1994-12-20 - Laserfiche WebLink

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Council Meeting Minutes December 20, 1994 Page 2 Public Hearing - None Council Business Community Development Director Kevin Locke presented for consideration the preliminary approval of issuance of housing revenue bonds for Polynesian Village. The item was pulled from the December 13 agenda at the request of the applicant, Real Estate Equities. However, now the applicants request Council consideration. Earlier this year, Council authorized $11.5 million in tax exempt housing revenue bonds for the refinancing of the property and funding $1.2 million in improvements. Real Estate Equities have concluded that additional improvements are necessary and requests an increase in the bond authorization of $4.5 million. Terry Troy, Real Estate Equities, explained that more improvements will be performed on the project and the investor, NSP, would like to utilize tax exempt bond financing. Jim Wacker, Real Estates Equities, said the additional improvements would include windows, dishwashers, carpet, light fixtures, parking lot improvements and other replacements . Samuelson verified that the bonds would not associate any liability to the City. Gunderman asked for further clarification of the process. Locke explained that housing revenue bonds are a limited obligation of the City, payable solely from revenues generated from the project and other security pledged by the building owners. The bonds do not affect the City's credit nor can the payment of the bonds be charged against the City's taxing powers. The cost of issuing the bonds is solely the expense of the building owners. A public hearing and final City resolution will be needed later. The advantages for the applicant is that these bonds carry a smaller interest rate than conventional fmancing. There are no fmancial risks to the City because the obligation to repay the bonds and costs are not the City's responsibility, but the owners responsibility. Gunderman asked if the City could become liable upon a bankruptcy. Locke said the City would not be financially responsible if a bankruptcy occurred. Even though the City's name appears throughout the document, the financial responsibility is between the bond holders and the applicant. Gunderman noted that the City would benefit from the improved condition of the apartment complex. Staff recommends approval of the bond issuance. The bonds would provide for the continued health of the largest single element of the City's housing stock. Benke views this project as a positive effect on the community. Motion by Samuelson, seconded by Larson, to WAIVE THE READING AND ADOPf THE RF$OLUTION GIVING PRELIMINARY APPROVAL TO ISSUANCE OF TAX EXEMPT BONDS AND AUTHORIZING APPLICATION OF BONDING AUTIlORITY. 4 Ayes - 0 Nayes, Motion Carried. Council Business Polynesian Village Bonds Report 94-300 Resolution 94-141 I I I