Title
Resolution to Amend Interest Rate on Previously Authorized Economic Development Loans for Shovel-Ready Industrial Development Site Grading
Body
Department: Legal
Council District: Districts 2 and 5
Public Hearing: June 3, 2014
Advertising Date/By: May 23, 2014
Contact 1 and Phone: Kathi Dubel, 373-4579
Contact 2 and Phone:Terri Jones, 373-2320
PURPOSE: To amend the interest rate on the Shovel-Ready Industrial Development Site Grading Loans previously approved by Council. These Loans will bear interest at a fixed rate equivalent to the 5 year Treasury bond + 50 basis points (set at 1.88%) annually compounded quarterly.
BACKGROUND:
On October 15, 2013, the City Council adopted resolution 301-13. This authorized a loan to McConnell Center Partners, LLC and to Samet Corporation in the amount of $500,000 each for grading of qualified industrial sites. On November 12, 2013, the City Council adopted resolution 322-13 which increased the amount of these loans by $100,000 each. In these two resolutions the interest rate was set at a fixed rate equivalent to the 10 year Treasury + 50 basis points annually compounded quarterly determined at the date of closing. The Request for Proposal for these loans stated a fixed rate based on the 5 year Treasury. This resolution will amend the interest rate to the five year Treasury Rate +50 basis points as of the date of the original Request for Proposals. All other provisions of the two resolutions remain intact.
BUDGET IMPACT:
The loans will be funded by the November 2006 voter approved Economic Development Bond.
RECOMMENDATION / ACTION REQUESTED:
Approve and authorize the change to the interest rate.