The City of New Rochelle will soon own the parking facility at New Roc City.
Where now the city pays for a lease on the garage, it will pay off bonds in the amount of $18.7 million with an anticipated savings over 10 years of $4.5 million.
The City Council unanimously passed a resolution at its meeting Tuesday cancelling the current subleases and authorizing city representatives to execute and delivery necessary purchase documents.
The problem was the current letter of credit expired May 12, and the issuer—Bank of New York Mellon—said it would not be renewed.
Finance Commissioner Howard Rattner said the city had to find another AA or AAA bank that will issue a replacement letter of credit.
If that couldn't happen, the city would be liable for a mandatory payment of $18.7 million, something the city would not have been able to do.
Rattner said the city could then issue general obligation bonds to purchase the garage at a lower rate of interest than it is currently paying, which is 7.25 percent.
He originally estimated an interest rate between 4 and 5 percent and a savings of $4 million.
Rattner said he was able to secure an interest rate of 3.93 percent with an additional $500,000 saving to the city.