1988-03-10 Minutes - Laserfiche WebLink

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r outh Bend Redevelopment Authority pecial Meeting - March 10, 1988 2. NEW BUSINESS (Cont.) Mr. Davey noted Center City Associates' support for this facility in light of the current parking shortage in the downtown and the importance potential developers put on this factor when considering South Bend as a possible development location. Mrs. Kolata noted that the existing City garages are booked above capacity. The proposed office building to be constructed on one of the surface parking lots, as well as the major renovation of the Sherland Building which will begin soon, will increase the downtown parking problems. This garage will help relieve that situation. Mrs. Kolata also noted that this garage would be operated under the same rate. structure as the other City garages and would be run by City personnel. Operating revenue will not entirely pay for this garage. Funds for repayment will come from three sources: (1) net operating revenue, (2) One Michiana Square UDAG repayment pledged for this purpose, (3) excess tax increment revenues which may be available. Mr. Nussbaum offered to answer any questions regarding the stadium refinancing.. Mr. Varga asked him to review the structure of the lease obligation and how the refinancing will work. Mr. Nussbaum responded that the present structure is that Security Pacific is the lessor. The Park Board is the lessee. Security Pacific financed the construction of the stadium. The Park Board pays semi-annual payments for 10 years to pay for that construction. At the end of the 10-year period, the Park Board has an option to purchase the stadium. The interest rate of the current lease is 13.420. At the time the agreement was negotiated, there was a question as to whether the interest payment would be taxable or non-taxable for Security Pacific. Decisions made in Washington have rendered it taxable. The lease provides that Security Pacific's after-tax income be guaranteed, regardless of the decision. So the interest rate escalated from 9.25% to 13.42%. All projections indicate that a savings of at least $200,000 over the life of the bond could be realized by refinancing. If the financing is determined to be a non-taxable transaction, the savings would be $900,000. The refinancing will have a term of approximately eight years so that the payments will not extend longer than the existing term of the Security Pacific lease. Upon a motion by Mr. Wroblewski, seconded by Mr. Davey, and unanimously carried, the Authority approved Resolution No. 1. 3 . O't'f~R Mrs. Kolata noted that the Authority would be proceeding with both financings concurrently. The garage will require a meeting in late March or early April. The stadium will require a meeting in mid-April.