The Phoenix-Mesa Gateway Airport Authority is planning to extend $6.4 million in tax-exempt revenue bonds on behalf of an airport tenant.
The Mesa City Council will meet Monday to vote on the revenue bonds, which will be issued by the airport authority and go toward a facility already built by Embraer Aircraft.
According to the airport authority, the total amount of the bonds will be $6,460,000. The facility was built in 2006 with Embraer's own money, and the authority left the option on the table to use tax-exempt bonds.
The proposed bond is for 15 years and would be repaid entirely by Embraer, according to a city report.
Scot Rigby, the Gateway project manager for the city, said Mesa would not be liable for the bonds, and that they were in fact being issued by the airport authority, which is made up of multiple East Valley municipalities.
"The only reason Mesa is asked to do this is because the facility is located within our city," Rigby said. "This happens to be the first time we've done this out at the airport."
He said because of the location of the airport, federal requirements mandate that the local city vote on the action.
Embraer spokeswoman Christine Manna said the city and airport authority are "only acting as a conduit, through which the bonds are being issued.
"All liabilities and costs related to the issue are solely the responsibility of Embraer," she said. Manna said using the bonds was always a part of the plan. "This is a financial strategy for all of our development projects."
According to a City Council report prepared by the Economic Development Department, in 2006 Embraer entered into lease negotiations with the airport to construct their facility and at that time discussed financing options including tax-exempt bonding.
Lynn Kusy, the airport authority's executive director, wrote in a report to the city that Embraer's building was constructed and equipped as "an aircraft and maintenance repair facility."
The company currently works out of the jet maintenance, service and overhaul center located on the north ramp of the airport.