Special Bd. of Aldermen — 05/20/2019 Page 8
spent and you spend another million, $1.7 | think already spent or allocated to the architecture firm, that is not
down to $10.4. How did you come up with the $10.4 million?
Mr. Cannon
The total project cost is over $19 million.
Mr. Teeboom ’ll get to that a minute. I’m talking how did you come up with the $10.4 million?
Mr. Cannon
That is the portion of the bond that we can get really difficult here, but we made a decision, | forced this on Tim,
that the Qualified Equity Investment that we thought we were competitive to get, was $15 million dollars. That’s
the most we thought we could get. So in order to get that, it requires that we put $10.4 million dollars through
the system and the balance of the project cost goes directly, the $4.5 goes directly down the side and into the
QALICB.
Mr. Cummings
If | may. What! believe is being also discussed here is a cash flow issue and what we are doing is we are
actually putting in money for the sale of the property, that $2 million dollars, which the City would get paid back
at closing. But we are taking the opportunity while we can to leverage those funds. So you have items like
that and you have items like soft costs, which are all on top of the building costs which are going to be in
excess of $15 million dollars when it’s all in, the total project. But what we are doing is we are leveraging $10
million dollars for our benefit to yield something in the range of about 28% leverage. That is essentially what
we are trying to do here. That other differential of that $10 million for this conversation let’s just keep it simple
and say it’s $5, we will be pushing it down in through to the QALICB and that is what we are referring to as our
equity investment which is how you yield that 19ish figure that we just mentioned.
Mr. Teeboom Let me understand something, the $4.5 million is your New Market Tax Credit money. Now I’m
really confused. | don’t know where the $10.4 comes from and now he says that there are $2 million dollars
from the building that you are going to deed over to this corporation and then generate a loan. Now if you
deed over the building how do you generate the loan unless this corporation takes a loan on the building. Is
that what you are talking about.
Mr. Cannon
That’s exactly what we are talking about.
Mr. Teeboom Alright so why didn’t you say so? So you expect the City, nothing to smile about, that’s the first
I’ve heard of this one. So as | understand it, you take the building, deed it over to this corporation, whatever.
Mr. Cannon
Sell it to the corporation.
Mr. Teeboom | can’t, the numbers, you know, QBR don’t mean anything to me because you are going to take
the building, deed it over to the corporation and they are going to borrow against it, $2 million. How does that
$2 million become $10.4 million.
Mr. Cannon
They are going to borrow $14 million against it. $14,700,000.00 against it.
