A newly-formed county organization announced this week that it has approved $10 million in bonds for the construction of a new residential facility at Paul Smith's College.
The Franklin County Civic Development Corporation authorized the bonds at a meeting last month, following approval by the Franklin County Legislature.
The CDC was established last year after the state decided in 2008 that Industrial Development Agencies could no longer carry bonding power. The local CDC is managed out of the Franklin County Industrial Development Agency's office in Malone and is overseen by county lawmakers.
Paul Smith's College is currently constructing a new, 95-bed dormitory. College officials say the project will be complete this summer, in time for the 2011-2012 school year.
John Tubbs is executive director of the Franklin County IDA and chief executive officer of the CDC. He says Paul Smith's College is one of the county's strongest assets.
Tubbs says the bonds issued through the CDC address important capital project needs that arose from increased enrollment.
Some people have expressed concern that the county's involvement in the bonding process will result in taxpayer dollars going toward a private endeavor - but Tubbs says that's not the case.
"Firstly, when a bond issue like this is made, what you have are buyers and sellers in the market place," he said. "Taxpayers do not subsidize these bonds."
According to Tubbs, the CDC issued bonds to the college originally purchased by NBT Bank.
"What we have is Paul Smith's College acting as a borrower of funds in the market place," he said. "Paul Smith's College borrowed the money, NBT Bank loaned them the money by taking on the bonds, and we issued them. Taxpayers are not associated with bonds like this in any fashion."
Tubbs explains that bonding, as opposed to private loan borrowing, can offer more competitive interest rates. Sometimes, bonding lends itself to a large institution's financial model better than conventional borrowing, Tubbs adds.
"Sometimes it (the bond) can be taken out for a much longer period of time," he said. "It's a common way of financing large infrastructure projects or civic facility projects."
Ken Aaron is communications director at Paul Smith's College. He says with enrollment on the rise, the college needs more space to house its students.
"We are very thankful that the CDC and Franklin County gave us access to this financing so we can continue to grow," he said.
Aaron notes that increasing enrollment at the college benefits the local economy, as more students translates to more dollars spent at local businesses.
Some three quarters of the bond goes to the construction of the new dorm, while the remainder will be used for energy conservation efforts on campus.
The new dormitory will total some 34,000 square feet and feature 23 four-bedroom units. Each unit will contain four single-bed rooms, a common area, a kitchen, and at least one bathroom.
The construction project employs some 100 workers from Clinton, Essex, and Franklin counties, although Aaron notes that numbers fluctuates depending on what phase the project is in.