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ITEM # 6. <br />of <br />MEMORANDUM <br />V~~` <br />TO: Housing and Redevelopment Authority <br />FROM: Tim Simon, Finance Director <br />DATE: August 2, 2010 <br />SUBJECT: Downtown Buildings Contract for Deed <br />The HRA entered into a contract for deed for the purchase of the 716 & 720 Main St. <br />buildings back in 2007. The final maturity of the loan is 01/15/2012. The loan carries an <br />interest rate of 6.0 percent. The contract for deed allows prepayment at anytime with no <br />penalties. <br />Given the cash balance in the HRA which is currently $628,572 as of 06/30/2010 and the <br />internal rate of return on our investments 1.72% as of 06/30/2010 it would make sense to <br />visit the issue of prepaying the remaining balance. The amount left to retire would be <br />principle of $165,405.27 and depending on when the final disbursement could be made you <br />would have a couple months of accrued interest. <br />If the HRA is considering this prepayment, I would recommend that you direct staff to work <br />with the HRA attorney to start the process of calling the outstanding debt. <br />C:\Users\cmehelich\AppData\Local\Microsoft\Windows\Temporary Internet Files\OLK4635\HRA buildings.doc <br />