Rosemont — the entertainment and business mecca in the Northwest suburbs — received a credit upgrade of two notches supported by improved tax revenues and paydowns of debt.
Daily Herald File Photo
Notorious for carrying loads of debt for its big municipal building projects, Rosemont has received a post-pandemic credit upgrade.
The rating increase of two notches — from ‘BBB’ to ‘A-’ — reflects “the village’s return to structural budgetary balance, supported by economic conditions and sensitive revenue performance that have improved following an abrupt decline at the height of the pandemic,” said Emma Drilias, a credit analyst at S&P Global Ratings.
The credit rating agency lowered its rating on the Northwest suburban municipality’s outstanding general obligation debt by three notches in September 2020, amid temporary shutdown of several village-owned sports and entertainment venues including the Allstate Arena, Rosemont Theatre, Donald E. Stephens Convention Center, Impact Field and the Parkway Bank Park entertainment district.
After the rating downgrade and associated declaration of a negative outlook four years ago, S&P Global Ratings last week updated Rosemont’s outlook to stable.
Impact Field — home of the Chicago Dogs baseball team — opened in 2018 in Rosemont. It’s one of several municipal-owned sports venues in town.
Brian Hill, bhill@dailyherald.com, 2018
Officials noted a “sustainable financial trajectory” for the key revenue-producing enterprises, coupled with considerable gains in sales and other tax receipts that have recovered to pre-pandemic levels.
The rating agency also pointed to a material reduction in high debt liabilities, after the village prepaid $52 million of debt over the past two years.
Rosemont has about $300 million of debt outstanding.
But measured against total assets of $750 million, village spokesman Gary Mack said it’s a “very healthy” loan-to-value ratio.
The improved credit rating could mean lower interest rates the next time Rosemont issues bonds to fund a municipal construction project, but Mayor Brad Stephens said there are no plans to do so at this point.
The last big borrowing package was approved by Stephens and village trustees around the time of the S&P credit downgrade in 2020, when they issued $75 million in bonds for a host of capital projects, including a new public safety department headquarters north of the arena.
They later scrapped plans for that $40 million building and a new separate $45 million village hall, deciding instead to buy, gut and renovate an old Cisco Systems office building for $50 million.
Rosemont approved borrowing — but later scrapped plans — for a $40 million, 100,000-square-foot public safety department headquarters that would have been situated between Lyndon Avenue and Barry Street, north of Lunt Avenue.
Courtesy of Village of Rosemont
Last month, the village board approved construction contracts for a $34.5 million, 103,000-square-foot indoor ice rink on the land that was originally eyed for the police station, and an $8.5 million, 28,000-square-foot exhibit space for immersive art experiences and pop-up museums in The Pearl District south of Balmoral Avenue and west of the Tri-State Tollway — where the new village hall was envisioned.
Stephens said instead of taking up two chunks of land with tax-exempt government buildings, “We’re putting things there that’ll attract more people.”
He predicted the EXP entertainment exhibit space could welcome up to 200,000 visitors a year — with associated amusement taxes for village coffers — while the new hockey rink on the other side of town could bring regional tournaments and overnight hotel stays for players and parents.
Mack added the village is using cash to pay for those public building projects.
He also attributed the credit upgrade to an ongoing effort to sell village-owned buildings to their tenants — including almost all of the venues in the entertainment district — thereby raising and creating cash used to pay down the debt.