55-Year Vista Ridge Debt Structure
1. The Total Loan Principal The City of Fairfield has entered into a secured financial agreement for a total principal of $22,000,000 provided by the State Homekey+ program.
According to the Secured Promissory Note, this amount is not forgiven partially every year; it is a fixed lien that remains 100% active against the property for the duration of the term of 55 years
2. Interest Liability Per Section 2.3 of the Development Loan Agreement, the debt carries a 3% annual simple interest rate.
• Accrual, Not Payment: This interest is not paid out of the annual budget; instead, it accrues and is added to the total balance owed.
No Interest Forgiveness: The legal documents contain no language providing for the annual forgiveness or waiver of this interest.
e Financial Growth: This results in an additional $660,000 of debt added to the ledger every year. By the end of the 55-year term, the total liability —principal plus accrued interest —will be $58,300,001.
3. The 55-Year Balloon Payment Under Section 3 of the Note, the entire principal "together with all accrued and unpaid interest" is due and payable on the Maturity Date, which is defined as the 55th anniversary of the agreement. • There is no incremental forgiveness (e.g., 1/55th per year). The city remains liable for the full, non -depreciated amount until the final day of the 55th year.
4. The Acceleration and Default Risk - If tha proJect fails to meet the state's operational �equirements_at�n�r point_— for instance, in Year 15—the state has the authority to initiate an "immediate call" of the debt.
• Section 6 of the Note allows the state to declare the entire unpaid balance (the $22 million principal plus all interest accrued to that date) immediately due and payable in a single lump sum.
• In Year 15, that balloon payment would be approximately $31.9 million.
In year 35, that balloon payment" would be approximately $45.8 million • If we make it to year 55, 2060. We will owe nothing, what a gamble! To summarize for the record: This agreement commits the City of Fairfield, and all of its 120,000 Residents to a 55-year, $58.3 million total liability. It is a deferred -payment obligation where the city is 100% liable for both the full principal and the total accrued
interest until the 55th year is completed, if we make to the end, we owe the state nothing, if it folds, we will owe between $22.6million and $58.3 million.
Citations for Council Reference:
• $22M Principal & 3% Interest: Secured Promissory Note, Section 2. • 55 Year Term & Maturity: Secured Promissory Note, Section 3 and Loan Agreement, Section 2.4.
• /Immediate Call: Secured Promissory Note, Section 6.
TERM
YEAR
PRINCIPAL
ACCRUED INTEREST
TOTAL LIABILITY DUE IF
DEFAULTED
1 2026
$22,000,000
$660,000
$22,660,000
2 2027
$22,000,000
$1,320,000
$23,320,000
3 2028
$22,000,000
$1,980,000
$23,980,000
4 2029
$22,000,000
$2,640,000
$24,640,000
5 2030
$22,000,000
$3,300,000
$25,300,000
6 2031
$22,000,000
$3,960,000
$25,960,000
7 2032
$22,000,000
$4,620,000
$26,620,000
8 2033
$22,000,000
$5,280,000
$27,280,000
9 2034
$22,000,000
$5,940,000
$27,940,000
10 2035
$22,000,000
$6,600,000
$28,600,000
11 2036
$22,000,000
$7,260,000
$29,260,000
12 2037
$22,000,000
$7,920,000
$29,920,000
13 2038
$22,000,000
$8,580,000
$30,580,000
14 2039
$22,000,000
$9,240,000
$31,240,000
15 2040
$22,000,000
$9,900,000
$31,900,000
16 2041
$22,000,000
$10,560,000
$32,560,000
17 2042
$22,000,000
$11,220,000
$33,220,000
18 2043
$22,000,000
$11,880,000
$33,880,000
19 2044
$22,000,000
$12,540,000
$34,540,000
20 2045
$22,000,000
$13,200,000
$35,200,000
21 2046
$22,000,000
$13,860,000
$35,860,000
22 2047
$22,000,000
$14,520,000
$36,520,000
23 2048
$22,000,000
$15,180,000
$37,180,000
24 2049
$22,000,000
$15,840,000
$37,840,000
25 2050
$22,000,000
$16,500,000
$38,500,000
26 2051
$22,000,000
$39,160,000
27 2052
$22,000,000
_$17,160,000
$17,820,000
$39,820,000
28 2053
$22,000,000
$18,480,000
$40,480,000
29 2054
$22,000,000
$19,140,000
$41,140,000
30 2055
$22,000,000
$19,800,000
$41,800,000
31 2056
$22,000,000
$20,460,000
$42,460,000
32 2057
$22,000,000
$21,120,000
$43,120,000
33 2058
$22,000,000
$21,780,000
$43,780,000
34 2059
$22,000,000
$22,440,000
$44,"0,000
35 2060
$22,000,000
$23,100,000
$45,100,000
36 2061
$22,000,000
$23,760,000
$45,760,000
37 2062
$22,000,000
$24,420,000
$46,420,000
38 2063
$22,000,000
$25,080,000
$47,080,000
39 2064
$22,000,000
$25,740,000
$47,740,000
40 2065
$22,000,000
$26,400,000
$48,400,000
41 2066
$22,000,000
$27,060,000
$49,060,000
42 2067
$22,000,000
$27,720,000
$49,720,000
43 2068
$22,000,000
$28,380,000
$50,380,000
44 2069
$22,000,000
$29,040,000
$51,040,000
45 2070
$22,000,000
$29,700,000
$51,700,000
46 2071
$22,000,000
$30,360,000
$52,360,000
47 2072
$22,000,000
$31,020,000
$53,020,000
48 2073
$22,000,000
$31,680,000
$53,680,000
49 2074
$22,000,000
$32,340,000
$54,340,000
50 2075
$22,000,000
$33,000,000
$55,000,000
51 2076
$22,000,000
$33,660,000
$55,660,000
52 2077
$22,000,000
$34,320,000
$56,320,000
53 2078
$22,000,000
$34,980,000
$56,980,000
54 2079
$22,000,000
$35,640,000
$57,640,000