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File #: 33611    Version: 1 Name: Advance Disbursement of TIF Funds
Type: Resolution Status: Passed
File created: 4/2/2014 In control: BOARD OF ESTIMATES (ended 4/2017)
On agenda: 4/29/2014 Final action: 4/29/2014
Enactment date: 4/30/2014 Enactment #: RES-14-00305
Title: Authorizing an advance disbursement of tax increment cash balances in TID 25 to redeem the 2000 Block 89 Redevelopment Lease Revenue Refunding Bonds and authorizing the Mayor and City Clerk to execute all documents necessary to facilitate such redemption and conveyance of the second phase of the Block 89 parking ramp from the City and CDA to Block 89 Parking Limited Partnership.
Sponsors: Michael E. Verveer
Fiscal Note
This resolution authorizes the acquisition of the second and final phase of the Block 89 parking structure by the developer (the "tenant" under the lease). The lease agreements between the City, the CDA and the developer required that the taxes generated by the incremental value of the Block 89 development be used to repay the $6.8 million in CDA bonds issued to finance this portion of the parking structure. These bonds were refinanced in 2008 to take advantage of lower interest rates and to avoid a large interest rate jump under the variable interest rate structure of the original bonds issued in 2000. The provisions in those bond indentures allow the bonds to be called (repaid in full) on or after July 1, 2014.

Under the lease agreement, the incremental property tax revenues are due to be paid to the bond trustee through 2018. The current lease agreement calls for the incremental revenues paid toward debt service on the bonds to be reduced from 100% in year 5 to 50% in year 10 through 2018. The amount paid to the bond trustee in 2013 was $159,899, which represents approximately 27% of the debt service in that year. The developer makes up the difference between the incremental revenues and the debt service through office lease and parking revenues from the Block 89 development.

Under the resolution, the City would pay the bond trustee $610,000, based on a present value calculation of the tax incremental revenues estimated to be paid under the lease agreement through 2018, discounted at approximately 4.8% annually. The methodology for this calculation was established in the lease agreement in the event that the bonds were repaid early due to closure of TID 25. Under the current debt service schedule, the bonds would be repaid in 2020, with the debt service reserve used to pay all of the principal due to be paid in 2020 and approximately 12% of the principal due to be paid in 2019.

Exercising the option to purchase the parking structure will ...

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