2008 CAFR - Laserfiche WebLink

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CITY OF ST. ANTHONY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 FANNIE MAE LOAN PAYABLE The City has entered into a non -revolving line of credit agreement with Fannie Mae. The line of credit was for a total of $3,350,000; proceeds were used to fund the acquisition of property in the Apache Plaza area related to the Silver Lake Village development. The City disbursed the funds to the developer who applied the funds towards purchase of property and other costs associated with the redevelopment project. The project is primarily for residential purposes. The loan was for a period of 36 months and was set to mature on August 27, 2007; however, the City extended the loan period to December 1, 2010. Interest on the loan is payable quarterly. The interest rate is variable based on the three month LIBOR (as published in the Wall Street Journal) plus 175 basis points. In addition, the interest rate will be reset quarterly on the first day of each calendar quarter. It is anticipated the loan will be repaid from proceeds of tax increment bonds to be issued in future years. Terms of the note agreement constitutes an unconditional general obligation of the City for which its full faith and credit and taxing power are pledged. In addition, the City pledges future tax increment to be derived from the tax increment district for payment of the note. The City has recorded a receivable from the developer for the amount of the line of credit. Interest on the line of credit is currently being paid by the City and reimbursed to the City by the developer. The City has a mortgage, assignment of leases and rents and fixture financing statement dated September 10, 2004 which obliges the developer to reimburse the City for the interest on the loan and to reimburse the City for the repayment of the loan.