Revitalization Commission Agenda and Packet 2014 08 11

Home Browse Search

SUBJECT: UPDATE ON CORE PROJECT AREA TIF BOND PROGRESS DATE:AUGUST 11, 2014 PAGE2OF3 $700,000. Additional Advances on the Bond will be made upon receipt by the Purchaser of an Advance Request submitted by the Commission and upon compliance with the Closing Conditions in the Term Sheet attached to the Core Project Area Agreement. 2. The Bond will be payable from property tax increment revenues in the Core Project Area based on a Property Tax Base year established in 2012. The payment of the Bond from the Pledged Revenues will be subordinate to the payments under the two Cooperation Agreements between the City and the Commission. Amounts owing to the County under the Tri-Party Agreement will not be considered Pledged Revenues. As the Pledged Revenues are received, the Commission will hold these revenues in the Revenue Fund. After paying all Senior Obligations (City IGA, County IGA, South Street IGA), the remaining Pledged Revenues will be remitted to the Paying Agent five business days prior to December 1 in each year and used to pay debt service on the Bond. 3. If there are insufficient Pledged Revenues to pay the interest on the Bond on any December 1, this will not be an event of default. The interest will remain outstanding, but will not compound. After the payment of the Senior Obligations and the payment of accrued interest, all remaining Pledged Revenues will be used to pay down the principal on the Bond on December 1 in each year. If on the maturity date of December 1, 2033 there are insufficient Pledged Revenues to pay all accrued interest and the principal of the Bond, the Bond will be discharged at the maturity date notwithstanding such nonpayment. 4. U.S. Bank will act as Paying Agent and Registrar for the Bond. 5. U.S. Bank will hold the Construction Fund and disburse the money to pay for the Costs of the Project under the Construction Fund Agreement. The Bonds are scheduled to be advanced in phases, as DELO plans to construct infrastructure needed for the Phase 1 townhome project. The second advance of funds will come when the Phase 2 infrastructure needs are approved and ready for construction. There is a risk Phase 2 of the DELO project will not be approved and/or built. The bond documents are currently being written where the Phase 1 improvements may be the only project funded through the bonds. Staff would like concurrence the LRC is comfortable with that risk. The actual bond documents are still in draft form and not ready for full review by the LRC. Changes may be needed prior to City Council consideration in accordance with the IGA. LOUISVILLE REVITALIZATION COMMISSION