The city of Detroit has announced it sold $80 million in bonds to fund parks, recreation, cultural centers, and public safety capital improvements.
The projects include updates to more than 25 city parks, phase one of the Joe Louis Greenway, repairs to firehouses, police precincts, and recreation centers, improvements to the Charles H. Wright Museum of African American History and the Detroit Historical Museum, and construction of an expanded animal control facility.
The 32-mile Joe Louis Greenway is a planned biking and walking trail that extends from the Detroit riverfront to Highland Park, Dearborn, and Hamtramck. It also includes connectors along Livernois Avenue and McNichols Road.
The greenway will include the Dequindre Cut and portions of the Detroit RiverWalk, as well as portions of the planned statewide Iron Belle Trail and May Creek Greenway that will connect Corktown and surrounding neighborhoods to the future Ralph C. Wilson Jr. Centennial Park along the west riverfront (22 acres bounded by the river, Eighth Street, Rosa Parks Boulevard, and W. Jefferson Avenue to open in 2023).
When the Joe Louis Greenway is completed, it will provide a place for people of all abilities to safely walk, bike, and run while connecting neighborhoods, parks, schools, jobs, historic sites, commercial corridors, and public transit.
Phase one of the Joe Louis Greenway is expected to be complete in fiscal year 2022. The city’s bonds will leverage philanthropic investment as well as state and federal grants. About $40 million will go to public safety infrastructure such as fire and EMS vehicles and updated facilities.
The sale of the bonds was nearly 10 times (or about $780 million in investor orders for $80 million in bonds) over-subscribed, allowing the city to secure an all in 4.64 percent interest rate. About 30 institutional investors placed orders on the bonds last Thursday, and many are repeat investors that purchased the city’s 2018 bonds.
“With these bond proceeds, we will invest in our neighborhoods with renovations to parks, recreation centers, fire houses, police precincts, and the start of the Joe Louis Greenway,” says Detroit Mayor Mike Duggan. “The partnership with council has enabled six straight balanced budgets, which makes these investments possible.”
The city has maintained a balanced budget despite revenue shortfalls caused by the COVID-19 pandemic.
“Today’s bond sale shows the continued confidence investors have in the city’s future,” says David Massaron, CFO. “This confidence is due in no small part to good work of city council and mayor to ensure that the city provides first-class services to its residents while planning to meet its long-term obligations.”
In 2018, the city council authorized the sale of $255 million in bonds over multiple series to support recreation, public safety, transportation, and economic development capital investments.
The sale marks the second series of that authorization. With funding from the bonds, the city has been able to reinvest in its capital infrastructure after decades of disinvestment. Since 2015, 155 parks have been renovated with city bonds and other funds. In 2013, only 26 city parks were maintained.
Detroit sold the bonds backed solely on the city’s ability to repay for the second time in more than 20 years. Prior to 2018, the city could sell only bonds that were backed by the state or with insurance to the bondholder, which added to the cost for the city.
For more information on the Joe Louis Greenway, click here.