HomeMy WebLinkAbout205642012017826 Received: 3/2812012 2:25:06 PM
Recorded: 03/28/2012 02:33:05 PM Filed &
Recorded in Official Records of Larry Crane,
1 ORDINANCE NO. 20,564 PULASKI COUNTY CIRCUIT /COUNTY CLERF
Fees $40.00
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3 AN ORDINANCE AUTHORIZING 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 (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 A PAYMENT IN LIEU OF TAXES AGREEMENT IN
I1 CONNECTION THEREWITH; AUTHORIZING THE EXECUTION AND
12 DELIVERY OF A TRUST INDENTURE SECURING THE BONDS;
13 AUTHORIZING AND PRESCRIBING CERTAIN MATTERS
14 PERTAINING TO THE INDUSTRIAL PROJECT, THE ACQUISITION,
15 CONSTRUCTION, AND EQUIPPING THEREOF, AND THE FINANCING
16 THEREOF; AUTHORIZING THE EXECUTION AND DELIVERY OF A
17 LEASE AGREEMENT RELATING TO THE PROJECT; AUTHORIZING
18 THE EXECUTION AND DELIVERY OF AN AMENDMENT TO A LEASE
19 AGREEMENT RELATING TO A DIFFERENT PROJECT OWNED BY
20 THE CITY AND LEASED TO THE SAME LESSEE; PRESCRIBING
21 OTHER MATTERS RELATING THERETO; AND TO DECLARE AN
22 EMERGENCY; AND FOR OTHER PURPOSES.
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WHEREAS, the City of Little Rock, Arkansas, is authorized by the Municipalities and Counties
Industrial Development Revenue Bond Law, as amended, Ark. Code Ann. §§ 14 -164 -201 to —224 (the
"Act "), to acquire lands, construct and equip industrial buildings, improvements, and facilities, and incur
other costs and expenses and make other expenditures incidental to and for the implementing and
accomplishing of the conduct of industrial operations; and
WHEREAS, the City is authorized by the Act to issue industrial development revenue bonds payable
from revenues derived from the industrial project so acquired constructed and equipped; and
WHEREAS, the City has previously issued its $11,000,000 Taxable Industrial Dav�bdpment
_.ter
Revenue Bonds (Welspun Tubular, L.L.C. Project), Series 2007 -A, dated August 1, 2007, 009
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I Taxable Industrial Development Revenue Bonds (Welspun Tubular LLC Project), Series 2007 -13, dated
2 January 30, 2008, $39,000,000 Taxable Industrial Development Revenue Bonds (Welspun Tubular LLC
3 Project), Series 2007 -C, dated December 13, 2007, and $50,000,000 Taxable Industrial Development
4 Revenue Bonds (Welspun Tubular LLC Project), Series 2008 -13, dated June 20, 2008, for the purpose of
5 financing a substantial industrial project consisting of the acquisition of approximately 800 acres of land,
6 construction of buildings, and acquisition of equipment, all located at 9301 Frazier Pike, Little Rock,
7 Arkansas, 72206 (the "Original Project "), which is leased to Welspun Tubular LLC (the "Company ") and
8 utilized in the Company's business of manufacturing steel pipes; and
9 WHEREAS, the City has previously issued its $30,000,000 Taxable Industrial Development
10 Revenue Bonds (Welspun Tubular LLC Project), Series 2010, dated August 31, 2010 (the "Series 2010
11 Bonds "), for the purpose of financing improvements to the facilities located at 9301 Frazier Pike and
12 acquiring an additional industrial facilities located at 8200 Frazier Pike, Little Rock, Arkansas, 72206,
13 which is leased to the Company pursuant to a Lease Agreement, dated as of August 1, 2007, as amended
14 (the "Original Lease "),and utilized in the Company's business of manufacturing steel pipes; and
15 WHEREAS, the Company has evidenced its interest in acquiring, constructing, and equipping
16 improvements and additions to the facilities located at 8200 Frazier Pike (the "Project ") if the permanent
17 financing can be provided through the issuance of bonds under the authority of the Act; and
18 WHEREAS, the Company has requested the City to refund the outstanding Series 2010 Bonds and to
19 amend the Original Lease pursuant to a Fifth Amendment to Lease Agreement, dated as of April 1, 2012
20 (the "Fifth Amendment to Original Lease Agreement "), for the purpose of removing the facilities located
21 at 8200 Frazier Pike from the Original Lease; and
22 WHEREAS, to provide permanent financing of a portion of the costs of the Project, necessary costs
23 and expenditures incidental thereto, and the cost of the issuance of bonds, the City will issue a series of its
24 taxable industrial development revenue bonds under the provisions of the Act designated "City of Little
25 Rock, Arkansas Taxable Industrial Development Revenue Bonds (Welspun Tubular LLC Project), Series
26 2012 -A," in the principal amount of $26,250,000 (the "Series 2012 -A Bonds "); and
27 WHEREAS, to provide for the refunding of the Series 2010 Bonds and the cost of the issuance of
28 bonds, the City will issue a series of its taxable industrial development revenue bonds under the
29 provisions of the Act designated "City of Little Rock, Arkansas Taxable Industrial Development
30 Refunding Revenue Bonds (Welspun Tubular LLC Project), Series 2012 -B," in the principal amount of
31 $5,000,000 (the "Series 2012 -B Bonds "; the Series 2012 -A Bonds and the Series 2012 -B Bonds are
32 referred to collectively as the "Series 2012 Bonds "); and
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I WHEREAS, the Series 2012 Bonds will be issued pursuant to the provisions of a Trust Indenture,
2 dated as of April 1, 2012 (the "Indenture "), between the City and Regions Bank, as Trustee (the
3 "Trustee "); and
4 WHEREAS, to induce the City to proceed with the issuance of the Series 2012 Bonds for the
5 purposes indicated, which will inure to the benefit of the Company and the Company, the City and the
6 Company will enter into a Payment in Lieu of Taxes Agreement ( "PILOT Agreement') with respect to
7 the Project; and
8 WHEREAS, an open public hearing on the question of the issuance of the Series 2012 Bonds was
9 held before the Board of Directors of the City on March 6, 2012, following publication of notice in the
10 Daily Record on February 23, 2012, and the Arkansas Democrat - Gazette on February 25, 2012, and that
11 having heard all persons desiring to be heard in the matter, the City has taken under advisement the
12 comments and statements of such persons, and declared the public hearing duly closed; and
13 WHEREAS, the City proposes to sell the Series 2012 Bonds to Welspun Pipes, Inc. (the
14 "Purchaser "), pursuant to a Bond Purchase Agreement by and between the City and the Purchaser;
15 WHEREAS, the Project will furnish additional employment and other benefits to and be in the best
16 interest of the City and its residents;
17 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY
18 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 Series 2012 -A Bonds and Series 2012 -B Bonds in the principal amounts of
21 $26,250,000 and $5,000,000, respectively, and the sale of the Series 2012 -A Bonds and the Series 2012 -B
22 Bonds to the Purchaser for a price of par upon the terms and conditions set forth in the Bond Purchase
23 Agreement.
24 (b) The execution and delivery of the Bond Purchase Agreement by the Mayor on behalf of the City,
25 in substantially the form submitted to this meeting, with such changes as shall be approved by such
26 persons executing the document, their execution to constitute conclusive evidence of such approval. An
27 executed copy of the Bond Purchase Agreement shall be filed in the Office of the City Clerk.
28 (c) The execution and delivery of the PILOT Agreement by the Mayor on behalf of the City, with
29 such changes as shall be approved by such persons executing the document, its execution to constitute
30 conclusive evidence of such approval. An executed copy of the PILOT Agreement shall be filed in the
31 Office of the City Clerk.
32 (d) The acquisition, construction, and equipping of the Project, and, in connection therewith, the
33 execution of any necessary architectural, engineering, or construction contracts or the acceptance of an
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I assignment of any such contracts previously executed by the Company or the Company for the
2 construction and equipping of the Project.
3 (e) The performance of all obligations of the City under the Lease Agreement pertaining to the
4 acquisition, construction, and equipping of the Project.
5 Section 2. (a) The Series 2012 -A Bonds shall be dated the date of their initial authentication and
6 delivery, shall bear interest from such date, shall mature (subject to prior redemption) in ten equal
7 consecutive semi - annual payments of $2,625,000 each commencing eighteen (18) months after the date
8 of the Series 2012 -A Bonds, or one (1) -month after completion of the Project, whichever is earlier, with
9 the final payment to be due no later than seventy -eight (78) months from the date of the Series 2012 -A
10 Bonds, and shall bear interest at a floating rate of interest as described in the Indenture. The Series 2012-
11 A Bonds shall be senior in security, repayments, and interest to the Series 2012 -B Bonds.
12 (b) The Series 2012 -B Bonds shall be dated the date of their initial authentication and delivery, shall
13 bear interest from such date, shall mature (subject to prior redemption) on July 1, 2016, and shall bear
14 interest at the rate of 5.50% per annum as described in the Indenture. The Series 2012 -B Bonds shall be
15 junior and subordinate in security, repayments, and interest to the Series 2012 -A Bonds and to bonds
16 issued of a parity of security with the Series 2012 -A Bonds under the terms of the Indenture.
17 Section 3. To provide the terms and conditions upon which the Series 2012 Bonds are to be secured,
18 executed, authenticated, issued, accepted, and held, the Mayor is hereby authorized and directed to
19 execute and acknowledge the Indenture, and the City Clerk is hereby authorized and directed to execute
20 and acknowledge the Indenture and to affix the seal of the City thereto, and the Mayor and City Clerk are
21 hereby authorized and directed to cause the Indenture to be accepted, executed, and acknowledged by the
22 Trustee. The Indenture is hereby approved in substantially the form submitted to this meeting, and the
23 Mayor is hereby authorized to confer with the Trustee, the Company, and the Purchaser in order to
24 complete the Indenture in substantially the form submitted to this meeting with such changes as shall be
25 approved by such persons executing the documents, their execution to constitute conclusive evidence of
26 such approval.
27 (Notice is given that, pursuant to the Act, a copy of the Indenture, in substantially the
28 form authorized to be executed, is on file with the City Clerk of the City of Little Rock
29 and are available for inspection by any interested person.)
30 Section 4. There be, and there is hereby, authorized and directed the execution and delivery of the
31 Lease Agreement, and the Mayor and City Clerk are hereby authorized to execute, acknowledge, and
32 deliver the Lease Agreement for and on behalf of the City. The Lease Agreement is hereby approved in
33 substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the
34 Company, the Trustee, and the Purchaser in order to complete the Lease Agreement in substantially the
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I form submitted to this meeting, with such changes as shall be approved by such persons executing the
2 document, their execution to constitute conclusive evidence of such approval.
3 (Notice is given that, pursuant to the Act, a copy of the Lease Agreement, in substantially
4 the form authorized to be executed, is on file with the City Clerk of the City of Little
5 Rock and is available for inspection by any interested person.)
6 Section 5. There be, and there is hereby, authorized and directed the execution and delivery of the
7 Fifth Amendment to Original Lease Agreement, and the Mayor and City Clerk are hereby authorized to
8 execute, acknowledge, and deliver the Fifth Amendment to Original Lease Agreement for and on behalf
9 of the City. The Fifth Amendment to Original Lease Agreement is hereby approved in substantially the
10 form submitted to this meeting, and the Mayor is hereby authorized to confer with the Company, the
11 Trustee, and the Purchaser in order to complete the Fifth Amendment to Original Lease Agreement in
12 substantially the form submitted to this meeting, with such changes as shall be approved by such persons
13 executing the document, their execution to constitute conclusive evidence of such approval.
14 Section 6. The Mayor and City Clerk, for and on behalf of the City, be, and they are hereby
15 authorized and directed to do any and all things necessary to effect the execution of the Lease Agreement
16 and the performance of the City's obligations under the Lease Agreement; the execution and delivery of
17 the Indenture, its execution and acceptance by the Trustee, and the performance of all obligations of the
18 City under and pursuant to the Indenture; the execution and delivery of the Series 2012 Bonds, the Bond
19 Purchase Agreement, the Lease Agreement, the PILOT Agreement, and the Fifth Amendment to Original
20 Lease Agreement; and the performance of all other acts of whatever nature necessary to effect and carry
21 out the authority conferred by this Ordinance. The Mayor and the City Clerk are further authorized and
22 directed, for and on behalf of the City, to execute all papers, documents, certificates, and other
23 instruments that may be required for the carrying out of such authority or to evidence the exercise thereof.
24 Section 7. Since the City is here involved with the acquisition, constructing, and equipping of a
25 complex industrial project, requiring highly specialized work and specialized types of machinery and
26 equipment, it has been and is hereby determined by the Board of Directors that competitive bidding be,
27 and the same is hereby, waived as to this particular industrial project. This action is taken by the Board of
28 Directors pursuant to applicable laws of the State of Arkansas, including particularly the Act.
29 Section 8. All actions heretofore taken by the City, the Company, and the Purchaser in connection
30 with the offer and sale of the Series 2012 Bonds are hereby in all respects ratified and approved.
31 Section 9. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or
32 word of this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or
33 adjudication shall not affect the remaining portions of this ordinance, which shall remain in full force and
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effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part of this
ordinance.
Section 10. Repealer. All ordinances or resolutions of the City in conflict herewith are hereby
repealed to the extent of such conflict.
Section 11. Emergency Clause. 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 2012 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: March 27, 2012
ATTFS=F�--.— ..,,,,„��,r�
City Clerk
�S TO LEGAL FORM:
Thomas M. Carpenter, City Attdrney
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