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HomeMy WebLinkAboutD-2348-17 Midtown West Mixed Use DevelopmentSponsors: Councilors Kimball and Worrell ORDINANCE D-2348-17 AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF CARMEL, INDIANA, AUTHORIZING THE ISSUANCE OF ONE OR MORE SERIES OF CITY OF CARMEL, INDIANA TAXABLE ECONOMIC DEVELOPMENT LEASE RENTAL REVENUE BONDS (MIDTOWN WEST PROJECT), LENDING THE PROCEEDS THEREOF TO THE BORROWER THEREOF, APPROVING A LEASE BETWEEN THE CARMEL MIDTOWN BUILDING CORPORATION, AS LESSOR, AND THE CITY OF CARMEL REDEVELOPMENT COMMISSION AND MIDTOWN CAPITAL PARTNERS, LLC OR AN AFFILIATE THEREOF, AS CO -LESSEES, AND AUTHORIZING AND APPROVING OTHER ACTIONS RELATED THERETO Synopsis: Ordinance authorizes the issuance of bonds by the City of Carmel to finance a portion of the cost of a new parking garage and related infrastructure improvements to support the Midtown West mixed use development, and approves a related financing Lease of the Carmel Redevelopment Commission. WHEREAS, the City of Carmel, Indiana (the "City") is a municipal corporation and political subdivision of the State of Indiana and by virtue of I.C. 36-7-11.9 and I.C. 36-7-12 (collectively, the "Act"), is authorized and empowered to adopt this ordinance (the "Ordinance") and to carry out its provisions; and WHEREAS, the Carmel Redevelopment Commission (the "CRC") and the Midtown Carmel Capital Partners, LLC or an affiliate thereof (the "Developer"), have entered into the Project Agreement (Midtown West/Mixed-Use/Garage), dated December 21, 2016 (the "Project Agreement"), which provides for the acquisition and construction of a mixed-use development, including a parking garage and other infrastructure improvements, and related improvements to be constructed by the Developer in an area of the City generally described as being located south of 2nd Street Southwest and bounded on the west by 3rd Avenue Southwest and on the east by the Monon Trail (collectively, the "Project"); and WHEREAS, pursuant to the terms of the Project Agreement, the CRC and the Developer have advised the City of Carmel Economic Development Commission (the "EDC") and the City and proposed that the City issue its Taxable Economic Development Lease Rental Revenue Bonds (Midtown West Project), in one or more series, in an amount not to exceed Fifteen Million Dollars ($15,000,000) (the "Bonds") under the Act and loan the proceeds of such Bonds to the Carmel Midtown Building Corporation (the "Borrower") for the purpose of financing a portion of the Project and certain costs related to the issuance of the Bonds, including capitalized interest on the Bonds, if necessary, and a reserve fund or other credit enhancements with respect to the Bonds; and WHEREAS, the financing of the Project will result in the diversification of industry, the creation or retention of jobs, and the creation of business opportunities in the City; and WHEREAS, pursuant to I.C. § 36-7-12-24, following publication of a notice in accordance with the requirements of I.C. § 5-3-1, the EDC held a public hearing regarding the proposed issuance of the. Bonds to finance the Project and received uncontroverted evidence that the Project will have no adverse competitive effect on similar facilities already constructed or operating in the City; and WHEREAS, the EDC has performed all actions required of it by the Act preliminary to the adoption of this Ordinance and has approved and forwarded to the Common Council of the City (the "Common Council") the forms of: (1) a Loan Agreement, between the City and the Borrower (the "Loan Agreement"), including the form of the Borrower's promissory note to evidence such loan (the "Note"); (2) a Trust Indenture, with respect to the Bonds (the "Indenture"), between the City and a corporate trustee to be selected (the "Trustee"); (3) the Bonds; and (4) this Ordinance (the Loan Agreement, the Note, the Indenture,'the Bonds and this Ordinance, collectively, the "Financing Documents"); and WHEREAS, the Borrower has been incorporated as an Indiana nonprofit corporation operating pursuant to the provisions of I.C. § 23-17, in order to finance local public improvements for lease to the CRC, as the governing body of the City of Carmel Redevelopment District (the "District"); and WHEREAS, the Borrower, the CRC and the Developer have adopted, or are expected to adopt, resolutions approving a proposed Garage Lease in the form presented at this meeting (the "Lease"), between the Borrower, as lessor, and the CRC and the Developer, as co -lessees, for the purpose of providing a source of revenue to pay the principal and interest on the Borrower's Note under the terms of the Loan Agreement, which Note payments will be used by the City to pay the principal of and interest on the Bonds when due; and WHEREAS, the annual rentals (the "Lease Rentals") payable by the CRC under the Lease will be pledged by the Borrower to pay debt service on the Borrower's Note, which the City will, in turn, pledge to pay debt service on the Bonds when due; and WHEREAS, the CRC reasonably expects to pay the Lease Rentals during the term of the Lease from certain tax increment revenues derived from the Midtown West Allocation Area established within the District to be received by the CRC pursuant to I.C. § 36-7-14, as amended, or other legally available revenues of the CRC, and the payment of the Lease Rentals will be secured solely by a back-up pledge of the revenues derived by the CRC from the levy of a special benefits tax pursuant to I.C. § 36-7-14-27; and WHEREAS, pursuant to I.C. § 36-7-14-25.2, as amended, following publication of a notice in accordance with the requirements of I.C. § 5-3-1, the CRC held a public hearing regarding the proposed Lease and all interested parties were provided the opportunity to be heard at said hearing; and WHEREAS, pursuant to I.C. § 36-7-14-25.2, the CRC has adopted a resolution finding that the Lease Rentals to be paid by the CRC to the Borrower pursuant to the Lease are fair and reasonable, and that the terms of the Lease are based upon the value of the Leased Premises (as 2 defined in the Lease) and the use of the Leased Premises and the Project throughout the term of the Lease will serve the public purpose of the City and is in the best interests of its residents; and WHEREAS, the Common Council desires to approve the Lease pursuant to I.C. § 36-7- 14-25.2, which provides that any lease approved by a resolution of the CRC must be approved by an ordinance or resolution of the fiscal body of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF CARMEL, INDIANA, as follows: Section 1. Findings; Public Benefits. After considering the evidence presented in the report and the resolution of the EDC, the Common Council hereby finds and determines that the Project involves the acquisition, construction and equipping of an "economic development facility" as that phrase is used in the Act and I.C. § 36-7-14-25.3(c); that the Project will create employment opportunities and diversification of economic development in the City, will improve and promote the economic stability, development and welfare in the City, will encourage and promote the expansion of industry, trade and commerce in the City and the location of other new industries in the City; that the public benefits to be accomplished by this Ordinance, intending to overcome insufficient employment opportunities and insufficient diversification of industry, are greater than the cost of public services (as that phrase is used in the Act) which will be required by the Project; and, therefore, that the financing of the Project by the issuance of the Bonds under the Act: (i) will be of benefit to the health and general welfare of the City; and (ii) complies with the Act. Section 2. Public Approval of Financing. The Common Council hereby approvesthe issuance of the Bonds, in one or more series, under the Act, and the use of the proceeds thereof to finance a portion of the costs of the Project and certain costs related to the issuance of the Bonds, including capitalized interest on the Bonds and a reserve fund or other credit enhancements with respect to the Bonds, as further described in the Financing Documents, in the form that such financing was approved by the EDC. Section 3. Approval of Lease. The Common Council hereby approves the execution and delivery of the Lease, as approved by the CRC, pursuant to I.C. § 36-7-14-25.2, including, if necessary, the levy by the CRC of a special benefits tax pursuant to I.C. § 36-7-14-27 during the term of the Lease to provide necessary funds from which to pay the Lease Rentals under the Lease and the pledge of the Lease Rentals thereunder to the payment of Borrower's Note and the Bonds, all subject to the following conditions: (a) the maximum annual Lease Rental payment during the term of the Lease shall not exceed $1,050,000;-(b) the maximum interest rate on the Bonds shall not exceed seven percent (7.0%) per annum; (c) the 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 Bonds, with such specific dates and redemption terms determined at the time of the sale of the Bonds and approved by the City in the purchase agreement for the Bonds, all upon the advice of the municipal advisor to the City; (d) interest on the Bonds may be capitalized through a date no later than January 15, 2021; and (e) the maximum term of the Lease shall not exceed twenty-five (25) years. 3 Section 4. Authorization; Terms of Bonds. The issuance of the Bonds, payable solely from revenues and receipts derived from the Financing Documents, is hereby authorized. The City is authorized to issue the Bonds, in one or more series, in the aggregate principal amount not to exceed Fifteen Million Dollars ($15,000,000), all for the purpose of procuring funds to (a) pay all or a portion of the costs of the Project by making a portion of the proceeds of the Bonds available to the Borrower, (b) fund a debt service reserve fund or pay the cost of a premium for a debt service reserve fund surety policy, (c) pay capitalized interest on the Bonds (if necessary), subject to the terms of this Ordinance, and (d) pay all incidental expenses incurred on account of the issuance of the Bonds and acquiring any credit enhancement with respect thereto (if any). The Bonds shall (i) be executed at or prior to the closing date by the manual or facsimile signatures of the Mayor of the City (the "Mayor") and the Clerk -Treasurer of the City ,(the "Clerk -Treasurer"); (ii) be dated as of the date of delivery or the first day of the month in which the Bonds are issued; (iii) mature on a date not later than twenty (25) years after the date of issuance of the first series of Bonds; (iv) bear interest at a taxable rate, for federal income tax purposes, not to exceed the maximum interest rate specified in Section 3 hereof, the exact rates as determined through negotiation with the purchaser thereof, with such interest to be payable as provided in the Financing Documents; (v) be issuable in such denominations as set forth in the Financing Documents; (vi) be issuable only in fully registered form; (vii) be subject to registration on the bond register as provided in the Indenture; (viii) be payable in lawful money of the United States of America; (ix) be payable at an office of the Trustee as provided in the Indenture; (x) be subject to optional redemption prior to maturity and subject to redemption as otherwise provided in the Financing Documents, subject to the terms of this Ordinance; and (xi) contain such other terms and provisions as may be provided in the Financing Documents. The Bonds and the interest thereon shall never constitute an indebtedness of, or a charge against the general credit or taxing power of, the City, but shall be special and limited obligations of the City, payable solely from revenues and other amounts derived from the Financing Documents. Forms of the Financing Documents are before this meeting and are by this reference incorporated in this Ordinance, and the Clerk -Treasurer is hereby directed, in the name and on behalf of the City, to insert them into the minutes of the Common Council and to keep them on file. Section 5. Sale of the Bonds; Purchase Agreement. The Mayor and the Clerk -Treasurer are hereby authorized and directed, in the name and on behalf of the City, to sell the Bonds through a negotiated sale to an underwriter, bank, financial institution or other purchaser (the "Purchaser") to be selected by the Mayor, at such prices and on such terms as may be determined at the time of sale and approved by the Mayor and the Clerk -Treasurer. The Mayor and the Clerk -Treasurer are hereby authorized to approve and execute a bond purchase agreement (the "Purchase Agreement") for the Bonds with the Purchaser, in a form and substance approved by such officers, such approval to be conclusively evidenced by the execution thereof. Such Purchase Agreement may set forth the definitive terms and conditions for such sale, but all of such terms and conditions must be consistent with the terms and conditions of this Ordinance, including without limitation, the interest rate or rates on the Bonds which shall not exceed the maximum rate of interest for the Bonds authorized pursuant to this Ordinance. 4 Notwithstanding anything herein to the contrary, the Bonds may, in the discretion of the Mayor, based upon the advice of the City's municipal advisor, be sold to a local public improvement bond bank established by the City pursuant to I.C. 5-1.4 (the "Bond Bank"). In the event of such determination of sale to the Bond Bank, the Bonds shall be sold to the Bond Bank in such denomination or denominations as the Bond Bank may request, and pursuant to one or more purchase agreements between the City and the Bond Bank. Any Bonds sold to the Bond Bank shall be accompanied by all documentation required by the Bond Bank pursuant to the provisions of I.C. § 5-1.4, and the Purchase Agreement, including, without limitation, an approving opinion of nationally recognized bond counsel, certification and guarantee of signatures and certification as to no litigation pending, as of the date of delivery of the Bonds to the Bond Bank, challenging the validity or issuance of the Bonds. In the event the City determines to sell the Bonds to the Bond Bank, the submission of any application to the Bond Bank, the entry by the City into the Purchase Agreement, and the execution and delivery of the Purchase Agreement on behalf of the City by the Mayor in accordance with this Ordinance are hereby authorized, approved and ratified. Section 6. Official Statement. If necessary, the Mayor and the Clerk -Treasurer are hereby authorized to approve the preparation and distribution of a Preliminary Official Statement for the Bonds. The Mayor and the Clerk -Treasurer are hereby authorized to deem and determine the Preliminary Official Statement as the near final Official Statement with respect to the Bonds for purposes of SEC Rule 15c2-12, subject to completion in accordance with such rule and in a manner acceptable to the Mayor and the Clerk -Treasurer, and to place the Preliminary Official Statement into final form as the Final Official Statement. The Mayor and the Clerk -Treasurer are hereby authorized to sign the Final Official Statement and by such signature approve its distribution. Section 7. Execution and Delivery of Financing Documents. The Mayor and the Clerk - Treasurer are hereby authorized and directed, in the name and on behalf of the City, to execute or endorse and deliver the Loan Agreement, the Note, the Indenture and the Bonds, submitted to the Common Council, which are hereby approved in all respects. The Mayor and the Clerk - Treasurer are hereby authorized and directed, to select a financial institution to serve as the Trustee. Section 8. Changes in Financing Documents. The Mayor and the Clerk -Treasurer are hereby authorized, in the name and on behalf of the City, without further approval of the Common Council or the EDC, to approve such changes in the Financing Documents as may be permitted by Act, such approval to be conclusively evidenced by their execution thereof. Section 9. General. The Mayor and the Clerk -Treasurer, and each of them, are hereby authorized and directed, in the name and on behalf of the City, to execute or endorse any and all agreements, documents and instruments, perform any and all acts, approve any and all matters, and do any and all other things deemed by them, or either of them, to be necessary or desirable in order to carry out and comply with the intent, conditions and purposes of this Ordinance (including the preambles hereto and the documents mentioned herein), the Project, the issuance and sale of the Bonds, and the securing of the Bonds under the Financing Documents, including, but not limited to, such agreements, documents and instruments as are contemplated under the Project Agreement, and any such execution, endorsement, performance or doing of other things heretofore effected be, and hereby is, ratified and approved. Section 10. Binding Effect. The provisions of this Ordinance and the Financing Documents shall constitute a binding contract between the City and the holders of the Bonds, and after issuance of the Bonds this Ordinance shall not be repealed or amended in any respect which would adversely affect the rights of the holders of the Bonds as long as the Bonds or interest thereon remains unpaid. Section 11. 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 12. 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 13. Effective Date. This Ordinance shall be in full force and effect immediately upon adoption. Section 14. Copies of Financing Documents on File. Two copies of the Financing Documents incorporated into this Ordinance were duly filed in the office of the Clerk -Treasurer, and are available for public inspection in accordance with I.C. § 36-1-5-4. 0 PASSED by the Common Council .9f the City of Carmel, Indiana, this lo day of /'n AA&,1+ , 2017, by a vote of ayes andnays. COMMON COUNCIL OF THE I ! 'I! M-0 Kevin D. Rider, Vice President Laura Campell Ronald E. Carter ATTEST: c7 Cler reasurer of the City of Carmel, Indiana Presented by me o the Mayor of the City of Carmel, Indiana, thi �11day of GeC, 2017, at I-V. K PM. �.7 C , C rk-Tre surer Approved by me, Mayor of the City of Carmel, 2017, at 6 °' f .M. ATTEST: C. 7 C Jerk-Tre surer of the City of Carmel, Indiana Prepared by: Bruce D. Donaldson, Esq. Barnes & Thornburg LLP 11 South Meridian Street Indianapolis, IN 46204 DMS 4633321v2 Indiana, this day of /'�' 6"z' J mes Brainard, Mayor 7