Revitalization Commission Agenda and Packet 2014 09 08

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Revitalization Commission Minutes August 11, 2014 Page 3 of 6 A question was raised as to how the multiple advance structure affects the call protection and bond maturity. DeJong and Attorney Light stated that the 7 year call protection begins at the date of closing. The second advance of bond proceeds does not extend TIF. 2033 is the last year to collect TIF revenues. Chair Becker asked Rick Brew if he is able to give the LRC an indication of investor interest and whether there is risk of where interest rates will be in a year. Rick Brew said there is interest in a 7% interest rate. Whoever invests has to have faith RMCS can do the project. Things shouldn't change in 10 months. Rick Brew indicated he understood the risk and was comfortable with the time horizon. Commissioner Lathrop asked about the inter - relationship with Tebo. Brew said Tebo wants to build next year but RMCS's plans are not reliant on him to build. Tebo needs the City to come to an agreement on zoning. 2. The bond will be payable from property tax increment revenues in the Core Project Area based on a Property Tax base value as of 2012. As the pledged revenues are received, the Commission will hold these revenues in the Revenue Fund. After paying all the Senior Obligations (City IGA, South Street IGA) and netting out the County IGA payments, the remaining Pledged Revenues will be remitted to the Paying Agent five business days prior to December 1St each year. City Attorney Light said the amounts payable to the County under the County IGA are not considered pledge revenue under the IGA and the bonds are not a superior lien to the County obligations. 3. If there are insufficient Pledged Revenues to pay the interest on the bond on any December 1st, this will not be an event of default. Interest that is earned does not become capitalized interest. Rick Brew said that unpaid interest should compound and earn interest. Attorney Light said the term sheet says it is 7% simple interest, not compounded interest. There was a discussion of simple interest vs. compound interest. Chair Becker said the payment should match the term sheet. Attorney Light said the term sheet says simple interest and interest unpaid in 2033 is discharged, and that under the cash flow structure of the TIF bond, nonpayment of principal or interest at a payment date because of lesser TIF revenues is not a basis of default. There are 3 parties with mutual interest in