Number
130973
Version
ORIGINAL
Reference
Sponsor
THE CHAIR
Title
Resolution appropriating and transferring $42,894.82 from the 2013 Common Council Contingent Fund to the Department of City Development for the purpose of refunding a participation loan overpayment by City Hall Square LLC.
Analysis
This resolution appropriates and transfers $42,894.82 from the 2013 Common Council Contingent Fund to the Department of City Development operating accounts for the purpose of refunding a participation loan overpayment by City Hall Square LLC due to a difference in calculating the depreciation of the City Hall Square development.
Body
Whereas, On January 16, 1997, a development loan agreement between City Hall Square, LLC ("Borrower") and the Redevelopment Authority of the City of Milwaukee ("RACM") was entered into for the project known as Component I of City Hall Square located at 104 East Mason Street and 123-37 East Wells Street; and
Whereas, RACM had entered into a Cooperation Agreement for Tax Incremental District No. 23 ("TID No. 23") with the City of Milwaukee ("City"), and RACM and the Borrower had entered into a Development Agreement for City Hall Square, both of which agreements provided for two loans to the Borrower in the amounts of $1,350,000 and $1,000,000; and
Whereas, In the loan agreement under Section 3, "Terms of the Loans," it states, "net proceeds from a Sale shall mean all sale proceeds after payment of all of the Borrower's outstanding debts and claims related to the Project (including repayment of loans or advances to the Borrower made by members of the Borrower and/or deferred payments due to a member under the Borrower's operating agreement and excluding the Participation Loan), reasonable closing expenses and state and federal capital gains taxes arising from the Sale," and the original estimate for depreciation on the asset was calculated at $223,582 higher than the actual depreciation; and
Whereas, City Hall Square, as sold August 31, 2012, and the subsequent "true-up calculation" was performed and as a result, the original amount paid to the City for the participation loan was overpaid by $42,894.82; and
Whereas, TID No. 23 has since been closed and along with its expenditure and revenue accounts, thus eliminating the expected source of funds to refund the Borrower for this overpayment; now, therefore, be it
Resolved, By the Common Council of the City of Milwaukee, that $42,894.82 shall be appropriated and transferred from the 2013 Common Council Contingent Fund (0001-9990-C001-006300)(2013) to the Department of City Development Operating Expenditures Account (0001-19110-R999-006300)(2013) for the purpose of refunding the Borrower; and, be it
Further Resolved, That the Commissioner of the Department of City Development, or designee, is directed to take all actions necessary to fulfill the intent of this resolution.
Drafter
DCD:DS:ds
11/05/13/A