After promising the Baltimore Ravens up to $600 million worth of upgrades to their stadium if the team resigned its lease, the Maryland Stadium Authority is now exploring how to finance those renovations amid a difficult economic environment.
Chief Financial Officer David Raith told the Stadium Authority’s board on Tuesday that the agency won’t be able to finance $435 million in planned improvements to M&T Bank Stadium with only tax-exempt bonds and is seeking the OK to find a bank loan or other financing to pay for up to $200 million of the project costs. Financing updates to the Baltimore Ravens stadium primarily using tax-exempt bonds, a cheaper option, won’t work because those types of bonds have to be spent in a three-year period. If the money is not spent in three years, Raith said the authority would be at risk of being penalized by the Internal Revenue Service.
“I knew there was no way we could spend $600 million in three years,” Raith told the Baltimore Business Journal after the meeting.
Raith wants to split the $435 million cost into two methods of financing — $235 million in tax-exempt revenue bonds and $200 million in taxable financing. That money could be raised through a letter of credit, a taxable bond deal or a bank loan. Acquiring taxable debt will be costly as Raith predicted the $200 million in taxable financing would have an interest rate of 5.6%, compared to 3.6% for the tax-exempt bonds.
