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EDA briefed on proposed lease-revenue bond plan to finance Moorhead City Hall reconstruction
Summary
City Attorney John Shockley told the Moorhead EDA the authority would sell lease revenue bonds to finance reconstruction of City Hall, with the EDA retaining land ownership, the city paying lease amounts equivalent to bond payments and purchasing the property for $1 at bond maturity; no EDA action was taken and resolutions are expected next month.
The Moorhead Economic Development Authority received an informational briefing on a proposed financing structure for a reconstructed City Hall. John Shockley, identified in the meeting as the city attorney, described a plan in which the EDA would sell lease revenue bonds to finance the project, retain ownership of the ground beneath City Hall during the bond term, and enter a lease with the city under which lease payments match the bond payments. At the end of the bond term the city would purchase the property for $1, Shockley said.
"What is being proposed, is, or referred to as, lease revenue bonds to be sold by the EDA to finance, the reconstruction of Morehead City Hall," Shockley said, explaining the transaction structure and that a trustee would collect rent from the city. He said the city would be fully responsible for building maintenance, operations and security under the proposed arrangement.
Shockley said there was no action required of the EDA at the meeting; the EDA and the city's financial advisor, Baker Tilly, have been working on the transaction and the related resolutions and supporting documents will appear on next month's agendas for formal consideration. The EDA also confirmed it currently owns lots within the redevelopment area of the former mall, including the lot where City Hall sits.
Board members did not debate or vote on the financing at this meeting; Shockley invited questions and said staff would provide resolutions and materials at the next EDA meeting and to the Morehead City Council for formal action.
