Title
Resolution Making Certain Findings and Determinations Regarding the Proposed Financing of Parking Facilities and Requesting the Local Government Commission to Approve the Financing Arrangement
Body
Council Priority: Ensure Fiscal Stewardship, Transparency, & Accountability
Department: Financial & Administrative Services
Council District: 3
Public Hearing: NA
Advertising Date/By: NA
Contact 1 and Phone: Richard L. Lusk, 373-2077
Contact 2 and Phone: Charles D. Watts, 373-2320
PURPOSE:
To authorize the filing of an application with the Local Government Commission requesting approval of the issuance of up to $37 million taxable limited obligation bonds to finance the costs of land acquisition, design, site preparation and construction of the February One Parking Garage and related financing costs, including capitalized interest during construction.
The project will be funded by bonds issued on about January 14, 2021. Based on projected interest rates, the par amount of the bond issue should not exceed $36.12 million. Issuance of limited obligation bonds to finance this project is subject to a public hearing (held on August 20, 2019) and approval by City Council (December 15, 2020) and the Local Government Commission (January 5, 2021).
BACKGROUND:
On April 18, 2017, the City Council authorized the City Manager to enter into a Memorandum of Understanding with Elm Street Hotel, LLC to design and build a public/private parking structure in the 100 block of South Davie Street. This downtown development project will include a new hotel and/or office/residential space, retail space, parking structure and a renovated event center.
On August 20, 2019, the City Council held a public hearing on financing the Eugene Street Parking Garage, the February One Parking Garage and Fire Department Facilities.
To finance the February One parking facility project, the City will issue taxable limited obligation bonds pursuant to a master trust agreement with U.S. Bank (bond trustee) and a bond purchase agreement with Wells Fargo Bank, N.A. The interest on this installment financing will have a 25-year term with a projected average interest rate of approximately 3.0%.
BUDGET IMPACT:
Annual debt service on the parking facility will be included in the Parking Fund budget, estimated at $2.15 million annually. Increases in monthly parking fees and property and sales tax revenue generated from related downtown development will fund the debt service.
RECOMMENDATION / ACTION REQUESTED:
The Finance and Legal Departments recommend approval of the attached resolution authorizing the filing of an application with the Local Government Commission requesting approval of the issuance of taxable limited obligation bonds for the February One Parking Garage.