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City Council Regular Meeting
Moral Obligation - American National Bank
Business Meeting: 09/18/2018
In June 2013, City Council approved a moral obligation with American National Bank for the Industrial Development Authority (IDA). The moral obligation relates to a borrowing for sewer infrastructure and improvements to 1000 Locket Drive. This borrowing was structured as a 20-year loan with 5-year maturities - the first maturity occurring on October 10, 2018. The IDA has completed the process of renewing this loan for another 5-year period with American National Bank. As is customary, American National Bank has requested a moral obligation from the City.
In 2013, the IDA secured a loan for $1,500,000 from American National Bank in order to improve and add sewer infrastructure to 1000 Lockett Drive. The loan was structured for payback over 20 years, but with 5-year maturities. The loan will reach its first scheduled maturity on October 10, 2018. The IDA has worked with American National Bank to renew the loan for another 5-year period.
The IDA has been making the required debt service payments on the borrowing since inception of about $10,000 per month. The original borrowing of $1.5 million has been paid down to approximately $1.28 million. The structure at 1000 Lockett Drive is currently leased to Morrisette Paper and lease revenue helps to cover the debt service on this loan.
It is recommended that City Council approve the Moral Obligation with American National Bank.
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