LONGMONT - The Longmont City Council on Friday morning voted 6-1 to use a financing tool that uses city property as collateral to come up with its part of the funds in a public-private partnership to help develop the Village at the Peaks, a retail area that will replace the blighted Twin Peaks Mall.

The financing tool, called a certificate of participation, will raise approximately $31 million, of which the city will use $27.5 million to reimburse developer NewMark Merrill Mountain States of Fort Collins disbursed over time when certain milestones in the $89.3 million project are reached.

The remainder will be used to cover costs incurred by the Longmont Urban Renewal Authority and repayment costs in 2014 and 2015 before revenue is expected to be generated from the project. The city will repay the bulk of the debt through tax-increment financing, sales-tax revenue generated by businesses in the project area.

The vote had been tabled at a council meeting Tuesday night because mayor Dennis Coombs was not in attendance.

Councilwoman Polly Christensen was the lone dissenting vote.

"I will not vote for this, on behalf of the citizens who are unhappy with this."

About a half dozen residents expressed their displeasure Friday about how the city is financing its end of the deal by using four city buildings as collateral to raise the money.

The certificate of participation, or COP, involves the sale of the Safety & Justice Center, the civic center complex, the library and the Development Services Center to a trustee to be held as collateral on the financing, according to a city document.

An underwriter, Piper Jaffray, will purchase the COP from the city in return for the COP proceeds to be used for the redevelopment project and associated costs. The underwriter then markets the COP in individual denominations of $5,000 or greater as with a traditional municipal bond.

The city will repay the financing over a period of 23 years through 2037, at which time the city will regain the titles to the buildings, according to city finance director Jim Golden.

Former Longmont city councilor Karen Benker spoke during the public hearing portion of the meeting and urged the council to table the vote and rethink the process.

"What you are about to do is crazy," she said. "Mortgaging city buildings is wrong. ... Development should be paying its own way. ... This is your last chance to make it right."

Citizens' comments ranged from criticizing the council for getting involved in the financing of the project to what they perceived as a lack of transparency about using city property as collateral to wondering how the city has protected itself in case the project falters or the economy hits a snag.

"We found a good partner in NewMark Merrill," said councilwoman Bonnie Finley. "The project will eliminate blight and generate income to do things in the future."

Allen Ginsborg, managing director and principal of NewMark Merrill Mountain States, told the council, "This is a great step to make this become a reality. You will not be disappointed. We will not fail."

He said demolition has begun on the Twin Peaks Mall.