FAQ

Q. When and where does the hamilton Community Authority meet?

A. There are no standing meetings for HCA, we meet on an as-needed basis. Future meeting dates and times will be announced here on the HCA website, as well as a formal media notice, digital media notice, flyer posted in the lobby of City Hall, and on the City of Hamilton’s website calendar.

Q. How are the board of trustees decided?

A. The number of Trustees is fixed at 7 members. Three who are Citizen Members to represent the interests of both present and future residents of the Hamilton Community Authority District; one member is to serve as a representative of Local Government; and three who are to serve as Development Members. Each Trustee holds office for a term of two years from the date of their appointment with the exception of two of the initial Citizen Members who will serve an additional year in order to provide some overlapping members for the next round of trustees. All members are approved by City Council.

Q. Why did the City of Hamilton sell 345 High Street to the HCA?

A. Rather than having the City take out long-term debt, Council was asked to use the Council-created Hamilton Community Authority (HCA) to issue debt and buy the building from the City. The City will use the proceeds from the proposed building sale to retire the City’s outstanding building debt, to construct a roundabout on Gilmore Road and to pay for capital improvements associated with infrastructure improvements surrounding the Spooky Nook development. The HCA will in-turn use the lease payments from a proposed lease agreement between the City and the Hamilton Community Authority to pay the debt service on the bonds. Under the lease, the City will remain responsible for maintenance on the building. There will be no noticeable difference on the day-to-day operations of the building. 

The concept of a sales-leaseback transaction is not new and public entities such as St. Louis, Missouri, Oakland, California and Akron, Ohio have participated in these types of transaction.

Q. How was selling the building be different than the current ownership structure?

A. It was a legal transfer of ownership and a deed to the HCA effectuated the transfer; however the City signed a lease with the HCA for an aggregate term not to exceed thirty years, and continues to occupy a portion of the building at 345 High St. Maintenance duties remain the responsibility of the City and City employees continue to perform maintenance duties. No City jobs were impacted and no one that currently sublets from the City at 345 High St were impacted.

Q. What happens when the lease is up on 345 high street?

A. The City has options at or before lease termination to repurchase the building or enter into a new lease:

● Beginning approximately seven years after the issuance of the HCA bonds, and every year thereafter, the City will have the option to terminate the Lease and optionally redeem, or provide for the optional redemption of, the bonds.

● Upon redemption of the bonds, the City will have the option to repurchase the building at fair market value.

● Upon redemption of the Bonds, the City could enter into another lease with the HCA or repurchase the building upon mutually agreeable terms.

● If the HCA is dissolved, City Council could pass a resolution requiring that the HCA’s property be transferred to the City.

Ultimately, the City has the right to retain the asset.

Q. Why did the City propose to sell the building to the HCA as opposed to selling it to a private developer and doing a sale-leaseback?

A. The City discussed this option with multiple entities specializing in sale-leasebacks of commercial property; however, the proposed City lease rate would not have provided sufficient return on investment for a private investor due to the assessment of approximately $350,000 of annual property taxes. Using the HCA allowed the City to enjoy a similar arrangement at a lower cost because the City lease payments need only to cover the HCA’s debt service and HCA ownership will not trigger the imposition of a property tax. Unlike a private investor, the HCA can also issue federally tax-exempt debt, which lowers the HCA’s borrowing costs vs. a private investor, thus lowering the City’s lease rate. In addition, since part of its mission is to assist the City with governmental operations, the HCA’s objectives are more aligned with the City’s objectives than those of a private investor.

Q. How will the sale of the building affect the City’s annual budget?

A. The City currently pays just over $2.1 million dollars a year for debt service and repairs and maintenance on the building. The money is set aside in a separate fund and only used for expenses associated with the building. The only change from the current structure is that the City will now pay a portion of the $2.1 million dollars to the HCA in the form of rental payments.

By selling the building to the HCA, the City was able to avoid issuing long term debt and paying interest on this debt in order to fund the infrastructure projects including projects to support the Spooky Nook development and the roundabout on Gilmore Road. This preserves the City’s legal debt capacity for other initiatives, which is an important consideration in any City financing. However, selling the building will extend the City’s obligation to fund debt service payments related the building from the end of 2026 until potentially 2049.