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Posted on: December 1, 2020

ELBRA Reduces Limited Obligation Debt Service by $2.3 Million by Refunding Bonds

EAST LANSING, Mich. — Today, the East Lansing Brownfield Redevelopment Authority (ELBRA), a component unit of the City of East Lansing, announced the refunding of bonds issued in 2017 to finance the public infrastructure and City parking garage portions of the Center City District redevelopment project.

The bonds are serviced only through the tax increment revenues created by the project, with no other revenues or guarantees pledged by ELBRA or the City of East Lansing. Completed in May 2020, this project replaced existing buildings along Grand River Avenue and a City surface lot with two mixed-use buildings, including retail, restaurants, apartments and a parking structure.

The refunding will reduce the obligation of the ELBRA by more than $2.3 million in net present value (NPV) savings. NPV is generally considered the industry standard in that it reflects the cashflow savings over the term of the financing in today’s dollars. It also reduces the current rate of 5 percent. The total issuance of approximately $29.5 million will be split between the tax exempt and taxable bonds for a blended rate of 4.2 percent. The term of the bonds is 30 years, in alignment with the brownfield plan.

“We are pleased that we were able to find a savings for this project while still protecting the ELBRA and City from any additional guarantees beyond the tax increment created by the project,” said ELBRA Chairperson Peter Dewan. “We appreciate the guidance of our legal and financial experts in making this happen.”

The ELBRA was represented by Miller, Canfield, Paddock, and Stone, P.L.C. as bond counsel and PFM Financial Advisors LLC as municipal advisor.

More information about the project and refunding is available at https://www.cityofeastlansing.com/2129/Center-City-Project---2020-Refunding-of-.

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