The Golden metropolis council has handed an ordinance permitting town to switch its settlement with the bank that holds the loans for the Coors workplace constructing property it bought final yr in order that the Golden Group Middle and Golden Fireplace Station #Four can turn out to be the collateral for the loans.
Beneath the unique loan settlement with BOKF, the value of the Coors workplace constructing property itself was used because the collateral. Nevertheless, town now plans to demolish the workplace constructing, so town to place up different property of the same value as collateral for the loan.
Beneath town’s settlement with BOKF, the bank would be capable of take possession of the group heart and Fireplace Station #4, which is situated alongside Heritage Street and serves the southern portion of town, if town had been to default on its debt funds as a way to function them so to generate important income to make the debt funds. For instance, the group heart might be operated by the bank as a personal well being membership whereas the hearth station constructing might be used for manufacturing.
Nevertheless, Golden Finance Director Jeff Hansen instructed the council he was recommending the collateral substitution as a result of it’s “highly unlikely” that town would default on its debt funds.
“I think it’s important to note that the city has an impeccable record historically of making its debt payments,” Hansen mentioned. “So, this is really only an issue if we were to default and there is nothing to indicate the city would be in a position where that is a possibility.”
Hansen mentioned the explanation the Coors property wouldn’t be acceptable to the bank as collateral as soon as the workplace constructing is demolished as a result of the bank is barely in a position to take possession of the collateral for producing income to pay the loans within the occasion of a default however can not truly take possession of it. Meaning the bank could be unable to promote the Coors property, which might be the one strategy to generate income from it.
Hansen additionally mentioned the substitution means it’s attainable town may lose the power to run fireplace service out of Station Four however emphasised that might solely occur if town defaulted on the loan. He additionally mentioned the value of the hearth station is about $2 million, which implies town will all in chance be capable of pay down the loan sufficient to launch the hearth station as a collateral asset within the subsequent two years. Town has reserves in different funds, together with the final fund, which it will possibly borrow in opposition to to pay the debt.
Hansen additionally mentioned he doesn’t have any concern that monetary uncertainty surrounding the COVID-19 pandemic places town at any elevated threat of being unable to pay its debt. He mentioned that’s as a result of town continues town continues to obtain gross sales tax income into the fund that’s used to repay the debt and town’s priorities for that fund are repaying debt first, sustaining current services second and constructing new services third. He mentioned town even have sufficient funds in different funds to cowl the money owed, if vital.
Councilwoman JJ Trout mentioned town has acquired feedback from Golden residents who had been involved about placing up the group heart and Fireplace Station #Four as collateral and councilors initially shared these considerations.
“We all were a bit concerned about using these two buildings but we talked through it came to the realization that it’s not a gamble because the chances of us not making payments is nominal so we all felt comfortable moving forward,” she mentioned.
Hansen mentioned that placing the substitution settlement in place doesn’t imply town has to demolish the constructing at any level. Nevertheless, he mentioned doing so now is sensible in order that town will probably be able to demolish it when the time is true. Hansen mentioned it is sensible for town to demolish the constructing, which it has decided it doesn’t make sense to make use of attributable to its age, sooner quite than later as a result of town incurs upkeep prices to maintain it working and viable whereas it’s nonetheless standing.
Town can also be presently within the technique of making an attempt to promote property from the constructing, corresponding to furnishings, and Hansen mentioned town would want to have a collateral substitution settlement in place earlier than it may take away the HVAC system or different components of the constructing that would cut back its value.
“I think it’s very important that we try to recover from the building as much as we can and I don’t think the market is going to get better,” mentioned Councilman Rob Reed. “Therefore I support the substitution.”