HomeMy WebLinkAbout21. 12-508
OCTOBER 9, 2012 12-508 RESOLUTION
(CARRIED __7-0____LOST ________LAID OVER ________WITHDRAWN ________)
PURPOSE: AUTHORIZE BORROWING FROM STATE LAND TRUST / CITY
CENTER HOTEL PROJECT
INITIATED BY: CITY ADMINISTRATION
WHEREAS, by the provisions of sec. 24.66 of the Wisconsin Statutes, all
municipalities may borrow money for such purposes in the manner prescribed; and,
WHEREAS, by the provisions of Chapter 24 of the Wisconsin Statutes, the Board of
Commissioners of Public Lands of Wisconsin is authorized to make loans from the State
Trust Funds to municipalities for such purposes. (Municipality as defined by Sec. 24.60(2),
Wisconsin Statutes, means a town, village, city, county, public inland lake protection and
rehabilitation district, town sanitary district created under sec. 60.71 or 60.72, metropolitan
sewerage district created under sec. 200.05 or 200.23, joint sewerage system created
under sec. 281.43 (4), school district or technical college district.)
NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of
Oshkosh that the City of Oshkosh, in the County of Winnebago, Wisconsin, is authorized
to borrow from the Trust Funds of the State of Wisconsin, a sum of up to Two Million
Dollars ($2,000,000), for the purpose of financing the City Center Hotel project in TID #25,
and for no other purpose.
The loan is to be payable within 10 years from the 15th day of March preceding the
date the loan is made. The loan will be repaid in annual installments with interest at the
rate of 2.75 percent per annum from the date of making the loan to the 15th day of March
next and thereafter annually as provided by law.
BE IT FURTHER RESOLVED, that there shall be raised and there is levied upon all
taxable property, within the City of Oshkosh, in the County of Winnebago, Wisconsin, a
direct annual tax for the purpose of paying interest and principal on the loan as they
become due.
BE IT FURTHER RESOLVED, that no money obtained by the City of Oshkosh by
such loan from the state be applied or paid out for any purpose except financing the City
Center Hotel project In TID #25, without the consent of the Board of Commissioners of
Public Lands.
OCTOBER 9, 2012 12-508 RESOLUTION
CONT'D
BE IT FURTHER RESOLVED, that in case the Board of Commissioners of Public
Lands agrees to make the loan, that the City Manager and Clerk of the City of Oshkosh in
the County of Winnebago, Wisconsin, are authorized and empowered, in the name of the
City to execute and deliver to the Commission, certificates of indebtedness, in such form
as required by the Commission, for any sum of money that may be loaned to the City
pursuant to this resolution. The City Manager and Clerk of the City will perform all
necessary actions to fully carry out the provisions of Chapter 24 Wisconsin Statutes, and
these resolutions.
BE IT FURTHER RESOLVED, that this preamble and these resolutions and the
"aye" and "no"vote by which they were adopted, be recorded, and that the Clerk of this City
forward this certified record, along with the application for the loan, to the Board of
Commissioners of Public Lands of Wisconsin.
City of Oshkosh
Community Development Department OIHKOfH
215 Church Avenue, Oshkosh,WI 54901 ON THE WATER
TO: Honorable Mayor and Members of the Common Council
FROM: Allen Davis, Community Development Director 11M
DATE: October 4, 2012
SUBJECT: Authorize Borrowing from State Land Trust/TIF#25 City Center
Hotel Project
BACKGROUND
The City of Oshkosh created Tax Increment Finance District#25 and entered into a
Development Agreement with the owners/developers of the City Center Hotel earlier this year.
An element of the TID#25 Plan and Development Agreement was the City's responsibility in
providing a $2,000,000 Development Assistance Grant to the hotel owners/developers. This
borrowing would allow the City to fund its commitment.
ANALYSIS
According to the Development Agreement, the City's $2,000,000 will be the last dollars into the
hotel reconstruction. The hotel owners obtained a roofing permit and demolition permit in the
spring of this year. The owners gutted the rest of the building through the summer. The State
approved their building plans last week and the City issued a building permit for the renovation
as well. The City's funds will not be available to the hotel owners until the required equity funds
and privately borrowed funds have been used for the reconstruction.
The State Land Trust offers very attractive rates and terms for the City's economic development
projects. Typical General Obligation borrowing is not available for this private purpose.
FISCAL IMPACT
The repayment of the proposed State Land Trust loan is based on the Tax Increment generated
in TID#25 by the renovated hotel. Also, according to the Development Agreement, the
repayments are also guaranteed by the hotel owners/developers if Tax Increments are not
sufficient to make the annual payment. Consequently, there is no anticipated fiscal impact.
RECOMMENDATION
The City Council authorizes the borrowing $2,000,000 from the State Land Trust.
Approved,
. �a-- /C
City Manager