The New Orleans Military/Maritime Academy on Thursday moved several steps closer to securing funding for the projected $14.1 million renovation and construction of a permanent facility in Algiers’ Federal City development.
Gathered in a temporary site once intended to be a U.S. Navy hospital, seven members of the school’s board of directors voted unanimously to approve a series of resolutions that will allow them to tap into $18 million for land lease, construction and related administrative costs and legal fees.
The board resolved to:
• borrow up to $4 million from the Louisiana Economic Development Federal City Megafund at an interest rate no more than 1 percent interest rate over five years;
• borrow proceeds from the sale of $11 million in bonds from the Louisiana Local Government Environmental Facilities and Community Development Authority to Iberia Bank.
• use federal New Market Tax Credits to help fund the renovation of two old Navy buildings for their school. Troy Villafarra of Crescent Growth Capital told the board that the net value of the credits to the school should come to about $3 million. The federal tax credit program is designed to bring investment capital into low-income communities.
Col. Bill Davis, commandant for the school, said the tax credit program requires the school to be operational for at least seven years. NOMMA currently holds a five-year charter contract with the state and comes up for renewal in four years.
Sill, Davis told the board that the 221-student school, which is in its second year of operation, is meeting enrollment projections for freshman and sophomore classes and he doesn’t anticipate any issues with renewal as the school expands to four grades.
“We’re tracking for success,” he said.
Board member Dave Whidden pressed for more information about the risk to the school should it not be able to keep that seven-year commitment.
Villafarra said the worst-case scenario would be that the school would be on the line to pay back the value of the tax credits.
The board also voted 7-0 to approve the school’s lease of an auditorium from New Orleans Federal Alliance, the nonprofit overseeing the Federal City development.
Under the arrangement, the school will pay all of the auditorium’s operational expenses not exceeding $35,000. It also has the ability to rent the facility out to others to help cover expenses.
Davis also updated the board on the school’s pending lease agreement with Historic Restorations Inc., for the current temporary campus. Though the school occupies only 39,000 sq. ft. of the 180,000 sq. ft. building, the lease draft requires the school to pay for damage anywhere in the building.
Davis said, however, that NOMMA’s liability is capped at $25,000. After a tour of every floor of the building, Davis feels comfortable asking board chairman Col. Terry Ebbert, to sign the lease. In exchange for using the space rent-free, the school is also responsible for paying operational costs, Davis said.
Three members of the 10-person board were absent: James Reiss, Eades Hogue and Blake LeMaire.
The only others in attendance besides a reporter for The Lens were Villafarra and board attorney Jacob Capraro.