Councilmember Bob Overbeck voted against the motion, with Mayor Karen Weitkunat abstaining from the mall discussion, citing conflict of interest.
The modification would allow Alberta Development Partners LLC, the Denver-based company in charge of redeveloping the mall, to issue $71 million in nonrated bonds sooner, an important matter as the deadline for issuing the bonds approaches.
The agreement between the city and Alberta can be terminated if the bonds are not issued by June 30, according to Josh Birks, economic health director for the city. The bonds are projected to include an interest rate around 7 percent, Birks said, but the precise interest rate will not be known until the bonds are issued.
The modification relates to the amount of space that must be leased before the bonds can be issued. In the original agreement, the developer was required to have signed leases on 240,000 square feet before the bonds could be issued. The modification would allow the developer to issue bonds with to 155,000 square feet leased, according to a presentation by Fort Collins CFO Mike Beckstead.
Additionally, the developer would decrease the total square footage occupied by tenants new to Fort Collins from the previously agreed-upon 120,000 square feet to 90,000.
The agenda item also states that if the requested alterations are made, only $23 million of the $53 million in bond proceeds would be released to the project. The remaining $30 million would be released in segments to the project as additional leases are executed by the developer.
Approving the changes to the agreement poses no additional risk to the city and will not result in additional financial gain for the developer, according to Beckstead. Alberta currently has about 90,000 square feet of space in the new mall leased, according to the document, and expects to have 195,000 square feet leased by the end of May.
Robby Schwindt of Walton Street Capital, the Chicago-based equity partner on the project was present at the meeting to speak on behalf of the changes.
If the deadline is missed, leases that have been signed can be terminated and tenants who are in negotiation will push the Foothills project back on their priority list, Swint said.