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Carmel looks at $195 million refinancing package

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The Carmel City Council will consider backing a $195 million debt re-issue, which would free up millions of dollars for further development of the massive City Center project.

The refinancing package, which the council will discuss Monday night, comes after Mayor James Brainard agreed this spring to give the council oversight of future debt obligations by the Carmel Redevelopment Commission.

The commission had rung up about $140 million of debt without council approval but this year began to find its revenue streams stretched thin. With the city’s backing, the commission can refinance debt on which it’s paying 6 percent to 9 percent interest.

Brainard said he expects the refinancing to free up from $10 million to $17 million, depending on the final interest rates.

The redevelopment commission has about $240 million in debt, but not all of it is included in the package headed to the council. The $195 million would cover refinancing-related fees and a list of 20 obligations entered into since late 2008. 

Some are installment-purchase contracts; others are grant agreements secured by lines of credit, and two are land-sale contracts.

Although city council members want to help the redevelopment commission improve its balance sheet, they won’t sign off on the refinancing without further scrutiny, said Eric Seidensticker, a council member since 2007.

Given the nature of some of the debt, Seidensticker said he wants assurance that the value of underlying assets is accurate.

“We’re talking about obligating the taxpayer on this,” he said.

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  • PR
    Bruce is most likely a Mayoral appointee of the Carmel 4CDC a private corp that distributes money for the Carmel Redevelopment Commission and took out unsecured loans for at least a 9% interest rate. He constantly promotes the position of Carmel's Mayor via social media. Take what he says with this in mind.
  • Lowest Taxes
    With interest rates at historical lows, the city leaders would be derelict in their duties to not refinance and save millions One only looks around Central Indiana, and one finds that Carmel’s infrastructure is second to none. The City has the lowest taxes of any in the area. Its debt to assessed ratio it is also at the bottom of any of the edge cities. Governor Daniels says of Carmel “Carmel is a city that every knowledgeable Hoosier should be proud of.”
  • Not A Refinance
    This is not a refinance. The Carmel Redevelopment Commission and their shell game private entity the 4CDC are insolvent. They took out unsecured loans at 9% to pay operating expenses. This is a very complicated issue but basically the Mayor's play money ran out and the CRC ran their program into the ground. The Carmel City Council is bailing them out by encumbering the taxpayers with the CRC's debt. Once this is accomplished the CRC will continue on only with the stipulation that the City Council has to approve all new debt. Yes it is just a matter of time. Carmel has somewhere between $500,000,000 and $1,000,000,000 of total debt. Nobody really knows what the total number is.
  • More Leverage
    Are Brainard and Ballard half brothers? Money burns a hole in their pocket (OPM that is - other peoples money). Get off the crack pipe Joe P! If they refi they need to commit to lower their overall debt level. Rates and growth are going to be stagnant like Japan for the next decade. Also I want to think the Carmel taxpayers for subsidizing my tickets to the shows at The Palladium. The business model is seriously flawed and will never succeed. It's Carmels version of Lucas Oil Stadium on a much smaller scale.
  • no issues here
    Cost of debt (as well as construction costs) is at historic low. So, generally speaking, government (local and federal) should try to do large needed infrastructure projects when the cost of doing it is pretty low. Like now. If they can refinance at below 5%, they should try to use the savings to do more work. At below 5%, this debt will be pretty much free over the long term, since inflation will likely pick up in a few years.
  • Yay!
    More debt!
  • Why not?
    Sounds like prudent business practices. Let's see what the Carmel-bashers wil have to say.
  • Log in eye
    Only in one of the most conservative counties/cities in the US
  • So, help me understand this
    "Brainard said he expects the refinancing to free up from $10 million to $17 million, depending on the final interest rates." So they're going to refinance this massive debt to a lower interest rate, and instead of using the savings to pay down the debt, they are going to just spend it?

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