HIA UPDATE – April 24, 2020
City of Minneapolis Virtual HIA Public Hearing-5/6
The City of Minneapolis has mailed the Virtual Public Hearing letter to Summit House residents. A Virtual Public Hearing will be held on Wednesday, May 6th. The process for participating in a virtual public hearing is described on the City’s website here . Please go to this link to review the process for attending the Virtual Public Hearing. There will be no question and answer time during the public hearing.
The City Council will approve the HIA Project on Friday, May 8th. It is expected that the City will issue the take-out commitment to Western Alliance Bank by Friday, May 15th.
HIA Interest Rate
From Doug Strandness, our HIA consultant to the City of Minneapolis.
The last HIA fee estimate that I received from the City Finance Department was dated January 31st, 2020. It used a projected interest rate of 3.75% - which was the then current GO bond rate plus 1.00%.
I have been trying to find projections of post-COVID-19 GO bond rates, but I have not found anything other than general comments. The trend of the comments is that we can expect lower rates than before COVID-19.
The City staff have always set the maximum HIA fees at a high amount. The reason is that they do not want an increase in interest rates to reduce their final maximum payoff of the construction loan from $15.8 million. The City Council will approve maximum HIA fees - and not specifically the $15.8 million. This said, I don't know what nightmare scenario would produce an interest rate of 7.34% for the GO bonds - and an interest rate for the HIA fees of 8.34%.