TO: Mayor and City Council
FROM: Kevin Sing, Director of Finance
SUBJECT:
title
Ordinance Authorizing the Execution of an Intergovernmental Loan Agreement with the Will County Exposition and Auditorium Authority (Rialto Square Theatre)
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BACKGROUND:
The City has been providing annual funding to the Rialto Square Theatre since 1980. The Rialto Square Theatre is a regional destination and economic driver for Joliet's downtown area. The Rialto Square Theatre began a substantial capital repair program in recent years including restoration of the floors, restrooms that increased the number of facilities, roof repairs, and repairs to the masonry. The cost of these projects was in excess of $5 million. The project slated for 2026 is the replacement of HVAC system for the theatre. This over $9M project is being funded with nearly $6.9M in grants and has a current funding shortfall. The Rialto intended to use reserve funds for the shortfall, however those funds were expended during their recent asbestos abatement. The Rialto is seeking reimbursement from the contractor for the funded money they expended as a result of the abatement.
To keep the project on schedule and avoid a failure of the HVAC system, the Rialto is requesting a short-term loan from the City of Joliet. The loan terms are:
Amount: $2,500,000
Loan Type: Line of Credit. Rialto to submit draws not earlier than monthly. Contractor invoices being funded to accompany draw requests.
Term: Loan to be paid from the reimbursement of asbestos costs or 6 years whichever is earlier. If loan has a balance when insurance claim proceeds are received, proceeds to be paid to City within 45 days of receipt to be applied to loan balance.
Interest Rate: Based on the 06-00 (6 year-0 month) Treasury Direct SLGS rate as of the date of execution of loan agreement.
Repayment: Asbestos cost reimbursement and/or annual balance forgiveness in the amount of $475,000 annually
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