6. HRSR 08-02-2010ITEM # 6.
of
MEMORANDUM
V~~`
TO: Housing and Redevelopment Authority
FROM: Tim Simon, Finance Director
DATE: August 2, 2010
SUBJECT: Downtown Buildings Contract for Deed
The HRA entered into a contract for deed for the purchase of the 716 & 720 Main St.
buildings back in 2007. The final maturity of the loan is 01/15/2012. The loan carries an
interest rate of 6.0 percent. The contract for deed allows prepayment at anytime with no
penalties.
Given the cash balance in the HRA which is currently $628,572 as of 06/30/2010 and the
internal rate of return on our investments 1.72% as of 06/30/2010 it would make sense to
visit the issue of prepaying the remaining balance. The amount left to retire would be
principle of $165,405.27 and depending on when the final disbursement could be made you
would have a couple months of accrued interest.
If the HRA is considering this prepayment, I would recommend that you direct staff to work
with the HRA attorney to start the process of calling the outstanding debt.
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