Even if there is a working arts school on the College of Santa Fe campus this fall, it does not mean the college will be completely off the hook with creditors.

City officials are contemplating issuing up to $30 million in bonds in order to acquire the college campus — minus the Shellaberger Tennis Center — and using lease revenue to pay of the debt.

But according to a presentation made by the city to the New Mexico Finance Authority this week, the city would not actually pay off all of the debt owed to bondholders by the College of Santa Fe.

Instead, the city would pay about $19.5 million of the $25 million owed to the Royal Bank of Canada. The balance would be paid by Radian Asset Assurance, Inc., the company that insured the bonds.

Laureate Education, Inc., a for-profit group that intends to run an arts school on the campus and who is owed $2.6 million, would retire that loan in exchange for the college's educational assets.

Calls to CSF President Stuart Kirk and Radian Asset were not returned.

The city plans to use the remainder of proceeds from the bonds, in addition to revenue from selling part of the campus to the state, to pay for up to $15 million in deferred maintenance and other capital improvements.

Other aspects of the negotiations include the college transferring "valuable, historical and culturally significant books and art" to the city, which would loan those assets to Laureate for use in the arts school.

There are some risks associated with the deal — state money, for example. Gov. Bill Richardson committed $11 million to the project — $5 million for buying property and $6 million for other related expenses.

But the Legislature must approve use of the $5 million, while $4 million in federal stimulus funds can be used only toward eligible expenses.

The success of the deal also is contingent on the success of Laureate. While city officials have said they feel confident that Laureate's track record makes them a good bet for success, the company has pledged $20 million to cover operating losses.

All of the details of the deal are scheduled to be discussed at Monday's meeting of the city Finance Committee. The meeting is scheduled to start at 5:15 p.m. in council chambers.

Contact John Sena at 986-3079 or jsena@sfnewmexican.com.