HomeMy WebLinkAboutD-2166-14 Partial Refunding of 2005 PAC Bonds/$59,000,000 Sponsor: Councilor Snyder
ORDINANCE D-2166-14
AS AMENDED
AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF CARMEL,
INDIANA, APPROVING AN AMENDMENT TO A LEASE AGREEMENT BETWEEN
THE CITY OF CARMEL REDEVELOPMENT AUTHORITY AND THE CITY OF
CARMEL REDEVELOPMENT COMMISSION AND TAKING
OTHER ACTIONS RELATED THERETO
WHEREAS, the City of Carmel Redevelopment Authority (the "Authority") has been
created pursuant to Indiana Code 36-7-14.5 as a separate body corporate and politic, and as an
instrumentality of the City of Carmel, Indiana (the "City") to finance local public improvements
for lease to the City of Carmel Redevelopment Commission (the "Commission"); and
WHEREAS, the Authority, as lessor, and the Commission, as lessee, entered into a Lease
Agreement, dated as of July 12, 2005, as amended by an Addendum to Lease dated December 6,
2005, as further amended by a First Amendment to Lease Agreement, dated as of January 19,
2010 (collectively, the "Original Lease"); and
WHEREAS, the Authority issued its Lease Rental Revenue Bonds of 2005, dated
December 21, 2005, consisting of current interest bonds in the original aggregate principal of
Fifty-Two Million Dollars ($52,000,000) (the "2005 Current Interest Bonds") and capital
appreciation bonds in the aggregate issued amount of Twenty-Seven Million Seven Hundred
Ninety-Eight Thousand Two Hundred Twenty-Seven Dollars and Fifteen Cents ($27,798,227.15)
(the "2005 Capital Appreciation Bonds", and together with the 2005 Current Interest Bonds, the
"2005 Bonds"), pursuant to a Trust Indenture, dated as of December 1, 2005, between the Lessor
and The Bank of New York Mellon Trust Company, N.A., as successor trustee, for the purpose
of procuring funds to finance the design and construction of a new performing arts center
complex in the city, to pay capitalized interest on the 2005 Bonds, to fund a partial debt service
reserve fund, and to pay costs incurred on the account of the issuance and sale of the 2005
Bonds; and
WHEREAS, the 2005 Current Interest Bonds are currently outstanding in the aggregate
principal amount of Fifty-Two Million Dollars ($52,000,000); and
WHEREAS, due to favorable market conditions, the Authority desires to refund all or a
portion of the outstanding 2005 Current Interest Bonds (the "Refunded Bonds") in order to effect
a savings in the interest costs on the Refunded Bonds; and
WHEREAS, the Authority has adopted, or is expected to adopt, a resolution authorizing
the issuance of one or more series of refunding bonds designated as the "City of Carmel
Redevelopment Authority Lease Rental Revenue Refunding Bonds of 2014 (with such additional
or different series designation as may be determined to be necessary or appropriate)," in the
aggregate principal amount not to exceed Fifty-Nine Million Dollars ($59,000,000) (the "2014
Bonds"), for the purpose of providing funds to (a) effect an advance refunding of all or a portion
of the Refunded Bonds, (b) if necessary, fund a debt service reserve fund or pay the premium for
a debt service reserve fund surety policy, and (c) pay the costs incurred on the account of the
issuance and sale of the 2014 Bonds, including any premiums for a municipal bond insurance
policy or other form of credit enhancement for the 2014 Bonds; and
WHEREAS, pursuant to the Original Lease, the Commission has agreed to pay the
Authority fixed annual rental payments, which were based on the annual amounts of principal
and interest due on the 2005 Bonds in each twelve-month period ending on each January 15
(each, an "Annual Period"), rounded up to the next $1,000 integral, plus an additional $5,000
each Annual Period to cover the certain administrative costs and expenses related to the 2005
Bonds, payable in advance in semi-annual installments on January 1 and July 1 of each year; and
WHEREAS, the Authority and the Commission have adopted, or are expected to adopt,
resolutions approving an amendment to the Original Lease, in substantially the form presented at
this meeting (the "Lease Amendment"), for the purpose of reducing the annual lease rental
payments due under the Original Lease to correspond with the reduced debt service owed under
the 2014 Bonds, plus certain annual administrative costs and expenses related to the 2014 Bonds,
thereby realizing a portion of the savings achieved by refunding the Refunded Bonds; and
WHEREAS, the Common Council of the City (the "Common Council") desires to
approve the Lease Amendment pursuant to Indiana Code 36-7-14-25.2, which provides that any
lease approved by a resolution of the Commission must be approved by an ordinance of the fiscal
body of the unit; and
WHEREAS, the annual rentals (the "Lease Rentals") payable by the Commission under
the Original Lease, as amended by the Lease Amendment (collectively, the "Lease"), will be
pledged by the Authority to pay debt service on the unrefunded 2005 Bonds and the 2014 Bonds;
and
WHEREAS, the Commission reasonably expects to pay the Lease Rentals during the
term of the Lease from tax increment revenues or other legally available revenues of the
Commission, and the payment of the Lease Rentals will be secured by a back-up pledge of the
revenues derived by the Commission from the levy of a special benefits tax pursuant to Indiana
Code 36-7-14-27; and
WHEREAS, the City and the Commission previously entered into a Revenue Deposit
Agreement, dated as of November 20, 2012, as supplemented and amended by a First
Amendment to Revenue Deposit Agreement (collectively, the "Revenue Deposit Agreement"),
for the purpose of setting forth the procedures to set aside tax increment revenues as and when
needed to make timely payment on obligations secured by and payable from such tax increment
revenues; and
WHEREAS, in connection with the refunding of the Refunded Bonds, it is necessary to
enter into an amendment to the Revenue Deposit Agreement, substantially in the form presented
at this meeting (the "Second Amendment to Revenue Deposit Agreement"), for the purpose of
making certain technical amendments to the Revenue Deposit Agreement; and
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NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE
CITY OF CARMEL, INDIANA, as follows:
Section 1. Approval 2014 Bonds, Second Amendment to Revenue Deposit
Agreement and Lease Amendment. The Common Council hereby approves the issuance of the
2014 Bonds, the execution and delivery of the Second Amendment to Revenue Deposit
Agreement, and the execution and delivery of the Lease Amendment, as approved by the
Commission, pursuant to Indiana Code 36-7-14-25.2, including, if necessary, the levy by the
Commission of a special benefits tax pursuant to Indiana Code 36-7-14-27 during the term of the
Lease to provide necessary funds from which to pay the Lease Rentals under the Lease, all
subject to the following conditions: (a) the maximum aggregate original principal amount of the
2014 Bonds shall not exceed $59,000,000; (b) the maximum annual lease rental payment during
the term of the Original Lease, as amended by the Lease Amendment, shall not exceed
$11,747,000; (c) the maximum interest rate on the 2014 Bonds shall not exceed six percent
(6.00%) per annum; (d) the 2014 Bonds may be subject to redemption prior to maturity on any
date not earlier than five (5) years following the date of issuance of the 2014 Bonds, with such
specific dates and redemption terms determined at the time of the sale of the 2014 Bonds and
approved by the Authority in the purchase agreement for the 2014 Bonds, all upon the advice of
the financial advisor to the Authority; and (e) the Common Council shall approve the use of any
surplus proceeds of the 2014 Bonds remaining after the defeasance of the Refunded Bonds.
Section 2. Severability. If any part of this Ordinance shall be adjudged to be invalid
by a court of proper jurisdiction, it shall be conclusively presumed that the Common Council
would have passed the remainder of this Ordinance without such invalid part.
Section 3. Authorization of Other Actions. Each of the Mayor, any member of the
Common Council and the Clerk-Treasurer, and any other officer, employee or agent of the City
is hereby authorized and directed, for and on behalf of the City, to execute and deliver any
contract, deed, agreement, certificate, instrument or other document and to take any action as
such person determines to be necessary or appropriate to accomplish the purposes of this
Ordinance, such determination to be conclusively evidenced by such person's execution of such
contract, deed, agreement, certificate, instrument or other document or such person's taking of
such action.
Section 4. Repeal of Conflicting Ordinances. All ordinances, resolutions and orders,
or parts thereof, in conflict with the provisions of this Ordinance, are, to the extent of such
conflict, hereby repealed.
Section 5. Effectiveness. This Ordinance shall be in full force and effect from and
after its adoption by the Common Council and upon compliance with the procedures required by
law.
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S�
PASSED by the Common Council of the City of Carmel, this °2i day of , 2014,
by a vote of 1 ayes and a nays.
/41() c---
COMM N COUNCIL OF THE CITY OF CA' L, IND. A r '
Presiding Offic K-vin D. Rider
Ata VfiA 1\
W. Eric S-idensticker, President Pro Tempore Carol Schle' )l
• ► al .. Carter Richa. L. harp
01101Y.A.6. _411
Su:rnkam Luc :nyder
ATT T:
/ ,
f
Diana L. Cordray, IAMC, Clerk-T -.surer
nd
Presented by me to the Mayor of the City of Carmel, Indiana, this (9a day of
2014, at la:ag P.M. /Diana L. Cordray, IAMC, Clerk-Trer
Approved by menMayor of the City of Carmel, Indiana, this °coo day of C� 1
2014, ata.:3c T" .M.
J es Brainard, Mayor
ATTEST:
0--12A-- 6.,
Diana L. Cordray, IAMC, Clerk-Treas . -r
Prepared by: Bruce D. Donaldson
Barnes & Thornburg LLP
11 South Meridian Street
Indianapolis, IN 46204
INDS01 BJB 1446448v1
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Draft of 04/16/14
SECOND AMENDMENT TO REVENUE DEPOSIT AGREEMENT
Between
CITY OF CARMEL, INDIANA,
And
CITY OF CARMEL REDEVELOPMENT COMMISSION
Dated as of , 2014
SECOND AMENDMENT TO REVENUE DEPOSIT AGREEMENT
This SECOND AMENDMENT TO REVENUE DEPOSIT AGREEMENT, dated as of
2014 (the "Second Amendment"), is being entered into between the CITY OF
CARMEL, INDIANA (the "City"), a political subdivision duly created and validly existing
under the laws of the State of Indiana (the "State"), and the CITY OF CARMEL
REDEVELOPMENT COMMISSION (the "Commission"), as governing body of the City of
Carmel Redevelopment District (the "District"), a special taxing district duly created and validly
existing under the laws of the State (each, a"Party" and, collectively, the "Parties").
WITNESSETH
WHEREAS, the City and the Commission previously entered into a Revenue Deposit
Agreement dated as of November 20, 2012 (the "Original Agreement"), as supplemented and
amended by a First Amendment to Revenue Deposit Agreement, dated as of December 5, 2013
(the "First Amendment," and together with the Original Agreement, the "Existing Agreement"),
relating to the agreed upon application of various tax increment revenues of the Commission to
the payment of Commission obligations; and
WHEREAS, the City of Carmel Redevelopment Authority (the "Authority") previously
issued its Lease Rental Revenue Bonds of 2005, dated December 21, 2005, consisting of current
interest bonds in the original aggregate principal of Fifty-Two Million Dollars ($52,000,000) (the
"2005 Current Interest Bonds") and capital appreciation bonds in the aggregate issued amount of
Twenty-Seven Million Seven Hundred Ninety-Eight Thousand Two Hundred Twenty-Seven
Dollars and Fifteen Cents ($27,798,227.15) (the "2005 Capital Appreciation Bonds", and
together with the 2005 Current Interest Bonds, the "2005 Bonds"), pursuant to a Trust Indenture,
dated as of December 1, 2005, between the Lessor and The Bank of New York Mellon Trust
Company, N.A., as successor trustee, for the purpose of procuring funds to finance the design
and construction of a new performing arts center complex in the city, to pay capitalized interest
on the 2005 Bonds, to fund a partial debt service reserve fund, and to pay costs incurred on the
account of the issuance and sale of the 2005 Bonds; and
WHEREAS, in order to provide revenues sufficient to pay debt service on the 2005
Bonds, the Authority, as lessor, and the Commission, as lessee, previously entered into a Lease
Agreement, dated as of July 12, 2005, as amended by an Addendum to Lease dated December 6,
2005, as further amended by a First Amendment to Lease Agreement, dated as of January 19,
2010 (collectively, the "Original Lease"); and
WHEREAS, the Commission's lease rental payments due under the Original Lease are
payable from TIF Revenue (as defined in the Original Agreement), and are secured by a back-up
pledge of the revenues derived by the Commission from the levy of a special benefits tax
pursuant to Indiana Code 36-7-14-27; and
WHEREAS, due to favorable market conditions, the Authority desires to refund all or a
portion of the outstanding 2005 Current Interest Bonds (the "Refunded Bonds") in order to effect
a savings in the interest costs on the Refunded Bonds; and
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WHEREAS, the Authority has adopted, or is expected to adopt, a resolution authorizing
the issuance of one or more series of refunding bonds designated as the "City of Carmel
Redevelopment Authority Lease Rental Revenue Refunding Bonds of 2014 (with such additional
or different series designation as may be determined to be necessary or appropriate)," in the
aggregate principal amount not to exceed Dollars ($ ) (the "2014
Bonds"), for the purpose of providing funds to (a) effect an advance refunding of all or a portion
of the Refunded Bonds, (b) if necessary, fund a debt service reserve fund or pay the premium for
a debt service reserve fund surety policy, and (c) pay the costs incurred on the account of the
issuance and sale of the 2014 Bonds, including any premiums for a municipal bond insurance
policy or other form of credit enhancement for the 2014 Bonds; and
WHEREAS, the Authority and the Commission have adopted, or are expected to adopt,
resolutions approving an amendment to the Original Lease (the "Lease Amendment"), for the
purpose of reducing the annual lease rental payments due under the Original Lease to correspond
with the reduced debt service owed under the 2014 Bonds and the outstanding 2005 Bonds, plus
certain annual administrative costs and expenses related to the 2014 Bonds, thereby realizing a
portion of the savings achieved by refunding the Refunded Bonds; and
WHEREAS, the City and the Commission now desire to amend the Existing Agreement
in order to modify the lease rental payment schedule set forth as Exhibit D to the Original
Agreement and for the purpose of making other technical amendments to the Existing
Agreement, thereby establishing a procedure for setting aside the TM Revenue as and when
received to ensure the timely payment of the 2014 Bonds and the outstanding 2005 Bonds;
NOW, THEREFORE, in consideration of the premises and the covenants and agreements
contained herein, the Parties now desire to enter into this Second Amendment and hereby agree
as follows:
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ARTICLE I
DEFINITIONS
In addition to the definitions contained in the Original Agreement, as supplemented and
amended by the First Amendment, the following words and phrases shall have the following
meanings, unless the context or use clearly indicates another or different meaning or intent.
"Existing Agreement" shall mean, collectively, the Original Agreement and the First
Amendment.
"First Amendment" shall mean the First Amendment to Revenue Deposit Agreement,
dated as of December 5, 2013,by and between the Commission and the City.
"Original Agreement" shall mean the Revenue Deposit Agreement dated as of November
20, 2012, by and between the Commission and the City.
"Supplemental Reserve Fund" shall mean the Supplemental Reserve Fund previously
created and established pursuant to Section 2.4 of the Original Agreement.
"2005 Refunded Bonds" shall mean the City of Carmel, Indiana, Redevelopment
Authority Lease Rental Revenue Bonds of 2005 (Current Interest Bonds), maturing on and after
1, 20 , currently outstanding in the aggregate principal amount of $
which are to be advance refunded with the proceeds of the 2014 Bonds.
"2005 Refunded Bonds Savings" shall mean, during each year for which the 2014 Bonds
are outstanding, an amount equal to (i) the annual principal and interest payments on the 2005
Refunded Bonds, minus (ii) the annual principal and interest payments on the 2014 Bonds. The
schedule of the 2005 Refunded Bonds Savings shall be set forth in Exhibit E to the Original
Agreement.
"2014 Bonds" shall mean the City of Carmel Redevelopment Authority Lease Rental
Revenue Refunding Bonds of 2014, dated , 2014, issued in the original aggregate
principal amount of$
(End of Article I)
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ARTICLE II
AMENDMENTS TO EXISTING AGREEMENT
Section 2.1. Amendment to Exhibit D of Original Agreement. In connection with the
issuance of the 2014 Bonds and the reduction of the lease rental payments related thereto,
"Exhibit D" to the Original Agreement is hereby deleted in its entirety and replaced with the
schedule attached hereto labelled as "Exhibit D (Revised)" and made a part hereof
Section 2.2. Addition of Exhibit E to Original Agreement; Deposit of 2005 Refunded
Bond Savings to Supplemental Reserve Fund. In connection with the issuance of the 2014
Bonds and the advance refunding of the 2005 Refunded Bonds, the Original Agreement is
hereby amended by adding thereto the schedule attached hereto labelled as "Exhibit E —
Schedule of 2005 Refunded Bond Savings" and made a part hereof Section 2.1 of the Existing
Agreement is hereby amended to add the following subsection (e):
"(e) After making the required transfers under subsections (a),
(b), (c) and (d) of this Section 2.1, the Clerk-Treasurer shall
transfer to the Supplemental Reserve Fund an amount of TIF
Revenue equal to the lesser of (i) all of such TIF Revenue, or (ii)
an amount of such TIF Revenue equal to the 2005 Refunded Bond
Savings attributable to the next Payment Date in accordance with
Exhibit E."
Section 2.3. References to 2005 Bonds. Unless the context otherwise requires or as
otherwise provided herein, any references in the Existing Agreement to the 2005 Bonds shall be
deemed to include both the 2014 Bonds and any outstanding 2005 Bonds, and any accounts
created and maintained by the Clerk-Treasurer related to the 2005 Bonds shall hereafter be
maintained, and the funds therein shall now be held, for the purpose of ensuring timely payment
of both the 2014 Bonds and any outstanding 2005 Bonds.
(End of Article II)
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ARTICLE III
MISCELLANEOUS
Section 3.1. Counterparts. This Second Amendment may be executed in several
counterparts, each of which when so executed shall be deemed to be an original, and such
counterparts, together, shall constitute but one and the same instrument, which shall be
sufficiently evidenced by any such original counterpart.
Section 3.2. Continuing Effect. This Second Amendment shall form a part of the
Original Agreement as previously supplemented and amended by the First Amendment. Except
as otherwise set forth in this Second Amendment, all terms, conditions and provisions of the
Original Agreement, as previously supplemented and amended by the First Amendment, are
hereby ratified and affirmed.
Section 3.3. Effective Date. This Second Amendment shall take effect immediately
upon the execution of a binding bond purchase agreement for the purchase and sale of the 2014
Bonds.
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IN WITNESS WHEREOF, the Parties have caused this Second Amendment to Revenue
Deposit Agreement to be executed in their names and on their behalf as of the date first written
above.
CITY OF CARMEL, INDIANA
By:
James Brainard, Mayor
Attest:
By:
Diana L. Cordray, Clerk-Treasurer
CITY OF CARMEL, INDIANA,
REDEVELOPMENT COMMISSION, as
governing body of the City of Carmel
Development District
By:
William Hammer, President
Attest:
By:
Brad Meyer, Secretary
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EXHIBIT D (REVISED)
SCHEDULE OF 2005 AND 2014 BOND PAYMENT OBLIGATIONS
[To be provided]
A-1
EXHIBIT E
SCHEDULE OF 2005 REFUNDED BONDS SAVINGS
[To be provided
INDS01 BJB 1446634v2
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