FAQ Friday: Will Phase One Revenues Generate Enough Income to Cover Yearly Bond Payments?

Can you demonstrate that phase one (3-4 stories tall with a transfer floor for the future addition of 1-2 additional stories) revenues alone can generate enough income to cover the yearly bond payments with interest? Would a four-story deck require the sale of two additional floors and perhaps even the air rights above in order to meet yearly bond payments?

With the mixed-use development, the City’s intention is to use bond funding to support costs associated with building four levels of parking (390 parking spaces), street-level retail space, rear alley beautification, and streetscape improvements for W. Troy Street. A cast-in-place structure provides the flexibility to build a transfer floor to accommodate two additional floors of commercial development. If future commercial growth is desired, the City could explore a variety of avenues to accommodate this, possibly including selling the air rights for private development, providing an extended lease of the air rights to a private developer, or other public-private partnership models. Sale, leasing, or future new tax revenues from any commercial development are intended to be committed toward debt service on the bond.

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