Developer Larry Dillin, who has committed to the creation of $320 million in private investments - including condominiums, restaurants, and hotels - for the Marina District in East Toledo, yesterday proposed changes to the financing structure he needs the city to back.
Mr. Dillin said attaining a letter of credit, which he needs before the city will close the deal on general obligation bonds for the project's public portion, has become increasingly difficult.
He wants to apply the letter of credit to just two parcels - a hotel and residential development - rather than six parcels, as was the previous plan.
"If the financial industry and banking industry were not in turmoil, we would not be here today having this discussion," Mr. Dillin told Toledo City Council's economic development committee.
The public part of the Marina District, which includes a riverfront park, roadway, fountains, and performance space, is estimated to cost $20 million.
The remainder of the project will total about $320 million from private investments.
To finance the public portion, the city is being asked to issue $6.75 million in five-year notes, starting at 2.5 percent annually and increasing to 4.5 percent.
That money would be combined by the city with $3.6 million in cash Mr. Dillin will pay for 58 acres of city-owned land.
The notes and the accrued interest will be paid off by issuing $8.2 million in 20-year general obligation bonds.
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 Mr. Dillin's Marina District property.
Mr. Dillin said he has to secure his private financing before the city will commit to the five-year notes.
He still must come up with 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.
The plan, including the sale of notes, still needs council approval.
Mr. Dillin yesterday said he has five parties interested in developing a hotel, which will be at the southern end of the Marina District near Main Street.