Laserfiche WebLink
February 6, 2025 <br />items before the commission today are as follows, the Resolution <br />authorizing the creation of the economic development tax and revenue <br />bonds, legal documents including the form of trust, indentured form of loan <br />agreement, form of Common Council bond ordinance and the tax impact <br />report prepared by Baker Tilly, and a public hearing. Mr. Randy Rompola, <br />Barnes & Thornburg LLP explained the structure of the financing and that <br />the proceeds of the bonds would be loaned to the developer, and the City <br />is not responsible. This would also not affect the city’s rating if the bonds <br />default. <br /> <br />Vice-President Morton asked about large number of units and Mr. Bauer <br />explained that a market analysis has been done by RCL Co., and it shows <br />that we have a significant potential for additional absorption of market rate <br />housing in the next five years as part of the City’s master plan. Mr. Sturgis <br />confirmed the findings. Mr. Todd May with J.C. Hart Company, Inc. stated <br />that there is a mix of studio apartments, 1-2 bedrooms, and 3 bedrooms <br />and the average rent is under $2000 per month for a 900 square foot unit <br />and is in line with other rental properties downtown. Secretary Matousova <br />asked about the number of parking spaces for residents. Mr. May stated <br />that there will be 398 spaces in the parking garage and 65 spaces <br />dedicated for Crowe use, one (1) spot per bedroom is a good estimate. <br />Commissioner White asked about the cost of parking and Mr. May stated <br />approximately $110 per space and one space is included in the rental <br />price. Commissioner Zapata asked if there was a cap for potential <br />earnings for the bond holders and Mr. Rompola explained that the bond <br />will not exceed $17 million and when the bond is issued, the principal <br />amount and interest rate will be locked in. He also confirmed that <br />whatever TIF is generated, if there's extra TIF or if the assessments would <br />increase and more TIF is generated, that would mean the bond would just <br />be paid off earlier. <br /> <br />Secretary Matousova asked why there would be overdue principal and <br />interest. Mr. Rompola explained that if the TIF for any year was less than <br />expected or if there's extra, it would be used to make up for any shortfalls <br />and if there is a non-payment event, then you can defer to excesses in <br />future years, and the City would still get 10%. Also, the bond would not be <br />rated because they are not sold in the municipal market, and the municipal <br />market wouldn't buy a bond like this because it is solely project based. Mr. <br />Bauer explained that this is the 1st time the city has used this type of <br />financing, however, other cities have used this format for allocation areas <br />where they are tied to one project since the 70’s. Also, we don’t have to <br />have the TIF revenue cash available and appropriated for a project and <br />there is no risk for the city. Commissioner White asked about the 25-year <br />term and Mr. Rompola stated that is what the statute allows. Secretary <br />Matousova asked if the rate is negotiable. Ms. Emma Adlan with Baker <br />Tilly explained that it’s a taxable bond at a 6% interest rate to upwards of