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Originally Posted by LMich
I'm still not getting the issue about the bonds, though, and what they mean by tax advantaged. Someone want to hash out this legalese for me?
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I think what it basically means is that those federal bonds are either (a) completely exempt from taxes, (b) exempt from taxes on the interest portion only, or (c) tax-deferred in one of several ways. But only if the city complies with the rules of the issued bonds, like the one that no more than 10% of the funds can go towards the private portion of the development (i.e. the tower above the public parking garage). The city has verified that less than 10% of the $50 million invested in the parking garage was related to the planned future development (in the form of stronger footings and foundations that otherwise would not have been required if nothing ever went atop it). If it was somehow determined that this structural reinforcing, etc. equated to more than 10%, I don't think it means the bonds are called by the issuer, but it means the issuer will be penalized and owe more money in the end, because the bonds becoming taxable. Not something that the city wants to have happen.
Bond work is tricky in general.