Title
Resolution Approving the Recommendation of the City Administrator for the Timing of Bond Issuance for the Arbor South Project
Memorandum
The attached resolution directs the City Administrator to structure the terms of the Arbor South Project so that the anticipated bond issuance will occur prior to construction of the public parking decks, rather than after their completion.
Budget/Fiscal Impact: Issuing bonds prior to construction, rather than upon project completion, would avoid an estimated additional $30.6 million in the ultimate purchase price for the parking structures. While the actual amount may be lower, it represents a reasonable projection of costs the City would not incur under the proposed approach.
Staff
Prepared by: Joe Giant, Economic Development Director
Reviewed by: Marti Praschan, CFO
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, City Council Resolution R-25-118 authorized the City Administrator to negotiate City participation in the Arbor South Project (the “Project”), including the potential for City ownership and operation, of three public parking decks in the development;
Whereas, The City is considering issuing bonds either to fund the construction of the parking decks directly or to purchase the completed decks from the developer after construction is finished;
Whereas, PFM Group Consulting LLC and PFM Financial Advisors, LLC, the City’s municipal financial advisors, are conducting ongoing due diligence on the Project, including review of the development proposal and associated financial and economic analyses;
Whereas, This due diligence indicates that if the City purchases each of the three public parking decks after completion, requiring the developer to finance construction, the resulting difference in costs to the City are estimated to be $30.6 million, due to higher private interest rates that the developer will incur and then pass to the City, as compared to municipal bond financing;
Whereas, Those increased costs would be paid from TIF revenues generated by the Project, which could otherwise be used to support critical public infrastructure investments, including expansion of a nearby sewer trunkline needed to accommodate future growth in the TC1 zoning district and on the south side of the City;
Whereas, issuing bonds prior to construction would also eliminate uncertainty regarding interest rate changes during the 18-to-24-month construction period; and
Whereas, The City Administrator has determined that the higher cost of purchasing the decks post-construction is not justified by the potential benefits, and that the risks and complexities associated with bonding prior to construction can be mitigated through terms negotiated in forthcoming public-private agreements; and
Whereas, City Council respects staff expertise and advice and wishes to proceed with additional caution;
RESOLVED, That City Council directs the City Administrator to continue negotiations with the developer of Arbor South on the following basis, that the City issue bonds after construction of the initial public parking deck for the Arbor South project, but that the City issue bonds before construction for subsequent decks, provided that the City retain the option to issue bonds after construction based upon then-current market conditions;
RESOLVED, That City Council directs the City Administrator to review any amendments to Chapter 14 or other sections of City Code necessary to proceed under the recommended financing structure and to bring forth such amendments for City Council consideration; and
RESOLVED, That the City Administrator is authorized to take all necessary actions to implement this resolution.
Sponsored by: Mayor Taylor
As Amended and Approved by City Council on July 7, 2025