Resolution No. 5014 - Laserfiche WebLink

Home Browse Search

RESOLUTION NO. 5014 A RESOLUTION DESIGNATING THE CITY OF EUGENE AS AN ARRA RECOVERY ZONE, AUTHORIZING PRELIMINARY ACTIONS IN CONNECTION WITH CONDUIT BONDS FOR BENNETT MANAGEMENT COMPANY, AND AUTHORIZING SUBALLOCATION OR TRANSFER OF RECOVERY ZONE ECONOMIC DEVELOPMENT BOND AUTHORITY FOR LANE COMMUNITY COLLEGE, The City Council of the City of Eugene, Oregon, finds as follows: A. The American Recovery and Reinvestment Act of 2009 ("ARRA") permits the issuance of recovery zone bonds. The City of Eugene has been allocated $11,083,000 of Recovery Zone Facility Bonds ("RZFB") and $7,389,000 of Recovery Zone Economic Development Bonds ('6'61?,,.ZEDBs") volume cap. B. RZFBs are tax- exempt bonds that can be issued before January 1, 2011, to finance depreciable property that is .privately owned or used, is located in a recovery zone, and is. constructed, reconstructed, substantially renovated or acquired by purchase by a private user after the recovery zone is designated. This type 'of property ordinarily i's not eligible for financing with low cost, tax - exempt bonds. C. Bennett Management, Company ("BMC") .has proposed development of a . roughly $10 million retail and commercial :building that will be located on a vacant parcel directly south of the Centre Court Building (the "Bennett Project "). D. BMC has requested assistance from the City of Eugene to make the Bennett Project financially viable, including (i) the transfer of ownership of the property from Beam Development to BMC; (ii) utilization of the City's RZFB authority to allow BMC to achieve a lower, tax- exempt interest rate on its bank loan; (iii) a City commitment to occupy and/or guarantee up to 20,000 feet of office space in the new facility; and (iv) a potential Downtown Redevelopment Loan Program loan to assist with closing financial gaps. E. The City's ' Debt Policies, which are attached hereto, set out requirements for conduit financings like - the proposed RZFB financing for the Bennett Project. The Bennett Project financing will comply with the debt policies related to conduit financings except for the rating - or -credit enhancement requirement. Because the Bennett Project will be financed through a bank private placement loan rather than a public bond sale, this policy requirement is not needed. F. The RZFBs for the Bennett Project will be payable solely from revenues provided by BMC, related parties and users of the Bennett Project. G. RZEDBs are taxable bonds that can be issued before January 1, 2011, for public infrastructure and facilities, and that will receive a subsidy from the federal government for a portion of the interest cast.