New financing for the Keeler property approved at the March 23 city council meeting will pay off the Keeler family and take some pressure off the city's general fund.
It's at a lower interest rate, too.
The council unanimously agreed to submit a 10-year, $675,050 bond to Cashmere Valley Bank with an interest rate between 3.75 percent and 3.95 percent.
Administrative Services Director Karen Goschen told the council the interest rate was less than the 5 percent the city was paying to the Keeler family.
In April 2008, the city council agreed to buy 35 acres of former farmland on U.S. Highway 101 just east of Simdars Road that are adjacent to 10 acres of land donated by the Keeler family.
The council had agreed to pay the Keeler family $806,610 over five years with a 5-percent interest rate and $200,000 annual payments through March 31, 2012.
Now instead of a $200,000 annual payment due on March 31 through 2012, the city will have two interest-only payments on June 1 and Dec. 1 totalling $17,850.
Then the city will have semiannual payments totalling $82,368 for 10 years until Dec. 1, 2019.
Goschen said the city had planned to use park impact fees, "real estate excise tax" fees or some other funding to make loan payments to the Keeler family rather than relying upon the heavily-used $7.8 million general fund.
A slowdown in development has reduced income from those fees though, so the lower semiannual payments for this "direct placement bond" will reduce pressure on the city's general fund, she said.
In addition to the property's purchase cost, it also could require as much as $1.2 million in improvements to make it available for use as a park, including a road extension, utility extension and restrooms, parking lot and storm water control, signs and a trail system.
Reach Brian Gawley at firstname.lastname@example.org.
The Sequim Gazette is located at 147 W. Washington Street in Sequim.
Business hours are Monday through Friday from 8:30 a.m. to 5:00 p.m. Phone 360-683-3311, or toll free at 800-829-5810. FAX 360-683-6670.
For a complete company directory with contact information please click HERE.