The Providence Village Town Council passed a loan agreement for up to $1.7 million between the town’s Economic Development Corporation and PlainsCapital Bank at the June 16 meeting.
Earlier that day, the Economic Development Corporation met and approved the loan agreement for the project and its purchase of real property intended to encourage business growth in the town.
“Our financial advisers prepared a term sheet and distributed it to 13 different banks that do this type of government financing,” Town Manager Brian Roberson said. “We had three banks that showed interest: PlainsCapital, Texas Regional and Amegy.”
Amegy Bank chose to withdraw because it couldn’t meet the EDC’s 15-year term request, which left only two options.
PlainsCapital Bank financing costs were slightly higher and required a debt service Reserve Fund, which increased the loan amount.
However, PlainsCapital Bank offers a lower interest rate of 5.50% on a 15-year term and lower annual and total debt service than Texas Regional, which had an interest rate of 5.90%.
“Which is really what we are trying to achieve— to get as low as we could under that [$286,626] because that’s the amount of revenue that they brought in the past four quarters leading up to this whole financing thing, and theoretically they will continue to grow that revenue,” Roberson said. “… So, we wanted to be below that so they still had some operating cash to continue doing some other things.”
Council members Dustin Clay and Klayton Rutherford, who serves on the EDC as the president, expressed their thanks to the EDC and anyone involved in the process.
The council also approved submitting an application to the Texas Water Development Board to help fund several projects or potentially reimburse them.
Although the TWDB is giving away $1 billion to fund water supply and infrastructure grants, the process will be competitive.
“A billion dollars sounds like a lot until every city and every water entity in the state says, ‘Hey, we need water,’ and all the water infrastructure right now is incredibly expensive ever since COVID,” Roberson said. “I have a feeling it’s going to go fast once they open this up.”
Roberson noted that the town has secured other financing for projects regardless of whether the application is granted.
The council also approved an amended plat covering about 9.5 acres for Providence Square, along with a renewal of health benefits from Oct. 1, 2026, to Sept. 30, 2027.
