Special tax only intended to help secure lower interest rate, Skinner says

A car passes along McKinley Street in front of the old Gatke property in Warsaw. The city announced plans to rehabilitate the blighted property on Monday. News Now Warsaw photo by Dan Spalding.
By Dan Spalding
News Now Warsaw

WARSAW — Warsaw’s redevelopment commission took a precautionary step involving a new special tax that officials say with confidence it will not be enacted.

The special tax is one of several backup plans put in place by the commission as part of a financing plan for the$20 million Gatke redevelopment project 

The bond issue for the project is not to exceed $3 million for a period of not more than 25 years.

Jeremy Skinner,  Director of Community & Economic Development for Warsaw said the plan is an effort by the city to established a series of back-up plans to cover the bond and secure a lower interest rate.

 If the city ran into trouble and coud not cover the bond payment, a second backup would come from the developer who will include a guarantee.

“If that falls short, then your EDIT is your third back up. If that falls short, then they have the ability to issue a tax to cover any shortfalls,” Skinner said.

But at the same time, Skinner said the city could turn to other funds rather than a special tax.

Wording about a tax, he said, is an attempt to help ensure the city gets a lower interest rate on the bond.

Asked if it’s strictly intended to secure a lower interest rate, Skinner replied, “yes.”

A public hearing on the lease between the city of Warsaw Building Corporation and Redevelopment Commission related to the Gatke development project drew no comments from the public Monday.