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<br /> <br /> <br /> <br />CITY COUNCIL COMMUNICATION <br />SUBJECT: TERM SHEET FOR HIGHWAY 42 CORE PROJECT AREA IMPROVEMENTS <br /> <br />DATE: APRIL 23, 2013 PAGE 5 OF 6 <br />It is important to note the bonds are only being repaid from the TIF revenue of this <br />subarea, the bond purchasers, not the City of Louisville or the LRC, carry the risk of TIF <br />revenues not being sufficient to cover bond payments. No guarantee is being provided <br />by either entity should revenues not meet expectations. <br /> <br />Denominations <br />The bonds may be sold in increments no less than $500,000. These bonds have a risk <br />profile that should only be undertaken by entities that have the ability to absorb such <br />risk. <br /> <br />Additional Bonds <br />No additional bonds may be serviced from revenues generated within the Highway 42 <br />Core Project Area without the consent of the bondholders. <br /> <br />Closing Conditions <br />Several conditions must be met before the bonds are issued for the public <br />infrastructure. They are; <br /> The DELO project must have an approved subdivision plat and final PUD <br />documents. <br /> All needed Right-of-Way must be dedicated to the City for the public <br />infrastructure. <br /> An executed redevelopment agreement outlining the actual public infrastructure <br />being constructed with the bond proceeds. <br /> Evidence that the developer for the DELO project has obtained the necessary <br />financing to complete the approved project. <br /> Approved final construction plans for the public infrastructure <br /> A third-party financial construction report showing that the discharge of the debt <br />due to non-payment will be remote. This is an IRS requirement for tax-exempt <br />bond issuances. <br /> <br />The bond amount may not be sufficient to complete the needed public infrastructure that <br />is identified through the development process. Any costs not covered by the LRC <br />financial contribution or from the City through its service utility funds will be the <br />obligation of the developer. It is important to ensure the public infrastructure project has <br />the funds available to complete them. <br /> <br />FISCAL IMPACT: <br />This TIF revenue bond does not have a fiscal impact on the City of Louisville. The bond <br />is paid through increased property tax revenue generated from projects within the <br />subarea denoted in Exhibit A of the Term Sheet. Only those revenues will facilitate the <br />principal and interest payments. The LRC is a separate governmental entity and its <br />financial commitments do not burden the City of Louisville. <br /> <br />19