Forging an ironclad guarantee to fully keep Hooksett’s taxpayers off the hook for repayment of an $18 million bond designed to jump-start the Exit 11 business district may not make the most business sense, a bond expert told the Hooksett Town Council.

Marc Hughes, senior vice president of First Albany Capital, a New York-based firm that regularly advises municipalities in negotiating tax increment finance, or TIF, bonds was pitching his services to the council at its Wednesday, March 14, meeting.

When asked by Councilor David Ross about the possibility of a “bombproof” guarantee that Hooksett’s taxpayers won’t be stuck footing some of the bill for repaying the bond, Hughes replied, “That’s impossible, quite honestly.”

That is unless Cabela’s, the Nebraska-based retail giant that spurred talks about TIF financing for Exit 11, follows through with its intention to buy the bond and accepts a clause that prohibits the company from selling it, Hughes said.

But if the council and the publicly traded retailer move in that direction, Hughes warned, “I’m thinking you could end up with more problems at the end of the day.”

He said if the company went under, it could be tied up in bankruptcy court for years, potentially leaving an unfinished development behind.

Voters last year collectively instructed the council to move forward with negotiations for an $18 million bond, portions of which would go to infrastructure upgrades in and around the proposed Cabela’s site off Interstate 93, and $4 million of which would go to town infrastructure improvements.

New tax revenue generated from within the TIF district would go to pay off the bond, and revenue exceeding that annual debt service would go to the town.

The warrant article said the deal would require no new property taxation, and said Cabela’s intended to guarantee payments on the 20-year, general obligation bond.

Several councilors said they intend to not stray from the legally binding warrant article. “Cabela’s is paying this bill,” said Ross.

Hooksett resident Bill Sirak, who was at the council meeting to volunteer his expertise in forming some sort of town committee or nonprofit corporation designed to foster economic development in town, said he respected the councilors’ efforts in being “tremendously responsible fiduciaries.”

But Sirak said that, in doing so, councilors may not get the most out of the deal.

“I think we should look at this from an economic development point of view,” said Sirak.

“Our thinking shouldn’t strictly be related to Cabela’s.”

Sirak suggested the biggest “guarantee” to Hooksett’s taxpayers is the economic fertility of the real estate around Exit 11, which he said is ripe for development with or without the Nebraska company.

“There’s always going to be some element of risk,” Sirak said of the bond negotiations.

Councilor Jason Hyde asked Hughes when the town could actually see tax revenue – to potentially offset property taxes – from the TIF district, which Cabela’s has projected could be jammed with developments like hotels, restaurants and commercial distribution centers.

Hughes said that’s one of the first questions he gets when working with municipalities on TIF bonds.

“There are things we can do to structure it to get money back into the town coffers quicker,” he said.

But that’s not without some sacrifice in the later years of the bond, he said.

“I think you need to sit down and have a policy discussion,” he told the council. “There is a happy medium between the ultimate protections and growing that revenue.”

Councilor Michael DiBitetto said the council should more actively investigate getting professional help as it enters such negotiations.

“To try and craft an $18 million bond in this chamber with our admitted neophyte view of it would be ludicrous,” he said. “We’d be here five years.”