Article submitted by Gavin Greer, The Pilot News Staff Writer
Plymouth City Attorney Jeff Houin recently updated the Plymouth Redevelopment Commission on the Water Street Townhome project.
Houin informed the commission that the bonds for this had closed on Friday, January 12. He added that because of the change in the financing there was an increase in the issuance cost. This was an increase of $5,500. This was paid for by the city through the Redevelopment funds as part of the closing on the 12th.
This increase was due to 1st Source needing to hire a lawyer.
A second update was provided for TIF 2. This was about a resolution called, the Amended and Restated Resolution of the Plymouth Redevelopment Commission Pledging Tax Increment and Ratifying Closing Actions. Houin explained that because of the language in the River Park Square bond from 2012, there were additional restrictions that were put on TIF 2 that usually are not there. Ice Miller and Baker Tilly missed these restrictions initially but eventually caught it. They had to go back and change new bond issue calculations.
It was thought that there had to be at least 125% of TIF revenues available for the cost of the new bond. When corrections were made, they found that this is actually 115%.
In order for this to be approved with the previous bond, 1st Source Bank needed to take a junior position to the existing bonds in TIF 2. 1st Source could not do this with their finance team, which is separate from the bank. Instead, they booked it as a loan through the bank rather than a bond. This makes no difference for the structure of the financing, it only changes the way that 1st Source put it on their end. This is why $5,500 was spent on a lawyer. This is not a common thing to do so that’s why a lawyer was needed.
1st Source also requested to be notified annually in the amount of funds that are generated and available in the TIF district.
Houin then summarized that the two real changes are that 1st Source is taking a junior position to the existing bond debt in the TIF district and also that they will receive an annual report of the TIF revenues.
A commission member asked if this is common practice, Houin replied that it is not. He believes that the fact that this is unusual is why it was missed at first.
Mayor Robert Listenberger told the commission that this was fixed quickly as hard work was put in to get it to where it needed to be.
A question was asked about what the junior position meant. Houin shared that this means it is a debt that is paid after the primary debt. The 2012 bonds for River Park Square are one of the primary bonds.
The commission approved this resolution.
Houin also added that bids were scheduled to be received during tonight’s Board of Public Works meeting for the demolition of the two houses located where the Water Street Town Homes will go.
