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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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    1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

    2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

    3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

    4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

    5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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