Development Team Meeting Notes (96-99)

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~ ~ Courthouse Square Project Interview Panel Planning Session June 4, 1996 Ralph Schwartzman, Saba Jim McGregor, SABA Mark Hudsbeth, US Bank Nancy McClain, US Bank Discussion: Maynard was introduced as an expert on COP fmancing General obligation bonds revenue bonds COPs Each can be t~ exempt or t~able. There is no such thing, evidence of participation in a stream of income. Lots of COPs, general obligations, full faith in credit to back up the debt. Revenue is pledging a certain stream of revenue to back up debt. No general obligation, or revenue pledge, do not have to go to vote, because there is a walk away prevision. They are not binding successive governing bodies to honor that COP. Since it is not binding, does not require vote, does not meet the test of being legally binding. Rating agencies rate them and consider them an obligation. If you walk away you ruin your credit rating. There have been problems where one government enters into these obligations and the next government walks away. Rating agencies notice this. If they are ta~c exempt, they are subject to the same provisions in the governing code, the market will want to know what it is for, how the organization plans to keep the obligation, and how they will pay it. That puts a lot of burden on a brand new building, space. To be tax exempt there are very specific things those things can finance, retail is not one of those things. These things need to be looked at and rated on their merit by a bonds expert. When you start introducing private space you start running into problems. You can have about 10 percent private space in a tax exempt office. There are certain types of tax exempt bonds, but most do not apply to retail space. In its structure it is a lease purchase agreement, typically sold by a government entity and as a public ~ offering. If you private or broker lease purchase agreement, that is not a public offering.