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Item 3D: Adoption of Resolution on 108 Funds for Construction Funding
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Item 3D: Adoption of Resolution on 108 Funds for Construction Funding
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1/11/2010
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<br />From: ramin@metrocomdev.com [mailto:ramin@metrocomdev.com] <br />Sent: Friday, December 18, 2009 9:31 AM <br />To: HOLSER Mary Ann (SMTP) <br />Cc: *Eugene Budget Committee; *Eugene Budget Committee <br />Subject: RE: Beam dowtown proposal <br /> <br />Mary Ann, <br /> <br />As a new member of budget committee, I also missed the forum opportunity. Furthermore, I have not <br />been preview to much of decision making process as well as the prudent contractual process that is and <br />should be done behind the scenes by the city officials and lawyers. <br /> <br />However, I want to agree whole heartedly with you on your email. I believe the city needs to be <br />extremely cautious given the times we live in. I have worked with World Bank and been preview to <br />numerous public/private initiated civil work projects as well development projects internationally. I <br />currently own and manage commercial properties in Eugene and the coast. <br /> <br />So in this context, my background affords me some knowledge of cost of properties, reconstruction <br />costs of properties as well as the rental market. <br /> <br />In addition to your concerns I wanted to add that I hope the city officials make certain that major <br />safeguards are in place to protect tax payers. I would hope the city officials at the minimum ensure the <br />following: <br /> <br />1)Signed and commitment leases from reputable tenants for majority of the space. Enough <br /> <br />commitment should be made so that the income from rents will be sufficient to pay for the loan, <br />operating cost, and capital cost. <br />2) The least terms should be not less than five years commitments. <br /> <br />3) Personal guarantees from Beam principals for the loan amounts (this is very important) – <br /> <br />Today, if any developer wants to get a loan for construction, they will have to give personal <br />guarantee from principals. After-all it seems that the interest rate charged for this project to be <br />below market rates. <br />4)Mechanism in place to ensure that the funds made available for construction will all be used for <br /> <br />construction. i.e. if Beam borrows “x” dollars there is evidence to show that they spend $”x” on <br />the property. <br />I am hopeful that my concerns are without warrant and wish the project every success. <br /> <br />All the best, <br /> <br />Ramin <br /> <br /> <br />
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