City Council Minutes 2014 10 07 - Laserfiche WebLink

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City Council Meeting Minutes October 7, 2014 Page 14 of 27 John Leary, 1116 LaFarge Avenue, Louisville, CO stated there was no due diligence on the assumptions and the bond counsel's assumption is incorrect. He stated no one has done an analysis on the subsidy and asked why this subsidy is going forward. He noted the land has been there for over fifty -years without any substantial development. He stated the North End did not receive any subsidy, so why is this development being subsidized. He stated the developer is purchasing the properties, and he questioned whether there is any double- dipping. He stated if the subsidy is needed to eliminate the risk, why is the interest rate so high. He questioned why the bonds weren't offered on the open market. He felt the process gives government a bad name, and a shallow interpretation to put it into this context. He stated he was challenged by a former City Council member by asking is it legal. He stated unfortunately it is not illegal to waste taxpayers' money. COUNCIL COMMENTS Council member Lipton asked Bond Counsel Dee Wisor, to outline what he would review in this type of proposal and for his conclusion of this particular proposal. Dee Wisor, Butler /Snow Law Firm, Denver, CO explained their role in the issuance of bonds is to prepare the documents and negotiate with the perspective bond holder and developer on various points, and consult with the City Attorney and Economic Development Director on the points of negotiation. At closing, should the City Council and the LRC approve the bonds, his firm will deliver a customary opinion that the bonds are validly issued and payable solely from the pledged revenue (TIF) and the interest is excluded for income tax purposes. Council member Lipton asked what was the role of the finance advisor. Economic Development Direct DeJong explained there were two financial advisors; George K. Baum and Alan T. Matlosz. Alan Matlosz prepared the performance bond and looked at the developers' assumptions, the values of the properties, previous sales in the community, commercial square footage, and previous sales on apartments in and near the community to determine the TIF to build these improvements. Council member Lipton asked in what part of the process does the developer and the City stress test the assumptions. Economic Development Director DeJong stated the final version in the council packet is one of the stress tests conducted. In the analysis, a one year delay was applied to all built private infrastructure that delays tax increment revenue for the core project area. There was also a two -year delay applied in a separate test, which was still able to pay off bonds during the term of the tax increment collection. 2031 is the last year tax assessment is collected and would be paid in 2033. Council member Lipton stated his understanding the LRC can refinance the bonds and asked if that would require coming back before the City Council. City Attorney Light explained the City and the LRC entered into a cooperation agreement in 2006, which