BOOK 21_1946-09-23 to 1948-08-09

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on vacant property and the amount of individual assessment on individual property 159 made it doubtful whether it would be a properly marketable type of security. He q stated that to be properly marketable, the security must be one in which the investor can get his money back on the due date and interest coupons on the interest date. This is generally true in well developed areas but there is an inclination to let the assessment ride in undeveloped areas. He outlined the improvements to be made within the district and also the amount of the assessments which would be made against certain properties other than that of those instituting the proceedings. It was quite apparent, he said, that parcels of land having only 50 foot width but carrying a double frontage would have a sizeable assessment even considering the fact that these lots would have dual street advantages. 'He was of the opinion that the only hopes of getting a sale of the bonds would be through a heavy discount, stating that the bonds would not be bought for the purpose of selling them to Investors but to speculators. He had checked with Beldon Gardner of Hannaford and S Talbot who stated his concern would be interested in the bonds only at a very high discount amount to 35 or 40 %. Mr. Wilson did not believe the project should proceed at such a heavy discount. He had suggested to the Land Development Company that the project should proceed subject to their agreeing to buying the bonds the same as is being done in the Redwood Terrace prosect. He suggested that they buy the bonds at 95% of par at an interest rate of 5 or 6% and that the prop- erty owners outside of the Land Development Company each receive a bill offering a 5% discount. He said there was a strong probability that most of these owners would take advantage of the discount. All bonds on presently improved parcels would have a ready market at the end of the prlsect and a bond on undeveloped par. cels would have a ready market as soon as the property is developed. He also suggested that the project proceed under the 1913 Act which provides for the con- tract to be awarded for cash and the subdivider would agree to buy the bonds on a monthly installment basis. He stated he had prepared a new resolution of prelim- inary determination redescribing the work to be done in this project and suggested that it be adopted with the understanding that it would not be published unless a meeting was held with the representatives of the Land Development Company in re- gard to the purchase of the bonds. City Manager Blom believed that the preliminary legal and engineering expenses should be advanced before the notice was published. He stated there was $7500 legal and engineering expenses for which there has been no advance guarantee up to this time. Mr. Wilson stated that there would be two ways to handle this; one, the money could be advanced and put in a special fund for this prosect; or, the agreement to purchase the bonds could be accompanied by a check for $7500 as the first payment on the work. City Manager Blom stated he would rather that the bonds be sold and all the money obtained so that there would be no delay in advancing the funds to the contractor. He suggested that it could be written into the contract that the bonds would be sold so that they would be 25% ahead of the contract at all times. This was agreeable to Mr. Wilson. City Manager Blom believed it would be in order to adopt the resolution of preliminary determin- ation with the understanding that there will be worked out with the Land Development Company a satisfactory agreement for the advancement of the preliminary cost and the advancing of the purchase price of the bonds. Councilman Briteehgi asked if the price of this land would be'so prohibitively high that it would remain vacant for