Toledo says Marina District bonds won't alter debt limit

6/25/2008

Toledo's debt limit will not change even if council approves general obligation bonds needed to help finance the $20 million public portion of the riverfront Marina District planned for the city's east side, the Finkbeiner administration said yesterday.

Fran Song, Toledo's debt management officer, said the general obligation bonds included in the financing structure would be paid off through assessments on Marina District property and not affect the city's ability to borrow.

City Council yesterday reviewed the Finkbeiner administration's request to issue $8.2 million in notes for the project, which includes a riverfront roadway and park.

Under the city's plan announced earlier this month, the city would issue $6.75 million in five-year notes, starting at 2.5 percent annually and increasing to 4.5 percent.

Adam Loukx, Toledo's law director, said the $8.2 million would cover the principal and interest on the notes.

After five years, general obligation bonds would be issued to pay off that debt.

The debt service on the general obligation bonds is expected to be about $704,000 a year for 20 years. The money to repay the bonds will come from assessments on developer Larry Dillin's Marina District property.

While the public part of the project is estimated to cost about $20 million, the remainder of the project will cost about $320 million from private investments, including condominiums, restaurants, and hotels.

Mr. Dillin must secure private financing before the city will commit to the five-year notes.

He is also required to provide a letter of credit for the full value of the bonds, make payments to an escrow account from which the city could draw money should he default on any payments, and place the city in the first lien position for the property.

Also yesterday, Mr. Loukx indicated the city has a buyer for The Docks restaurant complex at International Park, also in East Toledo.

"It is too early to talk about, but we have several interested parties," Mr. Loukx said.

Council is being asked next week to approve spending $15,000 to have the property assessed.

Last year, city leaders said they hoped to raise additional cash by selling The Docks for a onetime revenue gain of at least $1 million.