City, CRA, looking to partner on $40 million land buy in the South Cape
The city of Cape Coral and its Community Redevelopment Agency are looking to partner on a $40 million, 43-parcel land buy in the South Cape.
Resolution 259-24 calls for the city to enter into a contract for the sale with Bimini Center of Cape Coral LLC, TCJBN LLC and Four Palms Condominium Association to purchase Bimini East to “further stimulate redevelopment in the downtown core of the City” at a contract price of $40,089,504. The parcels are within the eastern portion of the CRA’s Bimini Basin District.
The resolution, part of the city’s consent agenda, also states “the City may incur additional costs to cause Bimini East to be marketable to prospective developers and may expend additional funds to purchase surrounding property in the CRA area…”
The city and CRA “acknowledge that the acquisition of Bimini East and surrounding property in the CRA Area is essential for the redevelopment and economic future of the City and its residents and visitors.”
According to the resolution, the city would purchase the parcels, could expend additional funds to make the property marketable to prospective developers and, upon the subsequent sale, use the proceeds to pay down the principal for the “commercial paper” that would be issued to buy the properties.
“For any Commercial Paper remaining following the application of proceeds, the city shall issue long-term debt for the remainder of term of the CRA,” the resolution states.
The CRA, a type of designated business district which operates with the Cape Coral City Council acting as its governing board, would “contribute and make all necessary payments due for debt and interest owed by the city for the Commercial Paper issued as a result of all costs associated with the City’s Purchase and associated cost of Marketing Bimini East and any surrounding property, and causing the property to be marketable for prospective developers.”
The payment for any principal and interest due would be paid by the CRA, which is funded primarily with property tax dollars generated by increased values that are the result of development, for the remainder of the term of the CRA, which is until 2047.
The resolution expressly exempts members of Council and members of the CRA Board from liability.
If the city does not purchase Bimini East, the agreement would be void.
Financing is included among three ordinances that call for a collective “commercial paper debt obligations” of up to $125 million — up to $60 million for the above land acquisition; an amount not to exceed $45 million to finance design costs for a Utility Expansion Program within the North 1 East, North 3 and North 6 Assessment Areas and up to $20,000,000 to finance costs for various fire capital equipment and improvements.
The funding mechanism for the issuance of commercial paper is Ordinance 31-24, which Cape Coral City Council adopted on May 1. The ordinance amended two earlier ordinances, reestablishing a Commercial Paper Program in an amount not to exceed $150 million outstanding at any one time.
To use the Commercial Paper Program, each request for funding must be included in an ordinance pursuant to the city’s Charter.
“Reimbursement of the Commercial Paper Debt obligations will be secured by a covenant to budget and appropriate legally available non-ad valorem revenues to pay the principal and purchase price of, redemption premium, if any, and interest on the Commercial Paper Debt Obligations. The City may also issue long-term debt if determined to be in its best interest to do so,” the city’s backup documents on the issuance of commercial paper states.
To reach VALARIE HARRING, please email vharring@breezenewspapers.com