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St. Paul HRA Reconsideration Failure (1/3/05)HRA decision on conduit bonds for financing of WCAL purchase (12/9/04)
Statement regarding bonding for construction of new MPR building and financing of the acquisition of WCAL (12/5/04)
Press Release: Minnesota Public Radio introduces new classical music broadcast schedule, to begin Sunday, Nov. 21 on its new station, WCAL (11/15/04)
Press Release: FCC approves WCAL sale (11/15/04)
Press Release: Statement by Bill Kling (08/10/04)
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Bill Kling speaks with Gary Eichten and takes listener calls (08/19/04)Bill Kling speaks with Marianne Combs (08/10/04)
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What should a third MPR broadcast service in the Twin Cities offer?Discuss the prospect of a third broadcast service in the Around MPR forum
December 9, 2004
The Saint Paul Housing and Redevelopment Authority (HRA) yesterday voted against issuing $12 million in bonds to replace the short-term financing Minnesota Public Radio used to purchase WCAL/KMSE. Although this will not interfere with our plans to launch a new service on the two stations early next year, it will make the long-term financing more expensive. The purchase has been concluded, and both WCAL staff and assets have been turned over to MPR.
Minnesota Public Radio asked the City of Saint Paul to issue $12 million in tax-exempt "conduit revenue bonds" for WCAL/KMSE as part of a financing package that also included money for our building expansion project. These bonds allow organizations to borrow money at a lower interest rate than commercial rates. Conduit revenue bonds are regularly made available to nonprofit organizations to finance large capital projects such as hospital or museum construction. They are issued at no cost and no risk to the city; the city earns a substantial fee for issuing the bonds; and the nonprofit has to pay the principal and interest on the bonds.
The HRA unanimously approved the bonds for WCAL/KMSE on October 27. Despite receiving assurances from St. Olaf College's president that the college made a strategic decision to sell the station to focus its resources on its educational mission, this decision was contested by SaveWCAL on procedural grounds (a form was not properly filed by the City before the first hearing). SaveWCAL heavily lobbied members of the City Council (who act as the HRA), arguing that the purchase did not meet requirements of a state law governing such bond issues.
MPR lost the vote yesterday 3 to 3, with one abstention. Voting for: Council members Debbie Montgomery, Lee Helgen and Kathy Lantry. Voting against: Council members Dan Bostrom, Dave Thune and Jay Benanav. Pat Harris abstained from voting; he works for Dain, one of the investment banking firms involved in marketing the bonds.
Despite the position taken by SaveWCAL, our proposal to use conduit bonds to finance the purchase of WCAL is fully in accordance with bonding guidelines. The City Attorney and the City's bond counsel agree with MPR and so advised the HRA board. The City of Saint Paul approved bonding financing for our purchase of 99.5 FM (KSJN) in 1990, and this circumstance is no different. Without these low-interest, nonprofit bonds, Minnesota Public Radio will pay approximately $240,000 a year in additional interest fees, funds we would prefer to devote to the production and broadcast of public radio programs. We are reviewing options on how to proceed next with WCAL financing. This does not change our commitment to providing excellent and diverse public radio service to this region (nor force us to sell WCAL), but it does add to our costs.
On a more positive note, the HRA approved $10 million in conduit revenue bonds for our building project.
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