NorthIowaToday.com

Founded in 2010

News & Entertainment for Mason City, Clear Lake & the Entire North Iowa Region

Opinion: City finance director confirms taxpayers truly on the hook for bonds connected to Renaissance Project

This River City Renaissance Project requires the City of Mason City to borrow $26,500,000 in order to fully fund five of the six projects on day one.

There might be some dollar contributions to the city but little or nothing so far.

The sixth project – a hotel via Gatehouse MC, LLC – may be funded in part from a small amount of equity, $1.5 million, and a loan from a private lender if one can believe this Gatehouse party. Remember back. Chodur/G8 made similar claims of their financial capacity to fund a hotel west of City Hall. One such boast, “This hotel will be built” – Chodur. On the front page of the Globe!

The elected officials believed him. They commissioned a full engineering design for a multimillion dollar four story city parking ramp to serve his promised hotel and mixed-use apartment project to be on that gravel city lot at the SE corner of North Federal Ave. and 2nd Street NE. This parking ramp deal with him included giving it to the hotel owner years later. See any of these three going up?

Got a law suit to deal with from this G8 entanglement. Plus a $526,000 expense for engineering plans for this parking ramp along the south side of 2nd Street NW that will never be built.

Now we are into a campaign to sell the citizens on a different hotel
in the parking lot south of Younkers. Another big talker this time from Minnesota who claims to have his millions ready to go. Just needs a little sweetheart $4.2 million loan at zero per cent interest from this $26.5 million pot of city bond money to get it moving. One that comes with no payments for 20 years and never any interest charge to Mr. Rachie of Gatehouse.

The promised lump sum pay back of this loan to the city backed up by who? No answer.

High odds that the LLC will never repay it. Mason City at risk to be stiffed via a foreclosure as the senior lender protects their loan and gets all of a foreclosure sale proceeds.

This whole $26.5 million of new city bond debt has a serious question for all M C taxpayers who are watching this spin about millions being available to the city to retire this massive new bond debt plus over $10,000,000 of interest on it. An interest cost far above the $7 million to be earned from sales tax on the room charges over up to 20 years as of now from this one potential new hotel.

You are receiving a mailer from City Hall and from proponents that is worded so that you believe that this General Obligation Urban Renewal bond debt funding each year for 20 years is not eligible to receive ANY tax levy dollars. This is not a correct claim and is contrary to Iowa law. But there is a way to clear this issue up and set the legal record straight for us. Our city has to follow state law precisely when borrowing money by selling bonds. To do so, the city retains a law firm in Des Moines – Ahlers & Cooney P.C. Law Firm. Opinion from a specialist in bond law called a Bond Counsel. This opinion rules on this subject and has the Bond Counsel’s written assurance to
The investors who buy the bonds and loan the $26.500,000. to the city
That the Iowa laws on such debt issuance have been followed by the city
And lists exactly the tax sources that such bonds will be retired with.
This Opinion will tell the citizens and bond buyers about the full faith and
Credit of the City of Mason City being available when necessary to fund
The retirement of this $26,500,000. Plus millions of interest cost.

This means us via our city’s right and obligation to levy new debt service
Property tax under Iowa law when such GENERAL OBLIGATION or GO
Urban Renewal bonding has been issued and other revenues are insufficient
To fund the 20 year payments.

So let’s ask our Bond Counsel to write this Opinion this week and have the city Release it to the whole community. It will tell all of us taxpayers about the use of the city’s debt service property tax levy to contribute tax dollars for the 20 years of debt retirement on this new bond debt of $26,500,000 if Public Measurers B and C receive a 60 % yes vote from the Nov. 7, 2017 referendums.

End the YES spin incorrect amateur legal advice on this matter this week.

Get the facts and whole truth from the Ahlers and Clooney, P.C. Bond Counsel.

Respect the citizens with accurate, honest, legal truth on this very
Important tax levy authority /usage matter.

LIES AND SPIN FROM CITY AND “YES” CROWD
EMAIL PROOF

Pat McGarvey
Mason City, Iowa


Send your letter to the editor to NorthIowaToday@gmail.com
NOTE: The opinions expressed in letters to the editor are not necessarily those of NorthIowaToday.com.

0 0 votes
Article Rating
Subscribe
Notify of
guest

26 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments

Even more news:

Watercooler
Copyright 2024 – Internet Marketing Pros. of Iowa, Inc.
26
0
Would love your thoughts, please comment.x
()
x