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HomeMy Public PortalAboutOrd 531 Taxable IRB's Series 2013 GILMORE& BELL,P.C. October 23, 2013 ORDINANCE NO. 531 OF THE CITY OF BEL AIRS, KANSAS AUTHORIZING THE ISSUANCE OF $5,500,000 TAXABLE INDUSTRIAL REVENUE BONDS SERIES 2013 (BROADSTONE VILLAS PROJECT) SOS1601000.052\OR UI N (Published in the Ark Valley News,November 21, 2013) ORDINANCE NO.531 AN ORDINANCE AUTHORIZING THE CITY OF BEL AIRE, KANSAS TO ISSUE ITS TAXABLE INDUSTRIAL REVENUE BONDS, SERIES 2013 (BROADSTONE VILLAS PROJECT) IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $5,500,000 FOR THE PURPOSES OF ACQUIRING, CONSTRUCTING, FURNISHING AND EQUIPPING AN AFFORDABLE HOUSING RESIDENTIAL RENTAL FACILITY; AUTHORIZING EXECUTION OF A BOND AGREEMENT BY AND BETWEEN THE CITY, BROADSTONE VILLAS, LP, AS TENANT AND UMB BANK, N.A., WICHITA, KANSAS, AS FISCAL AND PAYING AGENT; AUTHORIZING THE CITY TO LEASE SUCH FACILITY TO BROADSTONE VILLAS, LP AND AUTHORIZING EXECUTION OF A LEASE BETWEEN SAID CITY AND BROADSTONE VILLAS, LP; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH. THE GOVERNING BODY OF THE CITY OF BEL AIRE, KANSAS HAS FOUND AND DETERMINED: A. The City of Bel Aire, Kansas (the "Issuer") is authorized by the Kansas Economic Development Revenue Bond Act,as amended, as codified in K.S.A. 12-1740 et seq. (the "Act"),to acquire, construct, improve and equip certain facilities (as defined in the Act) for commercial, industrial and manufacturing purposes,to enter into leases and lease-purchase agreements with any person, firm or corporation for such facilities, and to issue revenue bonds for the purpose of paying the costs of such facilities;and B. The Issuer's governing body has determined that it is desirable in order to promote, stimulate and develop the general economic welfare and prosperity of the Issuer and the State of Kansas that the Issuer issue its Taxable Industrial Revenue Bonds, Series 2013 (Broadstone Villas Project) dated as of the Issue Date of the Bonds in the aggregate principal amount of not to exceed $5,500,000 (the "Series 2013 Bonds"), for the purpose of paying the costs of acquiring, constructing, furnishing and equipping an affordable housing residential rental facility (the "Project"), as more fully described in the Bond Agreement and in the Lease authorized in this ordinance for lease to Broadstone Villas, LP (the "'Tenant"); and C. The Issuer's governing body finds that it is necessary and desirable in connection with the issuance of the Series 2013 Bonds to execute and deliver the following documents (collectively,the "Bond Documents"): (i) a Bond Agreement dated as of Issue Date of the Bonds(the "Bond Agreement"), among the Issuer, the Tenant and UMB Bank, n.a., Wichita, Kansas (the "Bank") prescribing the terms and conditions of issuing and securing the Series 2013 Bonds; 505\1,01000.052\ORDIN (ii) a Lease dated as of the Issue Date of the Bonds (the "Lease"), with the Tenant, under which the Issuer will acquire, construct, furnish and equip the Project and lease it to the Tenant in consideration of Basic Rent and other payments; and (iii) an Agreement for Payment in Lieu of Taxes (the "Agreement for Payment in Lieu of Taxes") with the Tenant, under which the Tenant will make certain payments in lieu of taxes for each year after issuance of the Bonds that the Project is exempt from ad valorem taxation; and (iv) an Origination Fee Agreement (the "Origination Fee Agreement") to be entered into between the Issuer and the Tenant in conjunction with the issuance of the Series 2013 Bonds. D. The Issuer's governing body has found that under the provisions of K.S.A. 79-201a Second, the Project purchased or constructed with the proceeds of the Series 2013 Bonds is eligible for exemption from ad valorem property taxes for up to 10 years, commencing in the calendar year following the calendar year in which the Bonds are issued, if proper application is made. The Issuer's governing body has further found that the Project should be exempt from ad valorem property taxes for a period of 10 years, subject to a payment in lieu of taxes for each year of the exemption, as more particularly described in the Agreement for Payment in Lieu of Taxes. Prior to making this determination, the governing body of the Issuer has conducted the public hearing and reviewed the analysis of costs and benefits of such exemption required by K.S.A. 12-1749d. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF BEL AIRE,KANSAS: Section 1. Definition of Terms. All terms and phrases not otherwise defined in this ordinance will have the meanings set forth in the Bond Agreement and the Lease. Section 2. Authority to Cause the Project to Be Purchased and Constructed. The Issuer is authorized to cause the Project to be acquired, constructed, furnished and equipped in the manner described in the Bond Agreement and the Lease. Section 3. Authorization of and Security for the Bonds. The Issuer is authorized and directed to issue the Series 2013 Bonds, to be designated "City of Bel Aire, Kansas Taxable Industrial Revenue Bonds, Series 2013 (Broadstone Villas Project)" in the aggregate principal amount of not to exceed $5,500,000, for the purpose of providing funds to pay the costs of acquiring, constructing, furnishing and equipping the Project. The Series 2013 Bonds will be in such principal amount, will be dated and bear interest, will mature and be payable at such times, will be in such forms, will be subject to redemption and payment prior to maturity, and will be issued according to the provisions, covenants and agreements in the Bond Agreement. The Series 2013 Bonds will be special limited obligations of the Issuer payable solely from revenues generated from the Project and the Lease of the Project. Section 4. Authorization of Bond Agreement. "the Issuer is authorized to enter into the Bond Agreement with the Bank and the Tenant in the form approved in this ordinance. The Issuer SOS'601000.052\ORDIN 2 will issue and sell the Bonds and provide for payment of the Bonds and interest thereon from the revenues derived by the Issuer under the Lease and other moneys as described in the Bond Agreement, all on the terms and conditions in the Bond Agreement. Section 5. Lease of the Project. The Issuer will acquire, construct, furnish and equip the Project and lease it to the Tenant according to the provisions of the Lease in the form approved in this ordinance. Section 6. Authorization of Origination Fee Agreement. At or prior to the issuance of the Series 2013 Bonds, the Issuer will enter into the Origination Fee Agreement with the Tenant providing for the payment to the Issuer of an origination fee upon the terms and subject to the conditions set forth in such agreement, in the form approved in this ordinance. Section 7. Execution of Bonds and Bond Documents. The Mayor of the Issuer is authorized and directed to execute the Series 2013 Bonds and deliver them to the Bank for authentication on behalf of the Issuer in the manner provided by the Act and in the Bond Agreement. The Mayor or member of the Issuers governing body authorized by law to exercise the powers and duties of the Mayor in the Mayor's absence is further authorized and directed to execute and deliver the Bond Documents on behalf of the Issuer in substantially the forms presented for review prior to passage of this ordinance, with such corrections or amendments as the Mayor or other person lawfully acting in the absence of the Mayor may approve, which approval shall be evidenced by his or her signature. The authorized signatory may all sign and deliver other documents, or certificates as may be necessary or desirable to carry out the purposes and intent of this ordinance and the Bond Documents. The City Clerk or the Deputy City Clerk of the Issuer is hereby authorized and directed to attest the execution of the Series 2013 Bonds, the Bond Documents and such other documents, certificates and instruments as may be necessary or desirable to carry out the intent of this ordinance under the Issuer's corporate seal. Section 8. 'Pax Exemption; Payment in Lieu of Taxes. The Project will be exempt from ad valorem property taxes for 10 years, commencing in the calendar year after the calendar year in which the Series 2013 Bonds are issued. The Tenant will prepare the application for exemption and submit it to the Issuer for its review. After its review,the Issuer will submit the application for exemption to the State Court of Tax Appeals. The Issuer is authorized to enter into the Agreement for Payment in Lieu of Taxes in substantially the form presented for review prior to passage of this ordinance. Section 9. Pledge of the Project and Net Lease Rentals. The Issuer hereby pledges the Project and the net rentals generated under the Lease to the payment of the Series 2013 Bonds in accordance with K.S.A. 12-1744. The lien created by the pledge will be discharged when all of the Series 2013 Bonds have been paid or deemed to have been paid under the Bond Agreement. Section 10. Further Authority. The officials,officers, agents and employees of the Issuer are authorized and directed to take whatever action and execute whatever other documents or certificates as may be necessary or desirable to carry out the provisions of this ordinance and to carry out and perform the duties of the Issuer with respect to the Series 2013 Bonds and the Bond Documents. SM601000.052WDIN 3 Section 11. Effective Date. This ordinance shall take effect after its passage by the governing body of the Issuer, signature by the Mayor and publication once in the Issuer's official newspaper. PASSED by the governing body of the City of Bel Aire, Kansas this 19°i day of November, 2013. APPROVED AND SIGNED by the Mayor of the City of Bel Aire, Kansas this 19'h day of November, 2013. [SEAL] Mayor Attest: v City Clerk SOS160I 000.052V0RDIN 4 CERTIFICATE OF COPY I hereby certify that the attached copy is a true and correct copy of Ordinance No. 531 of the City of Bel Aire, Kansas duly passed by the governing body, signed by the Mayor and published in the official City newspaper on the respective dates stated in this ordinance, and that the signed original of such ordinance is on file in my office. [SEAL] 146ED City C rl SUS\601 OW052\01Z DIN 5 AGREEMENT FOR PAYMENT IN LIEU OF TAXES This Agreement, entered into as of November 19, 2013 between the City of Bel Aire, Kansas(the "Issuer")and Broadstone Villas, LP (the "Tenant"); WITNESSETH THAT: 1. Tax Exemption; Payment in Lieu of Taxes. In consideration of the issuance by the Issuer of its Taxable Industrial Revenue Bonds, Series 2013 (Broadstone Villas Project), in the principal amount of not to exceed$5,500,000 (the "Series 2013 Bonds") to finance the acquisition, construction, furnishing and equipping of an affordable housing residential rental facility (the "Project")to be leased by the issuer to the Tenant and in consideration of the Tenant's execution of the lease of the Project financed with the proceeds of the Series 2013 Bonds, and in consideration of the laws of the State of Kansas affording exemption from ad valorem property taxation for the portion of the Project acquired, purchased or constructed with the proceeds of the Series 2013 Bonds for a period commencing with the year 2014, and the agreement by the Issuer to apply for such exemption if the payments provided for herein are made, the Tenant agrees to make payments in lieu of ad valorem property taxes in the amounts specified herein, in the manner provided for herein. 2. Amount of Payments; Place of Payment. In lieu of general ad valorem property taxes on the Project for calendar years 2014 through and including 2023, other than special assessments levied on account of special benefits, the Tenant shall pay by separate check to the Treasurer of Sedgwick County, Kansas, or other appropriate office as directed by the Issuer, on or before December 20 in each of the years 2014 through and including 2023, with the privilege of half payment as provided by law for general ad valorem taxes, a payment in lieu of taxes, the total amount of which is specified below, to be distributed as and for a part of the general ad valorem tax collections for all taxing subdivisions in which the Project is located. The total amount of such payments shall be determined as follows: Calendar Year Payment in Lieu of Taxes 1 0% 2 05% 3 10% 4 15% 5 20% 6 100% 7 100% 8 100% 9 100% 10 100% (expressed as a percentage of ad valorem tax otherwise payable in respect of the Project) KMCVi01000.052TILOT The amount of such payment in lieu of taxes will be determined in the same manner and according to the same statutory procedure as general ad valorem taxes, real and personal, as the case may be, are determined, using the valuations determined by the Sedgwick County Appraisers office. Such payments shall be distributed to all applicable taxing subdivisions in Sedgwick County as provided in K.S.A. 12-1742. 3. Reduction of Payment for Actual Taxes Paid. The annual amount to be paid pursuant to Paragraph 2 above shall be reduced (but not below zero) by any actual ad valorem tax payments paid in respect of the real property constituting a part of the Project by or on behalf of the Tenant for any given year(other than special assessments). 4. Special Assessments. Any special assessments levied against the real property portion of the Project, if any, shall not abate and shall continue to be the obligation of the Tenant, payable in the manner provided by law. 5. Failure to Make Payment in Lieu of Taxes. Should the Tenant fail to make the payments required above, penalties and/or interest will be assessed against the Tenant by the Sedgwick County Treasurer in accordance with applicable state laws relating to late tax payments. If the Tenant fails to make a payment required by this Agreement and such failure shall continue for one year, this Agreement shall be deemed terminated effective as of December 20 in the year such payment was originally due, and Tenant agrees that from and after such termination date, it shall pay in full the regular amount of ad valorem real estate and personal property taxes on the property constituting the Project. G. Approval of Exemption. This Agreement is conditioned on the issuance by the Court of Tax Appeals of the State of Kansas of an order exempting the bond-financed portion of the Project from ad valorem taxation in accordance with Kansas law, including particularly K.S.A. 79-201 a Second. 7. Counterparts. This Agreement may be executed simultaneously and several camteiparts, each of which shall be deemed to be an original and all of which shall constitute the same instrument. 8. Transferability. The benefits of this Agreement may be transferred to any assignee of the Lease of the Project made in accordance with the provisions of the Lease between the Issuer and the Tenant. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] rM060 1 ooa.o52Tn.o r 2 IN WITNESS WHEREOF, the Issuer has caused this Agreement to be signed by a duly authorized official, such signature to be attested by a duly authorized officer and its official seal to be applied, and the Tenant has caused this Agreement to be signed on its behalf by a duly authorized officer, such signature attested by a duly authorized officer, and its corporate seal (if any) to be applied, as of the day and year first above written. CITY OF BEL AIRE, KANSAS By: Jc id A stin, Mayor [SEAL] ATTEST: ou& Ja le Hayes, City C c KMC1601000.052\P1 LOT 3 BROADSTONE VILLAS, LP By: Title: Limited Partner KMC\601000.052TILOT 4