After negotiations lasted until the wee hours of the morning, the city today filed its proposed agreement with bond insurer Financial Guaranty Insurance Co. in the bankruptcy case. The full document is below. Here are a few highlights:
*A development agreement would mean FGIC or its developer partner would build “mixed-use facility” on the site of Joe Louis Arena after it is torn down in 2017. The development would include at least 300 hotel rooms and office, retail, commercial and residential space. Buildings would not be higher than 30 floors.
*Detroit Emergency Manager Kevyn Orr will ask the city council to approve the deal by early next week. If the council doesn’t approve it, Orr could ask the State Emergency Loan Board for approval.
*The agreement means the city’s litigation challenging the legality of a 2005 pension funding deal is dropped.
*The city will demolish “the Joe” and remediate the site. The state will pay $6 million toward those cots and expenses.
*The state will reimburse the developer up to $4 million in incentives from the Michigan Strategic Fund, in cooperation with the Michigan Economic Development Corp. and $14 million from the Michigan Strategic Fund’s Brownfield Tax Increment Financing Program.
*The city will change the zoning on the site to permit a mixed-use development. The city will approve the site plans.
* To settle FGIC’s debt on the interest rate swap deal for pension funds, FGIC will receive $39.7 million, partially in B notes already in the city’s Plan of Adjustment, partially in money from the Downtown Detroit Development Authority. Another $4.5 million paid to FGIC will come from other funds in the swap claim.
*FGIC will receive about $67.2 million in new C notes. Bond insurer Syncora, in a deal announced last month, received about $23.5 million in those funds. City attorney Corrine Ball said the C note payments represented the relative share of each insurer’s claim in the pension fund insurance: Syncora at about $400 million, FGIC at about $1.1 billion.
*About $19.7 million in “settlement credits,” also offered to Syncora, will be available for FGIC to use as vouchers toward future purchases of city assets. The funds could be used toward 50 percent of any purchase price.