123971 RESOLUTION NO. 12,397
2 A RESOLUTION AUTHORIZING THE ENTRY INTO AN
3 AGREEMENT TO ISSUE BONDS FOR THE PURPOSE OF
4 ASSISTING IN THE FINANCING OF INDUSTRIAL FACILITIES
5 WITHIN THE CITY OF LITTLE ROCK, ARKANSAS, TO BE
6 LEASED TO ARKANSAS AEROSPACE, INC., A SUBSIDIARY OF
7 RAYTHEON AIRCRAFT COMPANY, PURSUANT TO THE
8 AUTHORITY OF THE LAWS OF THE STATE OF ARKANSAS,
9 INCLUDING PARTICULARLY AMENDMENT 65 TO THE
10 ARKANSAS CONSTITUTION AND THE MUNICIPALITIES
11 AND COUNTIES INDUSTRIAL DEVELOPMENT REVENUE
12 BOND LAW.
13
14 WHEREAS, the City of Little Rock, Arkansas (the "City "), is authorized under
15 the provisions of Amendment 65 to the Arkansas Constitution and the Municipalities
16 and Counties Industrial Development Revenue Bond Law, Arkansas Code Annotated
17 §§ 14- 164 -201 to -224 (Michie Repl. 1998 & Supp. 2005), as amended (the "Act "), to own,
18 acquire, construct, equip, and lease facilities to secure and develop industry and to
19 assist in the financing thereof by the issuance of bonds payable from the revenues
20 derived from such facilities; and
21 WHEREAS, Arkansas Aerospace, Inc., a subsidiary of Raytheon Aircraft
22 Company, which is a division of Raytheon Company, a Delaware corporation (the
23 "Company "), has evidenced its interest in acquiring, constructing, and equipping an
24 expansion of its industrial facilities at Little Rock National Airport within the City if the
25 permanent financing can be provided through the issuance of bonds under the
26 authority of the Act; and
27 WHEREAS, following notice published in the Arkansas Democrat - Gazette on
28 November 8, 2002, and delivered to the Superintendent of Schools for the Little Rock
29 School District and Chief Fiscal Officer for the State of Arkansas, the City held a public
30 hearing on November 19, 2002, regarding the issuance of bonds to finance the
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1 acquisition, construction, and equipping an industrial facility to be owned by the City
2 and leased to and operated by the Company, consisting of expansion of existing
3 buildings and a new hangar and associated workspace for designing, manufacturing,
4 and installing completion of business jet aircraft, to be located at the Little Rock
5 National Airport, Adams Field, 2400 David Grundfest Jr. Drive, Little Rock, Arkansas
6 72202, and adopted Resolution No. 11,439, authorized entry into an Agreement to Issue
7 Bonds for this purpose and approving a form of PILOT Agreement providing for no
8 payments for the first 10 years and payments equal to 35% of the aggregate amount of
9 ad valorem taxes that would be paid if the project were on the tax rolls for the following
10 10 years; and
11 WHEREAS, the bonds have not been issued and the expansion project proposed
12 in 2002 has not been undertaken; and
13 WHEREAS, the Company now proposes to undertake a portion of the project
14 and the Company and the City desire to alter the form of PILOT Agreement to provide
15 for payments equal to 35% of the aggregate amount of ad valorem taxes that would be
16 paid if the project were on the tax rolls for a period of 20 years;
17 NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
18 THE CITY OF LITTLE ROCK, ARKANSAS that:
19 Section 1. The form of Agreement to Issue Bonds and of PILOT Agreement
20 approved in Resolution No. 11,439 are hereby amended by substituting the following:
21 AGREEMENT TO ISSUE BONDS
22 THIS AGREEMENT is made as of December 2006, by and between the City
23 of Little Rock, Arkansas, a city of the first class under the laws of the State of Arkansas
24 (the "City "), and Arkansas Aerospace, Inc., a subsidiary of Raytheon Aircraft Company,
25 which is a division of Raytheon Company, a Delaware corporation (the "Company "),
26 for the purpose of carrying out the purposes set forth in the Municipalities and Counties
27 Industrial Development Revenue Bond Law, Arkansas Code Annotated §§ 14- 164 -201
28 to -224 (Michie Repl. 1998 & Supp. 2005), as amended (the "Act ").
29 WITNESSETH:
30 WHEREAS, the City is authorized by Amendment 65 to the Arkansas
31 Constitution and the Act to own, acquire, construct, reconstruct, extend, equip,
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1 improve, operate, maintain, sell, lease, or contract concerning, or otherwise deal in or
2 dispose of any land, buildings, or facilities of any and every nature that can be used in
3 securing or developing industry within or near the City; and
4 WHEREAS, the City has determined that such purposes may be served by
5 cooperation with the Company in the acquisition, construction, and equipping of
6 industrial facilities located at Little Rock National Airport in the City to be used in the
7 Company's business of designing, manufacturing, and installing completion of business
8 jet aircraft and for other lawful purposes of the Company as may be profitable to it; and
9 WHEREAS, the facility will be located at the Little Rock National Airport,
10 Adams Field, 2400 David Grundfest Jr. Drive, Little Rock, Arkansas 72202, and will
11 consist of acquiring, constructing, and equipping an industrial facility consisting of
12 expansion of existing buildings and a new hangar and associated workspace for
13 designing, manufacturing, and installing completion of business jet aircraft (the
14 "Project "); and
15 WHEREAS, the City and the Company desire to cooperate in the acquisition,
16 constructing, and equipping of the Project and to have the costs of the Project financed
17 from the proceeds of revenue bonds of the City (the "Bonds ") to be issued pursuant to
18 the Act in an aggregate principal amount now estimated not to exceed $17,000,000
19 (excluding any bonds issued to refund the Bonds); and
20 WHEREAS, the City and the Company intend to enter into a Second
21 Amendment to Lease Agreement (the "Lease ") of the real and personal property
22 constituting the Project, which contemplate that the Project will be leased to the
23 Company, with an option to purchase for a nominal price, and the rental payments
24 therefor together with other moneys available shall be sufficient to pay debt service on
25 the Bonds and all related costs;
26 NOW, THEREFORE, in consideration of the premises and other good and
27 valuable consideration under the mutual benefits, covenants, and agreements herein
28 expressed, the City and the Company agree as follows:
29 1. Proceedings. All proceedings in connection with the issuance of the Bonds
30 shall be consistent with the requirements of the Act. All references contained herein to
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1 the issuance of the Bonds shall be subject to compliance with the formalities of the Act
2 when the facts required to do so are determined.
3 2. Acquisition, Construction, and Equipping. The City and the Company will
4 cooperate in causing to be commenced and continued the required acquisition,
5 construction, and equipping of the Project, and the Company may provide, or cause to
6 be provided, the necessary interim financing to permit work on the Project to
7 commence and continue expeditiously pending the issuance of Bonds. Not later than
8 the date of issuance of the. Bonds, the Company will convey and transfer or cause to be
9 conveyed and transferred to the City, for an amount approximately equal to that then
10 expended by the Company (including at the Company's option any costs of interim
11 financing), the Project or portions thereof theretofore acquired, constructed, and
12 equipped. There shall also be conveyed to the City any easements and rights -of -way
13 necessary to permit construction, equipping, installation, operation, and maintenance of
14 the Project or such portion.
15 3. Lease. The City and the Company shall enter into the Lease under which the
16 Company will lease the Project, with an option to purchase for a nominal price, from the
17 City for a term not to exceed 20 years with respect to each Project and will agree to
18 make rental payments sufficient to pay the principal of and premium, if any, and
19 interest on the Bonds, together with all charges of any Trustee and /or any Paying Agent
20 for the Bonds.
21 4. Sale of Bonds, Security. The City will take such steps as are necessary to issue,
22 sell, and deliver the Bonds, pursuant to the terms of the Act, for the purposes of
23 financing the costs of the Project, in each case only upon receipt of the written
24 designation by the Company of the purchaser(s) or underwriter(s) thereof, such Bonds
25 to be in such principal amount, to mature in such amount and times, to bear interest at
26 such rate or rates, to be payable on such dates, and to have such optional and
27 mandatory redemption features and prices as are determined by the City and approved
28 in writing by the Company. The City further agrees that it will enter into the Lease and
29 a trust indenture with a bank or trust company, qualified to exercise trust powers where
30 necessary, for the purpose of providing rental payments sufficient, with other amounts
31 available from the Company or directly or indirectly from the proceeds of the Bonds, to
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1 pay the principal of and premium, if any, and interest on the Bonds as they become due
2 together with the charges of any Trustee and /or any Paying Agent for the Bonds, and
3 pledging and /or otherwise securing the payment of such rental payments for the benefit
4 of the holder(s) of the Bonds. The Lease, the trust indenture, other related documents,
5 and the Bonds shall contain such terms and conditions as are agreed upon by the City
6 and the Company. The City will cooperate in consummating the transactions so
7 contemplated.
8 5. Bonds to be Special Obligations. The City shall have no financial
9 responsibility with respect to the Project, the Bonds, or the costs associated with either,
10 and the Bonds shall be special obligations of the City and shall never constitute a
11 general obligation, indebtedness, or pledge of the credit of the City within the meaning
12 of any constitutional or statutory provision and shall never be paid in whole or in part
13 out of any funds raised or to be raised by taxation or any other revenues or other funds
14 of the City except those (including unexpended Bond proceeds) derived from or in
15 connection with the sale or lease of the Project as provided for herein.
16 6. Conditions of Issuance. The Bonds may be issued either at one time or in
17 several series from time to time, in such aggregate principal amount or amounts as the
18 Company shall request in writing; provided, however, that all conditions of the Act
19 shall have been met.
20 7. Costs to be Financed. The costs of the Project may include any costs
21 permissible under the Act, including but not limited to reasonable and necessary costs,
22 expenses, and fees incurred by the City in connection with the issuance of the Bonds or
23 in connection with the Project, such as out -of- pocket expenses incurred by any
24 employee of the City; fees and out -of- pocket expenses of Rose Law Firm, a Professional
25 Association, as bond counsel; fees and expenses of any trustee; fees and expenses, if
26 any, required in connection with the underwriting or placement of the Bonds; recording
27 costs; rating agency's fees, if any; and printing costs. The City will upon request provide
28 or cause to be provided any data or information which may be reasonably required to
29 verify any of the costs, expenses, and fees enumerated above.
30 8. Termination. In the event that the Bonds shall not be sold within five years
31 from the date hereof, this Agreement shall automatically terminate unless the parties
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1 hereto shall agree in writing to its extension for a further period of time specified in
2 such writing, which agreement on the part of the City shall not be unreasonably
3 withheld. The Company may unilaterally terminate this Agreement without liability to
4 the City (except for any amounts due and owing by the Company to the City arising out
5 of the transactions occurring on or before the time of such termination, which shall be
6 promptly paid by the Company to the City) by giving notice by ordinary mail, postage
7 prepaid, to the City specifying therein the date of termination, which may be the date of
8 the notice.
9 9. Protection to the City. The Company shall pay all of the City's costs and
10 expenses reasonably and necessarily incurred in connection with this Agreement or any
11 other related document or instrument. The Company will at all times indemnify and
12 hold harmless the City against any and all losses, costs, damages, expenses, and
13 liabilities of whatsoever nature directly or indirectly resulting from, arising out of, or
14 related to matters in connection with this Agreement. Such indemnification shall
15 include, but is not limited to, all clean -up costs, litigation costs, fines, or penalties
16 resulting from or relating to the real property on which the Project is to be located and
17 from any activities of the Company thereon.
18 10. Ad Valorem Taxation Exemption. The City and the Company recognize that
19 under the Arkansas Constitution and decisions of the Supreme Court of Arkansas and
20 in accordance with Arkansas Code Annotated (Michie Repl. 1998 & Supp. 2005) §§ 14-
21 164 -701 to -703, the Project will be exempt from ad valorem taxation. The City agrees
22 that the Company shall be required to enter into an Agreement for Payments in Lieu of
23 Taxes ( "PILOT Agreement ") with the City for payments in lieu of ad valorem taxes that
24 would otherwise be levied by local public bodies with taxing authority in substantially
25 the form submitted to the Board of Directors at this meeting. The Mayor is hereby
26 authorized and directed to execute and acknowledge the PILOT Agreement. The PILOT
27 Agreement is hereby approved in substantially the form submitted at this meeting, and
28 the Mayor is hereby authorized to confer with the Company in order to complete the
29 PILOT Agreement with such modifications as shall be approved by the Mayor, his
30 execution to constitute conclusive evidence of such approval.
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1 11. Purpose and Effect. The Bonds are to be issued, sold, and delivered under the
2 authority of the Act and all related actions and documents shall be in conformity
3 therewith. The City intends this Agreement to be the expression of its present intent,
4 pursuant to the terms hereof, to issue the Bonds up to $17,000,000 aggregate principal
5 amount outstanding at any one time, and also to issue additional Bonds if the Project
6 costs exceed such amount, and to expend the Bond proceeds to defray the costs of the
7 Project.
8 12. Assignment. The Company may assign this Agreement in whole or in part to
9 an affiliate of the Company without the prior written consent of the City and may
10 assign this Agreement in whole or in part to an entity which is not an affiliate of the
11 Company with the prior written consent of the City, which consent shall not be
12 unreasonably withheld. Notwithstanding the foregoing, no assignment and no dealings
13 or transactions between the City and any assignee shall relieve the Company of any of
14 its obligations under this Agreement.
15 IN WITNESS WHEREOF, the City of Little Rock, Arkansas, acting pursuant to a
16 Resolution of its Board of Directors, has caused its name to be hereunto subscribed by
17 its Mayor and the Company has caused its corporate name to be subscribed hereto by
18 its duly authorized officer, all as of the year and date first above written.
19 CITY OF LITTLE ROCK, ARKANSAS
20 By:
21 Mayor
22 ARKANSAS AEROSPACE, INC.
23 By:
24 Title:
25 Section 2. This Resolution shall be in full force and effect from and after its
26 adoption.
27 Section 3. Severability. In the event any title, section, paragraph, item, sentence,
28 clause, phrase, or word of this resolution is declared or adjudged to be invalid or
29 unconstitutional, such declaration or adjudication shall not affect the remaining
30 portions of the resolution which shall remain in full force and effect as if the portion so
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1 declared or adjudged invalid or unconstitutional was not originally a part of the
2 resolution.
3 Section 4. Repealer. All laws and parts of laws are hereby repealed to the extent of
4 such inconsistency.
5 ADOPTED: December 5, 2006
6 ATT ST: AP7a2
7 �X/� 674
8 Nat i S. Blocker, Assistant City Clerk Arad Cazort, Vice Mayor
9 For Nancy Wood, City Clerk
10
11 APP ED AS TO LEGAL FORM:
12 '
13 Thomas M. Carpenter, City Attor
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