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Wednesday, January 20, 2010

U.S. Treasurer, Dallas Mayor tout benefits of Build America Bonds

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As part of the Obama Administration's efforts to highlight the local impact of economic stimulus programs, U.S. Treasurer Rosie Rios met with Dallas Mayor Tom Leppert at the Omni Dallas Convention Center Hotel construction site to highlight the use of Build America Bonds in North Texas infrastructure projects. The Build America Bonds program has provided $64 billion in low-cost borrowing to date for state and local governments across the country, including almost $3 billion in North Texas.

"With the Recovery Act's bond programs, the federal government has emerged as a strong partner in revitalizing state and local communities struggling with tight budgets," said Rios. "By providing much needed access to financing and low-cost borrowing, Build America Bonds have already helped hundreds of communities fund the development of schools, hospitals, and other public projects. These bonds give city and state governments the access to funds needed to jumpstart infrastructure projects that will create jobs, improve neighborhoods, and provide our children with the quality education they deserve."

A new financing tool created by the American Recovery and Reinvestment Act of 2009 (Recovery Act), Build America Bonds allow state and local governments to obtain much needed funding at lower borrowing costs. The city of Dallas issued $388 million in Build America Bonds for the construction of the 1,000-room Omni Dallas Convention Center Hotel. According to city estimates, this project will create an estimated 3,000 temporary construction jobs and 800 permanent jobs and save taxpayers $150 million through the use of Build America Bonds.

In addition, Dallas Area Rapid Transit (DART) sold $829.6 million in Build America Bonds as part of a $1 billion bond sale to help fund construction of 48 new miles of light rail. The use of Build America Bonds by DART will save taxpayers $220 million, and the DART Rail expansion, between 2007 and 2014, is estimated to yield a $5.6 billion economic impact and create 47,760 jobs, according to DART estimates.

"When the municipal credit market froze last year, these bonds allowed us to make a critical investment in our community," said Dallas Mayor Tom Leppert. "As a derivation of the historical tax exempt municipal bond market, the Build America Bonds provided a new avenue for infrastructure financing to not only provide jobs but also build local communities."

Under the Build America Bonds program, the Treasury Department makes a direct payment to the state or local governmental issuer in an amount equal to 35 percent of the interest payment on the Build America Bonds.

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