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City introduces ordinance to issue up to $6M in taxable general obligation notes to finance spec building
Summary
The commission introduced an ordinance authorizing up to $6,000,000 in taxable general obligation notes (Series 2026A) to finance the city's portion of the speculative building project; staff said the notes are structured as a 3‑year interest‑only note callable after one year with sale planned for Aug. 20 and closing Sept. 3.
City staff introduced an ordinance authorizing the issuance of taxable general obligation notes (Series 2026A) with a maximum aggregate principal of $6,000,000 to finance all or a portion of the city's share of costs for the speculative commercial building project. Staff explained the structure: a 3‑year note with interest‑only payments during the term, callable after one year, and an anticipated sale on Aug. 20 with closing on Sept. 3 and maturity on Sept. 1, 2029.
Audra and other staff said the city's total commitment is capped at $6,000,000 and that, based on current estimates and issuance costs, the structure is expected to provide slightly over $5,100,000 in project dollars. Staff noted the construction bid award was approximately $6,523,000 and that the KPDI grant of $2,000,000 is included in overall funding. A commissioner asked who would pay interest during the note period; staff replied the city would make interest payments and anticipate reimbursement from sale proceeds when and if the building is sold.
