LANSING, MI – The Lansing City Council has approved a plan to let a local developer borrow $31 million to build a new parking ramp downtown.
Chrisman Company is using bonds issued through Lansing's Economic Development Corporation to build a ramp for the Accident Fund Insurance Company's new headquarters. Bob Trezise is president of the EDC. He says the developer originally planned on using federal stimulus bonds.
"There was a technical switch from the type of bond we're using," Trezise says. "We're no longer using the American Recovery Act bonds, we're using EDC bonds. Those were tax exempt, these are taxable. Beyond that there's really no difference."
Councilmember Brian Jeffries says the new bonding plan will still protect the city from liability. He says no city tax dollars will be used for the ramp.
"All of the costs associated with putting the bonds out on the market and any of the attorney fees for example that would be required will all be paid for by the developer," Jeffries says.
The Chrisman Company is essentially backing its own bonds by putting up $31 million as collateral. The company can't spend cash on the ramp since the state Office of Financial and Insurance Regulation capped spending on the $182 million Accident Fund project at $137 million.