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HomeMy WebLinkAboutResolutions - 1990.06.28 - 16852June 14, 1990 MISCELLANEOUS RESOLUTION #90145 BY: FINANCE COMMITTEE, DR. G. WILLIAM CADDELL, CHAIRPERSON IN RE: OAKLAND COUNTY TREASURER - INVESTMENT IN REDEVELOPMENT PROJECT IN THE CITY OF ROYAL OAK TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Mr. Chairperson, Ladies and Gentlemen: WHEREAS the City of Royal Oak, through its Downtown Development Authority and the Department of Economic Development, have jointly developed a plan for economic redevelopment along the 1-696 corridor; and WHEREAS said redevelopment is anticipated to add over $100 million to the property tax valuation base; and WHEREAS that plan calls for the assembly and acquisition of approximately $11.5 million of property; and WHEREAS the City of Royal Oak has obtained financing for $5 million from State and Federal sources and anticipates $1.5 million from the sell-off of a portion of the acquired land leaving a balance of approximately $5 million; and WHEREAS the County through its Treasurer may invest its funds in Bonds or Notes issued by the Downtown Development Authority of Royal Oak and in accordance with the legal requirements of the Michigan Municipal Finance Act; and WHEREAS said investment will have the dual purpose of providing the County a fair rate of return and of helping encourage development and avoid the possibility of urban decay; and WHEREAS the terms of the County investment with the Downtown Development Authority may include: (A) A variable interest rate adjusted annually to be equivalent to the 6 month Treasury Bill rate. (B) Repayment to be within ten years with the County Treasurer's right to put the issue in the sixth year. (C) Investment is to be secured by the Limited Full Faith and Credit of the City of Royal Oak and the acquired property with the County reserving the right to review terms and conditions of the sale of said property including distribution of proceeds until such time the County is made whole. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners authorizes, through its Treasurer, to invest up to $5 million from the General Fund in Bonds or Notes issued by the Downtown Development Authority of the City of Royal Oak in accordance with Section 13A of Public Act 197 of 1975 as amended. BE IT FURTHER RESOLVED said investment be secured by the property involved as well as the Limited Full Faith and Credit of the City of Royal Oak or bond insurance or letter of credit to the satisfaction of the County Treasurer. BE IT FURTHER RESOLVED that the maturity schedule and other necessary terms and conditions of the issue be mutually agreed on by the County Treasurer and the Downtown Development Authority of the City of Royal Oak. BE IT FURTHER RESOLVED that the City of Royal Oak shall hereby appoint a designee of the County Treasurer as a member of the Downtown Development Authority to serve for the duration of this agreement. BE IT FURTHER RESOLVED the Chairperson of the Board be authorized to sign said agreement in concurrence with the County Executive and the County Treasurer. Mr. Chairperson, on behalf of the Finance Committee, I move the adoption of the foregoing resolution. FINANCE COMMITTEE ju6-1u9001mr City. (1 apt Oah OFFICE OF THE MAYOR R difilf°€ n-tr I A 21 1 WILLIAM 2 51177111/ST ROYAL OAK MICHIGAN oloiss PATRICIA PARUCH, MAYOR COMM iSSION MEM5ERS ()ENNIS G. COWAN, MAYOR PRO TEM PHILLIP .1, AeRAHAM JAMES C, JOHNSON THOMAS E KUHN NANCY A. PIR$LIN DAVID L, RICE-IARDS June 19, 1990 Dr. G. William Caddell Chairperson Finance Committee Oakland County Board of Commissioners 1200 N. Telegraph Road Dear Dr. Caddell: The City of Royal Oak was most pleased when we were approached by County officials asking if a loan from Oakland County would be helpful as seed money for the 1-696/Woodward Redevelopment Project. This possibility was discussed over several weeks along the lines of a similar loan made to Auburn Hills. Only in the last few days, were we aware of the requirements for pledging limited full faith and credit or securing bond insurance or securing a letter of credit. While these were not required of the City of Auburn Hills and as I understand it, are not a part of the County Board Policy on loans, we can understand why this would be desirable from a pure investment point of view. However, if the County looks at this as an opportunity to assist cities needing redevelopment to continue a viable economy and tax base, the criteria for assistance would be quite different. The question at hand is whether Oakland County can assist with the project without these guarantees. Other cities needing seed money or "start up" funding in the future will probably find it Impossible to offer these guarantees. If the guarantees can be offered then County assistance will not be needed because conventional bonds will be sold. Royal Oak has already made a significant financial commitment to the project not to mention the significant staff time expended. The financial commitment includes about $3.9 million from the Block Grant program and other sources. Sincerely, Cay eV Royal 04 Michigan. Dr. G. William Caddell June 20, 1990 Page 2 The Royal Oak City Commission at its meeting on Monday, June 18 discussed the provisions of the proposed loan to the City of Royal Oak and directed the staff to advise the appropriate County officials that these provisions present practical difficulties that would make it impossible to proceed with the loan. The City is very pleased that the Finance Committee has taken positive action on this request; however, we would respectfully request the opportunity to meet with you and County Treasurer Hugh Dohany to discuss the project and to see if a mutually agreeable solution can be found to further a project that will be extremely beneficial to Royal Oak, surrounding cities, and to Oakland County. Perhaps the best approach would be to arrange for a meeting here in Royal Oak where we could show you first hand this important redevelopment opportund.tyc I eagerly look forward to your reply and establishing a mutual convenient date to discuss this matter further. Patricia Paruch Mayor PP/hjs cc: Members of the City Commission William J. Baldridge r City Manager d ded PP .kP PP PP p. P 5, 6 eds Pp PP1 rdPP ! E p.t I ,9 I rI ddd dd,o'd.rd June 14, 1990 Moved by McCulloch supported by Pappageorge the resolution be carried forward to the Board meeting to be held June 28, 1990. A sufficient majority having voted therefor, the motion carried. #90145 June 28, 1990 The Chairperson referred the resolution to the Finance Committee. There were no objections.