Board members Scott Linde and Mark Rabo voted no, raising concerns about the lack of final terms and details. Other authority representatives said the board approval is needed to proceed with final negotiation to obtain a financing package that will yield the most cash for the fund, and thus, county-owned projects.

Borrowing must be completed for the authority to start receiving the annual $3 million payment, according to the state legislation.

Linde and Rabo discussed various lingering hesitations about the package during Tuesday’s council meeting along with Thornton and Lescavage.

Thornton said in an email to county officials Wednesday the exact terms of the loan must be clear, and he referenced other documentation he believes should be produced.

“To proceed with the hasty closing of a county loan of this magnitude would be reckless and irresponsible. I adamantly oppose this action at this point in time,” Thornton wrote.

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.