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HomeMy WebLinkAbout19972ORDINANCE NO. 19,972 K 3 AN ORDINANCE AUTHORIZING THE ISSUANCE OF INDUSTRIAL 4 DEVELOPMENT REVENUE BONDS UNDER THE MUNICIPALITIES s AND COUNTIES INDUSTRIAL DEVELOPMENT REVENUE BOND 6 LAW FOR THE PURPOSE OF SECURING AND DEVELOPING 7 INDUSTRY (THE PARTICULAR INDUSTRIAL PROJECT IS 8 DESCRIBED IN THE ORDINANCE); AUTHORIZING THE SALE OF 9 THE BONDS AND THE APPROVAL OF A BOND PURCHASE 10 AGREEMENT AND AN AMENDED AND RESTATED PAYMENT IN 11 LIEU OF TAXES AGREEMENT IN CONNECTION THEREWITH; 12 AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST 13 INDENTURE SECURING THE BONDS; AUTHORIZING AND 14 PRESCRIBING CERTAIN MATTERS PERTAINING TO THE 15 INDUSTRIAL PROJECT, THE ACQUISITION, CONSTRUCTION, 16 AND EQUIPPING THEREOF, AND THE FINANCING THEREOF; 17 AUTHORIZING THE EXECUTION AND DELIVERY OF A THIRD 18 AMENDMENT TO LEASE AGREEMENT RELATING TO THE 19 PROJECT; PRESCRIBING OTHER MATTERS RELATING THERETO; 20 AND DECLARING AN EMERGENCY. 21 22 WHEREAS, the City of Little Rock, Arkansas is authorized by the Municipalities 23 and Counties Industrial Development Revenue Bond Law, Ark. Code Ann. §§ 14 -164- 24 201 to -224 (the "Act "), to acquire lands, construct and equip industrial buildings, 25 improvements, and facilities, and incur other costs and expenses and make other 26 expenditures incidental to and for the implementing and accomplishing of the conduct 27 of industrial operations; and [Page 1 of 8] I WHEREAS, the City is authorized by the Act to issue industrial development 2 revenue bonds payable from revenues derived from the industrial project so acquired, 3 constructed, and equipped; and 4 WHEREAS, the City has previously issued its $11,000,000 Taxable Industrial 5 Development Revenue Bonds (Welspun Tubular, L.L.C. Project), Series 2007 -A, dated 6 August 1, 2007, $50,000,000 Taxable Industrial Development Revenue Bonds (Welspun 7 Tubular LLC Project), Series 2007 -B, dated January 30, 2008, and $39,000,000 Taxable 8 Industrial Development Revenue Bonds (Welspun Tubular LLC Project), Series 2007 -C, 9 dated December 13, 2007 (collectively, the "Prior Bonds "), for the purpose of financing a 10 substantial industrial project consisting of the acquisition of approximately 800 acres of 11 land, construction of buildings, and acquisition of equipment, all located at 9301 Frazier 12 Pike, Little Rock, Arkansas 72206 (the "Project "), to be leased to Welspun Tubular LLC 13 ( "Welspun'), and utilized in Welspun s business of manufacturing steel pipes; and 14 WHEREAS, Welspun has informed the City that the size, scope, and cost of the 15 Project has increased by $50,000,000; and 16 WHEREAS, to provide permanent financing of the increased Project costs, 17 necessary costs and expenditures incidental thereto, and the cost of the issuance of 18 bonds, the City will issue a series of its taxable industrial development revenue bonds 19 under the provisions of the Act designated "City of Little Rock, Arkansas Taxable 20 Industrial Development Revenue Bonds (Welspun Tubular LLC Project), Series 2008- 21 A," in the principal amount of $50,000,000 (the 'Bonds "); and 22 WHEREAS, the Bonds will be issued pursuant to the provisions of a Trust 23 Indenture, dated as of June 1, 2008 (the "Trust Indenture "), to be entered into between 24 the City and Regions Bank, as Trustee (the "Trustee "); and 25 WHEREAS, the Project has been leased to the Company pursuant to the terms of 26 a Lease Agreement, dated as of August 1, 2007, as amended (the "Lease Agreement "), 27 for a term of 30 years; and [Page 2 of 7] I WHEREAS, to induce the City to proceed with the issuance of the Bonds for the 2 purpose indicated, which will inure to the benefit of Welspun and the Company, the 3 City and the Company will enter into an Amended and Restated Payment in Lieu of 4 Taxes Agreement ( "PILOT Agreement ") in order to increase the principal amount of 5 bonds from $100,000,000 to $150,000,000; and 6 WHEREAS, an open public hearing on the question of the issuance of the Bonds 7 was held before the Board of Directors of the City on May 20, 2008, following 8 publication of notice in the Arkansas Democrat - Gazette on May 6, 2008, and that having 9 heard all persons desiring to be heard in the matter, the City has taken under 10 advisement the comments and statements of such persons, and declared the public I t hearing duly closed; and 12 WHEREAS, the City proposes to sell the Bonds to Welspun Pipes, Inc. (the 13 "Purchaser ") pursuant to a Bond Purchase Agreement by and between the City and the 14 Purchaser; 15 WHEREAS, the completion of the Project will furnish additional employment 16 and other benefits to and be in the best interest of the City and its residents; 17 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS 18 OF THE CITY OF LITTLE ROCK, ARKANSAS that: 19 Section 1. There be, and there is hereby authorized and directed the following: 20 (a) The issuance of the Bonds in the principal amount of $50,000,000 and the sale 21 of the Bonds to the Purchaser for a price of $50,000,000 upon the terms and conditions 22 set forth in the Bond Purchase Agreement. 23 (b) The execution and delivery of the Bond Purchase Agreement by the Mayor on 24 behalf of the City, in substantially the form submitted to this meeting, with such 25 changes as shall be approved by such persons executing the document, their execution 26 to constitute conclusive evidence of such approval. An executed copy of the Bond 27 Purchase Agreement shall be filed in the office of the City Clerk. [Page 3 of 7] I (c) The execution and delivery of the PILOT Agreement by the Mayor on behalf 2 of the City, with such changes as shall be approved by such persons executing the 3 document, its execution to constitute conclusive evidence of such approval. An 4 executed copy of the PILOT Agreement shall be filed in the office of the City Clerk. 5 (d) The acquisition, construction, and equipping of the Project, and, in 6 connection therewith, the execution of any necessary architectural, engineering, or 7 construction contracts or the acceptance of an assignment of any such contracts s previously executed by Welspun or the Company for the construction and equipping of 9 the Project. 10 (e) The performance of all obligations of the City under the Agreement 11 pertaining to the acquisition, construction, and equipping of the Project. 12 Section 2. The Bonds shall be dated the date of their initial authentication and 13 delivery, shall bear interest from such date, shall mature (subject to prior redemption) 14 or be subject to mandatory sinking fund redemption in the amount of $16,666,667 on 15 April 1, 2012 and 2013 and $16,666,666 on April 1, 2014, and shall bear interest at the 16 rate of 5.25% per annum as described in the Trust Indenture. The Bonds shall be junior 17 and subordinate in security, repayments, and interest to the Prior Bonds. 18 To provide the terms and conditions upon which the Bonds are to be secured, 19 executed, authenticated, issued, accepted, and held, the Mayor is hereby authorized and 20 directed to execute and acknowledge the Indenture, and the City Clerk is hereby 21 authorized and directed to execute and acknowledge the Indenture and to affix the seal 22 of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to 23 cause the Indenture to be accepted, executed, and acknowledged by the Trustee. The 24 Indenture is hereby approved in substantially the form submitted to this meeting, and 25 the Mayor is hereby authorized to confer with the Trustee, Welspun, the Company, and 26 the Purchaser in order to complete the Indenture in substantially the form submitted to [Page 4 of 7] I this meeting with such changes as shall be approved by such persons executing the 2 documents, their execution to constitute conclusive evidence of such approval. 3 (Notice is given that, pursuant to the Act, a copy of the Indenture, in 4 substantially the form authorized to be executed, is on file with the City 5 Clerk of the City of Little Rock and are available for inspection by any 6 interested person.) 7 Section 3. There be, and there is hereby, authorized and directed the execution s and delivery of the Third Amendment to Lease Agreement, and the Mayor and City 9 Clerk are hereby authorized to execute, acknowledge, and deliver the Third 10 Amendment to Lease Agreement for and on behalf of the City. The Third Amendment II to Lease Agreement is hereby approved in substantially the form submitted to this 12 meeting, and the Mayor is hereby authorized to confer with Welspun, the Company, 13 the Trustee, and the Purchaser in order to complete the Third Amendment to Lease 14 Agreement in substantially the form submitted to this meeting, with such changes as 15 shall be approved by such persons executing the document, their execution to constitute 16 conclusive evidence of such approval. 17 (Notice is given that, pursuant to the Act, a copy of the Third Amendment 18 to Lease Agreement, in substantially the form authorized to be executed, 19 is on file with the City Clerk of the City of Little Rock and is available for 20 inspection by any interested person.) 21 Section 4. The Mayor and City Clerk, for and on behalf of the City, be, and they 22 are hereby authorized and directed to do any and all things necessary to effect the 23 execution of the Third Amendment to Lease Agreement, the performance of the City's 24 obligations under the Lease Agreement, as amended, the execution and delivery of the 25 Trust Indenture, its execution and acceptance by the Trustee, the performance of all 26 obligations of the City under and pursuant to the Trust Indenture, the execution and 27 delivery of the Bonds, the execution and delivery of the Bond Purchase Agreement, the [Page 5 of 7] i execution and delivery of the PILOT Agreement, and the performance of all other acts 2 of whatever nature necessary to effect and carry out the authority conferred by this 3 Ordinance. The Mayor and the City Clerk are further authorized and directed, for and 4 on behalf of the City, to execute all papers, documents, certificates, and other 5 instruments that may be required for the carrying out of such authority or to evidence 6 the exercise thereof. 7 Section 5. Since the City is here involved with the acquisition, constructing, and 8 equipping of a complex industrial project, requiring highly specialized work and 9 specialized types of machinery and equipment, it has been and is hereby determined by 10 the Board of Directors that competitive bidding be, and the same is hereby, waived as to 1 I this particular industrial project. This action is taken by the Board of Directors pursuant 12 to applicable laws of the State of Arkansas, including particularly the Act. 13 Section 6. All actions heretofore taken by the City, Welspun, the Company, and 14 the Purchaser in connection with the offer and sale of the Bonds are hereby in all 15 respects ratified and approved. 16 Section 7. Severability. In the event any title, section, paragraph, item, sentence, 17 clause, phrase, or word of this ordinance is declared or adjudged to be invalid or 18 unconstitutional, such declaration or adjudication shall not affect the remaining 19 portions of this ordinance, which shall remain in full force and effect as if the portion so 20 declared or adjudged invalid or unconstitutional was not originally a part of this 21 ordinance. 22 Section 8. Repealer. All ordinances or resolutions of the City in conflict herewith 23 are hereby repealed to the extent of such conflict. 24 Section 9. There is hereby found and declared to be an immediate need for the 25 securing and developing of substantial industrial operations in order to provide 26 additional employment, alleviate unemployment, and otherwise benefit the public 27 health, safety, and welfare of the City and the inhabitants thereof, and the issuance of [Page 6 of 7] i the Bonds authorized hereby and the taking of the other action authorized herein are 2 immediately necessary in connection with the securing and developing of substantial 3 industrial operations and deriving the public benefits referred to above. It is therefore, 4 declared that an emergency exists and this Ordinance, being necessary for the 5 immediate preservation of the public health, safety, and welfare, shall be in force and 6 take effect immediately upon and after its passage. 7 PASSED: May 20, 2008 8 ATTEST: APPROVED: 9 10 11 *;cy- W d, City Clerk Mark St dola, Mayor 12 APPROVED AS TO LEGAL FORM: 13 14 .G-- 15 Thomas M. Carpenter, City ttorney 16 // 17 // 18 // 19 // 20 // 21 22 // 23 // 24 // 25 26 // 27 // [Page 7 of 7]