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by Michael ScarchilliThe College of the Holy Cross in Worcester, Mass., this month will refund, $65 million of general obligation bonds., The Massachusetts Development Finance Agency on Thursday gave final, approval to the deal, which will refund a 1996 bond issuance from the, now-defunct Massachusetts Industrial Finance Agency. That entity merged, with, the state's Government Land Bank later in 1996 to form MassDevelopment., The bonds mature from 2007 through 2026 and will be marketed by Banc of, America Securities LLC. The bonds are scheduled to close on March 1, will, likely price the day before since it is a floating rate deal, said, MassDevelopment first vice president Jami Loh., Loh said the college entered into a swaption with Goldman, Sachs & Co., several years ago that gave Goldman the right to pay the variable-rate debt, while Holy Cross paid the fixed-rate, and Goldman exercised that option., Boston-based Mintz, Levin, Cohn, Ferris, Glovsky & Popeo PC is bond, counsel on the transaction. The bonds carry insurance from Ambac Assurance, Corp., Moody's Investors Service rates the college's debt Aa3, but hasn't yet, rated this deal. Neither Standard & Poor's nor Fitch Ratings rate the debt., The College of the Holy Cross has issued bonds twice since *1996-, selling, $31.3 million in July *1998-, and $30 million in March 2002. Though the, college, which has about $122 million of debt outstanding, has sold bonds, every four years recently, it sells debt on an as-needed basis, Loh said., MassDevelopment is a conduit issuer that financed 25 issues for various, institutions through the state in 2005. This will be its second sale of, 2006., Its first sale, priced on Feb. 7, was $47 million of solid-waste disposal, revenue bonds for Dominion Energy Brayton Point LLC in Somerset. Goldman, Sachs was the lead manager on that deal, with PNC Capital Markets and, SunTrust Capital as co-managers. The bonds mature in *2036-, with a yield of, 5.0%., Proceeds from the college's 1996 deal were used to renovate the school's, Hogan Campus Center, perform renovations to other campus buildings and, grounds, and refund pre-existing debt, Loh said., The College of the Holy Cross, founded in *1843-, is a Jesuit liberal arts, college, and the oldest Catholic college in New England. It has about 2, students and employs 1, 096 individuals in central Massachusetts.
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by Humberto SanchezThe Federal Transit Administration is proposing to enter into agreements, to provide over $300 million in fiscal 2007 to help fund five public mass, transit projects in Utah, Texas, Oregon and Colorado, agency officials, said yesterday., The FTA also anticipates providing nearly $572 million in fiscal 2007 for, 16 additional projects around the nation under existing agreements, including $90 million for the $1.4 billion Central Phoenix, East Valley, Light Rail in Arizona, a 19.6-mile rail system that will connect Phoenix, Mesa, and Tempe., Under the long-term funding commitment, formally known as a full funding, grant agreement, the federal government would pay $587 million, in $90, million-a-year increments, with the cities covering the difference., Phoenix issued $500 million in tax-exempt bonds in 2004 to cover its, portion of the project, according to a Valley Metro Rail official., Funding for the 21 projects was included in the transportation portion of, President Bush's fiscal 2007 budget, which recommended a total of $1.5, billion for the FTA's so-called New Starts program, which provides funding, for transit projects around the country., An investment in transit is an investment in fighting congestion, said, Transportation Secretary Norman Y. Mineta at a press conference., Of the $300 million the FTA recommended for new agreements in *2007-, million would be provided to help cover the estimated $611.7 million, construction cost of a 43-mile, eight-station commuter rail project, between Salt Lake City and Pleasant View, Utah. In September the Utah, Transit Authority sold $175 million sale tax revenue bonds to help finance, the project., For a 21-mile light rail extension in Dallas, the FTA proposed $80 million, in 2007. The project's cost is expected to be $1.49 billion. Area voters, approved a $2.9 billion revenue bond authorization for the authority in, 2000. The line will carry an average of nearly 46, 000 riders on weekdays, including 10, 700 new daily riders, by *2025-, according to the FTA., Oregon is the home of two projects selected by the FTA, including a nearly, 15-mile, five-station commuter rail line in the Portland area between, Beaverton and Wilsonville, estimated to cost $117 million. The FTA, proposed providing $27.6 million for the project in 2007., The other project, estimated to cost $557.4 million, is an 8.3-mile new, light rail transit line consisting of two segments connecting Portland to, Clackamas. The first segment of the proposed project is a 6.5-mile line, that runs north and south and parallel to Interstate 205. The second, segment of the project is a 1.8-mile extension, which would run along the, existing downtown bus mall on 5th and 6th Avenues in Portland. The FTA, recommended $80 million for the project in 2007., Officials from TriMet, the Portland-area transit service provider, could, not be immediately reached for more financing details., The rail agency designated a project in Denver to receive $35 million in, 2007 to help fund a $593 million, 12-station light rail extension between, downtown and West 6th Avenue, about 12 miles. Most of the $302 million, local share of the cost will be covered with bonds Denver's Regional, Transportation District plans to issue, according to RTD spokesman Scott, Reed., The FTA also proposed $355 million for two projects whose agreements have, not yet been finalized. One project is a $7.7 billion,, three-and-a-half-mile rail extension connecting the Long Island Rail Road, with New York City's Grand Central Station. As part of the state, Metropolitan Transportation Authority's capital plan, a portion of the, East Side Access project's cost will likely be bond-financed. The other is, a1.5-mile extension of Pittsburgh's light-rail system, known as the North, Shore Connector. A spokesperson with the Port Authority of Allegheny, County could not be immediately reached., In addition to the 23 projects proposed to receive FTA funding under the, president's fiscal 2007 budget, five other projects will compete for $102, million, including a $4.9 billion, 2.3 mile section of the proposed Second, Avenue Subway project on Manhattan's East Side. The MTA and the New York, City Transit Authority are seeking $1.3 billion, or 30%, in New Starts, funds for the project.
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by Elizabeth Carvlin and Yvette ShieldsBond issuance in the Midwest surged last year to $78.8 billion from $62.7, billion in 2004 - a nearly 26% increase., The increase surpassed the national gain of 13.2% and spanned all sectors., All but one of the 11 states in the region saw an increase in volume as, issuers sought to take advantage of low interest rates to refund debt., Volume grew between 20% and 32% in all four quarters of 2005. The second, quarter recorded the strongest gain - 32% - with nearly $22.5 billion in, issuance, according to Thomson Financial. Refunding bonds accounted for, nearly all of the increase, skyrocketing 71.7% to $30.4 billion from $17.7, billion. New-money issuance held steady at $40.4 billion, up only 3.5%, from the previous year., Though interest rates had remained low over the past two years, issuers, held off on some advance refunding opportunities because of negative, arbitrage that results when the spread between short- and long-term rates, is wider. The flattened yield curve last year eliminated negative, arbitrage that occurs on the short-term securities purchased to establish, the escrows that are used to retire the refunded bonds as they become, callable., The majority of debt sold in the region was sold through negotiation -, $66.7 billion compared to $11.9 billion that was competitively bid., Revenue bond issuance grew by 40.2%, to $48.1 billion from $34.3 billion., General obligation issuance grew 8.2%, to $30.8 billion from $28.4 billion., Issuers in Indiana, Michigan, Minnesota, and Missouri all recorded, multibillion increases in their volume totals. Illinois, Iowa, Nebraska, North Dakota, Ohio, and Wisconsin posted more modest gains, and only South, Dakota experienced a drop after an increase in 2004., Volume was higher for all types of issuers with the exception of state, governments, which issued $5.9 billion last year, down by 14.6% from $6.9, billion in 2004. Municipalities drove their issuance totals up by 27.1%, to $37.6 billion from $29.6 billion a year earlier. State agencies sold, $22.7 billion, 30.2% more than in 2004., The jump in volume spanned all sectors, with education accounting for the, largest chunk with $25.7 billion of debt sold, a 17.5% increase over 2004., Transportation issuance nearly doubled to $6.8 billion from $3.6 billion, the year before. That figure was boosted by large deals, including, Chicago's December sale of $1.2 billion of new-money and refunding O'Hare, general airport revenue bonds, the Illinois State Toll Highway Authority's, $770 million new-money sale in June, and the Wayne County, Mich., Airport, Authority's sale of $507 million of revenue bonds in April., Health care borrowers recorded a robust rise in issuance in *2005-, to $10.1, billion from $5.9 billion., Indiana hospitals remained a strong presence in the market with the, issuance of $450 million of bonds through the Indiana Health and Education, Facility Financing Authority on behalf of Ascension Health, with Citigroup, Global Markets Inc. as lead underwriter. The Illinois Finance Authority, sold $350 million of bonds for Resurrection Health Care and $226 million, for Advocate Health Care Network. The Missouri Health & Educational, Facilities Authority issued $755 million of debt on behalf of SSM Health, Care., Volume this year in the Midwest will depend on a combination of factors, that include interest rates and the political and economic climate, according to Richard Ciccarone, chief research officer at Illinois-based, McDonnell Investment Management., I would not expect refundings to come in at quite the same level, but at, the state level politics and economics will play a role, Illinois, the governor is facing re-election and has major capital, improvement plans on his agenda. In Michigan, where issuance was strong in, *2005-, I see them being a little more prudent as they face some financial, Ciccarone predicted strong issuance in the health care sector as hospitals, attempt to remain competitive by building state-of-the-art facilities or, With volume and utilization numbers strong, because of the aging baby boom population, there's a facility war going on, Chicago ranked number one among issuers with $2.9 billion of debt sold in, 19 issues, due mostly to its $1.2 billion airport sale. The Illinois, Finance Authority, the state's main conduit issuer, was number two, with, $2.6 billion sold in 67 issues. Detroit followed with $2.4 billion in, eight issues, and the state of Ohio was fourth with $1.4 billion in 21, issues., Wisconsin came in fifth with $1.4 billion in eight issues. Michigan was, sixth with eight sales totaling nearly $1.4 billion. Illinois, in the, absence of a capital budget for two years, dropped to 15th, with $815, million of debt compared to its third-place finish a year earlier., Detroit had the largest single bond issue in the region in 2005 - $1.44, billion of pension obligation certificates, a taxable deal brought to, market on June 1., In Indiana, a reorganization of the state's issuers affected statistics, for the year. The Indiana Finance Authority completed 12 deals in *2005-, after legislation established the agency as the replacement for the, Indiana Development Finance Authority. The IFA issued $962.8 million of, debt, including about $400 million for a stadium for the Indianapolis, Colts. Goldman, Sachs & Co. and J.P. Morgan Securities Inc. served as the, lead managers on that Oct. 12 sale. The Indianapolis Local Public, Improvement Bond Bank sold $889 million of bonds, ranking 12th in the, region and second in Indiana, behind the IFA., The IFA also took over issuance of bonds to fund the state revolving fund, program, which had been issued through the Indiana Bond Bank. The Bond, Bank's ranking dropped to 111th from sixth in the Midwest in 2004 as that, program shifted and municipal borrowings slowed. The Bond Bank's, short-term borrowing had grown in recent years as statewide reassessments, delayed property tax collections for municipalities, according to Dan, Huge, executive director of the bank. The Bond Bank issued $1.3 billion of, tax warrants in *2003-, a figure that dropped to $750 million in *2005-, said., UBS Securities LLC held onto its top position among underwriters, managing, 208 issues totaling $9.56 billion, including Detroit's pension certificate, issuance in May. The firm finished 2004 with 152 issues in the region, worth $7.3 billion., Citigroup Global Markets - a co-senior manager on the Detroit sale and, book-running manager on the O'Hare sale - came in a close second, senior, managing $9.52 billion worth of debt in 163 issues. That was up, dramatically from the 86 issues totaling $3.5 billion last year, when the, firm also snagged second place., Merrill Lynch & Co. placed third with $4.7 billion of issuance in 53, deals, up from its eighth position a year earlier. J.P. Morgan came in, fourth with $4.2 billion of volume in 151 issues. Lehman Brothers rose to, the fifth position from ninth a year earlier. Bear, Stearns & Co. fell to, ninth place from fifth a year earlier. Despite a strong showing in several, states, including Wisconsin, the firm's Illinois drought continued due to, ongoing state and federal probes into how it won its book-running spot on, the state's $10 billion pension bond sale in 2003., Public Financial Management Inc. held on to its first place finish among, financial advisers in the Midwest by working on 254 deals totaling nearly, $5 billion. The Detroit pension certificate sale helped Robert W. Baird &, Co. capture the No. 2 slot, up from its fifth place finish in 2004., Chicago-based Scott Balice Strategies was one of the firms that also, benefited from the Detroit deal, moving up to seventh in the overall, rankings in the Midwest from 18 in 2004. In Michigan, the firm ranked, fourth among financial advisers. Working as FA on health care issuance, Kaufman, Hall & Associates Inc. broke into the top 10 in the Midwest, moving up to sixth place from 14th in 2004., Ice Miller, bond counsel on the Detroit pension bond sale, knocked Chapman, and Cutler LLP out of the first spot among bond law firms, working on, nearly $6 billion of debt compared to Chapman's $5.8 billion. Ice Miller, also served as bond counsel on several large deals for Indiana., Miller Canfield Paddock and Stone was third among bond counsel in the, Midwest, working on $4.9 billion of issuance. Lewis & Munday, which also, worked on the Detroit sale, rose to fourth from seventh place in Michigan, and jumped to number 12 from 59 among bond counsel in the Midwest.
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by Elizabeth AlbaneseThe Denver Convention Center Hotel Authority is scheduled today to sell, $358.5 million of XL Capital Assurance-insured convention center hotel, senior revenue refunding bonds to take out debt issued in 2003 to finance, a Hyatt hotel., Piper Jaffray & Co. is the lead book-running manager for the deal. UBS, Securities LLC is the co-senior manager of the transaction, with A.G., Edwards & Sons Inc., George K. Baum & Co., Harvestons Securities Inc., JPMorgan, D.A. Davidson & Co., RBC Capital Markets, and Stifel, Nicolaus &, Kutak Rock LLP is the authority's bond counsel, and Bookhardt & O'Toole, will serve as underwriters' counsel for the transaction. JPMorgan Trust, Co. is trustee., Although some of the firms' names have changed, the underwriting syndicate, is the same team that sold the authority's Series 2003 hotel revenue bonds., That issue of debt financed the construction of a 1, 100-room Hyatt to, serve the needs of an expanded Colorado Convention Center in downtown, Denver. The hotel opened this past December., Proceeds of the issue scheduled for this week will refund the outstanding, 2003 bonds., According to the preliminary official statement, the bonds will be offered, in a term bond structure, with the issue reaching a final maturity in 2035., Standard & Poor's has assigned an underlying rating of BBB-minus to the, Series 2006 bonds, while Moody's Investors Service rates the debt Baa3., Fitch Ratings does not rate the credit., The bonds are secured by net hotel revenue and fixed contributions from, the city of Denver. Denver's share of the debt service will be funded by, an annual appropriation that averages between 40% and 42% of annual debt, service obligations., According to the Standard & Poor's report released March 31, the demand, The report, written by analysts Jodi Hecht and Scott Taylor, states that, the ramp-up period for the hotel is expected to last four years., The downtown Denver hotel market RevPAR [revenue per available room] is, below the average of the top 25 markets in the U.S., which may not support, the hotel's projected RevPAR and growth in room rate, which is above the, the long bond, term exposes lenders to increasing competition and deteriorating physical, However, the deal also reflects a number of credit strengths, the report, said, including strong support by the city, a good location alongside the, convention center, hotel management by Hyatt Hotel Corp., and the fact, that the facility is already operational, which eliminates construction, risk., Debt service for the Series 2003 bonds ranges from $19 million to $20, million per year, with no debt service payments in 2004 and 2005 and slow, amortization over the following 23 years., The original bonds were priced to yield 4.4% on the 2033 final maturity.
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by Elizabeth CarvlinThe state-appointed financial manager for Hamtramck resigned last week, after working for six years to help fix the small city's finances., Louis Schimmel, a longtime municipal finance participant in Michigan, said, he accomplished what he set out to do in the financially troubled city., Schimmel was appointed by Lansing in 2000 to return the city to fiscal, soundness. Hamtramck faced a $2.5 million deficit and had $7.5 million of, bond debt with a total city budget of about $16 million. It failed to meet, some of the requirements of its agreement with Michigan in 1999 and, triggered the process for state officials to begin a financial review and, appoint a financial manager. Michigan's response to the crisis, and those, in two other cities, became a test of legislation that sought to bring a, state solution to local fiscal problems., The state also appointed financial managers in Highland Park and Flint., Flint's financial manager ended his term, but Highland Park's resigned, amid disagreements with Lansing about how to fix the struggling city's, finances. The state appointed someone else to fill her position., Michigan officials still must decide whether to release Hamtramck from its, designation as a city in financial emergency. The Local Emergency, Financial Assistance Loan Board will make that determination., Schimmel, who had planned to leave the city in *2004-, said he accomplished, the task of helping the city stabilize its financial status, according to, local reports.
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by Alison L. McConnellThe Internal Revenue Service's tax-exempt bond office plans to further, toughen its settlement standards in illegal arbitrage cases, requiring, 100% of bondholders' tax exposure, in addition to disgorging illicit earnings, according to a top enforcement, official., The TEB office also intends to de-link Section 6700 penalty protection, from bondholder settlements and notify bondholders even before it issues, adverse determinations - sometimes even at the opening of an audit - to, expedite case handling, according to field manager Charles Anderson., Historically, the IRS has looked to a disgorgement of arbitrage earnings, in settled cases involving yield-burning and other abusive arbitrage, devices, Anderson said yesterday at a tax enforcement session of the, National Association of Bond Lawyers' Tax and Securities Law Institute, here., Anderson added that if the IRS were to continue with those settlement, strategies, practitioners would have little incentive to stay on the right, side of the law because existing terms are not harsh enough., With arbitrage bonds, particularly [in] advance refundings, I don't think, we're going to be much longer willing to settle on the disgorgement of, On future examinations we'll be asking for tax, exposure and the redemption of bonds. That's something all the managers, TEB's voluntary closing agreement program typically requires repayment to, the government of the arbitrage earned in an abusive deal, such as an, advance refunding scheme, and those standards should differ from those of, the audit division, he added., The enforcement division is also going to be less likely to negotiate, settlements for less than 100% of tax exposure if issuers have not, disclosed any material events to their bondholders., We're not entirely comfortable with negotiating on behalf of someone's, tax liability when that person might not know about it, think it's a question of fairness. If the issuer is not willing to notify, bondholders, He also said the IRS plans to notify bondholders and mutual funds much, earlier in the audit process than it has in the past., Bondholders are the real taxpayers and they have the right to know what's, At the earliest possible moment when we think there's, an adverse consequence, - where a dealer buys an entire maturity of bonds, and immediately sells them to an institutional investor, who then sells, them to a regional dealer who in turn sells them to retail customers -, Anderson said., Another issue TEB is examining is the discharge of indebtedness that, occurs when a party steps in to pay bondholders' tax exposure in an audit, settlement. The discharge of indebtedness represents taxable income to the, bondholders, Anderson said., I think we're going to be a little tougher on the dollars because, effect, the payment of someone's liability by another party does result in, That may, Additionally, because the TEB office has heard criticism about it using, Section *6700-, which applies penalties to the participants in abusive, transactions, enforcement agents plan to de-link 6700 from the bondholder, settlement process., But service providers, such as underwriters and financial advisers, not going to put up funds to settle cases without Section 6700 protection, according to tax controversy attorney Bradley S. Waterman, who moderated, the enforcement session., Waterman asked., Anderson replied with a smile., Waterman went on to say that the threat of Section 6700 penalties was, useful because it got the attention of participants and enabled issuers to, raise money from the deal participants for settlements with the IRS. If, TEB takes that negotiating tool off the table, it will likely see less, settlements and will have to chase down bondholders, he added., Given the often-negligible amounts of income individual bondholders earn, is more than the service can, said panelist Daniel B. Rosenbaum of Caplin & Drysdale in, Circular 230, Earlier in the day, IRS chief counsel Donald L. Korb addressed the general, NABL membership and discussed Circular 230., Donning a white T-shirt with a target in the middle of his chest, Korb, said comment letters sent to the IRS in response to interim guidance have, opened the door to the possibility that the final regulations - which, apply to covered opinions and from which traditional bond opinions are, excepted - may be revised., Echoing the position espoused by several key Treasury Department officials, in recent months, Korb added that it was common sense to reevaluate that, set of rules before finalizing the proposed regulations, which would set, forth standards for attorneys issuing state and local bond opinions., Those regulations, which were proposed in December 2004 and remain, unfinalized, would require a bond lawyer to include with the bond, transcript a memo that analyzes all significant federal tax issues., Korb also addressed tribal government financings, noting the IRS', important questions with serious implications for the, The federal tax code currently allows tribes to issue municipal bonds if, essential government, To work with that oft-disputed requirement, attorneys ought to consider, the legislative history and Congress's 1987 clarification that tribes can, only use tax-exempt bonds to finance activities customarily performed by, Taking the podium after Korb, Clifford Gannett, acting director of the, for forging, a partnership between NABL and the IRS and a challenging time for the, office's management team. Gannett replaced W. Mark Scott three months ago, when Scott went into private practice with Vinson & Elkins LLP in, Washington., Echoing comments he made in December, Gannett said TEB's field operations, division plans two new major programs this year., The first is designed to evaluate the level of noncompliance in the, charitable finance sector, and the agency is currently conducting research, and data analysis for indications of potential pockets of problems, said., We will assess which areas are most susceptible to noncompliance, then, determine the scope of an examination program, Gannett said., TEB's other 2006 initiative will deal with derivatives, focusing on the, bond yield aspect of deals after last year's focus on investment yields, TEB views the derivative market as one growing in significance, Gannett, said, noting that agents have heard troubling accounts of swap deals in, which issuers use the transactions to obtain large up-front payments and, to terminate swap agreements., We understand that practitioners are struggling with treatment of this, technical issue, which can a significant impact on the amount of arbitrage, A targeted, limited derivatives exam project will be developed this year, Gannett said.
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by Rich SaskalAn old California finance tool can finance modern approaches to dealing, with, the state's rapid growth, according to speakers here at a conference on the, topic Monday., The Mello-Roos Community Facilities District Act of 1982 was created as a, financing tool to allow governments to support traditional postwar suburban, growth after the tax cuts of Proposition 13., conference, presented by, Stone & Youngberg LLC, said the act also provides tools to support the, higher-density, infill, and brownfield development that the state needs, today., said Mike Roos, the former, state assemblyman who co-developed the law with the late state Sen. Henry, Mello. Roos is now a senior vice president for Stone & Youngberg and also, owns a political consulting firm., Here we are in 2006 and more pieces of infrastructure are needed, It has proved, The Mello-Roos act authorized the formation of community facilities, districts with the power to levy special taxes to finance infrastructure, such as sewers, streets, and schools., When there are fewer than a dozen registered voters, the districts can be, created by a vote of landowners, making Mello-Roos districts an effective, tool, to develop vacant land in an environment where local governments have, limited, general taxing power to provide such infrastructure to new development., As the state's population grows, and people look for alternatives to, continued sprawl, Mello-Roos financing tools can help pay for those, alternatives, conference participants said., Mello-Roos offers communities a great deal of flexibility in the design, of community facilities districts and their special tax levies., When it comes to infill and urban growth, we really maximize that, said Susan Goodwin, a tax consultant who, specializes in Mello-Roos consulting as managing principal of Goodwin, Consulting Group Inc., Building on an urban scale involves inherent difficulties that tend to be, greater than traditional suburban development on previously vacant land, said, Gregory Vilkin, president of the western residential business of developer, Forest City Enterprises Inc., He talked about the company's effort to redevelop Denver's former, Stapleton Airport property using so-called new urbanist principles, which, call for mixing work, retail, and residential uses at higher densities than, suburban development. The firm used a Colorado law, Title 32, which is, comparable to California's Mello-Roos law, as a financing tool., It's more expensive to build that way, Vilkin said, but noted that such, development also generates more revenue., Because you have more houses per acre, you can bond more, The Mello-Roos act came about following a crisis generated by 1978's, Proposition 13, which limited property taxes. Though the law's provisions, the state's continued population growth and, infrastructure problems should send decision makers back to the drawing, board, said Carol Whiteside, the former mayor of Modesto and president of, Great Valley Center, a nonprofit created to promote the well being of, California's Central Valley., People ought to be thinking creatively about what new financing, mechanisms might be helpful and how to get them enacted, The conference also included the announcement of the first Stone &, Youngberg Award for Innovation in Smart Growth Finance. The award went to, San Francisco Redevelopment Agency for its project to replace abandoned, railroad yards in the city's Mission Bay district with housing, office, space,, and a University of California research campus -- an effort that involved, more, than $110 million in CFD bonds., The events of Monday, the first day of a two-day conference, concluded, with a speech from Willie Brown, the former San Francisco mayor and, California Assembly speaker, who said today's term-limited Legislature, could, never produce a bill as sophisticated as the Mello-Roos act., Californians can serve only six years in the Assembly and eight in the, Senate because of term limits, which were approved by voters in 1990., Citizens of California are really idiots when it comes to voting, Brown, said.
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by Robert WhalenThe New York City Housing Development Corp. yesterday approved up to, nearly $190 million of taxable and tax-exempt revenue bonds, which will, likely start coming to market later this month., The board -- noting that the corporation has another $550 million of bond, projects in the pipeline this year -- also voted to allocate the, corporation's, remaining private activity bond capacity to signal to city and state, officials, the need for additional capacity, said HDC general counsel Richard, Froehlich., He said that HDC has increasingly taken larger shares of New York's roughly, $1.5 billion of private activity bond capacity under federal rules. The, corporation last year received $210 million and $283 million of private, activity borrowing capacity last year from the city and state, respectively., That compares to *2000-, when the corporation received $60 million from the, city and $70 million of capacity from the state, the city has designated $140 million to HDC and the state has allocated, roughly $200 million, activity capacity in the near future., The Bond Buyer's annual survey of private activity bond cap allocations, found that New York allocated roughly half of its 2005 cap to multifamily, housing projects., HDC was the nation's busiest housing bond seller last year, and is, leading housing issuers this year, corporation president Emily Youssouf, said, at the board meeting, citing data from Thomson Financial. According to, Thomson, the corporation sold more than $1.5 billion of multifamily housing, debt in 2005 and has sold roughly $725 million of such debt so far this, year., The upcoming bond sales will finance multiple developments that will, together create more than 5, 000 affordable housing units. The corporation, the city's Department of Housing Preservation & Development have joined, together to execute Mayor Michael Bloomberg's ambitious housing development, plan, which calls for the city to help create 165, 000 new residential units, throughout the city's five boroughs by 2013., Bear, Stearns & Co. is slated to underwrite several series of taxable and, tax-exempt HDC debt totaling about $163 million. These bonds are authorized, under HDC's 1993 bond resolution and are expected to be rated AA by, Standard, & Poor's and Aa2 by Moody's Investors Service, according to HDC spokesman, Aaron Donovan., An issue of $85 million of tax-exempt, fixed-rate Series C bonds will, mature through 2040 and finance more than 700 apartments in Manhattan, Queens, and the Bronx. The Series D bonds, which will also be exempt from, federal, state, and local income tax, total only $4 million and will be, used, to repay mortgage debt on three properties in Brooklyn and Manhattan. The, other series of bonds will be taxable and marketed as auction-rate debt., These obligations will help finance repair loans and mortgages on a dozen, properties., A $32 million block of Series B debt, which the board first authorized, last November, will be lumped in with the other series that Bear Stearns, will, underwrite, Donovan said., JPMorgan is expected to underwrite $25 million of 7-day, variable-rate, bonds, which will be backed by a direct pay letter of credit provided by, Citibank NA. These tax-exempt securities are expected to carry Standard &, Poor's AA, A1-plus ratings. These bonds will finance a low- and, middle-income, property in Harlem that will include 125 apartments, documents from, yesterday's meeting indicate. The bonds will probably be sold this summer.
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by Rich Saskalfter being rebuffed by voters last year, officials in Ketchikan, Alaska, will ask their constituents next month to approve a scaled-down, authorization for revenue bonds to rebuild the city's cruise ship docks., Voters will be asked, April 11 to approve a $38.5 million authorization for revenue bonds. In, August *2005-, they voted down a $70 million bond authorization by a 55%-45%, margin., Ketchikan, located near the southernmost end of the Alaska Panhandle, traditionally been the first port of call for ships heading north on the, Inside Passage route from Vancouver, British Columbia, and Seattle., In recent years, the number of travelers taking these cruises has, snowballed, and the cruise lines have been building bigger ships to, accommodate them., That created a little problem for Ketchikan. The city's docks have room, to tie up three medium-size cruise ships of about 700 feet long. But many, They could accommodate three medium-size ships as of ten years ago, said John Hansen, president of the Vancouver-based North West CruiseShip, Association, the trade group for cruise lines on the Alaska Inside Passage, They cannot accommodate three of what we term Panamax ships, referring, to ships of the largest length possible that fit through the Panama Canal, roughly 965 feet., said Bob Newell,, Any other ships have to anchor out on the, Ships at anchor have to ferry passengers to shore on small tender boats, which is less convenient for passengers. As a result, some cruise, itineraries, in the 2006 season omit a stop in Ketchikan, Newell said., We're expected to lose 100, 000 passengers in the 2006 season, Last year, voters turned down a $70 million bond proposal., The biggest difference is the proposal last year included the city, constructing all four berths and making improvements so that the city would, Newell said., A fourth berth is still planned, but it would be privately financed, said., said Zig Ziegler,, co-owner of a real estate firm and co-chair of the advocacy group Ketchikan, For A Positive Economy!, which was created to support the bond measure., As a, result of that, RBC Capital Markets would underwrite the bonds, Newell said. Preston, Gates & Ellis LLP is bond counsel., The city is contemplating issuing the bonds through the Alaska Municipal, The revenue stream securing the improvements is a $6 per passenger fee, paid by cruise lines for ships that tie up at the Ketchikan dock, and a $4, per head fee for ships that anchor in the waters near Ketchikan, Hansen, said., Its primary purpose is to pay for the infrastructure improvements, said., Ketchikan has had a rough economic ride since *1990-, after the pulp mill, that used to be the area's largest employer closed down. But the number of, visitors arriving on cruise ships has skyrocketed since then., In *1990-, cruise ships made 314 calls in Ketchikan, dropping off 230, passengers, according to statistics posted by the Ketchikan Visitors, Bureau., *2004-, there were 538 calls, with more than 848, 000 passengers., The numbers reflect not only an increase in cruise ship calls, but also, growth in the capacity of ships, as the average vessel carried more than, 1,500 passengers in 2004 compared with about 730 in 1990., And the growth has continued: For example, two of the seven ships that, Princess Cruises, owned by Carnival Corp., will send to Alaska this year, considered post-Panamax vessels. That means the Diamond Princess and the, Sapphire Princess, each of which carry more than 2, 600 passengers, would be, too big to fit through locks of the Panama Canal., The growth in the cruise ship industry has helped on the job front, many of the jobs generated are retail-oriented and seasonal, and last, year's, election prompted some residents to complain about the impact of the ships, whose daily summer passenger counts can outnumber the city's population of, about 8,000., This year, supporters of the bond measure are committed to explaining its, benefits, Ziegler said., What we're trying to accomplish as a group is to promote the positive, aspects of this economic activity and spell out for everyone clearly the, economic impact of what it means to have the bond pass, About 25% to 30% of the city's sales tax receipts come from tourist, He said bond supporters are also going to emphasize the amenities that, will be financed by the bond measure, which include construction of a, waterfront promenade to link all the docks, improvements to a small-boat, harbor, and enhancements to traffic circulation around the downtown area., Supporters also hope to make it clear that the debt consists of revenue, bonds supported by the head tax on cruise passengers, and do not threaten, raise anyone's taxes., We are undertaking a pretty thorough education of the bond process, Ziegler said., The logging and fishing industries that sustained Ketchikan for decades, were vulnerable to economic and social forces, Ziegler said., I think it's very important for people to recognize at this point this, is one area we have direct control over with regards to our local economy, With this bond issue, we have a direct say in it, and it directly
Published in Bond Buyer (2006)
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