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HomeMy WebLinkAbout21811 1 ORDINANCE NO. 21,811 2 3 AN ORDINANCE TO AUTHORIZE THE ISSUANCE OF INDUSTRIAL 4 DEVELOPMENT REVENUE BONDS UNDER THE MUNICIPALITIES 5 AND COUNTIES INDUSTRIAL DEVELOPMENT REVENUE BOND 6 LAW FOR THE PURPOSE OF SECURING AND DEVELOPING 7 INDUSTRY; TO AUTHORIZE THE SALE OF THE BONDS AND THE 8 APPROVAL OF A BOND PURCHASE AGREEMENT AND A PAYMENT 9 IN LIEU OF TAXES AGREEMENT IN CONNECTION THEREWITH; TO 10 AUTHORIZE THE EXECUTION AND DELIVERY OF A TRUST 11 INDENTURE SECURING THE BONDS; TO AUTHORIZE AND 12 PRESCRIBE CERTAIN MATTERS PERTAINING TO THE PROJECT, 13 THE ACQUISITION, CONSTRUCTION, AND EQUIPPING THEREOF, 14 AND THE FINANCING THEREOF; TO AUTHORIZE THE EXECUTION 15 AND DELIVERY OF A LEASE AGREEMENT RELATING TO THE 16 PROJECT; TO DECLARE AN EMERGENCY; AND FOR OTHER 17 PURPOSES. 18 19 WHEREAS, the City of Little Rock, Arkansas (the "City") is authorized under the provisions of 20 Amendment 65 to the Arkansas Constitution and the Municipalities and Counties Industrial Development 21 Revenue Bond Law, Ark. Code Ann. §§ 14-164-201 et seq. (collectively, the "Act"), to own, acquire, 22 construct, equip, and lease facilities to secure and develop industry and to assist in the financing thereof 23 by the issuance of bonds payable from the revenues derived from such facilities; and, 24 WHEREAS, HMS Mfg. Co. (the "Company") has evidenced its interest in acquiring, constructing, 25 and equipping an industrial facility within the City if permanent financing can be provided through the 26 issuance of bonds under the authority of the Act; and, 27 WHEREAS,the City has agreed to cooperate with the Company in the acquisition, construction, and 28 equipping of an industrial facility within the City, consisting of the acquisition of land and/or leasehold 29 rights, construction and renovation of buildings, infrastructure and improvements, and acquisition and 30 installation of equipment for the manufacture, development, testing, production and warehousing of 31 housewares that promote home organization located at 6901 Lindsey Road in Little Rock(the "Project"); 32 and, [Page 1 0161 1 WHEREAS, to provide permanent financing of the Project costs, necessary costs and expenditures 2 incidental thereto, and the cost of the issuance of Bonds, the City will issue its Taxable Industrial 3 Development Revenue Bonds under the provisions of the Act designated "City of Little Rock, Arkansas 4 Taxable Industrial Development Revenue Bonds(HMS Project), Series 20_," in the principal amount of 5 not to exceed Thirty-Give Million Dollars($35,000,000.00)(the"Bonds"); and, 6 WHEREAS, the Bonds will be issued pursuant to the provisions of a Trust Indenture, (the "Trust 7 Indenture") to be entered into between the City and a trustee (the "Trustee") to be selected upon the 8 mutual agreement of the City and the Company; and, 9 WHEREAS, the City and the Company intend to enter into a Lease Agreement (the "Lease 10 Agreement") relating to the real and personal property constituting the Project, which contemplates that 11 the Project will be leased to the Company, with an option to purchase for a nominal price, and the rental 12 payments therefor together with other moneys available shall be sufficient to pay debt service on the 13 Bonds and all related costs; and, 14 WHEREAS, to induce the City to proceed with the issuance of the Bonds for the purpose indicated, 15 which will inure to the benefit of the Company, the City and the Company will enter into a Payment in 16 Lieu of Taxes Agreement("PILOT Agreement") in substantially the form presented at this meeting;and, 17 WHEREAS,an open public hearing on the question of the issuance of the Bonds was held before the 18 Board of Directors of the City on November 19, 2019, following publication of notice of the hearing and 19 that having heard all persons desiring to be heard in the matter, the City has taken under advisement the 20 comments and statements of such persons; and, 21 WHEREAS, the City proposes to sell the Bonds to an affiliate of the Company (the "Purchaser") 22 pursuant to a Bond Purchase Agreement by and between the City and the Purchaser; and, 23 WHEREAS, prior to issuance of the Bonds, the Company obtained independent loans from one (1) 24 or more lenders secured by liens on, or security interests in, title to all or part of the Project granted 25 pursuant to various agreements, instruments and documents; and, 26 WHEREAS,the City acknowledges and consents to all liens and encumbrances on, security interests 27 in and rights to, the title to the Project granted by the Company and acknowledges that the Company's 28 interests in the Project will be transferred to City subject to the such liens, encumbrances and security 29 interests and such acknowledgement and consent will be evidenced through the execution of a 30 Recognition of Prior Interests, Nondisturbance and Attornment Agreement between the City, the 31 Company, and the lenders of the Company (or such lenders' agents) benefitting from such lien, 32 encumbrance or security interest(the"RNA Agreement"); and, 33 WHEREAS,the completion of the Project will furnish additional employment opportunities, and will 34 furnish other benefits to and be in the best interest of the City and its residents; 'Page 2 of 61 NOW,THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY 2 OF LITTLE ROCK,ARKANSAS: 3 Section 1. There be,and there is hereby authorized and directed the following: 4 (a) The Bonds shall be issued in one or more series in an aggregate principal amount of not 5 to exceed Thirty-Five Million Dollars ($35,000,000.00), and the Bonds shall be sold to the 6 Purchaser for a price of par plus costs of issuance upon the terms and conditions set forth in the 7 Bond Purchase Agreement. 8 (b) The execution and delivery of the PILOT Agreement by the Mayor on behalf of the City, 9 in substantially the form submitted to this meeting, with such changes as shall be approved by 10 such persons executing the document, its execution to constitute conclusive evidence of such 11 approval, is hereby authorized and directed. An executed copy of the PILOT Agreement shall be 12 filed in the City Clerk's Office. 13 (c) The acquisition, construction, and equipping of the Project, and, in connection therewith, 14 the execution of any necessary architectural, engineering, or construction contracts or the 15 acceptance of an assignment of any such contracts previously executed by the Company for the 16 construction and equipping of the Project on behalf of the City is hereby authorized and directed. 17 Section 2. The issuance of the Bonds in the total principal amount of not to exceed Thirty-Five 18 Million Dollars ($35,000,000.00) in one or more series is hereby authorized. The Bonds shall be issued 19 in the forms and denominations, shall be dated, shall be numbered, shall mature, shall bear interest (at a 20 rate or rates) and shall be subject to redemption prior to maturity, all upon the terms and conditions to be 21 set forth in the Trust Indenture. 22 That to further prescribe the terms and conditions upon which the Bonds are to be executed, 23 authenticated, issued, accepted, held and secured, the Mayor is hereby authorized and directed (when 24 requested to do so by the Company) to execute and acknowledge the Trust Indenture, and the City Clerk 25 is hereby authorized and directed to execute and acknowledge the Trust Indenture and to affix the seal of 26 the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Trust 27 Indenture to be accepted, executed and acknowledged by the Trustee. The Trust Indenture is hereby 28 approved in substantially the form submitted to this meeting(and a copy of such Trust Indenture is on file 29 with the City Clerk and available for inspection by any interested person), and the Mayor is hereby 30 authorized to confer with the Trustee and the Company in order to complete the Trust Indenture in 31 substantially the form submitted to this meeting with such changes as shall be approved by such persons 32 executing the document,their execution to constitute conclusive evidence of such approval. 33 Section 3. There be, and there is hereby, authorized and directed the execution and delivery of the 34 Lease Agreement, and the Mayor and City Clerk are hereby authorized to execute, acknowledge, and 35 deliver the Lease Agreement for and on behalf of the City. The Lease Agreement is hereby approved in [Page 3 of 61 1 substantially the form submitted to this meeting(and a copy of such Lease Agreement is on file with the 2 City Clerk and available for inspection by any interested person), and the Mayor is hereby authorized to 3 confer with the Company in order to complete the Lease Agreement in substantially the form submitted to 4 this meeting, with such changes as shall be approved by such persons executing the document, their 5 execution to constitute conclusive evidence of such approval. 6 Section 4. There be, and there is hereby, authorized and directed the execution and delivery of the 7 Bond Purchase Agreement, and the Mayor and City Clerk are hereby authorized to execute, acknowledge, 8 and deliver the Bond Purchase Agreement for and on behalf of the City. The Bond Purchase Agreement 9 is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby 10 authorized to confer with the Purchaser in order to complete the Bond Purchase Agreement in 11 substantially the form submitted to this meeting (and a copy of such Bond Purchase Agreement is on file 12 with the City Clerk and available for inspection by any interested person), with such changes as shall be 13 approved by such persons executing the document, their execution to constitute conclusive evidence of 14 such approval. 15 Section 5. There be, and there is hereby, authorized and directed the execution and delivery of the 16 RNA Agreement, and the Mayor and City Clerk are hereby authorized to execute, acknowledge, and 17 deliver the RNA Agreement for and on behalf of the City. The RNA Agreement is hereby approved in 18 substantially the form submitted to this meeting(and a copy of such RNA Agreement is on file with the 19 City Clerk and available for inspection by any interested person), and the Mayor is hereby authorized to 20 confer with the Company and lenders of the Company (or such lenders' agents) in order to complete the 21 RNA Agreement in substantially the form submitted to this meeting, with such changes as shall be 22 approved by such persons executing the document, their execution to constitute conclusive evidence of 23 such approval. 24 Section 6. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and 25 directed to do any and all things necessary to effect (i) the execution of the Lease Agreement; (ii) the 26 performance of the City's obligations under the Lease Agreement; (iii) the execution and delivery of the 27 Trust Indenture; (iv) the performance of all obligations of the City under and pursuant to the Trust 28 Indenture; (v) the execution and delivery of the Bonds, (vi) the execution and delivery of the PILOT 29 Agreement, (vii) the performance of the City's obligations under the PILOT Agreement; (viii) the 30 execution and delivery of the Bond Purchase Agreement; (ix) the performance of the City's obligations 31 under the Bond Purchase Agreement; (x) the execution and delivery of the RNA Agreement; (xi) the 32 performance of the City's obligations under the RNA Agreement; and (xii) the performance of all other 33 acts of whatever nature necessary to effect and carry out the authority conferred by this ordinance. The 34 Mayor and the City Clerk are further authorized and directed, for and on behalf of the City, in connection 35 with the issuance of the Bonds and in connection with on-going rights and obligations that arise after (Page 4 of 61 A 1 issuance and prior to maturity of the Bonds, to execute all papers, documents, certificates, and other 2 instruments that may be required for the carrying out of such authority or to evidence the exercise thereof, 3 including, but not limited to, the execution of one (1) or more Home Office Payment Agreements, 4 Memorandums of Lease, Delivery Instructions and other closing certificates. 5 Section 7. Since the City is involved with the acquisition, constructing, and equipping of a complex 6 industrial project, requiring highly specialized work and specialized types of machinery and equipment, in 7 compliance with Ark. Code. Ann. § 14-164-204, it has been and is hereby determined by the Board of 8 Directors that competitive bidding be, and the same is hereby, waived as to this particular industrial 9 project. This action is taken by the Board of Directors pursuant to applicable laws of the State of 10 Arkansas, including particularly the Act. 11 Section 8. All actions heretofore taken by the City, the Company, and the Purchaser in connection 12 with the issuance, offer and sale of the Bonds and the development and completion of the Project are 13 hereby in all respects ratified and approved. 14 Section 9. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or 15 word of this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or 16 adjudication shall not affect the remaining portions of this ordinance, which shall remain in full force and 17 effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part of this 18 ordinance. 19 Section 10. Repealer. All ordinances or resolutions of the City in conflict herewith are hereby 20 repealed to the extent of such conflict. 21 Section 11. Emergency Clause. There is hereby found and declared to be an immediate need for the 22 securing and developing of substantial industrial operations in order to retain exiting employment, 23 provide additional employment, alleviate unemployment, and otherwise benefit the public health, safety, 24 and welfare of the City and the inhabitants thereof, and the issuance of the Bonds authorized hereby and 25 the taking of the other action authorized herein are immediately necessary in connection with the securing 26 and developing of substantial industrial operations and deriving the public benefits referred to above. It is 27 therefore, declared that an emergency exists and this ordinance, being necessary for the immediate 28 preservation of the public health, safety, and welfare, shall be in force and take effect immediately upon 29 and after its passage. 30 PASSED: i . •tuber 19,2019 31 • 1 ` APPROVED: 32 ' �.33 �&���� `-- 34 S.11171 •• itY Clerk Frank D. Scott,Jr.,May [Page 5 of 61 1 APPROVED AS TO LEGAL FORM: 2 3 • -1/1•43`14 .i/• Sipa. / 4 Thomas M.Carpenter,City Atto 7•y 5 // 6 // 7 // 8 // 9 // 10 // 11 // 12 // 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 29 // 30 // 31 // 32 // 33 // 34 // 35 // [Page 6 of 6J