City Committee to Evaluate Extension of Key Letter of Credit for Conference Center Financing

The Pasadena City Council’s Finance Committee is set to deliberate on a proposal to extend the Bank of America Letter of Credit linked to financing for the Pasadena Conference Center. This extension, which will be considered during a special meeting on Monday, March 17, at 3:30 p.m., is crucial to addressing the upcoming March 31 expiration of the current arrangement.

The agenda item, titled “Joint Action with the Pasadena Public Financing Authority regarding the 2008A Variable Rate Demand Refunding Certificates of Participation,” reflects the city’s ongoing commitment to fiscal stability. These Certificates of Participation (COPs) were originally issued during the financial crisis in 2008 as a strategic solution to fund the expansion of the Pasadena Conference Center and ensure cost-effective financing amid market volatility.

Under the proposal, the Bank of America Letter of Credit would be extended for an additional three years at an annual rate of 0.34 percent. This extension, projected to cost $155,400 over the term, represents a slight annual increase in fees but aligns with the city’s broader financial goals. The move will allow the city to continue benefiting from the stable financial arrangement established during the crisis.

The expansion of the Pasadena Conference Center, part of the larger Pasadena Convention Center complex, was originally funded through a $162.64 million issuance of Certificates of Participation in 2006. The project aimed to modernize the facility, solidify its role as a hub for conventions, cultural events, and gatherings, and bolster Pasadena’s local economy.

Following the collapse of the auction rate market in early 2008, the city transitioned to the 2008A Variable Rate Demand COPs, a more resilient financial instrument featuring a seven-day put option backed by a liquidity facility or bank Letter of Credit. This structure proved effective in ensuring financial stability during uncertain times.

The Finance Committee’s upcoming decision will determine whether to uphold this arrangement for another three years, as Pasadena continues to balance fiscal responsibility with its commitment to vital infrastructure and community investments.