Title
Resolution Authorizing Notice and Issuance of General Obligation Bonds - 350 South Fifth Avenue (6 Votes Roll Call)
Memorandum
On May 9, 2018, the City attempted to pay the deed-prescribed $4,200,000 "Asking Price" to Fifth Fourth, LLC to exercise its reversionary interest and formalize its fee simple absolute title to the 350 S. Fifth Ave. parcel. Although this payment was not initially accepted, Fifth Fourth, LLC, and its owner, Dennis A. Dahlmann, later offered a written settlement agreement to the City, which agreement contemplated that Fifth Fourth, LLC would accept the "Asking Price" and other consideration in exchange for quieting title in the City and dismissing their lawsuit. Council accepted that offer and the City executed the settlement agreement on May 22, 2018. The costs associated with this settlement agreement, repossession of the property, insurance of the City's title, and financing of the same are:
Tender $4,200,000
Settlement 1,000,000
Bond Issuance 150,000
Closing Costs 145,000
Total $5,495,000
Council has authorized funding the costs from the General Fund unassigned fund balance. However, in the budget resolution approved May 18, 2018 Council directed staff to return to Council at their June 4, 2018 meeting with a resolution authorizing the notice and issuance of general obligation bonds to reimburse the city's expenditures. The attached resolution was prepared by the City's outside bond counsel and, if approved, will provide the authorizations necessary to issue the bonds.
The bonds would be sold as a direct placement with a financial institution determined by a competitive bidding process based on the lowest interest cost proposal. The principal terms of the bonds are set forth in the resolution and will be determined in consultation with the City's financial advisor after evaluating the debt market conditions closer to the date of sale. The interest rate is anticipate...
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