NUMB:
000479
VERS:
SUBSTITUTE 2
REF:
XXBY:
ALD. HENNINGSEN
TITL:
Substitute resolution exercising the City of Milwaukee's option to purchase the parking structure at 324 West Highland Avenue from the Redevelopment Authority of the City of Milwaukee for the purpose of refinancing bonds issued for this facility.
ANLS:
- Analysis -
This substitute resolution essentially refinances bonds previously issued for a parking ramp built to serve the Bradley Center.
In 1986, the Redevelopment Authority issued revenue bonds to build a parking ramp to serve the Bradley Center. The City has been making the payments on these bonds from the Parking Fund.
The bonds are backed by a letter-of-credit issued by National Westminster Bank PLC. This letter-of-credit expires on November 4, 2000. Currently, $6,105,000 of debt remains outstanding for the parking facility. Upon the expiration of the letter-of-credit, the City will be required to repay the full amount of the bonds outstanding.
Given the expiration of the letter-of-credit, it is recommended that the City exercise its option to purchase the ramp for an amount equal to the outstanding bonds (less reserve funds), issue its own bonds through contingent borrowing authority, and continue making payments through the Parking Fund.
The net amount of City borrowing for this refinancing is estimated at $3,500,000.
BODY:
Whereas, The Redevelopment Authority of the City of Milwaukee ("RACM") issued its $25,515,000 Redevelopment Authority Revenue Bonds (Bradley Center Parking Facilities Project) Series 1986 (the "Bonds") for the purpose of constructing parking facilities to serve the Bradley Center; and
Whereas, The Bonds were used to construct parking facilities at 324 West Highland Avenue and North 8th and West State Streets, the latter having since been sold to the Milwaukee Area Technical College; and
Whereas, Payment on the Bonds ($6,105,000 currently outstanding) is secured through a letter-of-credit issued by National Westminster Bank PLC (the "Bank"), which letter-of-credit expires on November 4, 2000; and
Whereas, Pursuant to a lease dated July 1, 1987 (the "Lease"), the parking facility is leased from RACM to the City of Milwaukee ("City") for an annual payment, subject to annual appropriation and made from the Parking Fund, equal to principal and interest payments on the Bonds, plus related fees and expenses; and
Whereas, In lieu of obtaining a substitute letter-of-credit to secure payment on the Bonds, it is proposed that the City, pursuant to Section 10.2 of the Lease, exercise its option to purchase the Bradley Center parking facility at 324 West Highland Avenue and finance that purchase through the issuance of general obligation promissory notes (the "Notes"); and
Whereas, The City's rent payments on the Bonds are currently made from the Parking Fund, and it is proposed that payments to be made on the Notes will also be made from the Parking Fund; and
Whereas, The purchase price of the parking ramp, as provided in Section 10.2 of the Lease, will be equal to the outstanding principal amount of the Bonds less $2,565,000 (approximately) of reserves held by Firstar Bank N.A., as trustee for the bond issue (the "Trustee"), plus accrued interest to the date the Bonds are redeemed and related fees and expenses, a net amount presently estimated at $3,500,000; now, therefore, be it
Resolved, By the Common Council of the City of Milwaukee that it exercises its Option to Purchase the parking facility at 324 West Highland Avenue in the City, pursuant to Section 10.2 of the Lease, authorizes the proper City officials to give appropriate notice to RACM, the Bank and the Trustee, and provide for a closing on or before October 3, 2000; and, be it
Further Resolved, That the Parking Fund shall be responsible for the annual debt service on the Notes issued to purchase the aforementioned parking ramp.
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07/14/00