Fiscal Note
The CDA has a current outstanding balance of approximately $1,250,000 on the $4,100,000 Fannie Mae line of credit (LOC), all related to the $2,500,000 financing of the Lake Point condominium project approved in 2004. In July of 2006 an additional $2,100,000 of loans have been approved to assist in the financing of condominium units in the Twin Oaks neighborhood. To date there have been no LOC draws by the CDA or disbursements related to the Twin Oaks project.
Under its present terms the LOC allows the CDA to make additional draw requests until June 15, 2007 but expires on December 15, 2007, with the full balance becoming due and payable at that time. If the term of the present LOC is not extended until at least December of 2008, there will not be sufficient time remaining to effectively finance the approved Twin Oaks project. Extension of this LOC beyond 2008 would facilitate the CDA's ability to finance additional unspecified redevelopment projects in the future, pending Common Council approval.
The proposed LOC extension will cost $18,250 plus legal fees at closing and will continue to bear a variable interest rate, currently estimated to be approximately 6.3%, on the outstanding balance.
The City has guaranteed repayment of any funds drawn on this LOC with its full faith and credit. Thus, if the CDA is unable to fund its obligations under the LOC at any time, the City will be required to assume any repayment due. This guarantee constitutes a general obligation of the City to the extent that the CDA acts to draw funds. If the City's "Aaa" general obligation debt rating falls to the next lower category, the LOC interest rate will increase. If the City's rating would fall further, the full outstanding debt will become due and payable.
Title
AMENDED - Authorizing the extension of the maturity date by the CDA of a revolving line of credit loan in an amount of Four Million One Hundred Thousand Dollars ($4,100,000) from Fannie Mae, a ...
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