1. City Council Meeting
November 21, 2011

2. Background
 2009 Certificates of Obligation $31.315 million
 $2,600,000 for portion of Chimney Hill property
purchase.
 Council has determined it no longer intends to
build a convention center.

3. Background
 Change in use of property requires City to take
action to maintain tax exempt status of CO’s
 Defeasance
 Establish and fund an escrow account to pay back the
CO’s used to purchase the property.

4. Taking This Action Will
 Maintain the tax exempt status of the 2009
Certificates of Obligation
 Remove the federal tax limitations on the use of
the property
 Provide maximum flexibility in use and sale of
property

5. Defeasance
 Total CO’s to be defeased is $2,305,000
 Total amount needed to fund the escrow
account is $2,715,367.
 Hotel Tax funds and Chimney Hill lease funds.
 All proceeds from sale of property will go to
Hotel Tax Fund

6. Defeasance
 Budget Amendment to appropriate funds for
this transaction
 December 8th

7. Staff Recommendation
 Approval of ordinance and escrow agreement