The City Council on Tuesday approved a plan to refinance a construction loan on two parking garages at the Hilton Hotel that have been the subject of a legal dispute between the city and hotel owners.
City officials said refinancing the $54-million loan at lower interest rates will save $625,000 a year for the next 26 years.
The city has sued the hotel owners over who should pay for the garages. In a 1982 agreement, the city borrowed to pay for building the garages, with the expectation that the owners would assume loan payments. But after a dispute arose with the new owners, the Anaheim Hotel Partnership, over repayment of the loan, the city assumed responsibility for the debt.
Since 1985, the city has made annual loan payments of $6 million. City officials said the payments are partly to blame for an $8-million shortfall in the city's 1987-88 budget.
Under the new refinancing, the city will not have to make the $3.3-million loan payment due Aug. 1 and will recover the $2.9-million payment it made in February.