Jerome Prince
Prince gets new deal on sale-leaseback proposal
Contributed By:The 411 News
Bond investors agree to his terms for loan on Gary Public Safety Facility
Now that incoming Gary Mayor Jerome Prince has arranged a new deal on the sale leaseback of the Gary Public Safety Facility, Mayor Karen Freeman-Wilson can sleep easier. At the close of a recent city council meeting, Freeman-Wilson said, “What I don’t want to see come January are headlines saying Gary employees miss a paycheck.”
Prince said the sale-leaseback bond investor Preston Hollow agreed to revise the deal according to his specifications.
Prince said he secured a coupon interest rate of 5.25% down from 6%, saving the City of Gary $4,486,000 from the original agreement negotiated by the Freeman-Wilson Administration. “My tough stance has made the sale leaseback a better arrangement, and I accept it as a short-term fix to Gary’s financial crisis.”
Following his win over Freeman-Wilson in May’s Democratic Primary, Prince called it “a bad deal for the city” and said he would not support the sale-leaseback as written. The bond investors in the proposed deal sought Prince’s approval of the transaction.
In early summer, Mayor Freeman-Wilson was ready to close on her plan to gain $35 million in cash with the public safety facility as collateral. The pain was in the terms. The city would be paying back nearly as much as it was borrowing.
Without the loan, Freeman-Wilson said the city would be broke at year’s end and the incoming administration would not be able to pay salaries and vendors.
The sale-leaseback proposal originated in 2018 and gained the city council’s approval, but had lain dormant. Better interest rates in 2019, the mayor said, was the reason for its revival.
Mayor Freeman-Wilson said she would like to have the loan closed by November 30.
Story Posted:10/14/2019
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