KCCHA/County LoansPage 2 of 6
Proceeds from sales of Harborside condos and the adjacentland (the Sinclair Lot)
Proceeds from sales of all non-low income residential assetsof the Authority (office buildings, land & market rateapartments)
“Excess Revenues” from the Housing Authority The County will manage the sale of assets, including theHarborside Condominiums. The four year term will give the realestate market a chance to recover so the condos and other realestate assets do not need to be sold at today’s fire-sale prices.Proceeds from asset sales will go directly to paying down the Bankof America loan.
What are Excess Revenues?
Sources of Revenue not required by the Authority (a) to sustainthe operating costs of fulfilling the Authority’s core low incomehousing mission; or (b) to satisfy the Authority’s other existingobligations.
What happens in four years if Proceeds from asset salesaren’t sufficient to repay the loan?
At the end of the 4 year term if there is a gap between theamount the County financed and the sale proceeds of the assets,the County will need to issue long-term bonds to cover that gap.County staff is working to establish a plan, including acontingency fund to set aside any one-time only revenues theCounty receives beginning in 2009 to provide for debt paymentneeds starting in 2013, at the end of the loan’s term. TheAuthority in turn is required to pay back this loan as it receivesone-time only revenues in excess of its budget.
Were recent County budget reductions related to takingon this debt?