In June 2006, Atlanta's mayor led an 11th-hour coup to buy the King Collection for $32 million only days before its planned public auction at Sotheby's in New York. Organizers had pledged to pay off the loan in two years but had struggled in the economic downturn to raise donations.
A four-member finance and executive committee of the Atlanta City Council on Wednesday unanimously recommended repaying the remaining debt with the help of city-issued bonds later this month. The plan requires the approval of the full council, which is expected to meet on the issue Monday.
Doug Shipman, the executive director of the museum project, said paying off the loan will finalize acquiring the exhibition rights to the papers. The collection -- which includes Dr. King's personal papers, sermons and books -- is intended to be the cornerstone of The Center for Civil and Human Rights, which is planned to be built downtown and open in 2012.
"We feel like the final payoff will actually boost the effort of the center," Mr. Shipman said. "We can go out and say they're secure and this is how we're going to use them."
The King Collection includes items ranging from canceled checks, to a term paper Dr. King wrote in college and a draft of his most famous speech, "I Have a Dream," delivered at the 1963 March on Washington.
The city and Atlanta Development Authority agreed to issue $40 million in bonds to the center.
The money was to be used for construction costs, but the center will use $11.5 million to secure the exhibition rights for the papers, said Cheryl Strickland, the authority's managing director for the tax allocation district.
The remainder is still set aside for construction costs and cannot be spent before the center raises the $85 million it needs to break ground.
The center is required to reach certain milestones as a condition for spending its bond money -- approved last year by the council.