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HomeMy WebLinkAbout22346 1 ORDINANCE NO. 22,346 2 3 AN ORDINANCE AUTHORIZING THE ENTRY INTO AN AGREEMENT 4 TO ISSUE BONDS FOR THE PURPOSE OF ASSISTING IN THE 5 FINANCING OF INDUSTRIAL FACILITIES WITHIN THE CITY OF 6 LITTLE ROCK, ARKANSAS, TO BE LEASED TO DASSAULT FALCON 7 JET CORPORATION, OR ITS AFFILIATE, PURSUANT TO THE 8 AUTHORITY OF THE LAWS OF THE STATE OF ARKANSAS, 9 INCLUDING PARTICULARLY AMENDMENT 65 TO THE ARKANSAS 10 CONSTITUTION AND THE MUNICIPALITIES AND COUNTIES 11 INDUSTRIAL DEVELOPMENT REVENUE BOND LAW; TO DECLARE 12 AN EMERGENCY; AND FOR OTHER PURPOSES. 13 14 WHEREAS,the City of Little Rock, Arkansas, is authorized under the provisions of Amendment 65 15 to the Arkansas Constitution and the Municipalities and Counties Industrial Development Revenue Bond 16 Law, Ark. Code Ann. §§ 14-164-201 et seq. (the "Act"), to own, acquire, construct, equip, and lease 17 facilities to secure and develop industry and to assist in the financing thereof by the issuance of Bonds 18 payable from the revenues derived from such facilities;and, 19 WHEREAS, Dassault Falcon Jet Corporation (the "Company"), has evidenced its interest in 20 acquiring, constructing, and equipping one or more industrial facilities within the City if the permanent 21 financing can be provided through the issuance of one or more series of Industrial Development Revenue 22 Bonds under the authority of the Act;and, 23 WHEREAS, the City desires to assist the Company in order to secure and develop industry within 24 the City,and to aid in the financing thereof under the provisions of the Act;and, 25 WHEREAS, it is desirable that the City enter into an Agreement to Issue Bonds for such purpose. 26 NOW,THEREFORE,BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY 27 OF LITTLE ROCK,ARKANSAS: 28 Section 1. The Mayor and the City Clerk of the City are hereby authorized to enter into an 29 Agreement to Issue Bonds in substantially the form and substance attached as Exhibit A and in a form 30 acceptable to the City Attorney. 31 Section 2. Subject to compliance with the statutory notice requirements, one or more Payment in 32 Lieu of Taxes Agreements("PILOT Agreements")shall be considered for approval at the meetings of the [Page 1 of 71 1 Board of Directors at which the ordinances authorizing the issuance of a series of Bonds is considered for 2 approval. 3 Section 3. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or 4 word of this resolution is declared or adjudged to be invalid or unconstitutional, such declaration or 5 adjudication shall not affect the remaining portions of this resolution, which shall remain in full force 6 and effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part of 7 this resolution. 8 Section 4. Repealer. All ordinances or resolutions of the City in conflict herewith are hereby 9 repealed to the extent of such conflict. 10 Section 5. Emergency Clause. There is hereby found and declared to be an immediate need for the 11 securing and developing of substantial industrial operations in order to retain existing employment, 12 provide additional employment, alleviate unemployment, and otherwise benefit the public health, safety, 13 and welfare of the City and the inhabitants thereof, and the taking of the action authorized herein is 14 immediately necessary in connection with the securing and developing of substantial industrial 15 operations and deriving the public benefits referred to above; therefore, an emergency is declared to 16 exist, and this ordinance, being necessary for the immediate preservation of the public health, safety, and 17 welfare, shall be in force and take effect immediately upon and after its passage. 18 PASSED: December 12,2023 19 ATTEdil APPROVED: At 20 21 401".. 22 usa . • City Clerk Frank Scott,Jr., Mayor 23 APPR► IM TO LEGAL FORM: 24 25 A . 26 Thomas M. Carpenter, City Attorney 27 // 28 // 29 // 30 // 31 // 32 // 33 // 'Page 2 of 71 I 1 Exhibit A 2 3 AGREEMENT TO ISSUE BONDS 4 THIS AGREEMENT is made as of December 12, 2023, by and between the City of Little Rock, 5 Arkansas, a City of the First-Class under the laws of the State of Arkansas (the "City"), and Dassault 6 Falcon Jet Corporation (the "Company"), for the purpose of carrying out the purposes set forth in the 7 Municipalities and Counties Industrial Development Revenue Bond Law, Ark. Code Ann. §§ 14-164-201 8 et seq. and Ark. Code Ann. §§ 14-164-701 et seq. (collectively, the"Act"). 9 WITNESSETH: 10 WHEREAS, the City is authorized by Amendment 65 to the Arkansas Constitution and the Act to 11 own, acquire, construct, reconstruct, extend, equip, improve, operate, maintain, sell, lease, or contract 12 concerning, or otherwise deal in or dispose of any land, buildings, or facilities of any and every nature 13 that can be used in securing or developing industry within or near the City; and, 14 WHEREAS, the City has determined that such purposes are public purposes and may be served by 15 cooperation with the Company in the acquisition, construction, and equipping of one or more industrial 16 facilities (as defined by the Act) within the City, consisting of the acquisition of leasehold rights, 17 construction and refurbishing of buildings, and acquisition and installation of equipment (the "Projects"), 18 located on property leased to the Company by the Little Rock Municipal Airport Commission (the 19 "Commission"); and, 20 WHEREAS, the City and the Company desire to cooperate in the acquisition, constructing, and 21 equipping of the Projects and to secure and develop the Project with the proceeds of one or more series 22 of Revenue Bonds of the City (the "Bonds") to be issued in one or more series pursuant to the Act in an 23 aggregate principal amount now estimated not to exceed One Hundred Fifty Million Dollars 24 ($150,000,000.00); and, 25 WHEREAS,the City and the Company intend to enter into lease agreements relating to the real and 26 personal property constituting the individual Projects, which contemplate that the Projects will be leased 27 to and operated by the Company and that the rental payments due thereunder together with other moneys 28 available therefor shall be sufficient to pay debt service on the Bonds and all related costs; and, 29 WHEREAS, the Company confirms to the City, and the City acknowledges, that the terms and 30 conditions set forth in this Agreement were material considerations and inducements for the Company to 31 enter into a long-term lease with the Commission in which the Company agrees to invest at least One 32 Hundred Million Dollars ($100,000,000.00) in tangible capital improvements on or before December 31, 33 2034. !Page 3 of 71 1 NOW,THEREFORE, in consideration of the premises, mutual benefits, covenants, and agreements 2 herein expressed and other good and valuable consideration, the receipt and sufficiency of which is 3 hereby acknowledged, the City and the Company agree as follows: 4 1. Proceedings. All proceedings in connection with the issuance of the Bonds shall be consistent 5 with the requirements of the Act. All references contained herein to the issuance of the Bonds shall be 6 subject to compliance with the formalities of the Act when the facts required to do so are determined. 7 2. Acquisition,Construction, and Equipping. The City and the Company will cooperate in causing 8 to be commenced and continued the required acquisition, construction, and equipping of the Projects,and 9 the Company may provide, or cause to be provided,the necessary interim financing to permit work on the 10 Projects to commence and continue expeditiously pending the issuance of Bonds. Not later than the date 11 of issuance of the Bonds, the Company will convey and transfer or cause to be conveyed and transferred 12 to the City, the Projects or portions thereof previously acquired, constructed, and equipped. There shall 13 also be conveyed to the City any easements and rights-of-way necessary to permit construction, 14 equipping, installation, operation, and maintenance of the Projects. The City acknowledges that the 15 Projects, or portions of the Projects, may be subject to liens or security interests in favor of third-party 16 creditors at the time that the Project is transferred to the City. 17 Since the City is involved with the acquisition, constructing, and equipping of a complex project, 18 requiring highly specialized work and specialized types of machinery and equipment, it has been and is 19 hereby determined by the Board of Directors in compliance with Ark. Code. Ann. § 14-164-204, that it is 20 impractical and unfeasible to bid these Projects, and that competitive bidding be, and the same is hereby, 21 waived as to these particular Projects. This action is taken by the Board of Directors pursuant to 22 applicable laws of the State of Arkansas, including particularly the Act. 23 3. Lease. The City and the Company or an affiliate of the Company will enter into one or more lease 24 agreements (the "Leases") relating to the real and personal property constituting the Projects, which 25 contemplates that the Projects will be leased to and operated by the Company and that the rental 26 payments due thereunder together with other moneys available shall be sufficient to pay debt service on 27 the Bonds and all related costs. The Leases shall include such terms and conditions as are agreed to by 28 the City and the Company, including, but not limited to, purchase options for nominal consideration and 29 transferability of ownership. 30 4. Sale of Bonds, Security. The City will take such steps as are necessary to issue, sell, and deliver 31 the Bonds, pursuant to the terms of the Act, for the purposes of financing the costs of the Projects, in 32 each case only upon receipt of the written designation by the Company of the purchasers thereof, such 33 Bonds to be in such series, to be in such principal amount, to mature in such amount and times, to bear IPage4of7l 1 interest at such rate or rates, to be payable on such dates, and to have such optional and mandatory 2 redemption features and prices as are determined by the City and approved in writing by the Company. 3 The City further agrees that it will enter into the Leases with the Company or an affiliate of the Company 4 for the purpose of providing rental payments sufficient, with other amounts available from the Company 5 or directly or indirectly from the proceeds of the Bonds, to pay the principal of and interest on the Bonds 6 as they become due, and pledging and otherwise securing the payment of such rental payments for the 7 benefit of the holder(s) of the Bonds. The City will cooperate in consummating the transactions so 8 contemplated. 9 5. Bonds to be Special Obligations. The City shall have no financial responsibility with respect to 10 the Projects, the Bonds, or the costs associated with either, and the Bonds shall be special obligations of 11 the City and shall never constitute a general obligation, indebtedness, or pledge of the credit of the City 12 within the meaning 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 of the City except 14 those (including unexpended Bond proceeds) derived from or in connection with the sale or lease of the 15 Projects as provided for herein. 16 6. Conditions of Issuance. The Bonds may be issued either at one time or in several series from 17 time to time, in such aggregate principal amount or amounts as the Company shall request in writing; 18 provided, however, that all conditions of the Act shall have been met. 19 7. Costs to be Financed. The costs of the Projects may include any costs permissible under the Act, 20 including but not limited to reasonable and necessary costs, expenses, and fees incurred by the City in 21 connection with the issuance of the Bonds or in connection with the Project, including, but not limited to, 22 fees and out-of-pocket expenses of Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. ("bond 23 counsel")and other counsel to the Company. The City will upon request provide or cause to be provided 24 any data or information which may be reasonably required to verify any of the costs, expenses, and fees 25 enumerated above. 26 8. Termination. In the event that none of the Bonds shall be sold within twelve (12)years from the 27 date hereof, this Agreement shall automatically terminate unless the parties hereto shall agree in writing 28 to its extension for a further period of time specified in such writing, which agreement on the part of the 29 City shall not be unreasonably withheld. The Company may unilaterally terminate this Agreement 30 without liability to the City (except for any amounts due and owing by the Company to the City arising 31 out of the transactions occurring on or before the time of such termination, which shall be promptly paid 32 by the Company to the City) by giving notice by ordinary mail, postage prepaid, to the City specifying 33 therein the date of termination, which may be the date of the notice. (Page 5 of 71 I 1 9. Protection to the City. The Company shall pay all of the City's costs and expenses reasonably 2 and necessarily incurred in connection with this Agreement or any other related document or instrument. 3 10. Ad Valorem Taxation Exemption. The City and the Company recognize that under the 4 Arkansas Constitution and decisions of the Supreme Court of Arkansas and in accordance with Ark. 5 Code Ann. §§ 14-164-701 et seq.,the Projects will be exempt from ad valorem taxation. The City agrees 6 that the Company or an affiliate of the Company shall be required to enter into Payment in Lieu of Taxes 7 Agreements ("PILOT Agreements") with the City providing for payments in lieu of a portion of the ad 8 valorem taxes that would otherwise be levied by local public bodies with taxing authority. The City and 9 the Company agree that the final form of the PILOT Agreements will be considered for approval at a 10 meeting of the Board of Directors at which the ordinance authorizing the issuance of the applicable series 11 of Bonds is considered for approval, subject to compliance with the terms of the Act, including, but not 12 limited to statutory notice requirements. Currently, the City and the Company anticipate that the PILOT 13 Agreements will provide 65%ad valorem tax abatement for a period of thirty(30)years. 14 11. Purpose and Effect. The Bonds are to be issued, sold, and delivered under the authority of the 15 Act and all related actions and documents shall be in conformity therewith. The City intends this 16 Agreement to be the expression of its present intent, pursuant to the terms hereof, to issue the Bonds in 17 an aggregate amount not to exceed One Hundred Fifty Million Dollars ($150,000,000.00) and to expend 18 the Bond proceeds to defray the costs of the Projects. 19 12. Assignment. The Company may assign this Agreement in whole or in part to an affiliate of the 20 Company without the prior written consent of the City and to an entity which is not an affiliate of the 21 Company with the prior written consent of the City, which consent shall not be unreasonably withheld. 22 Notwithstanding the foregoing, no assignment and no dealings or transactions between the City and any 23 assignee shall relieve the Company of any of its obligations under this Agreement. 24 IN WITNESS WHEREOF, the City of Little Rock, Arkansas, acting pursuant to an Ordinance of its 25 Board of Directors, has caused its name to be hereunto subscribed by its Mayor and City Clerk and the 26 Company has caused its corporate name to be subscribed hereto by its duly authorized officer, all as of 27 the year and date first above written. 28 CITY OF LITTLE ROCK,ARKANSAS 29 ATTEST: APPROVED: 30 31 32 Susan Langley,City Clerk Frank Scott,Jr.,Mayor 33 [Page 6 of 71 1 DASSAULT FALCON JET CORPORATION 2 3 By: 4 5 Name: 6 7 Title: 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 // [Page 7 of 7j