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  Retirement in Sight?
Dave Druker | 10th Street

 

The Shores Property.  Photo Virginia Lawrence

A public hearing to sell city-owned property on Balboa Avenue to help retire the Del Mar Shores Property loan, due October 2011, will be on the City Council agenda June 14.

On May 22, 2008, the City of Del Mar officially purchased the Del Mar Shores School Property. This important purchase provides that City with a park and continued use by a school facility. The purchase price was $8,500,000. The Friends of the Park were able to raise approximately $5,000,000 including a significant contribution from The Winston School. To complete the purchase, the City borrowed approximately $3,500,000 on a short-term basis, with a commitment from the Friends that their fundraising would assist with the interest and principal payments until a long-term solution could be found to fund the rest of the amount due. The loan is due in October 2011.

The actual loan amount is $3,527,810 with an interest rate of 1.9886% through November 2011. The original loan was taken out in November 2008. Fortunately for Del Mar, interest rates continue at historic lows. Interest payments of approximately $18,000 are made quarterly. Through February 2010 approximately $134,000 of interest has been paid. Principal payments of approximately $47,000 are also made on a quarterly basis (a different month of the quarter). Through March 2010 approximately $235,000 of principal has been paid. So a total of $369,000 has been paid against the loan.

Between November 2008 and March 2010, the Friends have raised $271,000. A private contribution of $5,000 has also been received by the City. The City has had to make up a difference of $93,000. Fortunately, for the City both the Powerhouse lease back and the library lease back have been paid off. These funds are available to pay for the loan on a short term basis. Unfortunately, the city’s revenues have been reduced do to state take-aways and the continuing slow economy that has reduced sales tax and hotel tax.

In addition to selling the Balboa property the City has the following additional options to complete the retirement: 1) renegotiate or extend the loan, 2) pursue a lease revenue bond or 3) have a vote on a general obligation bond. To date no decision has been made as how to proceed. The Del Mar Union School District though has asked to extend their lease of the district offices for at least one more year and this lease provides the city with approximately $30,000 per year.

 

 
 

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