New Southern California Resort Receives LIBOR-Based Loan
City of Rancho Palos Verdes makes deal with Terranea Resort to ensure its opening

June 4, 2009

According to the Los Angeles Times, Terranea Resort, a new $480 million resort, has received a loan from the city of Rancho Palos Verdes to ensure its scheduled June opening. Rancho Palos Verdes is a seaside community in the greater Los Angeles area. The new resort will occupy a 102-acre site where Marineland of the Pacific, an ocean-themed amusement park, once stood. Cost of funds for the city loan is pegged to the 3-Month Dollar LIBOR.

Under the agreement, Terranea Resort’s owner Lowe Enterprises will be able to defer payment of its hotel tax for 27 months or until it has collected $8 million under the deferment, whichever comes first. The loan is repayable in four years at LIBOR plus 8%. Lowe can delay repayment for an additional year in exchange for a higher LIBOR-based interest rate.