Denver property owners will spend two decades paying off a massive $550 million program to fix roads and civic buildings.
Now is their chance to get some money back.
City leaders are preparing to borrow the final $12 million for the Better Denver Bond Program, approved by voters in 2007. Instead of issuing the bonds the usual way, to banks and other institutional investors, the city in early August will offer $500 “mini-bonds” for sale — and any resident of Colorado can buy them.
The pitch: Loan $500 to the city for nine years and get a 50 percent return. Hand it over for 14 years and double it, receiving $1,000 back when the bond matures. Each individual is limited to investing $20,000 when bonds go on sale Aug. 4-8.
On Tuesday, the city will begin promoting the mini-bonds on its website, denvergov.org.
“It’s a great opportunity for Colorado investors because these are relatively small denominations,” said Deputy Mayor Cary Kennedy, also Denver’s chief financial officer. “It’s a very attractive rate for a very safe investment. Denver is a AAA-rated city.”
Think of it like a government savings bond, with much higher interest rates available than banks and credit unions offer for certificates of deposit.
Doing it this way will cost the city more in the end, Kennedy said. But city leaders say they approved the mini-bonds, championed by City Councilwoman Jeanne Faatz, as a small portion of the Better Denver program because of its symbolic value. The council approved the mini-bonds 12-0 last month.
“It’s always been important to me to allow citizens to invest themselves in the projects they approve,” Faatz said. “Otherwise, they’re just on the payor end. I want them to get some of the interest.”
The new mini-bonds are the fifth batch offered by Denver since 1990, and by far the largest. In 2007, the city raised nearly $9 million from small investors toward the new downtown Denver Justice Center.
This time, they will pay for $5.4 million in deferred maintenance at Civic Center’s McNichols Building, $3.6 million in renovations to Boettcher Concert Hall and $3 million toward construction of the new Central Denver Recreation Center.
Those are the among the last of more than 300 projects covered by the Better Denver program.
“Places like Boettcher Concert Hall and the McNichols Building help create livable communities,” Mayor Michael Hancock said through a spokesman, “and the resources provided through the Denver Mini-Bonds will ensure a vibrant future for these institutions and venues.”
The city will split the $12 million available between the nine- and 14-year bonds.
The mini-bonds will come with fixed compounding interest rates — estimated at 4.26 percent for a nine-year term and 4.8 percent for a 14-year term — that beat rates offered on certificates of deposit by large local credit unions. Those currently top out at about 1.5 percent.
Plus, interest on municipal bonds is tax-free. That increases the equivalent interest rate by more than 2 percentage points, the city says.
When the bonds go on sale, they will be available online; at Vectra Bank, 1650 S. Colorado Blvd.; and by mail, at Better Denver Mini-Bonds, 1001 17th St. Suite 850, Denver, CO 80202. The latter two options require an official bank check.
Jon Murray: 303-954-1405, jmurray@denverpost.com or twitter.com/JonMurray
