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Home My WebLink AboutM-82-0287OF MIAMI. i=LORIOA :NTER•OFFICE 'AE;MO�RANOU`.t �� •;� 1 J Howard V. Gary -°tF March 31, 1982 V!UE City Manager Convention Center Bonds Carlos Garcia I r Finance Director The City's financial advisor, James J. Lowrey, has teleponed the following information regarding the value of the $60,000,000 Convention Center and Parking Garage Revenue Bonds sold by the City of Miami in 1980: The market value of these bonds is currently estimated to be $43,200,000, due to the increase in interest rates since the time when the bonds were sold. If the bonds were to be sold under the present market conditions, the interest cost would be approximately $222,000,000. Actual interest cost to the City on the 1980 bonds is approximately $136,000,000, or $86,000,000 less than current market. A letter containing this information is being express mailed from New York. CG/avp ww 8 2 - 2 8 7 A r) i' F. aMArtii all 1992 Mr. Carlos Frei* Director of zinancg' The City of Miami, Florida 350o P4D American DT ive Miami, Florida 331 Dear Carlos: wL- tave reviewed, as p4r your Tequest, the current markct value of any outslandlntt L•3YV of Mimi, Florida C•on cntion C-EnItr and park ine i.orAgr- These bonds w:rz i�sared bs !MIA land thus tarry a AAA rating from. Standard &. poar's. The term bonds of Soli (740,% O tt;c loia.i issue) which carry S.Z� ccu-ons arc cartentiy v4ilued a: apprr i tel;c $72.00 pet Sla'3.%U principal-amouai:--Tbis eyuAxes to s yield to matutity 4f approximately 12.25%. IA th*uid be un4erstoad that these rates are sabicet Lo sipifieant fluctuation and that iley ire based on limited secondary market dc;ivtty Sn these securities. This is t;te pT:ee yaq might pal+ for x $2,000,000 black o• bonds. The pri" xoald Change tar a substantially larger block of bonds, assOming thty were available. if the City •nre to issue $6t ,W,014 at bonds today to timance a similar prajeri in tooay'la m&iket with similar credit ptovislorts including MBU 1094r*r1ce, we would ;stimate the COOV*11tt interest Bost at approximtely 13.05%. At thest tstes. total Interest palible over the lite of the bonds would be ippsasl tt:y based or. a te7aymcut se,%t4ult sLmilar to tine etis4 g one, This to�ares to egprozi�ZCi' ; in inters payable Over the life of the outstanding bonds. E�02-27 The 13.0t-% rate for new bonds is hiethtt than the eurrttt yield 4n the ostst&-nding bonds due to the d4i %tonal yield required to issue $69,000,000 35 year bonds in today's ft srket envit�e tct, sphere croapared with a pwrchs,�c of a much Mallet block of autst�ncltng diseountcct sveurities. t It the City w re to eon-: ides ref inaneing tho esis i«� �rtklVCt i s+E;vrral paints should bie noted: It would not be neoesasry to issue $Sb million bonds. A signi i i cacttly lower pr ineiphl _ ► —ant of bonds w*uZd be sufficient to refinance t:;e outstfindirg bonds. jb) A lower principal ttnw-jurit of bards would Te4uLC aggreg*te interest payable over the titc at the P-ew bands. (rt:t ir: interest mentioned &boor would be rcdaecd ). Any acceleration in the rtttr-.g:rA schedule would also significantly red«�!e aggrtgake interest paynal=:. if we spat, tie furtivet >,Esistanee in this matter, please 60 not hes i ta; s to Call. 3 t�F;�ly yours, M. Traudt Exeeutsy ViCe PreoicScIIt 82-IV ''87 41 CITY OF MIAMI. FLORIDA INTEROFFICE MEMORANDUM TO Mr. Howard Gary GATE - March 23, 1982 FILE City manager James L. Knight International Center April 1, 1982 agenda �F.,•: Maurice A. Ferre Mayor J Please bring up for discussion on April 1 the matter of the James L. Knight International Center. I would like to have an appraisal made of the value of the property in 1982 upon completion. I would also like a letter from our financial advisors, James J. Lowrey, as to their estimation of the value of our bond issue in today's market. The purpose of these two requests is so that as we enter negotiations, the Commission and the community are aware of the present value of the property and of the bond issue. MAF . anus c; rV ... C� 82-ti87 7 1-allxxrwa March 18, 1982 Mr. Daniel P. S. Paul & Thomson Suite 1300, 100 Miami, Florida Dear Dan: Paul S. Biscayne Boulevard 33131 I appreciate very much the time that you spent with me yesterday to further discuss our Lease with the City and the relationship between the parties. I highly applaud and commend you for the most generous amount of time that you spend with "our fair City". You provide a genuine service to its citizens. - Attached is a table that lists the contractual payments of the Lease Agreement with the City which recites that upon opening we will have paid or be obligated to pay to the City the sum of $4,100,000.00, and pursuant to our projections of income, the total payments during the intitial term of the Lease aggregate $167,872,000.00. Of course, the ultimate payments under the Lease will be many times the above number based upon renewal if executed. If you take the above income stream and discount it at a 9% internal rate return (present value), the value of these payments in today's dollars is $25,353,000. As we discussed, I could purchase a site for a hotel considerably cheaper than the above, and as you appropriately pointed out, that site would not have a convention center attached with it. However, the fact that we were willing to risk dollars at an uncertain time to build the hotel made the convention center possible, because without the hotel revenue stream, the City could nc; have issued bonds with which to build the facility. As a result of the above payments and the income stream that flows to the City, the City will not only recoup their actual investment, but the Convention Center will be totally paid for by the revenues derived from the Center and the Hotel. Additionally, we are paying full real estate taxes which, if escalated at 8% per annum for inflation, will average approximately $700,000.00 per year over the next ten years, and over the initial lease term will total approximately $178,566,000.00 (the City thanks you for this!). 14of yY.,� 9.. �.' ✓f!�1!5°...� d°- P . ,t~1�.�. ��"�`� 7 . 140.0 PSP•PBs� 82-2'87 i] Dan, if you have any questions, or would like to discuss any matters concerning our relationship with the City, please do not hesitate to call me at any time either in Atlanta or Miami or at home. This project is important for me, for you, and for the entire community. Thanks for your very sincere interest and concern. Sincerely, EW Earl S. Worsham Chairman ESW/cfw cc: Mayor Ferre Martin Fine, Esq. 82-287 LEwsE PA't S HYATT REGE40 44Mt RASE RENT YEAR ------ RENT ------ FACTOR ------ AMOUNT ------ 4200 1982 218 1593 923 M4 1163 1985 1468 1936 1500 1.00 1500 1987 1500 1.09 1620 ties 1500 1.16 1740 1989 1500 1.24 1860 1990 1500 1.32 19EO 1991 1500 1.40 2100 1992 15,10 1.48 2220 1993 150 1.56 2340 1994 1500 1.64 2460 1995 1500 1.72 2580, 1196 1500 I.SO 2700 1497 1500 1.98 2820 li98 1500 1.96 2940 1999 1500 2.(14 3060 2000 1500 2.12 3180 2001 1500 2.20 3300 2002 1500 2.28 3420 2003 1500 2.36 3540 2004 1500 2.44 3660 2005 1500 2.52 3780 20_)6 1500 2.60 POO 2001, 1500 2.08 40:; 1008 I5U0 2.76 4146 2i,09 1500 2.54 4 2 E 0 IL lE!U 2,92 4'80 2011 15C..0 3.00 44 20 1504 3.(6 4626 2013 ISO6 3.16 4740 2014 150U 3.,4 486v 205 150 3,32 4980 1016 1500 3.40 5100 2017 1500 3.48 5220 20:8 1�00 3.56 2019 1550 3.64 5460 2020 150 3.72 5580 2021 1500 3.30 5700 A.A. 1500 3.88 5820 2023 1500 3.96 5944 2024 1500 4.04 6060 2025 1500 4.12 6I80 2026 I.S 4.20 6300 TOTAL 167872 DISCOUNT RATF .09 NET FRESENT VALUE 25353 It N-287 TAX PAYMENTS HYATT REnENCY MIAMI YEAR ------ __ TAXES 1982 462 1983 499 1984 539 1985 582 1986 629 1987 679 1988 733 1999 792 1990 8C05 1991 924 1492 997 1993 1.77 1994 116> 1995 1256 19% 1357 1997 1466 " 1998 1583 1999 1709 2000 1846 2001 1994 2002 2153 2003 2326 2004 2512 2005 2713 2006 2;30 2007 3164 i0(18 3;17 2009 3690 2010 3966 2011 4 305 2012 4649 241: SJ2i �J15 .s56 2016 6325 2017 E33: 2019 7377 2019 7467 6. & 86(t5 2021 9243 2022 10037 2023 10640 2024 11707 2025 12643 2026 13655 TOTAL 178566 v 82 - 2 8'7