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City Council Meeting
  November 21, 2011
Background
   2009 Certificates of Obligation $31.315 million
     $2,600,000 for portion of Chimney Hill property
      purchase.


   Council has determined it no longer intends to
    build a convention center.
Background
   Change in use of property requires City to take
    action to maintain tax exempt status of CO’s

   Defeasance
     Establish and fund an escrow account to pay back the
      CO’s used to purchase the property.
Taking This Action Will
   Maintain the tax exempt status of the 2009
    Certificates of Obligation

   Remove the federal tax limitations on the use of
    the property
     Provide maximum flexibility in use and sale of
      property
Defeasance
   Total CO’s to be defeased is $2,305,000

   Total amount needed to fund the escrow
    account is $2,715,367.
     Hotel Tax funds and Chimney Hill lease funds.


   All proceeds from sale of property will go to
    Hotel Tax Fund
Defeasance
   Budget Amendment to appropriate funds for
    this transaction
     December 8th
Staff Recommendation
   Approval of ordinance and escrow agreement

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Chimney Hill Defeasance

  • 1. City Council Meeting November 21, 2011
  • 2. Background  2009 Certificates of Obligation $31.315 million  $2,600,000 for portion of Chimney Hill property purchase.  Council has determined it no longer intends to build a convention center.
  • 3. Background  Change in use of property requires City to take action to maintain tax exempt status of CO’s  Defeasance  Establish and fund an escrow account to pay back the CO’s used to purchase the property.
  • 4. Taking This Action Will  Maintain the tax exempt status of the 2009 Certificates of Obligation  Remove the federal tax limitations on the use of the property  Provide maximum flexibility in use and sale of property
  • 5. Defeasance  Total CO’s to be defeased is $2,305,000  Total amount needed to fund the escrow account is $2,715,367.  Hotel Tax funds and Chimney Hill lease funds.  All proceeds from sale of property will go to Hotel Tax Fund
  • 6. Defeasance  Budget Amendment to appropriate funds for this transaction  December 8th
  • 7. Staff Recommendation  Approval of ordinance and escrow agreement