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HomeMy WebLinkAbout202802010032912 Received: &712010 9:41:36 AM Recorded: 06/07/2010 09:50:14 AM Filed & Recorded in Official Records of PAT O'BRIEN, ORDINANCE NO. 20,280 PULASKI COUNTY CIRCUITYCOUNTY CLERK Fees $35,00 3 AN ORDINANCE TO AUTHORIZE THE ISSUANCE OF INDUSTRIAL 4 DEVELOPMENT REVENUE BONDS UNDER THE MUNICIPALITIES AND 5 COUNTIES INDUSTRIAL DEVELOPMENT REVENUE BOND LAW FOR THE 6 PURPOSE OF SECURING AND DEVELOPING INDUSTRY (THE 7 PARTICULAR INDUSTRIAL PROJECT IS DESCRIBED IN THE 8 ORDINANCE); TO AUTHORIZE THE SALE OF THE BONDS AND THE 9 APPROVAL OF A BOND PURCHASE AGREEMENT AND A PAYMENT IN 10 LIEU OF TAXES AGREEMENT IN CONNECTION THEREWITH; TO 11 AUTHORIZE THE EXECUTION AND DELIVERY OF A FIRST 12 SUPPLEMENTAL TRUST INDENTURE SECURING THE BONDS; TO 13 AUTHORIZE AND PRESCRIBE CERTAIN MATTERS PERTAINING TO THE 14 INDUSTRIAL PROJECT, THE ACQUISITION, CONSTRUCTION, AND 15 EQUIPPING THEREOF, AND THE FINANCING THEREOF; TO AUTHORIZE 16 THE EXECUTION AND DELIVERY OF A FOURTH AMENDMENT TO LEASE, 17 AGREEMENT RELATING TO THE PROJECT; TO PRESCRIBE OTHER 18 MATTERS RELATING THERETO; TO DECLARE AN EMERGENCY; AND 19 FOR OTHER PURPOSES. 20 21 WHEREAS, the City of Little Rock, Arkansas is authorized by the Municipalities and Counties' 22 Industrial Development Revenue Bond Law, as amended, Ark. Code Ann. §§ 14-164-201 to —224 (the 23 "Act"), to acquire lands, construct and equip industrial buildings, improvements, and facilities, and incur 24 other costs and expenses and make other expenditures incidental to and for the implementing and 25 accomplishing of the conduct of industrial operations; and 26 WHEREAS, the City is authorized by the Act to issue industrial development revenue bonds payable 27 from revenues derived from the industrial project so acquired, constructed, and equipped; and 28 WHEREAS, the City has previously issued its $11,000,000 Taxable Industrial Development 29 Revenue Bonds (Welspun Tubular, L.L.C. Project), Series 2007-A, dated August 1, 2007, $50,000,000 30 Taxable Industrial Development Revenue Bonds (Welspun Tubular L.L.C. Project), Series 2007-B, dated 31 January 30, 2008, and $39,000,000 Taxable Industrial Development Revenue Bonds (Welspun Tubular 32 L.L.C. Project), Series 2007-C, dated December 13, 2007 (collectively, the "First Lien Bonds"), and its 33 $50,000,000 Taxable Industrial Development Revenue Bonds (Welspun Tubular L.L.C. Project), Series 34 2008-B, dated June 20, 2008 (the "Series 2008 Bonds"), for the purpose of financing a substantial [Page 1 of 5] I industrial project consisting of the acquisition of approximately 800 acres of land, construction of 2 buildings, and acquisition of equipment, all located at 9301 Frazier Pike, Little Rock, Arkansas 72206 3 (the "Original Project "), to be leased to Welspun Tubular LLC ( "Welspun "), and utilized in Welspun's 4 business of manufacturing steel pipes; and 5 WHEREAS, Welspun has informed the City that the Original Project has expanded to include 6 property located at 8200 Frazier Pike and that the size, scope, and cost of the Project has increased by 7 $50,000,000 (the "Series 2010 Project); and 8 WHEREAS, to provide permanent financing of the costs of the Series 2010 Project, necessary costs 9 and expenditures incidental thereto, and the cost of the issuance of bonds, the City will issue a series of its 10 taxable industrial development revenue bonds under the provisions of the Act designated "City of Little 11 Rock, Arkansas Taxable Industrial Development Revenue Bonds (Welspun Tubular L.L.C. Project), 12 Series 2010 -A," in the principal amount of $50,000,000 (the "Series 2010 Bonds "); and 13 WHEREAS, the Series 2010 Bonds will be issued pursuant to the provisions of a Trust Indenture, 14 dated as of June 1, 2008 (the "Original Trust Indenture "), as amended by a First Supplement to Trust 15 Indenture, dated as of July 1, 2010 (the "First Supplemental Indenture "; the Original Indenture, as 16 amended, is referred to as the "Indenture "), between the City and Regions Bank, as Trustee (the 17 "Trustee "); and 18 WHEREAS, the Project has been leased to the Company pursuant to the terms of a Lease 19 Agreement, dated as of August 1, 2007, as amended (the "Lease Agreement "), for a term of 30 years; and 20 WHEREAS, the Lease Agreement will be amended pursuant to a Fourth Amendment to Lease 21 Agreement, dated as of July 1, 2010, in order to include the Series 2010 Project and to extent the term to 22 July 1, 2040; and 23 WHEREAS, to induce the City to proceed with the issuance of the Series 2010 Bonds for the 24 purpose indicated, which will inure to the benefit of Welspun and the Company, the City and the 25 Company will enter into a Payment in Lieu of Taxes Agreement ( "PILOT Agreement ") with respect to 26 the Series 2010 Project; and 27 WHEREAS, an open public hearing on the question of the issuance of the Series 2010 Bonds was 28 held before the Board of Directors of the City on June 1, 2010, following publication of notice in the 29 Arkansas Democrat- Gazette on May 18, 2010, and that having heard all persons desiring to be heard in 30 the matter, the City has taken under advisement the comments and statements of such persons, and 31 declared the public hearing duly closed; and 32 WHEREAS, the City proposes to sell the Series 2010 Bonds to Welspun Pipes, Inc. (the 33 "Purchaser ") pursuant to a Bond Purchase Agreement by and between the City and the Purchaser; [Page 2 of 5] I WHEREAS, the completion of the Series 2010 Project will furnish additional employment and other 2 benefits to and be in the best interest of the City and its residents; 3 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY 4 OF LITTLE ROCK, ARKANSAS that: 5 Section 1. There be, and there is hereby authorized and directed the following: 6 (a) The issuance of the Series 2010 Bonds in the principal amount of $50,000,000 and the sale of 7 the Series 2010 Bonds to the Purchaser for a price of $50,000,000 upon the terms and conditions set forth 8 in the Bond Purchase Agreement. 9 (b) The execution and delivery of the Bond Purchase Agreement by the Mayor on behalf of the 10 City, in substantially the form submitted to this meeting, with such changes as shall be approved by such 11 persons executing the document, their execution to constitute conclusive evidence of such approval. An 12 executed copy of the Bond Purchase Agreement shall be filed in the office of the City Clerk. 13 (c) The execution and delivery of the PILOT Agreement by the Mayor on behalf of the City, with 14 such changes as shall be approved by such persons executing the document, its execution to constitute 15 conclusive evidence of such approval. An executed copy of the PILOT Agreement shall be filed in the 16 office of the City Clerk. 17 (d) The acquisition, construction, and equipping of the Series 2010 Project, and, in connection 18 therewith, the execution of any necessary architectural, engineering, or construction contracts or the 19 acceptance of an assignment of any such contracts previously executed by Welspun or the Company for 20 the construction and equipping of the Series 2010 Project. 21 (e) The performance of all obligations of the City under the Lease Agreement pertaining to the 22 acquisition, construction, and equipping of the Series 2010 Project. 23 Section 2. The Series 2010 Bonds shall be dated the date of their initial authentication and delivery, 24 shall bear interest from such date, shall mature (subject to prior redemption) or be subject to mandatory 25 sinking fund redemption in the amount of $16,666,667 on July 1, 2014 and 2015 and $16,666,666 on 26 July 1, 2016, and shall bear interest at the rate of 5.50% per annum as described in the Trust Indenture. 27 The Series 2010 Bonds shall be junior and subordinate in security, repayments, and interest to the First 28 Lien Bonds and on a parity of security, repayments, and interest with the Series 2008 Bonds. 29 To provide the terms and conditions upon which the Series 2010 Bonds are to be secured, executed, 30 authenticated, issued, accepted, and held, the Mayor is hereby authorized and directed to execute and 31 acknowledge the First Supplemental Indenture, and the City Clerk is hereby authorized and directed to 32 execute and acknowledge the First Supplemental Indenture and to affix the seal of the City thereto, and 33 the Mayor and City Clerk are hereby authorized and directed to cause the First Supplemental Indenture to 34 be accepted, executed, and acknowledged by the Trustee. The First Supplemental Indenture is hereby [Page 3 of 5] I approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to 2 confer with the Trustee, Welspun, the Company, and the Purchaser in order to complete the First 3 Supplemental Indenture in substantially the form submitted to this meeting with such changes as shall be 4 approved by such persons executing the documents, their execution to constitute conclusive evidence of 5 such approval. 6 (Notice is given that, pursuant to the Act, a copy of the First Supplemental Indenture, in 7 substantially the form authorized to be executed, is on file with the City Clerk of the City 8 of Little Rock and are available for inspection by any interested person.) 9 Section 3. There be, and there is hereby, authorized and directed the execution and delivery of the 10 Fourth Amendment to Lease Agreement, and the Mayor and City Clerk are hereby authorized to execute, 11 acknowledge, and deliver the Fourth Amendment to Lease Agreement for and on behalf of the City. The 12 Fourth Amendment to Lease Agreement is hereby approved in substantially the form submitted to this 13 meeting, and the Mayor is hereby authorized to confer with Welspun, the Company, the Trustee, and the 14 Purchaser in order to complete the Fourth Amendment to Lease Agreement in substantially the form 15 submitted to this meeting, with such changes as shall be approved by such persons executing the 16 document, their execution to constitute conclusive evidence of such approval. 17 (Notice is given that, pursuant to the Act, a copy of the Fourth Amendment to Lease 18 Agreement, in substantially the form authorized to be executed, is on file with the City 19 Clerk of the City of Little Rock and is available for inspection by any interested person.) 20 Section 4. The Mayor and City Clerk, for and on behalf of the City, be, and they are hereby 21 authorized and directed to do any and all things necessary to effect the execution of the Fourth 22 Amendment to Lease Agreement, the performance of the City's obligations under the Lease Agreement, 23 as amended, the execution and delivery of the First Supplemental Indenture, its execution and acceptance 24 by the Trustee, the performance of all obligations of the City under and pursuant to the Trust Indenture, 25 the execution and delivery of the Series 2010 Bonds, the execution and delivery of the Bond Purchase 26 Agreement, the execution and delivery of the PILOT Agreement, and the performance of all other acts of 27 whatever nature necessary to effect and carry out the authority conferred by this Ordinance. The Mayor 28 and the City Clerk are further authorized and directed, for and on behalf of the City, to execute all papers, 29 documents, certificates, and other instruments that may be required for the carrying out of such authority 30 or to evidence the exercise thereof. 31 Section 5. Since the City is here involved with the acquisition, constructing, and equipping of a 32 complex industrial project, requiring highly specialized work and specialized types of machinery and 33 equipment, it has been and is hereby determined by the Board of Directors that competitive bidding be, [Page 4 of 5] I and the same is hereby, waived as to this particular industrial project. This action is taken by the Board of 2 Directors pursuant to applicable laws of the State of Arkansas, including particularly the Act. 3 Section 6. All actions heretofore taken by the City, Welspun, the Company, and the Purchaser in 4 connection with the offer and sale of the Series 2010 Bonds are hereby in all respects ratified and 5 approved. 6 Section 7. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or 7 word of this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or 8 adjudication shall not affect the remaining portions of this ordinance, which shall remain in full force and 9 effect as if the portion so declared or adjudged invalid or unconstitutional were not originally a part of this 10 ordinance. 11 Section 8. Repealer. All ordinances or resolutions of the City in conflict herewith are hereby repealed 12 to the extent of such conflict. 13 14 15 16 17 18 19 20 21 Section 9. There is hereby found and declared to be an immediate need for the securing and developing of substantial industrial operations in order to provide additional employment, alleviate unemployment, and otherwise benefit the public health, safety, and welfare of the City and the inhabitants thereof, and the issuance of the Series 2010 Bonds authorized hereby and the taking of the other action authorized herein are immediately necessary in connection with the securing and developing of substantial industrial operations and deriving the public benefits referred to above. It is therefore, declared that an emergency exists and this Ordinance, being necessary for the immediate preservation of the public health, safety, and welfare, shall be in force and take effect immediately upon and after its passage. PASSED: June 1, 2010 22 ATTEST: 23 24 25 n ley, ity Clerk 26 APPR AS TO LEGAL FORM: 27 28 U� 29 Thomas M. Carpente , City torney 30 31 32 // 33 // 34 // 35 Mark Jtodola, Mayor [Page 5 of 5]