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Report to City Council and Redevelopment Agency Board regarding CIEDB Loan Approval <br />January 7, 2003 <br />Page 2 of 2 <br />Environmental Imnact <br />None. The action item would not have any environmental impact. The public improvement project <br />itself was reviewed as paR of the Environmental Review and Assessment conducted at the time the <br />Ashley Furniture project was approved. <br />Consistencv with Redevelooment Imolementation Plan <br />Securing the financing necessary to install the public improvements is consistent with the Agency <br />Implementation Plan, in so much as the financing will facilitate the construction of the improvements <br />that will encourage the development of "complementary land uses on the major vacant properties and <br />increase the tax increment generation of the project area." Additionally, the CIEDB Loan will <br />"encourage development of the EVLC (TMI) property with a combination of industrial and <br />commercial uses consistent with the Cooley Ranch Planned Community, while minimizing the amount <br />ofpublic investment required " <br />Financial Imoact <br />Based upon the interest rate and underwriting terms, the CIEDB Loan is the best financing method for <br />the Agency to pursue. Securing the loan from the CIEDB will save the City/Agency a significant <br />amount of money in debt service payments over the life of the loan. The interest ra[e for the CIEDB <br />Loan is 334%, whereas the interest rate on a subordinate tax allocation bond issue would in all <br />likelihood exceed 6%. In addition to the interest savings the transactional costs of securing tl�e <br />CIEDB Loan are considerably less than that to issue a bond. The loan will be secured by Cooley <br />Ranch tax increment and has a term of 20 years. <br />Recommendation <br />Approval of City Resolution and Agency Resolution No 808 Approving and Authorizing the Agency's <br />Executive Director to Execute a Tax Allocation Loan Agreement with the California lnfrastructure and <br />Economic Development Bank (CIEDB) as Matching Funds to the EDA Grant for the Cooley Ranch <br />Public Infrastructure Improvement Project. <br />Attachments <br />City Resolution <br />Agency Resolution 808 <br />TEAM ONLY <br />City Attorney: ..... Finance Director: � <br />Executive Directo : Agency Special Cou <br />R:\Meetings�2003 MeetingsUanuary "J, 2003\CIEDB Loen Approval.doc <br />