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MINUTES <br />CITY COUNCIL <br />DECEPSBER 6, 1995 <br />SALE OF Rusty Fifield, Ehlers & Associates, reported that four <br />G.O. TAXABLE bids were received for the sale of G.O. Taxable Tax <br />TAX INCREMENT Increment Bonds, Series 1995B in the amount of <br />BONDS, $1,970,000. Proceeds from this bond sale will be <br />SERIES 1995B loaned to Mr. Bob Grootwassink and Mr. Mark Hotzler for <br />purposes of acquiring and rehabilitating the Market <br />Place Shopping Center. <br />Fifield reported that the low bid was received from FBS <br />Investment Services, Inc. at a true interest rate of <br />6.0013%. This is approximately 1 2/3% lower than <br />anticipated, resulting in a reduction in total interest <br />from $712,000 to $572,000. The City will loan the bond <br />proceeds at 1 1/4% higher, or at 7 1/4%. Fifield <br />reported that his office has compared the low bid to <br />some recent sales, and the low bid is very favorable. <br />Fahey asked if the additional 1 1/4% will accrue to the <br />City's benefit while payments are being made. <br />Fifield replied that that is correct. Payments on the <br />loan will commence on February 1, 1996 and the loan <br />will be retired at the end of 1998. The bonds are <br />callable beqinning February 1, 1999. <br />Fahey asked if Grootwassink and Hotzler will have <br />permanent financing after that date. Fifield replied <br />that that was correct. Fifield pointed out that <br />assuming a 5% investment rate for the $150,000 loan <br />origination fee and on mortgage payments, the City will <br />gain $197,000. Fifield explained that the $150,000 <br />loan origination fee will go into the cash flow of the <br />bond issue as a cushion in the event of interruption of <br />loan payments. However, it is a relatively short <br />period of time before those dollars will be available <br />to the City. <br />Fahey asked if this financial arrangement precludes the <br />City from granting TIF assistance on any other proposal <br />that might be presented. Fifield replied that it would <br />not. <br />Fahey pointed out that the $150,000 is on hold until <br />January 1, 1999. Fahey asked if that money could be <br />factored into any support agreement. <br />Fifield replied that the $150,000 is not a liquid asset <br />at this point, but will be available three years from <br />now. <br />The City Administrator pointed out that hopefully tax <br />increments will be generated from the Market Place <br />2 <br />