HomeMy WebLinkAboutVII(E) Discussion Re: Authorization to Increase SunTrust Line of Credit for the Coca-Cola Property
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Agenda 02-17-2004
Item VII E
City Manager
Jim Gleason
Commissioners
Danny Howell, District 1
Scott Anderson, District 2
Rusty Johnson, District 3
Nancy J. Parker, District 4
Mavor
S. Scott Vandergrift
STAFF REPORT
TO:
The Honorable Mayor and City Commission
FROM:
Russ Wagner, AICP, Community Development Director
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DATE:
February 9, 2004
SUBJECT: Authorization to Increase Sun Trust Line of Credit for the Coca-Cola Property
ISSUE:
Should the Mayor and City Commissioners authorize an increase to the Sun Trust Bank Line of
Credit for the Coca-Cola Property?
BACKGROUND:
In order to acquire the Coca-Cola Property in the year 2000, the City established a line of credit
with Sun Trust Bank to pay for the due diligence report, acquisition of the property, master
planning, engineering design, and infrastructure construction. This credit line was established at
$4 million by Resolution 2000-15, based upon the best projection of costs for the project at that
time.
DISCUSSION:
Over the course of the development of the Coca-Cola Property (Ocoee Crown Point PUD),
expenditures authorized by the Mayor and City Commission have totaled approximately
$2,865,000. In order to have enough money to award the construction contract for Phase I
Infrastructure in support of the High School and to permit the sale of property to private
developers, additional funds will need to be borrowed on a short-term basis. The total
anticipated costs of construction, extra permitting, underground wiring, reuse system, and other
City ofOcoee . 150 N. Lakeshore Drive. Ocoee, Florida 34761
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The Honorable Mayor and City Commissioners
February 10, 2004
Page 2 of 2
miscellaneous costs will total approximately $2,835,000. With approximately $1,135,000 still
available from the City's original line of credit, we would need to increase our loan limit to $5.7
million, an increase of $1.7 million.
This additional funding with Sun Trust would only be utilized as necessary to cover cash flow
requirements, since we anticipate receiving significant proceeds from the sale of land to private
developers within the next 6 to 9 months. This is anticipated to be at least $3.5 million if we are
able to combine the original single family land with the Poer property land in our sale. The
remainder of the loan would be paid off by further sales of commercial and village lands based
upon market conditions and the wishes of the City Commission.
It should be noted that when the original line of credit was established for the project, the
additional costs associated with the acquisition of the Poer property were not anticipated.
Additionally, the City Manager at that time believed that Orange County would make a sizable
contribution to utility extension costs. This did not happen. Accordingly, these two additional
costs alone make up the majority of the added amount necessary to carry the project to
completion of the opening phase.
Despite not realizing the County participation in the project, the potential profits to be made on
the Poer property will help make up for the shortfall. When compared with the anticipated profits
to be secured with the sale of the commercial and village parcels, the City should easily break
even on its investment, and possibly realize a surplus of funds to be utilized for park or public
safety facility improvements planned in the Ocoee Crown Point PUD.
STAFF RECOMMENDATION:
Staff respectfully recommends that the Mayor and City Commissioners authorize Staff to
negotiate with Sun Trust Bank to increase the existing line of credit for the Coca-Cola property
from $4 million to $5.7 million, and further, authorize Staff to schedule a Public Hearing on
March 2, 2004 to consider an amendment to Resolution 2000-15, including preparation of all
loan documents in support of the increase to the line of credit.
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