LCDC to borrow $16.75M

COEUR d'ALENE - Lake City Development Corp. will borrow $16.75 million from Washington Trust Bank to fund future projects - including McEuen Field's redesign - the urban renewal board decided Wednesday.

Of that $16.75 million, the agency will have $11.7 million to allocate for projects inside its Lake District boundary after subtracting existing debts and operation, while saving 10 percent for reserves.

The loan was recommended by Seattle-Northwest Securities, the asset management firm LCDC contracted in January to study the urban renewal agency's borrowing power.

"Our recommendation was to go with Washington Trust," said Eric Heringer, SNW senior vice president in the Boise office. "The fees ... were substantially lower."

The 10-year rate will be broken into two five-year terms. The interest rate is 3.75 percent for the first five years. It will be reset for the second five years, capped at 5.75 percent.

Even if the interest rate is set at the 5.75 percent cap for the second five years, the lower interest rate for the first five years would mean a substantial portion of the debt could be paid back by the time the second rate sets in, Heringer said.

That rate, combined with a .25 percent charge for fees, made it more financially savvy than Mountain West Bank's 10-year fixed rate between 4 and 4.3 percent. Mountain West Bank requested 1 percent for fees.

Bank of America offered a 10-year rate of 4.7 percent.

LCDC will begin working out the contract with the bank. It will come back to the urban renewal board for final approval. The board increased the $11,250 contract with SNW to $20,000 so the financial management firm can help through the process.

The topic of how much, if any, LCDC will fund for the McEuen Field redevelopment project still hasn't come to the board for a formal request as the project, whose construction documents are currently being worked on, hasn't gotten that far.

Estimates on the park range from a roughly $14 million footprint, to a $39 million fully built out plan, with a replacement boat launch and baseball field included.

LCDC also agreed Wednesday to renew its annual contract with its legislative lobbyist, Centra Consulting, for $20,000.