HomeMy WebLinkAboutAgenda Statement 1982/11/18 Item 3
COUNCIL AGENDA STATEMENT
• Item 3
Meeting Date 11/18/82
TITLE: Resolution 11084 Authorizing the sale of $9,600,000 in
Revenue Bonds and approving related documents, offering
memorandum and authorizing official action
ITTED BY: Community Development Director ~1N (4/5ths Vote: Yes No X )
F r the past five years, the City and Agency have been attempting to assist in
t e development of a marina and R~' park on Port District property in our
B yfront. Two years ago the City was about to take a position as guarantor of
f nancing instruments in order to fund the project. However, in a report by
G uen Gruen + Associates, the potential cash flow v-as not sufficient enough
f r the City to risk ~i is credit. Thus, direct City i nvol vement was rejected.
T e Agency and City Council did, however, indicate that if the issue could be
f nanced ~~ithout the need for the City's faith and credit that it would
c nsider sponsorship pf such a bond issue. By Council Resolutions 107Q0 and
1 791, March 9, 1982, inducement resolutions relative to the sponsorship of
I dustrial Development-type bonds was authorized by the City Council.
R COMMENDATION: That the City Council
f
l approve
6
$9 the
million resolution and
in Industrial
•d cumentation relative to
bonds for the e o
the sa
financing of the .
marina and RV park by IPG.
D velopment-type
SCUSSION:
fter many tries, the fi nanci ng of the P1ari na and RV Park i s now a reality.
he Bank of America has agreed to participate in the financing (called
!leposit with Lender") via tax exempt bonds. In this manner, proceeds of the
and sal a are uti 1 i zed to fund the project and the bank places a Certificate
f Deposit in Trust'to guarantee the repayment of the bonds. P, negotiated
nterest rate of 10-~/4% has resulted in the sale of the bonds through Merrill
ynch, Inc. The bonds will be dated as of December 3, 1982. Pity issuance
nables the bonds to be tax exempt securities. No City guarantee is required;
ny City involvement throughout the life of the issue is a reimbursable
~xpense from the Tr~,stee. Since the Bank of America i s Lender of Record for
.he issue, First Interstate Bank of California is proposed to he the Trustee
~f the issue. The Trustee will disburse funds through a Construction Control
account.
'INANCIAL IMPACT: A City spousal s Develoeme t Blond Ofund laccounteas,vincome~
placed into the Cifiry's Industri p
;i ty expenses may be' charged against this account.
GD : nr
• CPC 0421 H
COUNCIL ACTION: Resolution adopted.