Fiscal Note
In 2004 the City's two ice arenas were sold to Madison Ice Inc. under a 30-year land contract for $1.1 million. This debt is currently being repaid to the City through semi-annual payments of $12,358 per location. The outstanding principal is $725,760, with an additional $238,000 in anticipated interest payments by the maturity date in 2036. The 2017 adopted capital budget authorized $1,075,240 in GO borrowing to refinance this debt, along with private debt, and provide funding for capital improvements. The newly issued debt along with the outstanding balance will be repaid on a 10-year term with a 20-year schedule, requiring an estimated $1.1 million balloon payment in year 10. The GO borrowing authorized by the resolution will be repaid by the City on a 10-year term; under this agreement the City's General Fund will absorb the higher debt payments during the first ten years of the agreement. The debt service payments will total an estimated $4,967 a year more than the amount of the loan payments received. Under the current loan, the City would receive $49,431 annually and a total of $543,742 in repayments over the next 10 years. Under this resolution, assuming the balloon payment is made in year 10, the City will receive an estimated net benefit of $7,500 compared to the current loan.
As additional mitigation from risk of failure to repay the loan by Madison Ice, Inc., the entity will provide a $30,000 letter of credit for each facility. This letter of credit will first be provided in year 5 of the loan repayment schedule.
Title
Authorizing amendments to the land contracts entered into between the City of Madison and Madison Ice Hartmeyer, LLC and Madison Ice MIA LLC for the purchase of the Hartmeyer and Madison Ice Arenas and reimbursement of expenses for improvements at Hartmeyer.
Body
WHEREAS, in 2004 the City of Madison entered into land contracts with Madison Ice Hartmeyer, LLC and Madison Ice MIA, LLC (together, the “LLCs”) for the owner...
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