An examination of Tuesday's upcoming Council/RDA agendas reveals that the Administration us still tweaking the details of the Junction "Hot Tub" Hotel project financing. Here's where the proposed financing stands at this latest juncture:
Proposed Project FinancingFor a little background on the above-mentioned New Markets Tax Credit (NMTC) Program, by the way, check out this link:
The $13 Million Hotel project will be funded using several different
financing mechanisms:
• $8.7 Million – Facilities Bonds: The City will act as a conduit
for the tax-exempt bonds. The Developer will be responsible
for the debt service.
• $1.5 Million – Tax Increment Bonds: The RDA will issue tax
increment bonds. The City will pledge the City’s Franchise
Tax as additional collateral for the bonds. Debt Service will be
derived from the tax increment generated by the development.
• $2.2 Million – New Market Tax Credits (Federal Allocation):
The Developer is still hopeful that there will be New Market
Tax Credits available for the project.
• New Markets Tax Credit ProgramThere are four main items on Tuesday's Council agenda (5:30 p.m.):
• Public Parking Assessment Area No. 2010-1View the full Council packet here:
- Designation Resolution #2010-23
- Assessment Ordinance #2010-41
Determination:
1. Pull Designation Resolution from Agenda
2. Pull Assessment Ordinance from Agenda
(A Parking Structure Is No Longer Part of the Junction Hotel
Project. These Actions are Unnecessary)
• Contribution Agreement Resolution. Pledging Franchise Tax as Security for RDA Junction Hotel Tax Increment Bonds.
Determination: Table to January 11, 2011 for Final Consideration.
• Addenda to Development Agreement - The Junction Hotel
Determination: Adopt/Not Adopt Resolution
• Industrial Revenue Bonds Qualified Recovery Zone Facilities Bonds - Authorizing Resolution
Determination: Adopt or Not Adopt Resolution
• 12/21 City Council/RDA Joint SessionThe RDA Board will also consider "approvals" relating to the operative project documents (as amended) in a Special RDA Session (6:00 p.m.):
• Reports from the Administration. Junction Hotel Development Agreement Addenda, Amended Promissory Note, and Substitute Trust Deed. Proposed Resolution 2010-15 approving and authorizing two addendums to the Development Agreement between the Ogden City Redevelopment Agency, Kevin Garn, and Western States Lodging, L.L.C., pertaining to the development of a hotel structure on parcel 01-099-0004 at The Junction in Ogden City, Utah, including approving an Amended Promissory Note and Substitute Trust Deed. (Adopt/not adopt resolution – roll call vote)View Tuesday's RDA packet here:
• 12/21 City Council-RDA Special SessionLots of interesting nuances here, not the least being the apparent abandonment of a plan for an underground parking garage, and the Special Assessment District which was originally "envisioned" to help finance its construction.
Another interesting element? The administration and other principals seem to believe they'll be able to "close" this highly-complicated (some would call it "Rube Goldbergesque") transaction no later than December 28, even though "final" Council consideration of the Franchise Tax pledge ($1.5 million) as additional security for RDA Junction Hotel Tax Increment Bonds has been "tabled" to January 11, 2011.
We're posting this info early, in order to afford WCF readers a full opportunity to digest and discuss all elements of the this proposed project, well in advance of Tuesday's Council/RDA sessions.
All WCF readers are therefore invited to post their savvy comments before, during or after Tuesday night's Council/RDA events.
Update 12/22/10 3:40 a.m.: Both the Standard-Examiner and the Salt Lake Tribune carry stories this morning reporting on the results of last night's Council/RDA meetings:
• Ogden City Council votes to make legal advice off-limits to publicUpdate 12/28/10 8:00 p.m.: View the full Council and RDA videos, via the Ogden City website:
• Ogden OKs changes scrapping underground parking at hotel
• 12/21 City Council-RDA Special Session
• 12/21 City Council Regular Session
23 comments:
Wow! I am so exited for this hotel! Its much needed what with all the other hotels in Ogden operating at full capacity and turning huge profits.
I am also glad that the city is working with Kevin Garn. Garn has proven himself to be an upstanding citizen who has the utmost integrity.
Ummmm....so just where are all these hotel guests supposed to park now?...if its surface parking, do they have enough room onsite?...no one is going to want to stay there and walk from the parking structure on the other side of the block....or are we looking at subsidized valet service now?
Anyone wonder why the parking structure got axed? My guess is the bank wouldn't issue the special assessment bonds because there's no guarantee the hotel will ever be built and the assessment collected.
So now Godfrey is going to put the franchise taxes collected up for collateral. He's got to be running out of things to hawk. I suppose he could always sell his ass and crap through his ribs.
Thanks to WCF for "grown up" local news and analysis for Weber County. No where else do I find as complete and convenient coverage events in Gotham City...
Ray:
Bite me.
Superiorly,
Mayor Godfrey
Heads up:
There's another very troubling item on the council agenda. They're proposing to revise their own procedural rules in several respects. Some are innocuous, but two of the revisions would establish procedures for unnecessary and undesirable secrecy:
1. The council is proposing to elect its chair and vice chair by secret ballot, rather than through open nominations and votes. Nominations and votes would be by anonymous written ballots, conducted during a study session prior to the meeting. After the new chair and vice chair have been identified by a majority of these anonymous votes, a final yes/no ratification vote would be taken during the formal meeting. This procedure would deprive the public of knowing the preferences of their elected representatives for these crucial leadership positions. Secret ballots are appropriate only for public elections, not for votes taken by elected representatives.
2. Council members would be prohibited from disclosing the content of legal opinions provided to them by the city attorney's office or by outside attorneys. This rule would deprive the public of knowing the legal basis of many city council decisions, and would allow the city to keep a great deal of information secret under the guise of "attorney-client privilege". The proposed rule is a perverse corruption of the concept of attorney-client privilege, which actually imposes confidentiality requirements on attorneys, not on their clients. Even in a lawsuit, while an attorney cannot share legal opinions with anyone except his or her own client, it is perfectly permissible, and often advantageous, for the client to share these opinions with the opposing party. Mayor Godfrey has released legal opinions to the press in the past, most notably in July 2009 when he released a legal opinion outlining his alleged authority to use his line-item veto on policy language in the FY 2010 budget regarding the Marshall White Center and other city recreation facilities. If the mayor has the discretion to share legal opinions with the public when he feels this is strategically advantageous, then city council members should also have that discretion. But more importantly, there are many instances in which the public deserves to know what legal advice the city council is getting.
Let's hope the council members come to their senses on these items by Tuesday.
YouWho
You have raised an excellent question there, Just what is left to hawk in Ogden?
It would be very interesting to see an honest accounting by an honest outside accounting firm to really see what the city's financial condition is.
I assume the great golden goose - AKA BDO - is tapped out as witnessed by not being part of the mix with this Hot Tub Hotel proposal. The BizWiz is now wanting to hawk the city's franchise tax income and for a hotel that will be owned by some else to boot!
Jeeze, what really is left of value that he can gamble with?
My understanding is that franchise taxes were already used as collateral when the Junction bonds were redone last year. I don't know the reason for this, and I don't think it changes the fact that the actual money being used to pay off the bonds has come mostly from BDO. Perhaps they're saving the BDO revenue, as collateral, to use for something else. Or perhaps, for some reason, banks won't accept BDO revenue as collateral.
Perhaps some honest Council member will earmark a couple of hundred bucks to install three gold balls over the main entrance to City Hall. It's the traditional signage for a pawn shop I think.
Anybody else see 60 Minutes last night? A wake-up call for people like Mayor Godfrey and others who have used and abused municipal (and state) bonds over the years. A real eye-opener...the next bubble to burst. I've read on this board over the years of this exact concern, too bad it has fallen on deaf Ogden City ears.
State Budgets: Day of Reckoning
Wow! Have a look at this!
Our blogmeister Rudi just put up Amazon.com links to a couple of "nuts and bolts" municipal bonding manuals in Rudi's left sidebar, which might put even our lovable but hopelessly business-inept City Council on it's so-far wobbly feet, as it ineluctably, and in its socialist wisdom, approves the Kevin Garn "Hot Tub Hotel,", and moves on to the lunk-headed Wonder Dome/Fieldhouse project.
Will Municipal Bonds be the Next Disaster?
The New Markets Tax Credit Program is to help distressed areas to construct low income housing--
I don't think we need to take valuable property to construct low income housing--
This whole promotion smells!
bond trader- Municipal bonds are already a disaster--
60 Minutes gave an excellent description of city financial disasters last Sunday night-
When the US municipal bond market craters, as it inevitably will, it will adversely effect all cities which are in significant debt.
When this happens, believe me, prudent investors will then avoid muni bonds like the plague.
If any of the council members had a lick of economic sense they would be able to see the truth to the house of cards they are building and stand up and say no to Godfrey's criminal economic negligence.
But they don't so they don't.
Oz-
I've watched the meetings. One of the seven has a lick of economic sense and has said no to the Garn/Godfrey grand scheme every step of the way on this project thus far.
The others are either stupid, afraid, oblivious to what they are agreeing to or really somehow think it's ok to let the taxpayers of Ogden be on the hook for the Hot Tub Hotelier's downtown hotel.
Off-topic, but possibly relevant to the Envision Ogden investigation:
Justice Dept. is criticized as corruption cases close
Dan
I hate to be cynical, but I predict that this is the same thing, with the same rationale, that is going to happen in the Envision Ogden crimes. Republicans in Utah just flat out are not going to prosecute crooked politicians. They would be opening pandora's box if they even started. Most politicians in Utah don't even think there was anything wrong with the FNURE and Envision crimes, or any of the other criminal conduct that Godfrey has gotten away with for a decade or so now. I think a lot of them actually admire the sleaziness of it all and wished they had thought of it first!
This whole parking structure fiasco stinks...bet the grant was going to be a big fat NO ..US bank is just the scapegoat....
further more...as I said before ...looks like valet parking is the way they are going...just where are they "valeting" to?...all this talk of not having enough parking downtown and now we have a project that by City Zoning Ordinance is to provide 125 stalls and is only providing 50...what a sweet deal for that owner....how many other private businesses get off by not providing about 1/3 of the required parking?.....Is the Hot Tub Hotel going to be providing the taxpayers a subsidy for using OUR parking structure?
No supply-side parking, that's easy - take away the demand w/a gondola stop!
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