HomeMy WebLinkAbout4/2/2008 - STAFF REPORTS - 2.L. ?A L M Sp
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CITY COUNCIL STAFF REPORT
DATE: April 2, 2008 CONSENT ITEM
SUBJECT: SET INTEREST RATES ON THE PROMISSORY NOTES ON THE SALE.
OF THE CONVENTION CENTER PARKING LOT AND THE FRANCES
STEVENS PARK.
FROM: David H. Ready, City Manager
BY: Douglas Holland, City Attorney
RECOMMENDATION:
SET THE INTEREST RATES ON THE PROMISSORY NOTES FOR THE SALE OF
THE CONVENTION CENTER PARKING LOT AND THE FRANCES STEVENS PARK
AT 10% FOR THE FISCAL YEAR COMMENCING ON JULY 1, 2008.
SUMMARY
In the sale of the Convention Center Parking Lot and the Frances Stevens Park
to the Redevelopment Agency, the City accepted promissory notes that allowed the City
to establish the annual interest rate to be charged to the Agency on any unpaid balance.
The staff is recommending that the interest rate be set at 10% for the upcoming fiscal
year.
STAFF ANALYSIS:
On December 12, 2007, the City conveyed the Convention Center Parking Lot
and the Frances Stevens Park to the Redevelopment Agency. The City received
promissory notes for the payment of the purchase price of these lots. These promissory
notes provide that interest will accrue on the notes at a yearly interest rate between 6%
and 10%. The City has the sole discretion to establish the interest rate for each fiscal
year so long as the City does so prior to April 15 prior to the fiscal year for which the
new interest rate will be assessed. The initial interest rate for the Convention Center
Parking Lot and the Frances Stevens Park was set at 6%.
Earlier this year, the City sold Village Green, Sunrise Park, and the Palm Springs
Visitor Center to the Redevelopment Agency. Promissory notes were furnished to the
City with the same general interest provisions as provided for the Convention Center
5151671 Item No. 2 . L •
City Council Staff Report
April 2, 2008 -- Page 2
Revise Interest Rates
Parking lot and the Frances Stevens Park, however, the initial interest rate was set at
10% for these three properties. Staff is recommending that the interest rates for the
Convention Center Parking Lot and the Frances Stevens Park be revised to 10% for the
upcoming fiscal year. This change would make the notes on the earlier sales consistent
with the more recent transactions.
FISCAL IMPACT:
The than - n interest rates will result in an increase in revenues to the City's general
fund.
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Dnd, City Attorney
David H. Ready, Cita 6 r
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