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Legislation #: 100815 Introduction Date: 9/30/2010
Type: Ordinance Effective Date: 4/21/2011
Sponsor: None
Title: Approving the refunding of certain bonds previously issued by the Industrial Development Authority of the City of Kansas City, Missouri and the issuance of refunding bonds in a fixed interest rate mode and the termination of swap agreements entered into by such Issuer relating to such bonds; approving and authorizing certain documents and actions relating to the refunding of bonds and termination of swap agreements relating to such bonds; approving the amendment of certain documents and agreements to effect the removal of certain property from the South Loop Downtown Economic Stimulus Plan; appropriating amounts from Unappropriated Fund Balance of the KC Live District Fund – Series 2006B; designating requisitioning authority; and recognizing an emergency.

Legislation History
DateMinutesDescription
9/29/2010 Filed by the Clerk's office
9/30/2010 Referred to Finance and Audit Committee
10/13/2010 Hold Off Agenda
4/20/2011 Advance and Do Pass as a Committee Substitute, Debate
4/21/2011 Passed as Substituted

View Attachments
FileTypeSizeDescription
Certificate of Final Terms 6-1-11.pdf Other 44K Certificate of Final Terms
cs 100815.pdf Authenticated 1486K Authenticated copy plus compared version
100815.pdf Authenticated 248K AUTHENTICATED
Other 0K sent to finance
RevisedAdmin___Apprp_ 4-6-11.xls Other 45K Revised Admin Approp
Admin___Apprp_ 4-6-11.xls Other 45K Appropriation & Admin Form
Fiscal Note 4-6-11.xls Fiscal Note 74K Fiscal Note
Revised IDA_Series_2011A_Fact_Sheet_4-12-11.xls Fact Sheet 201K Revised Fact Sheet
http://kansascity.granicus.com/ViewSearchResults.php?view_id=2&keywords=100815 Video Link 0K http://kansascity.granicus.com/ViewSearchResults.php?view_id=2&keywords=100815
IDA Series 2010A Fact Sheet 9-29-10 Revised.xls Fact Sheet 206K IDA Series 2010A Fact Sheet
IDA Series 2010A Fact Sheet 9-27-10 v3.xls Fact Sheet 206K Fact Sheet

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COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 100815

 

Approving the refunding of certain bonds previously issued by the Industrial Development Authority of the City of Kansas City, Missouri and the issuance of refunding bonds in a fixed interest rate mode and the termination of swap agreements entered into by such Issuer relating to such bonds; approving and authorizing certain documents and actions relating to the refunding of bonds and termination of swap agreements relating to such bonds; approving the amendment of certain documents and agreements to effect the removal of certain property from the South Loop Downtown Economic Stimulus Plan; appropriating amounts from Unappropriated Fund Balance of the KC Live District Fund – Series 2006B; designating requisitioning authority; and recognizing an emergency.

WHEREAS, the Industrial Development Authority of the City of Kansas City, Missouri (the “Issuer”) is a public corporation duly organized and existing under Chapter 349, Revised Statutes of Missouri, as amended (the “Act”); and

WHEREAS, pursuant to the Indenture of Trust, dated as of March 1, 2005 (the “Original Indenture”) between the Issuer and UMB Bank, N.A., as Trustee, as amended and supplemented by a First Supplemental Indenture of Trust, dated as of July 1, 2006 (the “First Supplemental Indenture”), the Issuer has previously issued its $115,015,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District), Series 2005A (the “Series 2005A Bonds”), its $64,985,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District) Series 2005B (the “Series 2005B Bonds”), its $69,500,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District), Series 2006A (the “Series 2006A Bonds”) and its $45,500,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District) Series 2006B (the “Series 2006B Bonds”) (collectively, the “Bonds”) to finance certain costs associated with the Kansas City Downtown Redevelopment Project (the “Project”); and

WHEREAS, in connection with the issuance of the Bonds, the City and the Issuer have previously entered into a Financing Agreement dated as of March 1, 2005 (the “2005 Financing Agreement”) and a Financing Agreement dated as of July 1, 2006 (the “2006 Financing Agreement” and collectively, the “Financing Agreement”) pursuant to which the City has agreed, subject to annual appropriation, to make certain payments to pay debt service on the Bonds and to make certain additional payments; and

WHEREAS, the Issuer, at the request of the City, amended the Original Indenture and the First Supplemental Indenture pursuant to the Amended and Restated Indenture of Trust dated as of June 1, 2007 (the “Amended and Restated Indenture”) to facilitate a restructuring of the Series 2005A Bonds, the Series 2005B Bonds, the Series 2006A Bonds and the Series 2006B Bonds; and

WHEREAS, the Series 2005A Bonds were restructured and converted to a fixed rate of interest in the principal amount of $114,915,000.00 pursuant to the Series 2005A Series Supplement dated as of June 6, 2007 (the “Series Supplement”); and

WHEREAS, at the request of the City, the Issuer entered into an ISDA Master Agreement, Schedule, Credit Support Annex and a Confirmation (collectively, the “swap agreements”) with each of certain counterparties including, as in effect at the present time, UBS-AG and Barclays Bank PLC, each relating to a portion of the Series 2005B Bonds and the Series 2006A Bonds, swapping the floating interest rate thereon to a fixed rate (subject to the conditions set forth in the swap agreements); and

WHEREAS, in connection with such swap transaction, the City and the Issuer entered into a Supplement to the Financing Agreement (Swap Transactions); and

WHEREAS, when the Bonds were initially issued, each series of the Bonds was insured by Ambac Assurance Corporation, and liquidity support for each series of variable rate bonds was initially provided by Depfa Bank, plc pursuant to Standby Bond Purchase Agreements providing for payment of the purchase price of variable rate bonds tendered for purchase; and

WHEREAS, on March 25, 2009, the Issuer and the City replaced the Depfa Bank, plc liquidity facility with an irrevocable direct-pay letter of credit provided by JPMorgan Chase Bank, National Association, and terminated the Standby Bond Purchase Agreement relating to the Series 2005B Bonds, the Series 2006A Bonds and the Series 2006B Bonds, the Issuer and the City terminated the bond insurance policy relating to such Bonds, and the Series 2005B Bonds, the Series 2006A Bonds and the Series 2006B Bonds were reissued pursuant to the terms and provisions of the Second Supplemental Indenture dated as of March 1, 2009 (the “Second Supplemental Indenture”) by and between the Issuer and the Trustee; the Series 2006B Bonds were reissued in the principal amount of $46,135,000; and

WHEREAS, the City now proposes that the Issuer issue refunding bonds (the “Refunding Bonds”) to refund the Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds and that the Refunding Bonds be issued in a fixed interest rate mode, and the Issuer has approved such issuance; and

WHEREAS, in connection with such refunding of the Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds and issuance of Refunding Bonds in a fixed interest rate mode, the Issuer will enter into a supplemental indenture supplementing the Amended and Restated Indenture, dated as of the date set forth therein; and

WHEREAS, the City proposes that the swap agreements relating to the Series 2005B Bonds and Series 2006A Bonds be terminated at the time of refunding of the Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds and the issuance of Refunding Bonds in a fixed interest rate mode, and that the Remarketing Agreements relating to, and letter of credit securing, such Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds be terminated at such time, and the Issuer has approved such termination; and

WHEREAS, the City has found and determined that the refunding of the Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds and the issuance of Refunding Bonds in a fixed interest rate mode and the termination of the swap agreements with respect to the Series 2005B Bonds and Series 2006A Bonds issued to finance the Project will benefit the citizens of the City; and

WHEREAS, the City is authorized under the Downtown and Rural Economic Stimulus Act, Sections 99.915 to 99.1060, inclusive, of the Revised Statutes of Missouri, as amended (the “DESA Act”), to approve development plans, establish a special allocation fund and pledge such fund to the repayment of obligations issued to finance such development plans; and

WHEREAS, the City Council of the City has approved the formation of the Downtown Economic Stimulus Authority of Kansas City, Missouri (“DESA”) pursuant to the DESA Act; and

WHEREAS, after all proper notice was given, DESA held a public hearing and after receiving the comments of all interested persons and taxing districts with respect to the South Loop Downtown Economic Stimulus Plan (the “DESA Plan”), closed such public hearing on June 30, 2004, and adopted its Resolution No. 6-5-04 recommending to the City Council the approval of the DESA Plan and the Development Project described therein (the “DESA Project”); and

WHEREAS, the City Council of the City on July 1, 2004, by Committee Substitute for Ordinance No. 040722 approved the DESA Plan and the DESA Project; and

WHEREAS, the City is authorized under the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800 to 99.865, inclusive, of the Revised Statutes of Missouri, as amended (the “TIF Act”), to approve redevelopment plans, establish a special allocation fund and pledge such fund to the repayment of obligations issued to finance such redevelopment plans; and

WHEREAS, after all proper notice was given, the Tax Increment Financing Commission of Kansas City, Missouri (the “TIF Commission”) held a public hearing and after receiving the comments of all interested persons and taxing districts with respect to the 1200 Main/South Loop Tax Increment Redevelopment Plan, closed such public hearing on January 14, 2004, adopted its Resolution No. 01‑10‑04 recommending to the City Council the approval of the 1200 Main/South Loop Tax Increment Financing Plan (the “TIF Plan”); and

WHEREAS, the City Council of the City on March 4, 2004, by Ordinance No. 040154 approved the TIF Plan; and

WHEREAS, in order to set forth the terms of their respective rights, duties and obligations, the City has entered into a Cooperative Agreement by and between the City and DESA (the “DESA Cooperative Agreement”), which set forth their roles and responsibilities in connection with the implementation of the Project and the payment of debt service on the Series 2005A Bonds; and

WHEREAS, DESA Revenues (as defined in the Indenture) are pledged to the payment of the Series 2005A Bonds; and

WHEREAS, the DESA Plan includes a block, Block 123, the legal description of which is as set forth in the DESA Plan (such block, as so legally described in the DESA Plan, is hereinafter referred to as “Block 123”), which is not included in the TIF Plan, there has been no development of Block 123 under the DESA Plan or otherwise as a part of the Project, and no DESA Revenues have been generated from Block 123; and

WHEREAS, the City wishes to remove Block 123 from the DESA Plan and the DESA Cooperative Agreement in order to facilitate development of Block 123 other than as a part of the Project, and to amend such documents as required to accomplish such removal; and

WHEREAS, in order to accomplish the foregoing, it is necessary and desirable that the City approve the transactions described in this Ordinance and the execution and delivery of the financing documents and certain other matters in connection with the transactions, as herein provided; NOW, THEREFORE,

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

Section 1. Approval of an Amendment to the Indenture, Refunding of Bonds and the Issuance of Refunding Bonds in a Fixed Interest Rate Mode, and Termination of Swap Agreements. The City hereby requests, directs and instructs the Issuer to, and consents to and approves the amendment of the Indenture by the Issuer and the refunding of the Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds and the issuance of Refunding Bonds in a fixed interest rate mode and the termination of the swap agreements with respect to the Series 2005B Bonds and the Series 2006A Bonds. The City hereby request, directs and instructs the Issuer to, and consents to and approves the issuance by the Issuer of the Refunding Bonds for such purpose, and the funding of certain costs of issuance of the Refunding Bonds and costs of the termination of such swap agreements. The City further consents to and approves the termination of the Remarketing Agreements relating to, and letter of credit securing, the Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds being refunded. The Refunding Bonds shall bear interest at rates such that the true interest cost of the Refunding Bonds shall not exceed 6.75% per annum, shall be issued in one or more series in an aggregate principal amount not to exceed $195,000,000 and shall have such other terms and provisions as shall be provided in the applicable supplemental indenture of trust and bond purchase agreement approved by the Director of Finance.

The Director of Finance is authorized and directed to approve the purchase price for the Refunding Bonds, the principal amounts by maturity, the interest rates, the terms of credit enhancement, if any, and the other final terms of the Refunding Bonds, including applicable redemption provisions, subject to the limitations set forth in this Section. The Director of Finance is authorized and directed to execute and deliver the Certificate of Final Terms for the Refunding Bonds for and on behalf of and as the act and deed of the City, which approval will be conclusively evidenced by the Director of Finance’s execution of the Certificate of Final Terms. Upon execution, the Certificate of Final Terms will be attached to this Ordinance as Exhibit A.

Section 2. Authorization and Approval of Financing Documents. The proposed documents relating to the financing (the “Financing Documents”) are hereby approved in substantially the forms submitted to the City Council, and the Director of Finance is authorized to execute and deliver the Financing Documents with such changes therein and additions thereto as the Director of Finance deems necessary or appropriate.

(a) Supplement to Financing Agreement.

(b) Continuing Disclosure Undertaking, under which the City agrees to provide continuing disclosure of certain financial information, operating data and material events, for the benefit of the owners of the Refunding Bonds.

The City Council further approves the execution and delivery by the City of any documents which may be required in connection with the execution and delivery by the Issuer of the supplemental indenture of trust and any documents relating to the refunding of the Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds and the issuance of Refunding Bonds in a fixed interest rate mode and the termination of the swap agreements, including any Tax Compliance Certificate relating thereto, any agreement relating to the underwriting of the Refunding Bonds, any swap termination agreement, any documents relating to the termination of the Remarketing Agreements and letter of credit and of such other documents as the Director of Finance deems necessary or appropriate in connection with the transactions authorized by this Ordinance.

Section 3. Refunding of Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds and Issuance of Refunding Bonds in a Fixed Interest Rate Mode. The refunding of the Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds by the Issuer and the issuance of Refunding Bonds in a fixed interest rate mode is hereby approved and the Director of Finance is hereby authorized and directed to execute, enter into and deliver on behalf of the City any documents, certificates and instruments with respect thereto as the Director of Finance determines to be in the best interest of the City.

Section 4. Termination of Swap Agreements Relating to Series 2005B Bonds and Series 2006A Bonds. The termination by the Issuer of the swap agreements relating to the Series 2005B Bonds and the Series 2006A Bonds is hereby approved and the Director of Finance is hereby authorized and directed to execute, enter into and deliver on behalf of the City any documents, certificates and instruments with respect thereto as the Director of Finance determines to be in the best interest of the City. The Director of Finance is delegated the power, in consultation with the financial advisor, to negotiate and approve the swap termination price and other terms and conditions of the swap termination with the respective counterparties.

Section 5. Official Statements. The City hereby delegates authority to the Director of Finance to prepare, approve and deem final any Preliminary Official Statements and any final Official Statements relating to the Refunding Bonds, with the signature of the Director of Finance thereon being conclusive evidence of the Director's approval and the City's approval thereof, and the Director of Finance is further authorized to approve the final terms of the Refunding Bonds. The City hereby consents to the use and public distribution of any Preliminary Official Statements and any final Official Statements in connection with the offering for sale of the Refunding Bonds.

Section 6. Approval of Selection of Professionals.

(a)                The City approves the selection of First Southwest Company and Moody Reid Financial Advisors to act as Co-Financial Advisors in connection with the issuance of the Refunding Bonds. The City approves the selection of Kutak Rock LLP and the Hardwick Law Firm LLC to act as Co-Bond Counsel in connection with the issuance of the Refunding Bonds. The City approves the selection of Kutak Rock LLP to act as Swap Counsel in connection with the issuance of the Refunding Bonds and termination of the swap agreements. The City approves the selection of Gilmore & Bell, PC and The Martinez Law Firm to act as Co-Disclosure Counsel in connection with the issuance of the Refunding Bonds. The City approves the selection of First Southwest Company to act as Swap Advisor in connection with the termination of the swap agreements.

(b)               The City approves the selection of Oppenheimer & Co. Inc., J.P. Morgan Securities LLC, Loop Capital Markets, LLC, Wells Fargo Brokerage Services, LLC, Stern Brothers & Co., Piper Jaffray & Co., Stifel Nicolaus & Company, Inc., Harvestons Securities, Inc. and Valdés & Moreno, Inc. to act as Underwriters in connection with the issuance of the Refunding Bonds.

Section 7. Approval of Amendment of DESA Plan and DESA Cooperative Agreement and Removal of Block 123. The City hereby authorizes and approves the amendment of the DESA Plan and the DESA Cooperative Agreement to remove Block 123 from such DESA Plan and DESA Cooperative Agreement, and the Director of Finance is authorized to approve the terms of such amendments. The City Council further approves the execution and delivery by the City of any amendatory documents which may be required in connection with the amendment of the DESA Plan and the DESA Cooperative Agreement and of such other documents as the Director of Finance deems necessary or appropriate in connection with such transaction.

Section 8. Appropriation. The sum of $1,322,953.00 is appropriated from the Unappropriated Fund Balance of the KC Live District Fund – Series 2006B to the following accounts in the KC Live District Fund – Series 2006B:

AL-3310-898014-B-89004678 ADA Signalization $ 175,500.00

AL-3310-078024-B-07FSBMNT Block 110 and 126 Booth

Additions 80,000.00

AL-3310-078024-B-07FSBMNT Johnson Controls Blocks 126,

110, and 124 250,000.00

AL-3310-078024-B-07FSBMNT Garage Elevators 50,000.00

AL-3310-898024-B Cordish Reimbursement 561,289.00

AL-3310-898044-G Capital Projects Department

Oversight 10,000.00

AL-3310-128044-G Legal Fees 28,664.00

AL-3310-122528-G TIF/EDC Amendment 10,000.00

AL-3310-129677-G Swap Termination Expenses 157,500.00

TOTAL $1,322,953.00

Section 9. Designation of Requisitioning Authority. The Director of Public Works is hereby designated as requisitioning authority for Account Numbers AL-3310-898014-B, AL-3310-898024-B and AL-3310-898044-G, the Director of General Services is hereby designated as requisitioning authority for account AL-3310-078024-B and the Director of Finance is hereby designated as requisitioning authority for account numbers AL-3310-128044-G, AL-3310-122528-G and AL-3310-129677-G.

Section 10. Closing of Project Accounts. The Director of Finance is hereby authorized to close project accounts upon project completion and return the unspent portion of the appropriation to the Fund Balance from which it came.

Section 11. Further Authority. The officials of the City are further authorized and directed to execute such documents, instruments and certificates and to take such further actions on behalf of the City as shall be necessary or desirable to effect the terms and provisions of this Ordinance.

Section 12. Emergency. This ordinance is recognized as an emergency measure within the provisions of Section 503(a)(3)(c) of the City Charter in that it appropriates money and shall take effect in accordance with that section.

____________________________________________

I hereby certify that there is a balance, otherwise unencumbered, to the credit of the appropriation to which the foregoing expenditure is to be charged, and a cash balance, otherwise unencumbered, in the treasury, to the credit of the fund from which payment is to be made, each sufficient to meet the obligation hereby incurred.

 

_______________________________

Randall J. Landes

Director of Finance

 

Approved as to form and legality:

 

 

_______________________________

Cecilia O’Connor Abbott

Assistant City Attorney