Title
Consider/Discuss/Act on an Ordinance Amending the Fiscal Year 2019-2020 Annual Budget to Provide Funds for the Purchase of the Parking Garage on the Southeast Corner of Chestnut Street and Herndon Street
Summary
COUNCIL GOAL: Direction for Strategic and Economic Growth
(1B: Continue to develop a retail development strategy for key areas of the community to further diversify revenue sources and expand entertainment, dining and shopping options and tourism)
MEETING DATE: November 5, 2019
DEPARTMENT: City Manager’s Office
CONTACT: Barry Shelton, Assistant City Manager
RECOMMENDED CITY COUNCIL ACTION:
• Approve Ordinance
ITEM SUMMARY:
• This Ordinance amends the Fiscal Year 2019-2020 Annual Budget by appropriating $2,981,391 from the TIRZ 1 Fund balance to the general fund.
BACKGROUND INFORMATION:
• On November 15, 2016 the City Council approved a development agreement with the owners of the property on the northeast corner of Chestnut Street and Virginia Street for the design, construction and lease of a parking garage.
• On April 4, 2017, the City Council approved a resolution authorizing the City Manager to execute a lease agreement with the property owner.
• The parking garage received a temporary certificate of occupancy on February 1, 2019, at which time the City began making monthly rent payments.
• The lease agreement required an initial payment of $3.0 million and 60 monthly payments of $86,405.84. These payments are being made using funds from TIRZ 1 and are included in the annual budget each year.
• By exercising the early option to purchase on December 1st, the city will save approximately $535,000 in interest and insurance costs that would otherwise accrue over the life of the lease.
FINANCIAL SUMMARY:
• The budget will be amended by appropriating $2,981,391 from the TIRZ 1 Fund balance to the general fund.