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TO: Mayor Richard C. Irvin
FROM: Martin S. Lyons, Chief Financial Officer/City Treasurer
DATE: October 1, 2019
SUBJECT:
A Resolution authorizing the use of $3.0 million in Line of Credit Funding for the Hobbs Redevelopment Project.
PURPOSE:
Resolution R19-159, R19-207 and R19-240 (Attached), established Lines of Credit (LOC) with Fifth Third Bank and Old Second Bank for $10.0 million at each institution. These resolutions also established the draw limits on these Lines of Credit at $6.8 million for downtown developments and $9,739,741 for Bilter Road Land Purchases. The attached resolution will authorize the use of $3.0 million in LOC funding for the Hobbs development, approved on September 24, 2019 (Resolution R19-330 is attached).
BACKGROUND:
As a part of funding for several development projects the City is using LOCs with local banking institutions combined with available funds on hand. As noted previously, some of the borrowing through LOCs will be paid back by the given developers when Federal and State tax credits are received and some of the borrowing will be converted into long term taxable debt.
As noted in the Resolution R19-159, R19-207 and R19-240, the City has previously authorized the use of $16,539,741 in LOC funding, of which the following has already been drawn:
Terminal Development $1.2 million
80 S. River Development $283,333
Avalon Heights/Old Copley Phase I $3.0 million
Bilter Road Land Purchase $9.7 million
TOTAL $14.2 million
DISCUSSION:
The approval of the redevelopment of the Hobbs building includes the provision of a $1.5 million grant, and the usage of a $1.5 million bridge loan to be repaid through tax credits associated with the redevelopment project. As is provided for in the enabling resolution for using LOC funding, each new project must be approved by the City Council for the use of these funds. Using the LOC for this project will bring the total authorized usage of LOC funding to $19.5 million of ...
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