The Fresno City Council passed a resolution Thursday that clears a path for paying off defaulted loans to the Fresno Metropolitan Museum and the Granite Park sports complex.
The city guaranteed both loans and is now being forced to make good on them -- $15 million for the museum, paid in July, and about $5 million due next week for Granite Park in east-central Fresno.
Thursday's action met a tax law deadline for declaring that those outlays will be converted to long-term bond debt.
Officials told the council that payments are expected to be about $1.7 million per year for 20 years.
The city is borrowing money from its internal funds until it can float long-term bonds.
The Fresno City Council on Thursday cleared a path toward paying off defaulted loans to the Fresno Metropolitan Museum, above, and the Granite Park sports complex.
But city staff said the internal funds must be repaid by June 30, 2010, or the city's AA- credit rating could be jeopardized and it might not have enough cash to repay a short-term line of credit.
After months of tough talk, the city this summer essentially acknowledged that it had little leverage and cut an expensive deal with the insolvent Fresno Metropolitan Museum.
Taxpayers paid off the $15 million defaulted bank loan that the city had guaranteed, took possession of property that The Met couldn't use anyway, left museum officials in control of operations, then gave The Met a huge rent break on the now city-owned museum building.
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