Laserfiche WebLink
6.3.A. - Page 1 <br /> RE PO RT <br /> To the Honorable Mayor and City Council <br /> From the Cit Mana er <br /> December 12, 2011 <br /> SUBJECT <br /> Selection of financing team to refund the outstanding City of Redwood City Community <br /> Facilities District No. 2000-1 (Pacific Shores Project) Special Tax Bonds, Series 2000A <br /> (Bonds) <br /> RECOMMENDATION <br /> Approve by Resolution, appointment of the consultants in connection with the refunding <br /> of the Bonds. <br /> BACKGROUND <br /> The Pacific Shores Project consists of approximately 1.6 million square feet of <br /> commercial office space in ten buildings located on a 106 acre site at the end of <br /> Seaport Boulevard. A community facilities district (CFD) was formed and bonds were <br /> issued in March 2000 in the amount of $21 million to finance public infrastructure <br /> improvements required by the City as a condition to construction of the project. <br /> The project is currently approximately 80% owned by a real estate partnership <br /> controlled by Starwood Capital Group and 20% by a partnership controlled by <br /> Shorenstein Properties LLC (Owners). The Owners requested that the City undertake a <br /> refunding of the Bonds to reduce debt service and realize savings on special taxes that <br /> are passed on to tenants. <br /> The debt service on the Bonds is the sole responsibility of the property owners. The <br /> Bonds are secured by a lien on the real property within the CFD and is paid through a <br /> special tax levied on the properties within the CFD. The City's only obligation in the <br /> event that one of the property owners defaults on the payment of their special tax is to <br /> advance funds from the debt service reserve fund and, if necessary, to initiate <br /> foreclosure proceedings. No City funds are pledged to repay the debt service on these <br /> bonds. The annual debt service currently averages about $2 million and is allocated to <br /> the Owners on the basis of improved property within the CFD. <br /> Since the inception of the CFD there have been no delinquencies in the payment of <br /> special taxes. <br /> Issuing refunding bonds is analogous to refinancing a mortgage with a high interest rate <br /> and replacing it with a mortgage with a lower interest rate in order to reduce monthly <br /> mortgage payments. Inasmuch as the Bonds were issued in 2001, when interest rates <br /> were higher than they currently are, it is now possible to reduce the property owner's <br />