Embassy Vacation Resort Bond sale
Their hands tiring from repeated signatures, Mayor Judy Brown, City Manager Kerry Miller and City Clerk Angie Peterson quietly sealed the deal in a back room of the city administrative building.
“It’s exciting,” Brown said, busily writing her name with a black Bic pen. “Knowing my name is affixed to this gives me a sense of awe.”
The Thursday afternoon signing ceremony was the final touch for the city of South Lake Tahoe’s $9,295,000 bond sale for the refinancing of Redevelopment Project Area No. 1 – that’s the Embassy Vacation Resort at the bottom of Ski Run Boulevard.
The sale was accompanied by extremely low interest rates.
“We had anticipated 5.5 to 5.6 (interest rates),” said Jay Von Klug, redevelopment manager. “We were real pleased with the 5.44 percent we got, it was a very good time to sell.”
The bonds will pay off the $8,295,000 Bond Anticipation Notes, also known as BANS, which the South Tahoe Redevelopment Agency sold in 1996 to finance their obligations toward the first three phases of the Embassy Vacation Resort. BANS are a temporary form of financing similar to construction financing. They are short-term, high-risk and high-interest.
According to Von Klug, Embassy Vacation Resort’s revenues were high enough to allow for the sale of the 30-year bonds, backed by project area revenues.
Von Klug said the sale was favorable for several reasons, besides the low interest rates. The annual BANS payments are currently $662,000, but payments on the bonds would not exceed $560,000, resulting in annual savings of $100,000. Also, this refinancing would eliminate any uncertainty about refinancing the BANS by its Oct. 1, 2001 expiration date.
Whatever money is available after the BANS and all other dues are paid off will finance additional Embassy Vacation Resort obligations, Von Klug said, including re-locating a storm runoff pond to provide better access to the mall and restaurant area, and widening the main access road to the Marina to allow for bus loading and unloading.
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