Friday, June 18, 2010

$5.56M debt refinance almost complete

Ketchum URA takes final step in combining 3 loans


By TREVON MILLIARD
Express Staff Writer

Ketchum's Urban Renewal Agency has been working on restructuring its $5.56 million in debt for almost a year, and will have the process completed in a couple of weeks when it issues bonds.

The debt comes from three loans: a $1 million loan from former City Councilman Steve Shafran to help build the first two phases of the Fourth Street enhancement project, a $2 million loan from the Idaho Housing and Finance Association for the purchase of property at the corner of Second Street and Washington Avenue, and a $2.56 million loan from Mountain West Bank for the purchase of the Sun Valley Road building that now houses the Sun Valley-Ketchum Chamber & Visitors Bureau.

Refinancing consists of swapping these three loans for one new loan.

David Ulbricht, managing director of Wedbush Morgan Securities, has overseen the URA's refinancing and said it would allow the agency to start paying off the principal and interest instead of just interest, as is currently being done.

He said the interest rate the agency will pay under the bonds will be slightly higher than under its current loans because term of repayment is longer. He said it will take between 20 and 25 years to pay off the debt using URA revenue, and would use most of the revenue.

The URA board, which is made up of Ketchum City Council members, manages the revenue brought in from the Urban Renewal District. This district was created by the city in 2006 to take advantage of a state law that allows the agency to receive increases in property tax rolls that occur through new development or inflation. The revenue then goes to support infrastructure improvement projects within the district, such as the creation of the Fourth Street Heritage Corridor.

City Administrator Gary Marks said the acquisition of the Mountain West Bank building on Sun Valley Road has proved to be a great success in that it provided space for the Ketchum Town Square.

Ulbricht said bonds of the type being sold by the URA usually sell within a day.

Those interested in buying bonds can call Gary Whinery at Morgan Securities' Boise office, (208) 331-5175.

Trevon Milliard: tmilliard@mtexpress.com




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