City of Racine - File #: 0247-20

• File #: 0247-20
• Version: A
• Name: Subject: (Direct Referral) Communication sponsored by Mayor Mason requesting approve a $2,400,000 Loan from the Board of Commissioners of Public lands (BCPL), which shall represent a General Obligation (G.O.) Debt to the City of Racine, which proceeds sha
• Type: Communication
• Status: Passed
• File created: 5/1/2020
• In control: Finance and Personnel Committee
• Final action: 5/5/2020
• Title: Subject: (Direct Referral) Communication sponsored by Mayor Mason requesting approve a $2,400,000 Loan from the Board of Commissioners of Public lands (BCPL), which shall represent a General Obligation (G.O.) Debt to the City of Racine, which proceeds shall, in turn, be lent to Cardinal Capital Management (Ajax Project), for a term of twenty-four (24) months; with Interest-only for the duration of the term; no pre-payment penalty; and, an interest rate to the City of 2.50% per annum. Cardinal will, in turn, be obligated to repay the City at an interest rate equal to 3.00% per annum with a second-position lien on the project subordinate only to the first mortgage, and a full corporate guarantee from Cardinal Capital. Recommendation of Mayor Mason: To approve the request for a $2,400,000 Loan from the Board of Commissioners of Public lands (BCPL), which shall represent a General Obligation (G.O.) Debt to the City of Racine, which proceeds shall, in turn, be lent to Cardinal Capital Man...

Date	Ver.	Action By	Action	Result
5/5/2020	A	Common Council	Approved	Pass

Title

Subject: (Direct Referral) Communication sponsored by Mayor Mason requesting approve a $2,400,000 Loan from the Board of Commissioners of Public lands (BCPL), which shall represent a General Obligation (G.O.) Debt to the City of Racine, which proceeds shall, in turn, be lent to Cardinal Capital Management (Ajax Project), for a term of twenty-four (24) months; with Interest-only for the duration of the term; no pre-payment penalty; and, an interest rate to the City of 2.50% per annum. Cardinal will, in turn, be obligated to repay the City at an interest rate equal to 3.00% per annum with a second-position lien on the project subordinate only to the first mortgage, and a full corporate guarantee from Cardinal Capital.

Recommendation of Mayor Mason: To approve the request for  a $2,400,000 Loan from the Board of Commissioners of Public lands (BCPL), which shall represent a General Obligation (G.O.) Debt to the City of Racine, which proceeds shall, in turn, be lent to Cardinal Capital Management (Ajax Project), for a term of twenty-four (24) months; with Interest-only for the duration of the term; no pre-payment penalty; and, an interest rate to the City of 2.50% per annum. Cardinal will, in turn, be obligated to repay the City at an interest rate equal to 3.00% per annum with a second-position lien on the project subordinate only to the first mortgage, and a full corporate guarantee from Cardinal Capital.

Fiscal Note: The City will incur a 24-month Debt obligation for $2.4million, which Cardinal capital will agree to fully repay. The City will pay $5,000 per-month in interest on this obligation, while, in turn, Cardinal will repay the City at $6,000 per-month, resulting in the City achieving positive revenue of $1,000 per-month. There are no fees involved in applying for and receiving the BCPL Loan.