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OGDEN, Utah (AP) -- The City Council has authorized the mayor to get a $5 million short-term loan to help settle lawsuits over the downtown mall site.
The loan will be repaid with a $20 million long-term loan the city plans to obtain early next month to refinance all debt associated with the downtown mall site and Business Depot Ogden, said Nate Pierce, the city's chief administrative officer.
The loan will settle two lawsuits filed by the Woodbury Corp. in 2002 and 2004 and a lawsuit filed in January by the American and Foreign Insurance Co. against the city and the Ogden Redevelopment Agency.
The lawsuits involve a 1994 real estate deal between the city's previous administration and Woodbury Corp.
The transaction enabled the city to obtain from Woodbury Corp. an office building at the mall site in exchange for an agreement to pay off about $4 million in industrial revenue bond debt the company had incurred for the structure.
The city wanted the Woodbury building to partially house the ZCMI department store to revitalize the downtown mall.
However, when the mall and the Woodbury building were demolished in 2002, Woodbury Corp. filed suit demanding that the bond debt, which had grown to about $6 million due to interest, be paid off immediately.
The city said the bond debts should continue to be repaid through RDA tax increment funds.
Once the settlement is paid, Woodbury Corp. will remove liens that it has on the mall property, paving the way for the development of a proposed high-adventure recreation center and multi-screen cinema at the site.
(Copyright 2005 by The Associated Press. All Rights Reserved.)
