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04/28/2009 Ordinances 9215Ordinance No. 9215 was approved on First Reading at the April 28, 2009 City Council meeting, ORDINANCE NO. 9215 AN ORDINANCE PROVIDING FOR THE PURCHASE AND LEASING OF A BUILDING AND RELATED IMPROVEMENTS TO SERVE AS A RECREATIONAL FACILITY FOR THE CITY OF GRAND ISLAND; AUTHORIZING EXECUTION AND DELIVERY OF A LEASE-PURCHASE AGREEMENT WITH WELLS FARGO BROKERAGE SERVICES, LLC RELATING TO THE CONSTRUCTION AND ACQUISITION OF SAID FACILITY; AUTHORIZING EXECUTION AND DELIVERY OF A RELATED GROUND LEASE AND ESCROW AGREEMENT; APPROVING THE FORMS OF DOCUMENTS WITH RESPECT TO SAID LEASE-PURCHASE AGREEMENT, GROUND LEASE AND ESCROW AGREEMENT; PROVIDING FOR THE APPROVAL OF AN APPRAISAL AND PROVIDING FOR THE PUBLISHING OF THIS ORDINANCE BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF GRAND ISLAND, NEBRASKA (the "City") as follows: Section 1. The Mayor and Council hereby find and determine: that the City is in need of a recreational facility (the "Project") to provide for indoor sporting programs and other indoor recreational activities and to serve as a facility for accommodating activities of the Nebraska State Fair Board (the "Board") upon transfer of State Fair activities to Hall County; that Wells Fargo Brokerage Services, LLC, ("Wells Fargo") has indicated its willingness to act as lessor for the purposes of acquiring, constructing and leasing such Project to the City for such purposes and has offered to enter into aLease-Purchase Agreement (the "Lease") with the City whereby the City may acquire the Project to be built in accordance with specifications approved by the Mayor and Council and provided by the Board, all pursuant to the provisions of Section 19-2421, R.R.S. Neb. 2007; that Hall County Livestock Improvement Association ("Former Park") has agreed to provide a site for the Project under the terms of a Ground Lease (the "Ground Lease") between Former Park as ground lessor and the City and Wells Fargo as lessees; that for purposes of governing the disbursement of funds provided by Wells Fargo in accordance with the Lease, the City, Wells Fargo and Wells Fargo Bank, National Association, (the "Escrow Agent") shall enter into an Escrow Agreement (the "Escrow Agreement"); that the documents necessary for such purposes have been prepared and said documents should be approved and their execution authorized. Section 2. The City of Grand Island shall enter into the Lease (to be dated as determined by the executing officers as of the time of its execution and delivery) with Wells Fargo and whereby Wells Fargo, with the City acting as its agent and contracting for construction and acquisition under a contract or contracts determined upon and awarded by the Board, will construct and acquire the Project in accordance with specifications approved or to be approved by the Mayor and Council of the City (with the schedule of rental payments ("Rental Payments") relating to the leasing and acquisition of the Project to be set forth in an exhibit to the Lease and that the Lease in the form presented at this meeting is hereby approved. Approved as to Formo <i April 27, 2009 City Attorney ORDINANCE NO. 9215 (Cont.) Section 3. The City of Grand Island shall enter into the Ground Lease (to be dated as determined by the executing officers as of the time of its execution and delivery) with Wells Fargo and Former and whereby Wells Fargo and the City shall lease from Former the site for the Project and that the Ground Lease in the form presented at this meeting is hereby approved. Section 4. The City of Grand Island shall enter into the Escrow Agreement (to be dated as determined by the executing officers as of the time of its execution and delivery) with Wells Fargo and the Escrow Agent and whereby amounts deposited by Wells Fargo for payment of construction and acquisition costs of the Project will be held and applied to payment of costs of the Project and that the Escrow Agreement in the form presented at this meeting is hereby approved. Section 5. The City of Grand Island by separate resolution shall approve and enter into contracts for the construction and acquisition of the Project in accordance with terms and directions specified by the Board and in so acting shall be the agent of Wells Fargo such that title to the Project from and after the time of its acquisition shall be and constitute the separate property of Wells Fargo with the City having beneficial ownership under the terms of the Lease and the Ground Lease. Section 6. The Mayor and City Clerk of the City be and they are hereby authorized and directed to execute and deliver on behalf of the City the Lease, the Ground Lease and the Escrow Agreement, including any necessary counterparts, in substantially the form and content as presented to the meeting at which final passage of this Ordinance has occurred, but with such changes or modifications therein as to them seem necessary, desirable or appropriate on behalf of the City; and said Mayor, the City Clerk, the City Finance Director and the City Administrator are further authorized and directed to execute and deliver any other documents or certificates and to do all other things necessary or appropriate in connection with the Lease, the Ground Lease and the Escrow Agreement. Section 6. In connection with the execution and delivery of the Lease, the Ground Lease and the Escrow Agreement, the following determinations and approvals are hereby made by the Mayor and Council: (a) The City hereby declares, as provided in the Lease, that it will take title to the Project when all of the Rental Payments specified in the Lease have been paid in full or otherwise satisfied. (b) The designation in the Escrow Agreement of the City Administratorand/or the City Finance Director to act on behalf of the City in approving disbursements of funds deposited by Wells Fargo under the terms of the Lease and the Escrow Agreement is hereby approved. (c) Prior to the execution and delivery of the Lease, the Ground Lease and the Escrow Agreement, there shall be placed on file with the City ORDINANCE NO. 9215 (Cont.) Clerk an appraisal report for the Project prepared by a certified appraiser in accordance with Section 13-403, R.R.S. Neb. 2007. (d) The Mayor and Council hereby acknowledge that the proposed transfer of the State Fair from Lancaster County to Hall County has been authorized by LB 1116 as enacted by the Second Session (2008) of the One Hundredth Legislature ofthe State ofNebraska ("LB 1116") and that there is currently pending in the District Court of Lancaster County, Nebraska, the case. of ~) (the "Pending Litigation"); that the City is a party to the Pending Litigation but no temporary restraining order, preliminary injunction, permanent injunction or other order restricting action by the City has been entered or is expected to be entered prior to the time (the "Anticipated Commitment Time") when execution and delivery of the Lease, the Ground Lease and the Escrow Agreement are expected to be required in order for construction to be timely completed; that the City's authority to enter into the Lease, the Ground Lease and the Escrow Agreement for the Project as a recreational facility for the benefit of the citizens of Grand Island, independent of the provisions of LB 1116, is not questioned or challenged in the Pending Litigation; that the Pending Litigation will not likely be finally resolved before the Anticipated Commitment Time; and that the Mayor and Council hereby declare the City's intention to proceed with entering into the Lease, the Ground Lease and the Escrow Agreement without respect of the validity of LB 1116 and in order to serve the general governmental purpose of obtaining a recreational facility for the benefit of the City and its citizens. (e) The principal amount for financing to be arranged under the terms of the Lease, the Ground Lease and the Escrow Agreement shall not exceed $5,000,000; the term of the Lease and the financing provided thereby shall not extend beyond ten years from the date of execution and delivery of the Lease and the interest rate relating to the interest component of the Rental Payments shall not exceed six percent per annum. Section 6. The Mayor and Council hereby state that it is the intention of the City that interest on the interest component of the Rental Payments under the Lease shall be excludable from gross income under the federal income tax by virtue of Section 103 of the Internal Revenue Code of 1986, as amended, (the "Code") and the Mayor and Council hereby authorize the Mayor, the City Clerk and the City Treasurer (Finance Director) (or any one of more of them) to take all actions necessary or appropriate to carry out said intention and for obtaining such interest exclusion. The City hereby covenants with Wells Fargo and any permitted assigns of Wells Fargo that it will make no use of the proceeds of said issue, including monies held in any sinking fund for the Rental Payments to be set forth in the Lease-Purchase Agreement which would cause the City's obligation under the Lease to constitute an "arbitrage bond" within the meaning of Section 103 and 148 and other related sections ofthe Code and further covenants to comply with said Sections 103 and 148 and related sections and all applicable regulations thereunder throughout the term of the ORDINANCE NO. 9215 (Cont.) Lease, including all requirements with respect to reporting and payment of rebates, if applicable. The Lease is hereby designated by the City as one of its "qualified tax-exempt obligations" under Section 265(b)(3)(B)(i)(III) of the Code and the City in connection with entering into the Lease hereby covenants and warrants that it does not anticipate issuance directly by it or on its behalf of tax-exempt bonds or other tax-exempt interest bearing obligations in an amount exceeding $30,000,000 in calendar 2009 (taking into consideration the exception for current refunding issues). Section 7. This Ordinance shall be in force and take effect from and after its publication as provided by law. Passed and approved this day of May, 2009. Margaret Hornady, Mayor Attest: RaNae Edwards, City Clerk