Fiscal Note
The proposed resolution amends the 2025 Adopted Operating Budget for the Economic Development Division to reflect $1,356,300 in loan revenues received from the Wisconsin Department of Natural Resources (WDNR) and an equal appropriation in expenditures for payment to the developer. The proposed resolution further approves the Ready for Reuse loan agreements between the City of Madison and WDNR and between the City of Madison and Conway at Huxley, LLC; between the City of Madison and Roth Street I Limited Partnership; and, between the City of Madison and Roth Street II Limited Partnership. WDNR's loan conditions require that the City provide a general obligation promissory note that pledges the full faith and credit of the City to repay the $1,356,300 loan in the event that the loan is not repaid by the developer.
The Ready for Reuse loan from WDNR is a 10-year, 0% interest loan. The developer will repay $585,000 of the loan to the City in the first 10 years, and the City will apply those payments to the repayment of the loan to WDNR. In the final year, the City will make a balloon payment for the balance of the loan to WDNR after the Developer's year 10 payment. The developer will then repay the City for the $771,300 balloon payment over the following 10 years with interest. The schedule outlined in the attached Repayment Schedule assumes a 4.6% interest rate on the remaining balance based on current City investment earnings rates plus 50 basis points. The interest rate will be adjusted as needed each year based on the City’s future annual rate of investment earnings. Repayments are scheduled such that the total payment (principal + interest) is the same in each of the 10 years.
The promissory note will require that the City designate a portion of General Fund reserves equal to the remaining principal on the loan until it is repaid. The unassigned General Fund balance as of December 31, 2024, is $110.6 million. The initial designation of $1,356,300 r...
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