Item 6: URA - Resolution Authorizing Tax Increment Bonds for LCC Projects

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EURA UGENE RBAN ENEWAL GENCY AIS GENDA TEM UMMARY Action: Adoption of Resolution 1059 Authorizing Tax Increment Bonds for Projects Described in the Downtown Urban Renewal District Plan Meeting Date: April 11, 2011 Agenda Item Number: 6 Department: Central Services Staff Contact: Sue Cutsogeorge www.eugene-or.gov Contact Telephone Number: 541-682-5589 ISSUE STATEMENT The Urban Renewal Agency (URA) will consider a resolution that would allow it to issue bonds to provide Lane Community College with an $8 million grant for its new Downtown Campus project and to refinance the Broadway Garages bonds to achieve interest rate savings. BACKGROUND On May 24, 2010, the council approved an amendment to the Downtown Urban Renewal District Plan. The amended plan allows for three projects: th 1)Assistance to Lane Community College (LCC) for their Downtown Campus project on the 10 and Charnelton Development Site ($8 million); 2)Additional urban renewal assistance in funding the Broadway Garages so that the Garages remain available and in good condition to support other development and redevelopment in downtown (and, at the same time, to enable improvements to public safety downtown) ($4,810,000 of debt outstanding); and 3)Infrastructure improvements to the Park Blocks to provide better opportunities for the Farmers’ Market ($500,000). The resolution included as Attachment A would allow the URA to borrow up to $4.5 million for LCC, plus borrow sufficient funds to refinance the outstanding Broadway Garages bonds. LCC Grant: In the 2010 plan amendment, the URA pledged $8 million of assistance to LCC for the new Downtown Campus project. At that time, it was estimated that the URA would need to borrow a little over $4 million in order to fund the full amount of the grant in FY11, and a debt service reserve account, if required by the lender. The resolution allows borrowing of up to $4.5 million for this purpose; the actual amount of borrowing will depend on terms required by the lender for the borrowing, and may be less than $4.5 million if no reserve is maintained. Parking Bonds Refunding: The 2010 plan amendment also called for the URA to make debt service payments on the City’s outstanding parking bonds issued for the Broadway Garages project on Charnelton and Broadway. The City’s financial advisor recommends that we consider refinancing the parking bonds \\Cesrv500\cc support\CMO\2011 Council Agendas\M110411\S1104116.doc