The Yavapai County Board of Supervisors approved a $204 million bond issue by Embry-Riddle Aeronautical University to fund proposed projects at its Prescott and Daytona Beach, Fla., campuses by a 3-1 vote on Wednesday, April 2.
While the bonds required Yavapai County approval to be issued, they do not represent a financial obligation of the county or the state because ERAU will be responsible for paying off the bonds.
Supervisor Nikki Check [D-District 3] voted against approval after attempting to have the bond issue tabled until April 16; she did not receive any support for her motion from her fellow supervisors.
“Our responsibility in this process is to ensure two things,” Check subsequently said about her vote. “One is that all of the statutes have been met in the process of preparing for these types of bonds; that I couldn’t have been sure of because of the rush process that I was experiencing on the back end of things. Second, that broadly this was going to be a benefit and not a harm to our county and our communities. By the end of that meeting, I didn’t have the answers that I really needed to feel confident in either one of those concerns.”
Prior to the board’s vote, a number of Clarkdale residents aired complaints about ERAU’s use of the Cottonwood airport for flight training. ERAU’s enrollment at its Prescott campus has grown by 500 since 2018, from 2,726 to 3,229 total students.
Supervisor Chris Kuknyo [R-District 4] said that the board should not “commingle” the bond issue with Clarkdale residents’ noise complaints.
“If you’re going to get a tax exemption, which is something that we as taxpayers are contributing to, you need to also have a responsibility with that tax exemption to be a good neighbor,” Clarkdale Town Manger Susan Guthrie said.
“I respect exactly what you’re saying about the co-mingling of the issues, but this is our only opportunity. This is it. If you approve this today, you have taken away any leverage, any because they don’t care about being a good neighbor.” ERAU attorney Ken Artin said that the school wanted to get the bonds approved and issued in April ahead of potential Congressional budget legislation changes.
“If [Congress wants] to endorse tax cuts … they have to come up with a method of paying for it,” Artin said. “The fear is one of the methods of paying for tax benefits is to remove the [bond] exemption. I have a number of not-for- profit universities that are trying to get their financings accomplished in April to avoid the risk of something bad happening in Congress in May.”
While ERAU representatives were unable to specify how much of the bond funding would be expended on each campus, Prescott projects include a 40,000-square-foot student housing facility with 300 beds; a 44,000-square-foot, two-story student union; renovations to flightline facilities; the addition of 13,000 square feet to the primary simulator facility; a new two-story, 20,000-square-foot flight training facility with simulators; a new one-story, 11,000-square-foot wind tunnel; and additional campus improvements.
“The Prescott campus projects list is significantly larger than the Daytona Beach campus and the planned expenditures for the Prescott campus likely exceeds the full amount of the bond issuance,” the Feb. 26 minutes of the Industrial Development Authority of Yavapai County stated.
“Choosing not to approve Resolution No. 2149 would withhold authorization for issuing revenue and refunding bonds, thereby preventing the proposed financing intended to support improvements at [ERAU’s] campuses and cover related bond issuance costs,” the Board of Supervisors agenda stated. “This decision could hinder the university’s ability to advance planned enhancements … potentially causing delays or changes to these initiatives.”
ERAU officials said during the meeting that their wish was “to be good neighbors.
“I will support this, but I will remember this conversation, and I truly would like to have a message, an email, sent to my office relatively soon that you’ve done something that has been some of these requests of thistown,” Supervisor Mary Mallory [R-District 5] said.
“Even though the other supervisors didn’t vote the way I did, there actually was a level of consensus among us, indicating that each board member indicated that they wanted to see [ERAU] be a better neighbor and a better working partner,” Check said. “I see the county really helping invite [ERAU] into those discussions earnestly and facilitating them to some degree.”
“I see this matter as being one with solutions nearby,” Check subsequently said.
Supervisors L. Brooks Compton [R-District 1], Mallory and Kuknyo voted for the measure, with Check opposed.
The District 2 seat is currently vacant due to the resignation of James Gregory in February.
