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HRA BUSINESS <br />Case #1: Consider Proposed Deal Structure The Residence at The COR Project <br />(portions may be closed to the public) <br />Development Manager Lazan explained that he has four items that he would like to review. <br />The first item for discussion is the sale price of land in The COR to Flaherty and Collins, which <br />will be a closed discussion. <br />Motion by Commissioner Ramsey to close the meeting at 10:00 p.m. seconded by Commissioner <br />Backous <br />Motion carried. Voting Yes: Chairperson Elvig, Commissioners Ramsey, Backous McGlone, <br />Tossey and Wise. Voting No: None. <br />Meeting re- opened at 10:25 p.m. <br />Motion by Commissioner Ramsey to open the meeting at 10:25 p.m. seconded by Commissioner <br />Backous <br />Motion carried. Voting Yes: Chairperson Elvig, Commissioners Ramsey, Backous McGlone, <br />Tossey and Wise. Voting No: None. <br />Stacie Kvilvang, Public Finance Consultant with Ehlers and Associates was present to walk <br />through the sensitivity analysis. <br />Working off the first page, which is the assumption page, total development cost is $29.8 <br />million; PNC will provide a loan for 20 million that will be a 40-year loan, interest only in the <br />first three years and then principal and interest thereafter. The interest rate is 6.5% with an <br />annual debt service payment of $1.4 million; that represents principal and interest. The City <br />would bond a maximum of $6 million. With interest paid, we would sell these initially as a <br />temporary bond, with the theory that if the project performs as anticipated with the sensitivity <br />that you've taken if the project did not perform out and your $6 million is being repaid back. <br />The remaining bond that we have to sell would be sold for a 23-year term at 6.27%. The rate is <br />high because you are providing financing to a private entity. <br />This discussion is for the bonding that we would do. <br />Commissioner Tossey stated the terms of the note are at three years. Ms. Kvilvang set up the <br />note to add three more, and if all else fails we can go to 23 years. <br />Ms. Kvilvang clarified it is set up at three and 23. <br />The next item Ms. Kvilvang discussed was the City loan of $1.3 million. A future decision point <br />is the option to increase the bond to 7.3 issuing temporary debt for 3 years. If it performs, <br />Housing and Redevelopment Authority / July 19, 2011 <br />Page 2 of 7 <br />