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Legislation #: 090123 Introduction Date: 2/12/2009
Type: Ordinance Effective Date: 2/20/2009
Sponsor: None
Title: Approving the restructuring and reissuance of certain bonds previously issued by The Industrial Development Authority of the City of Kansas City, Missouri to finance the Kansas City Downtown Redevelopment District Project and the entering into of one or more agreements by such Authority relating to such bonds; approving and authorizing certain documents and actions relating to the restructuring and reissuance of such bonds; amending Committee Substitute for Ordinance No. 080636 to conform to the current transaction; and declaring an emergency.

Legislation History
DateMinutesDescription
2/11/2009 Filed by the Clerk's office
2/12/2009 Referred to Finance and Audit Committee
2/18/2009 Advance and Do Pass as Second Committee Substitute, Debate
2/19/2009 Councilmember Hermann Move to Amend
2/19/2009 Passed as Substituted and Amended

View Attachments
FileTypeSizeDescription
090123.pdf Authenticated 347K authenticated
http://kansascity.granicus.com/ViewSearchResults.php?view_id=2&keywords=090123 Video Link 0K http://kansascity.granicus.com/ViewSearchResults.php?view_id=2&keywords=090123
#272877v4_MNDCiManage_ - Reimbursement Agreement.DOC Other 361K Other
KC LIVE ordinance_fact_sheet_v5.xls Fact Sheet 54K Fact Sheet
fiscal notes-KC LIVE remarketing ordinance v2.xls Fiscal Note 63K Fiscal Note

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SECOND COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 090123, AS AMENDED

 

Approving the restructuring and reissuance of certain bonds previously issued by The Industrial Development Authority of the City of Kansas City, Missouri to finance the Kansas City Downtown Redevelopment District Project and the entering into of one or more agreements by such Authority relating to such bonds; approving and authorizing certain documents and actions relating to the restructuring and reissuance of such bonds; amending Committee Substitute for Ordinance No. 080636 to conform to the current transaction; and declaring an emergency.

 

WHEREAS, at the request of the City, The Industrial Development Authority of the City of Kansas City, Missouri (the Authority) previously issued and thereafter reissued its $114,915,000.00 Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District) Series 2005A (the Series 2005A Bonds), $64,985,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District) Series 2005B (the Series 2005B Bonds), $69,500,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District), Series 2006A (the Series 2006A Bonds) and $45,500,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District) Series 2006B (the Series 2006B Bonds and collectively, the KC Live Bonds) to finance the costs of the Citys Kansas City Downtown Redevelopment Project (the Project), pursuant to the Amended and Restated Indenture, as amended and supplemented (the Amended and Restated Indenture) by and between the Authority and UMB Bank, N.A., as Trustee; and

WHEREAS, pursuant to Committee Substitute for Ordinance No. 080636 (the Prior Ordinance), the City previously approved, among other things, the issuance of the Citys special obligation refunding bonds to provide funds to pay the costs of refunding on a current basis the Series 2005B Bonds, Series 2006A Bonds and Series 2006B Bonds (collectively, the Variable Rate KC Live Bonds); and

WHEREAS, the City has determined that instead of the City issuing its special obligation bonds to refund the Variable Rate KC Live Bonds, it would be preferable to authorize a restructuring and reissuance of the Variable Rate KC Live Bonds by the Authority under the Amended and Restated Indenture, inasmuch as the Authoritys Series 2005A Bonds will remain outstanding as fixed rate bonds under such Amended and Restated Indenture, so that the terms and provisions of all four series of Bonds issued to finance the Project will be governed by the same indenture of trust; and

WHEREAS, the Prior Ordinance approved the provision of credit support and liquidity support for the Variable Rate KC Live Bonds, following the proposed refunding, through a letter of credit to be provided initially by DEPFA Bank plc, which presently provides credit support for the Variable Rate KC Live Bonds under a standby bond purchase agreement; however, the credit ratings of DEPFA Bank plc have been downgraded, and the City has therefore determined that letter of credit support and liquidity support for the Variable Rate KC Live Bonds, as restructured, should initially be provided by JPMorgan Chase Bank, National Association (the Letter of Credit Provider); and

WHEREAS, the City wishes to authorize the restructuring and reissuance of the Variable Rate KC Live Bonds by the Authority, and to provide that credit support and liquidity support for such bonds will be provided by a letter of credit rather than a standby bond purchase agreement, with such letter of credit to be provided initially by the Letter of Credit Provider; and

WHEREAS, in connection with such restructuring and reissuance, the Authority will enter into a supplemental indenture of trust, amending and supplementing the Amended and Restated Indenture, dated as of the date set forth therein; and

WHEREAS, the City wishes to amend the Prior Ordinance to provide for the restructuring and reissuance of the Variable Rate KC Live Bonds by the Authority rather than for the City to issue special obligation refunding bonds, and to provide for the change of designation of letter of credit provider; and

WHEREAS, the Authority has entered into certain swap agreements relating to the Series 2005B Bonds and the Series 2006A Bonds, which swap agreements may be amended and supplemented upon the restructuring and reissuance of such bonds to conform to the supplemental indenture of trust; and

WHEREAS, an emergency exists, in that the public bond market is in flux, there has been a downgrade in the rating of Ambac Assurance Corporation, the insurer of the Bonds, and of DEPFA Bank pfc, the liquidity provider for the Bonds, and consequently the costs to the City relating to the remarketing of the Variable Rate KC Live Bonds under the existing terms thereof have escalated which causes a significant and ongoing drain upon financial resources and other public property of the City; the restructuring and reissuance of the Variable Rate KC Live Bonds is intended to result in a reduction in such costs to the City upon such restructuring and reissuance; and authorization for the expeditious restructuring and reissuance of such Variable Rate KC Live Bonds is needed for the immediate preservation of the public property, health, safety or morals of the City; and

WHEREAS, the City has found and determined that restructuring and reissuing the Variable Rate KC Live Bonds issued to finance the Project will benefit the citizens of the City; and

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

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

Section 1. Approval of Restructuring and Reissuance of Bonds. The City hereby requests, directs and instructs the Authority to restructure and reissue the Variable Rate KC Live Bonds, and consents to and approves the restructuring and reissuance by the Authority of the Variable Rate KC Live Bonds issued to finance the Project, with credit support and liquidity support for such Variable Rate KC Live Bonds to be provided by a letter of credit, initially to be provided by JPMorgan Chase Bank, National Association as the Letter of Credit Provider. The City further approves the remarketing of each series of the Variable Rate KC Live Bonds to facilitate such transactions. The City further directs and approves that the aggregate principal amount of the Variable Rate KC Live Bonds be increased in order to provide funds to pay the costs of the restructuring and reissuance of the Variable Rate KC Live Bonds, provided, that the aggregate principal amount of the Variable Rate KC Live Bonds following such restructuring and reissuance shall not exceed $185,000,000.00. The Variable Rate KC Live Bonds upon such restructuring and reissuance shall have such other terms and provisions as shall be provided in the supplemental indenture of trust approved by the Director of Finance. The Director of Finance is further authorized and directed to approve the purchase price for each series of the Variable Rate KC Live Bonds upon the restructuring and reissuance thereof, the principal amounts by maturity, the interest rates, the terms of credit enhancement and the other final terms of each series of the Bonds, including applicable redemption provisions, subject to the limitations set forth in this Section.

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 on file with the City Clerk, 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. Reimbursement Agreement between the City and JPMorgan Chase Bank, National Association relating to the Variable Rate KC Live Bonds.

The City Council further approves the execution and delivery by the City of any documents which may be required in connection with the restructuring and reissuance of the Variable Rate KC Live Bonds and the execution and delivery by the Issuer of the supplemental indenture of trust supplementing the Amended and Restated Indenture, any amendment of the swap agreement relating thereto, any amendment of the Financing Agreement and Tax Compliance Certificate relating thereto, any documents relating to the remarketing of the Bonds 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. Official Statement/Remarketing Statement. The City hereby delegates authority to the Director of Finance to prepare, approve and deem final any Preliminary Official Statement and/or Remarketing Statement and any final Official Statement and/or Remarketing Statement, with the signature of the Director of Finance thereon being conclusive evidence of the Director's approval and the City's approval thereof and to approve the final terms of each series of the Bonds, including any credit enhancement of a series of the Bonds. The City hereby consents to the use and public distribution of any Preliminary Official Statement and/or Remarketing Statement and any final Official Statement and/or Remarketing Statement in connection with the offering for sale of each series of the Variable Rate KC Live Bonds.

Section 4. Approval of Selection of Professionals. The City approves the selection of First Southwest Company and Valds & Moreno, Inc. to act as Co-Financial Advisors in connection with the restructuring and reissuance of the KC Live Variable Rate 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 restructuring and reissuance of the KC Live Variable Rate Bonds. The City approves the selection of Kutak Rock LLP to act as Swap Counsel in connection with the restructuring and reissuance of the KC Live Variable Rate Bonds. The City approves the selection of J.P. Morgan Securities, Inc, to act as Remarketing Agent for the Variable Rate KC Live Bonds. The City approves the selection of Bryan Cave, LLP, and Fields & Brown, LLC to act as Co-Disclosure Counsel in connection with the restructuring and reissuance of the KC Live Variable Rate Bonds. The City approves the selection of JPMorgan Chase Bank, National Association to act as the initial Letter of Credit Provider in connection with the restructuring and reissuance of the KC Live Variable Rate Bonds.

Section 5. Amendment of Prior Ordinance.

(1) Section 3 of the Prior Ordinance is hereby amended by deleting subsections (e) and (f) thereof, and by deleting subsections (j) and (k) and replacing said subsections (j) and (k) with the following:

(j) Remarketing Agreement between the City and the applicable Remarketing Agent, relating to the Refunding Bartle Hall Bonds.

(k) Tender Agent Agreement among the City, the applicable Trustee, the applicable Tender Agent and the applicable Remarketing Agent, relating to the Refunding Bartle Hall Bonds.

(2) Section 5 of the Prior Ordinance is hereby deleted and replaced with the following:

Section 5. Refunding and Redemption of Prior Arena Bonds and Prior Bartle Hall Bonds. The Corporations refunding and redemption of the Prior Arena Bonds and the Prior Bartle Hall Bonds is hereby approved and the Acting Director of Finance is hereby authorized and directed to execute, enter into and deliver on behalf of the City any bond purchase agreement, escrow deposit agreement and such other documents, certificates and instruments with respect thereto as the Acting Director of Finance determines to be in the best interest of the City.

(3)               Section 7 of the Prior Ordinance is hereby amended by deleting subsection (c) thereof.

Section 6. That the sum of $1,400,000.00 is hereby appropriated from the Unappropriated Fund Balance of the Downtown Redevelopment District Debt Fund (No. 5320) to the following account in the Downtown Redevelopment District Debt Fund:

09-5320-129600-G Debt Service $1,400,000.00

Section 7. 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 8. Emergency. The City declares that an emergency exists under the provisions of Section 503(a) of the Charter of Kansas City. This ordinance shall take effect in accordance with that section.

________________________________________________

Approved as to form and legality:

 

 

_______________________________

Heather A. Brown

Assistant City Attorney