Pursuant to Internal Revenue Service Notice 2009-50, the City was allocated $26,831,000 of Recovery Zone Facility Bond authority and Yellowstone County has allocated its $9,973,000 of Recovery Zone Facility Bond authority to the City for a total of $36,804,000. Zootist Hospitality LLC has submitted an application for $20,000,000 to renovate the Northern Hotel. The application meets the requirements of the City’s Resolution NO. 09-18890, establishing the criteria for financing as Recovery Zone Facility Bonds.

The Council may:

• Approve the application and inducement resolution; or
• Not approve the application and inducement resolution.

The City received $1,000 with the application and will receive another $4,000 after bond closing. Zootist Hospitality LLC will also be responsible for all costs incurred by the City’s Bond Counsel. The Recovery Zone Facility Bonds will be special limited obligations of the City, payable solely from the Loan repayments of the Borrower and other security provided by the Borrower and will not give rise to any financial obligation of the City. Neither the City’s credit nor its taxing power will be pledged to the repayment of the Recovery Zone Facility Bonds.

Staff recommends approval of the application and inducement resolution and set a public hearing for January 11, 2010.