After Gwinnett County Government’s rare Triple AAA/Aaa bond rating was reaffirmed, the Board of Commissioners on Tuesday gave final approval for the issuance of $23.5 million in bonds to buy 39 acres of Gwinnett Place Mall as part of a major initiative to redevelop one of the key economic engines of the county.
The solid bond rating, reaffirmed in February by the three major rating firms, assures investors the 20-year revenue bonds are sound, and enables the county to issue debt at a favorable interest rate.
The purchase is part of an effort by the County government, the Gwinnett Place Community Improvement District and local property owners to create new opportunities to serve as a catalyst for redevelopment in the area.
Board of Commissioners Chairwoman Nicole Hendrickson said the County has the resources, the motivation and the vision to push redevelopment of the mall forward.
“Redevelopment of the Gwinnett Place Mall area has the potential to reap tremendous benefits for the entire county by generating new businesses and jobs and increasing the county tax base,” said Hendrickson. “I want to thank the previous Board of Commissioners for leaving us in such a great financial position that we can take on this project.”
District 1 Commissioner Kirkland Carden, whose district includes Gwinnett Place Mall, said the project could be a destination again.
“The potential is unlimited,” said Carden. “We’re starting with a blank slate. We can remake this area that is so central to our county into just about whatever we want, and we will involve residents and businesses in the process.”
Joe Allen, executive director of the Gwinnett Place Community Improvement District, said his CID members are very excited about the prospects for the area.
“The CID members are very excited,” said Allen. “We think now we’ll see real progress in redeveloping the mall. We’re grateful to the Board of Commissioners for their leadership.”
In December, the County Commission voted to purchase the 36-year-old mall minus four anchor stores, which own their property. The County now will launch an intensive planning effort to craft a strategy for revitalizing the area, which has struggled in recent years. The proximity to Interstate 85 and the destination’s central location within Gwinnett County have made the property a key focus for leadership within the county. Closing on the property is anticipated to take place by the end of March.
The Board of Commissioners, acting as the Urban Redevelopment Agency of Gwinnett County, also gave its final approval for the bonds on Tuesday. The purchase of the property and the actual issuance of the bonds is technically being handled through the agency, which was established in 2009 to exercise redevelopment powers. The annual debt service for the bonds is expected to be around $1.45 million a year.
The County’s Triple AAA/Aaa bond rating, the highest available, means the County can borrow money at most-favorable interest rates at the time the bonds are issued and also refinance bonds at better rates than most other counties.
Fewer than 2% of counties nationwide hold the highest bond ratings from all three major rating agencies.
According to S&P Global Ratings, Gwinnett merited the high bond rating largely because of its “very strong management, with strong financial policies and practices…,” its operating General Fund surplus, very strong budgetary flexibility and liquidity, and overall low debt.
Moody’s Investors Service wrote in its report, “The stable outlook reflects our expectation that the county’s base will continue to expand given strong permitting activity, recent development announcements and proximity to Atlanta. This growth will support strong revenue performance, which, along with good management and low fixed costs, will lead to continued stability in the county’s financial position.”
Fitch Rating’s report endorsed the high rating, saying, “The county has continually demonstrated prudent fiscal management through conservative budgeting. Actual results typically outperform the budget, allowing the county to increase reserves annually.”
