Tuesday, September 18, 2007

From Council

R-07-09-35
"A RESOLUTION of the Common Council of the City of Fort Wayne, Indiana, approving the issuance of certain City of Fort Wayne Redevelopment District Tax Increment Revenue Bonds
and Bans
Serving the Jefferson Illinois Road Economic Development Area – aggregate principal amount not to exceed Eighteen Million Dollars ($18,000,000)"

DO PASS recommendation out of Committee

Breakdown: (Tom Hayhurst not present)

For:
John Crawford
Tom Didier
Glynn Hines
Tim Pape
Sam Talarico Jr.

Against:
Don Schmidt
John Shoaff
Tom Smith

The resolution will face a final vote at next week's City Council meeting, September 25. The Council's vote breakdown has maintained the same for every major item related to Harrison Square so far and there is no reason to expect a deviation at next week's meeting.

Once the $18M Bond Anticipatory Note is approved by Council, Greg Leatherman advises that we can expect to see dirt turning around the first of October.

DFWB notes:

The Bond Anticipation Note (BAN) for $18M is to be a temporary bond that would ultimately be paid for by the final bond, when approved by the Department of Local Government Finance (DLGF). As stated at the Plan Commission meeting, the $18M breaks down to $12M for the parking garage, $3M for earth moving of the entire project site, and $3M for underground utility installation for the entire site.

Talarico question: Is this the same mechanism (BAN) that was used for the Grand Wayne Center, Southtowne, and other projects?

Leatherman answer: Yes, putting together all of the pieces takes time and the BAN allows for the construction of the parking garage in order to fulfill the obligation to provide parking for Lincoln. The short term bond would be paid for immediately upon passage of the full bond. The $18M short term bond can be paid for by the Jefferson Pointe TIF, if a situation arose in which the final bond was not passed.

Shoaff question: If the ultimate bond is not passed, what happens to the project?

Leatherman answer: The $18M bond will buy a parking garage which would be used for any project that would be built on the site and also would pay for site preparation for the entire area.

Crawford question: How much money is saved by using the property tax backing to reduce the interest rate?

Answer: Around $3-4M, alternatives to property tax backing are being researched that would allow for the securing of the final bond.

Pape question: What standard of review is there for the DLGF when considering the property tax backing?

Answer: The DLGF looks at the City's various revenue streams and makes an assessment of whether or not the City would need the property tax backing. The department could determine that the property tax backing is not required at all and that there is enough revenue available so that property tax backing of the bond is not necessary.

Crawford question: Is there a time limit for a response from the DLGF?

Answer: Three months, and the department can extend that deadline by another 3 months, which they have, putting the deadline into the middle of January

Schmidt comment: TIF districts historically have been used to improve the infrastructure around a development. Controversy came about when the Jefferson Pointe TIF district was stretched to include areas not immediately adjacent to Jefferson Pointe.

Pape response: It is not abnormal to extend TIF districts. Underlying law allows for it, because it allows funding to be in or serving the district. The original Jefferson Pointe district, when drawn up, contemplated a possible future extension and even directly referenced downtown Fort Wayne. The possible extension was very much anticipated.

Smith question: The skybridge was said to be a dealbreaker. Where does that stand? What is the price tag?

Leatherman answer: The first challenge was to work with the historic preservation commission to determine whether the walkway could penetrate the Indiana Hotel building. The issue was solved to the satisfaction of committee members who looked at the issue and who are also part of the historic commission, but no vote has yet been taken by the historic commission. The second issue was the budget and what it would include. There are ongoing meetings concerning the budget and a final budget has not been determined.

Smith question: Interior work would be required for the Indiana hotel. Would that cost fall on the City's shoulders?

Leatherman answer: The budget has included interior improvements for the third floor of the Indiana Hotel and is still part of the original $1M estimate.

3 comments:

John B. Kalb said...

Scott S. Two corrections to your report on the city council meeting today:
1) Pape question in re: standard of review by DLGF - answer was NOT that the DLGF commissioner could approve the issue of the bonds without property tax back-up (she can't). You don't need DLGF ok for the lease/bond method the city is seeking since the Fort Wayne Redevelopment AUTHORITY is the entity that will sell the bonds - not the city! (This is the method that our state political entities created to avoid the Indiana constitutional ban on a bonded debt amount over 2% of taxable assessed valuation.) So the city only needs an ok from commissioner Musgrave to enable the Authority to list the bonds as "property tax backed". This is so the buyers of the bonds have the collateral of our general property taxes so they can give us a lower rate since the risk is less.
2) Schmidt comment re: TIF districts historically have been ....... Papes response was incorrect, the original Jefferson Illinois Road EDA Declairatory Resolution did NOT mention downtown or even close to downtown - it was addressed to the infrastructure required in the area and specified " Jefferson Blvd. from Professional Park West to its intersection with Ardmore Ave.; then the undeveloped extension of Ardmore Ave. from there to Illinois Road(now the southern-most section of Hillegas Road); then Illinois Road from Thomas Road to iit's intersection with Jefferson at the signal light close to where Biaggi's is now; then old Illinois road eastward to what is now Hillegas road. If you desire, I have a copy of this 1991 document which I can get to you just let me know how. John B. Kalb

scott spaulding said...

Thanks John. Always nice to have a second set of ears.

John B. Kalb said...

Scott S. You know it also helps not be double tasking like you - I find it very hard to listen and type at the same time! I admire those that can do it! John B. Kalb