The Financial Advisor and City Staff recommend adoption of the resolutions as presented.
Housing Director Ken Thomas negotiated purchase of the properties known as Kristen Court Apartments contingent on the sale of 100% of the properties. All property owners have signed purchase agreements for the 59 units at a total cost of approximately $3.4 million.
The first Resolution accepts the proposal from Suntrust Bank to provide a Bank Anticipation Note (BAN) in an amount not to exceed $4.0 million in accordance with the loan agreement and pledges payment of the note from revenues derived from the Public Service Tax, Half-cent Sales Tax and Guaranteed Entitlement, which shall be subordinate to outstanding debt. Term of the BAN is three years; the fixed rate will be determined at the time of closing but is estimated to be 5.6% to 6%.
The second Resolution authorizes the issuance (within three years) of $4.0 million Capital Improvement Revenue Bonds to pay the Bank Anticipation Note. The bond term and rates will be determined at the time of issuance.
1. Adopt the resolutions as presented; or,
2. Such alternative action as the Commission may deem appropriate
Revenues generated from rent of existing units will pay for operations, maintenance and debt service. Long term plans for the complex will include payment of the debt. Interest payments will be capitalized for the first year and payment in subsequent years will be budgeted. Budget adjustments for revenues and expenditures will be required for 2006-07 Budget.
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Deputy C.M. ___________________
City Manager ________rs___________
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