Holyoke City Council Finance Committee takes $15 million step toward a new library
By Mike Plaisance, The Republican
April 22, 2010, 9:32PM
HOLYOKE – The City Council will vote on May 4 whether to approve borrowing $15 million to renovate the Holyoke Public Library under a plan councilors referred to the mayor on Thursday.
But officials said among the numerous issues to be resolved are how much control the city would have over the library, which currently is a private, nonprofit corporation.
The discussion came in a two-hour meeting of the council Finance Committee at City Hall.
The $15 million is a figure needed to trigger receipt of tax credits that will be sold to investors to help fund the library renovation. The $15 million is not necessarily the amount that the city will borrow and have to pay interest on over a 20-year loan, officials said.
Most of the project, in fact, would be paid for not with borrowing but with a state grant, funds from the library endowment and fund-raising, officials said.
The motion the council Finance Committee approved by a vote of 4-0 caps the city’s actual borrowing commitment at $5.5 million.
Still, councilors said, the city is taking on a burden of debt, however important the library project.
“Just so everyone’s clear about this: That’s an enormous payment. This is a very serious commitment on the part of the city,” committee member Kevin A. Jourdain said.
“It’s a tremendous amount of money” for a worthy project, council President Joseph M. McGiverin said.
Said Terry Plum, president of the library board of directors: “The library and the city have been partners for 100 years, so I’m looking at this as a new partnership.”
But, he said, time is tight.
The library board has a $4.5 million grant from the state Board of Library Commissioners. But the grant is contingent on library officials demonstrating by June 15 that they can raise the rest of the money and that the community supports the project. The community support includes City Council authorization for borrowing, officials said.
The 108-year-old library at 335 Maple St. has various problems. There's water damage from leaks, mold and air quality issues, cracks in the stone exterior and inadequate space for children’s services, public computers and archives.
The plan is to increase the current 25,000 square feet to 39,000 square feet. A final decision has yet to be made about whether that means building a new library or an addition to the existing one.
One of the concerns of councilors about the library project is the uncertainty about exactly how much money can be expected from investors willing to buy the tax credits. Such credits are attractive to investors because in return for the cash they pay into a project, they later get a federal tax reduction, or credit.
The larger the investment from those buying tax credits, the lower the financial burden on the city and the less the library’s board of directors must tap into the $5 million endowment, officials said.
The committee’s motion was referred to Mayor Elaine A. Pluta, who supports the project. Proposals for borrowing money must come from the mayor.
The motion also sets as a condition a requirement that the documents detailing the borrowing contain a surety, or pledge, that the library board will commit $2.5 million to the project either from fund-raising or the endowment.
The Holyoke Public Library gets a yearly appropriation from the city of more than $500,000 to cover salaries of the 21-person staff and utilities.
Discussions have included the possibility of the city taking over the library as a new department, given the city's financial commitment to the project.
But Plum and other officials, including Councilor John J. O'Neill said Thursday the preference would be for some separation to be maintained with a governance consisting of a board with a majority of members appointed by the mayor.
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