In 2006, the City entered into a Lease Purchase Agreement for the Park 2 garage expansion with Koch Financial. The City borrowed $5,930,00 at 5.48% for 20 years. Since that time Capital One Public Funding, LLC has been assigned the lease with the same terms.  

To help Parking reduce the financial strain of the annual debt service payment, the City will apply $2.62 million from the sale of Park 4 to retire a portion of the debt, and Capital One has agreed to lower the interest rate to 4.45% and extend the term of the lease to 20 years. 

The City Council may:

• Approve the resolution
• Disapprove the resolution and request staff to find an alternate plan to reduce the debt service payment 

By paying down the principal amount owed, lowering the interest rate, and increasing the length of the agreement, the debt service payment will be $201,961.  This will reduce the annual paymenet by $293,435.
 
There will be no addtitional cost to the City for the refinancing by Capital One as their fee is built into the interest rate.  

Staff recommends that City Council approve the resolution for refinancing Park 2 debt.