Tuesday, Jan. 6

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Financing for business
development approved    
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[JAN. 6, 2004]  Financing for the Diversified Business District development was discussed at Monday's adjourned work session of the Lincoln City Council. The council agreed to jointly finance redevelopment of the former Kmart plaza with Diversified Acquisition LLC and developer David Christie. Dollar Tree and Goody's stores will be opening there this spring.

The city planned on using their standard means of financing for the project, through alternate bonds. Getting the financing completed by January, as requested by the developer, was not likely to be possible. The developer said he would be asking for reimbursement for expenses as work progressed. He could ask for it all at once or at any time now. Work began last fall and continues at the site.

A couple of local banks offered financing, either as a bridge loan until the bond money came through or for the entire 10 or 15 years needed to pay off the debt.

Projected interest rates on the alternate bonds are 4.5 percent for 10 years and 4.75 percent for 15 years. Bill Bates, the city attorney, said that depending on which loan period is chosen, it will take $43,000-$50,000 or $60,000-$67,000 annually to pay the debt.

The loan rates offered through the banks are not any better than the bond issue, Bates said.

With all of that said, Bates added that the information to move forward on the bonds with First Midstate is all in place. However, some of the banks need additional information. A decision to go with the bonds should make the funds available by mid-February.

 

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Because the developer could ask for the money at any time, Bates pressed the council to make a decision. He said that considering the offers the banks are making would take time for both the council and the banks to review the information. "I'm just not certain we have enough time to do that," he said.

Finance Chairman Verl Prather agreed, saying that since it would cause further delay to work with the banks, he felt they should proceed with the alternate revenue bonds through First Midstate.

Of the proposed $665,000 project, $155,000 is allocated for a traffic light at the plaza. The light must be approved by the Department of Transportation. Alternate funding for it may be found through grants or motor fuel tax. So, the amount to be borrowed is $510,000.

Alderman Benny Huskins said he would not approve the ordinance to borrow the money for the project. "I was against giving this much money up front and I still am," he said. Alderman David Armbrust agreed.

By a 7-2 vote the council approved borrowing $510,000 for the project through alternative bonds from First Midstate. Aldermen Huskins and Armbrust cast the two "no" votes. Alderman Glenn Shelton was absent.

[Jan Youngquist]

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