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FINANCING OBLIGATION -3rd & BROADWAY <br />Bonds <br />•Estimated cost of issuance <br />$268,000, transaction <br />takes time <br />•Taxable interest for the <br />third-party investor <br />•General Fund obligation, <br />secured by City-owned <br />building <br />•Current Market: 4.9% for <br />30 years, $830,000 annual <br />debt service <br />Private <br />Placement <br />•Little to no cost of <br />issuance, can be done <br />quickly <br />•Taxable interest for the <br />third-party investor <br />•General Fund obligation, <br />secured by a City-owned <br />building <br />•Four options identified. <br />Details on next slide. <br />General Fund <br />•Developer pays costs of <br />staff time to establish <br />financing <br />•Variable Interest Rate = <br />Local Agency Investment <br />Fund (LAIF) rate, currently <br />0.365% <br />•Maximum term of 30 years <br />•Initial estimated $459,000 <br />annual debt service –this <br />will increase as LAIF rate <br />increases <br />35