Mashpee Tribal Chairman Cedric Cromwell answers questions at the Council Meeting at Taunton High School recently.
Taunton casino agreement includes bonding mechanism
Taunton —
The terms of the casino agreement between the city and the Mashpee Wampanoag tribe would allow the tribe and its financial partners to fund infrastructure improvements by using the ability of the city or a state agency to issue special revenue bonds and access interest rates lower than what would typically be available commercially.
“What it’s designed to do is allow the tribe’s financial partner to use its credit to put up a special revenue bond,” explained Attorney Michael Schaller of Chicago-based Shefsky & Froelich, the firm that is serving as Taunton’s legal consultant on casino matters.
The arrangement also allows for the city to include $15 million in projects not directly related to the casino in the bond, Schaller said Friday.
Mayor Thomas Hoye Jr. and Mashpee Wampanoag Chairman Cedric Cromwell announced Thursday that they had reached an intergovernmental agreement that would see the tribe pay millions to the city for agreeing to host a tribal casino. The tribe said it would pay Taunton approximately $33 million in mitigation payments up front, $4.79 million in additional annual mitigation payments and at least $8 million per year in slot machine payments.
The section of the intergovernmental agreement pertaining to bonding states that the “Tribe shall pay, or cause to be paid, the principal, interest and issuance costs of bonds issued to finance the One-Time Payment Costs and Traffic Mitigation Costs,” the section reads, in part.
“The key is that the tribe would be fully responsible for paying the portion of the bond for paying those onetime payments,” said Schaller, who has worked on several other intergovernmental agreements and casino industry issues for other clients.
If bonds are used for additional city infrastructure improvements not related to the casino, the city would pay that portion.
“It allows us to borrow against future casino revenues if we want to …” City Solicitor Jason Buffington said. “There’s some bonded costs and other city infrastructure costs. Generally speaking, some of the mitigation costs would be bonded by the city but backed by a letter of credit or guaranty by the tribe or its financial partner.”
Requiring a letter or guaranty protects the city in the vent of a default, Buffington added.
“It gives us the opportunity to get more work done at a lower interest rate,” Hoye said. “Our legal counsel reviewed everything, and our bond counsel as well. We feel solid about it.”
“What it’s designed to do is allow the tribe’s financial partner to use its credit to put up a special revenue bond,” explained Attorney Michael Schaller of Chicago-based Shefsky & Froelich, the firm that is serving as Taunton’s legal consultant on casino matters.
The arrangement also allows for the city to include $15 million in projects not directly related to the casino in the bond, Schaller said Friday.
Mayor Thomas Hoye Jr. and Mashpee Wampanoag Chairman Cedric Cromwell announced Thursday that they had reached an intergovernmental agreement that would see the tribe pay millions to the city for agreeing to host a tribal casino. The tribe said it would pay Taunton approximately $33 million in mitigation payments up front, $4.79 million in additional annual mitigation payments and at least $8 million per year in slot machine payments.
The section of the intergovernmental agreement pertaining to bonding states that the “Tribe shall pay, or cause to be paid, the principal, interest and issuance costs of bonds issued to finance the One-Time Payment Costs and Traffic Mitigation Costs,” the section reads, in part.
“The key is that the tribe would be fully responsible for paying the portion of the bond for paying those onetime payments,” said Schaller, who has worked on several other intergovernmental agreements and casino industry issues for other clients.
If bonds are used for additional city infrastructure improvements not related to the casino, the city would pay that portion.
“It allows us to borrow against future casino revenues if we want to …” City Solicitor Jason Buffington said. “There’s some bonded costs and other city infrastructure costs. Generally speaking, some of the mitigation costs would be bonded by the city but backed by a letter of credit or guaranty by the tribe or its financial partner.”
Requiring a letter or guaranty protects the city in the vent of a default, Buffington added.
“It gives us the opportunity to get more work done at a lower interest rate,” Hoye said. “Our legal counsel reviewed everything, and our bond counsel as well. We feel solid about it.”
The terms of the casino agreement between the city and the Mashpee Wampanoag tribe would allow the tribe and its financial partners to fund infrastructure improvements by using the ability of the city or a state agency to issue special revenue bonds and access interest rates lower than what would typically be available commercially.
“What it’s designed to do is allow the tribe’s financial partner to use its credit to put up a special revenue bond,” explained Attorney Michael Schaller of Chicago-based Shefsky & Froelich, the firm that is serving as Taunton’s legal consultant on casino matters.
The arrangement also allows for the city to include $15 million in projects not directly related to the casino in the bond, Schaller said Friday.
Mayor Thomas Hoye Jr. and Mashpee Wampanoag Chairman Cedric Cromwell announced Thursday that they had reached an intergovernmental agreement that would see the tribe pay millions to the city for agreeing to host a tribal casino. The tribe said it would pay Taunton approximately $33 million in mitigation payments up front, $4.79 million in additional annual mitigation payments and at least $8 million per year in slot machine payments.
The section of the intergovernmental agreement pertaining to bonding states that the “Tribe shall pay, or cause to be paid, the principal, interest and issuance costs of bonds issued to finance the One-Time Payment Costs and Traffic Mitigation Costs,” the section reads, in part.
“The key is that the tribe would be fully responsible for paying the portion of the bond for paying those onetime payments,” said Schaller, who has worked on several other intergovernmental agreements and casino industry issues for other clients.
If bonds are used for additional city infrastructure improvements not related to the casino, the city would pay that portion.
“It allows us to borrow against future casino revenues if we want to …” City Solicitor Jason Buffington said. “There’s some bonded costs and other city infrastructure costs. Generally speaking, some of the mitigation costs would be bonded by the city but backed by a letter of credit or guaranty by the tribe or its financial partner.”
Requiring a letter or guaranty protects the city in the vent of a default, Buffington added.
“It gives us the opportunity to get more work done at a lower interest rate,” Hoye said. “Our legal counsel reviewed everything, and our bond counsel as well. We feel solid about it.”
Schaller said that it is unlikely that the city would issue a special revenue bond. It would be far more common, he said, for a state agency to issue such a bond. The arrangement also does not mean that the tribe is borrowing from the city or bond issuer.
“This allows for tax-exempt financing,” he said. “The tribe is not borrowing from the city, absolutely not.”
The tribe is partnered with casino developer Arkana Limited, a privately held company wholly owned by the Malaysia-based Lim Family Trust. Trust member PK Lim serves as president and CEO of casino and resort developer Genting Berhad, a publicly held company of which Lim has majority control.
Schaller said that it is unlikely that the city would issue a special revenue bond. It would be far more common, he said, for a state agency to issue such a bond. The arrangement also does not mean that the tribe is borrowing from the city or bond issuer.
“This allows for tax-exempt financing,” he said. “The tribe is not borrowing from the city, absolutely not.”
The tribe is partnered with casino developer Arkana Limited, a privately held company wholly owned by the Malaysia-based Lim Family Trust. Trust member PK Lim serves as president and CEO of casino and resort developer Genting Berhad, a publicly held company of which Lim has majority control.
Read more: http://www.tauntongazette.com/news/x1832932643/Taunton-casino-agreement-includes-bonding-mechanism#ixzz1vJv4iOPf
“What it’s designed to do is allow the tribe’s financial partner to use its credit to put up a special revenue bond,” explained Attorney Michael Schaller of Chicago-based Shefsky & Froelich, the firm that is serving as Taunton’s legal consultant on casino matters.
The arrangement also allows for the city to include $15 million in projects not directly related to the casino in the bond, Schaller said Friday.
Mayor Thomas Hoye Jr. and Mashpee Wampanoag Chairman Cedric Cromwell announced Thursday that they had reached an intergovernmental agreement that would see the tribe pay millions to the city for agreeing to host a tribal casino. The tribe said it would pay Taunton approximately $33 million in mitigation payments up front, $4.79 million in additional annual mitigation payments and at least $8 million per year in slot machine payments.
The section of the intergovernmental agreement pertaining to bonding states that the “Tribe shall pay, or cause to be paid, the principal, interest and issuance costs of bonds issued to finance the One-Time Payment Costs and Traffic Mitigation Costs,” the section reads, in part.
“The key is that the tribe would be fully responsible for paying the portion of the bond for paying those onetime payments,” said Schaller, who has worked on several other intergovernmental agreements and casino industry issues for other clients.
If bonds are used for additional city infrastructure improvements not related to the casino, the city would pay that portion.
“It allows us to borrow against future casino revenues if we want to …” City Solicitor Jason Buffington said. “There’s some bonded costs and other city infrastructure costs. Generally speaking, some of the mitigation costs would be bonded by the city but backed by a letter of credit or guaranty by the tribe or its financial partner.”
Requiring a letter or guaranty protects the city in the vent of a default, Buffington added.
“It gives us the opportunity to get more work done at a lower interest rate,” Hoye said. “Our legal counsel reviewed everything, and our bond counsel as well. We feel solid about it.”
Schaller said that it is unlikely that the city would issue a special revenue bond. It would be far more common, he said, for a state agency to issue such a bond. The arrangement also does not mean that the tribe is borrowing from the city or bond issuer.
“This allows for tax-exempt financing,” he said. “The tribe is not borrowing from the city, absolutely not.”
The tribe is partnered with casino developer Arkana Limited, a privately held company wholly owned by the Malaysia-based Lim Family Trust. Trust member PK Lim serves as president and CEO of casino and resort developer Genting Berhad, a publicly held company of which Lim has majority control.
Schaller said that it is unlikely that the city would issue a special revenue bond. It would be far more common, he said, for a state agency to issue such a bond. The arrangement also does not mean that the tribe is borrowing from the city or bond issuer.
“This allows for tax-exempt financing,” he said. “The tribe is not borrowing from the city, absolutely not.”
The tribe is partnered with casino developer Arkana Limited, a privately held company wholly owned by the Malaysia-based Lim Family Trust. Trust member PK Lim serves as president and CEO of casino and resort developer Genting Berhad, a publicly held company of which Lim has majority control.
Read more: http://www.tauntongazette.com/news/x1832932643/Taunton-casino-agreement-includes-bonding-mechanism#ixzz1vJv4iOPf
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