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City sells North of South bonds, locks in 5.2-percent rate

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The city went to the bond market last month to sell $97 million in debt for the $155 million North of South hotel and retail project near the Eli Lilly and Co. campus.

Indianapolis Bond Bank Executive Director Deron Kintner said the city locked in a 5.2-percent interest rate for the bonds, most of which are tax-exempt. That’s a relatively solid rate, given the recent turmoil in the municipal bond market, Kintner said. The city sold during the brightest period in the market since October.

“We wanted to get it done as quickly as we could to increase the likelihood that we were getting in the market during that window,” Kintner said.

The city is providing the loan—guaranteed with property-tax revenue from a downtown development district—to Indianapolis developer Buckingham Cos., which will pay off the debt and interest with project revenue. The project includes a boutique hotel, retail, apartments and a YMCA.

The $97 million includes $86 million for the project, plus issuance costs and capitalized interest so bondholders can be paid before the project generates revenue.

Kintner said the city expects to close on the sale April 7.

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  1. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  2. If you only knew....

  3. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

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  5. Please consider a couple of economic realities: First, retail is more consolidated now than it was when malls like this were built. There used to be many department stores. Now, in essence, there is one--Macy's. Right off, you've eliminated the need for multiple anchor stores in malls. And in-line retailers have consolidated or folded or have stopped building new stores because so much of their business is now online. The Limited, for example, Next, malls are closing all over the country, even some of the former gems are now derelict.Times change. And finally, as the income level of any particular area declines, so do the retail offerings. Sad, but true.

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