Bank Saves City Officials a Trip to the Big Apple : Finances: Delegation drops plans to go to New York after Sumitomo Bank offers to provide a letter of credit.

City officials have scuttled a trip to New York City after receiving assurances that Pomona can obtain a low interest rate on a $50-million redevelopment bond issue without sending a sales team to Wall Street.

A 10-member city delegation, including the mayor and four council members, had planned to fly to New York July 28 to meet with officials from Sumitomo Bank and Standard & Poor’s Corp., a credit-rating firm.

But the bank sent an emissary to Pomona last week to review the redevelopment project, and the bank apparently will provide the necessary financial backing without requiring a sales pitch from city officials, said Douglas Dunlap, deputy executive director of the city’s redevelopment agency. Thus, he said, the trip to New York will be unnecessary.

Bank officials could not be reached for comment, but Dunlap said the bank has made a verbal commitment to issue the letter of credit.

City Administrator Julio Fuentes estimated that the New York trip would have cost $12,000 to $15,000. The money would have come from bond proceeds, not general taxes, but still could have subjected city officials to criticism since the city has been in severe financial trouble.

The council imposed $4 million in new taxes and laid off 16 workers to balance the budget this year.

The City Council, which has not yet formally approved the redevelopment bond issue, will meet at 4 p.m. Monday to discuss the plan.

Most of the proposed $50 million issue would be used to retire $40 million in bonds issued in 1989. But the refinancing also would produce $8 million in new money for the regional mall proposed at the Pomona Freeway and Corona Expressway. The money would be used to clean up hazardous waste on four acres of the 74-acre shopping center site and make other improvements.

Dunlap said Sumitomo Bank provided a letter of credit that helped the agency obtain a low interest rate on the $40 million bond issue in 1989. Now, the bank is being asked to renew the letter of credit for the refinancing plan.

The redevelopment agency hopes to issue five-year bonds at 6.5% interest, Dunlap said. At that rate, the agency would pay $3.25 million a year in interest. The bond issue is tentatively scheduled for mid-August.

Forest City Development Inc., a national builder of shopping centers, apartments and office towers, is attempting to line up department stores as major tenants for the proposed mall. But the Pomona project is in competition with malls also planned in nearby Chino and Chino Hills, and developers say only one of the three is likely to be built.

Fuentes said the cost of the New York trip would have been “not even a drop in the bucket” compared to the potential benefits if it had secured the city a better bond rating and lower interest costs.

Still, he said, he’s glad the trip became unnecessary and was canceled. “We’re trying to be very conscious of spending money,” he said.