Howard County approves building corporation, OKs lease framework to finance planned jail

The Howard County Board of Commissioners approved two related measures to finance a planned county jail, voting to form a nonprofit building corporation and to adopt a lease agreement template that will allow the county to issue lease-rental revenue bonds.

Max Adams of Barnes & Thornburg, serving as bond counsel for the jail project, told commissioners the building corporation will issue the bonds and lease the project back to the county. "We're using what's called a lease financing model," Adams said, explaining that the county may also lease the courthouse temporarily as collateral while construction is underway.

The measures matter because the financing approach can reduce short-term borrowing costs. Adams said using a secondary leased asset "saves several million dollars during the first three years of these bonds." The lease resolution approved by the board sets a 20-year maximum term and includes a not-to-exceed cap on annual lease rental (the maximum annual debt-service amount) of $12 million; Adams emphasized the figure is a ceiling, not a projection.

Commissioners moved and seconded approval for the incorporation documents and the building-corporation resolution (BCC R 04), and later approved the form-of-lease resolution (BCCRR-05) by voice votes. Adams explained additional steps before closing: the building corporation must be incorporated with the Indiana Secretary of State, appraisals must be obtained for the project site and the courthouse, and those appraisals will set a minimum sale price the building corporation may pay at closing. "An appraisal will be done for the project site where the actual jail will be built," Adams said, adding that two separate appraisers will produce the valuation used to calculate sale proceeds.

Adams also noted that the documents leave room for market changes: the not-to-exceed amounts allow the county to sell bonds later in the summer without restarting the approval process. He said the board should not expect lease payments at the $12 million maximum and that the final bond amount will be determined after cost estimates and competitive bids.

Residents in public comment asked how officials plan to share information about the jail project with the broader public. "A lot of people did not have the time to go to an 11:30 meeting," resident Lisa Washington said, asking about outreach. County staff said they are considering a town-hall–style meeting and noted a contractors' night scheduled for May 21 to engage local contractors about the project.

What happens next: staff and bond counsel will complete incorporation paperwork, obtain required appraisals and finalize financing details. The board set policy-level approval for the financing approach but did not adopt a final bond amount or closing date during this meeting.