Trailblazer moves forward on Wright County facility

The Trailblazer Transit Joint Powers Board took steps Thursday that will hopefully lead to financing for a new facility in Buffalo to serve its Wright County riders.
Trailblazer Executive Director Gary Ludwig said that trying to secure funding has been, well, trying.
The Buffalo Housing and Redevelopment Authority has offered to issue bonds to build the facility, which would be a virtual duplicate of Trailblazer’s Glencoe building, and then transfer ownership to Trailblazer through a lease-to-own agreement over a number of years.
Ludwig said the agreement is unique, and is causing some issues in trying to get funding through traditional means.
The proposal, Ludwig said, “has no money down, no collateral and is counting on money that is coming in on a year-to-year basis.”
Once the building is constructed, Ludwig said, that will be considered the collateral to secure future bond payments, but will not help with upfront financing.
Ludwig said that after trying to get conventional bank financing and then financing on a “more national approach,” the housing authority’s financial agent, Ehlers, has partnered with Dougherty Financial Group to try and secure financing.
“Dougherty is very excited about this, very optimistic, and thinks we have a good, solid plan here,” said Ludwig.
The Joint Powers Board reviewed lengthy legal and financial documents regarding the financing, one a lease agreement between Trailblazer and the Buffalo Housing Authority, and the other regarding the joint Ehlers-Dougherty financial effort.
Attorney Melissa Manderscheid reviewed the lease agreement, noting it was unique in that the Buffalo Housing Authority was acting as the “conduit” for erecting the building and obtaining financing.
Because of the unique situation, Manderscheid said, the lease needs to be executed before financing is obtained, because repayment of a bond or loan is contingent on Trailblazer making lease payments.
The Buffalo Housing Authority “doesn’t really have a lot of skin in the game, they’re just the conduit,” said Manderscheid. “This shifts a lot of the risk to the tenant (Trailblazer).”

For more, see the Feb. 25 print edition of The Chronicle.