Explanation
Background: This ordinance provides consent, on behalf of the city, to the issuance of refunding bonds by the Franklin County Convention Facilities Authority (FCCFA) and authorizes the Mayor, City Auditor, or Director of Finance and Management to negotiate, execute, and deliver, on behalf of the City, the Second Supplement to the Cooperative Agreement dated as of January 1, 2010 with the Franklin County Convention Facilities Authority (FCCFA) and the County of Franklin, Ohio pertaining to the issuance of refunding bonds by the FCCFA and restructuring of reserve funds by the FCCFA. The FCCFA is contemplating a current refunding of all or a portion of its Lease Revenue Anticipation Bonds, Series 2010 (County of Franklin, Ohio, Lessee) (Federally Taxable - Build America Bonds - Direct Payment).
Certain lease and sublease agreements among the FCCFA, the city, and Franklin County and certain agreements between the FCCFA and the city with respect to outstanding bonds of the FCCFA require the city and Franklin County to consent to the issuance of “Additional Bonds.”
Emergency Justification: Emergency action is requested to allow the issuance of the refunding bonds to proceed as quickly as possible to allow the FCCFA to achieve financial benefits with respect to debt restructuring in connection with the transaction.
Fiscal Impact: No funding is required for this legislation.
Title
To authorize the Mayor, City Auditor, or the Director of Finance and Management to negotiate, execute, and deliver, on behalf of the City, the Second Supplement to the Cooperative Agreement dated as of January 1, 2010 with the Franklin County Convention Facilities Authority (FCCFA) and the County of Franklin, Ohio pertaining to the issuance of refunding bonds by the FCCFA and restructuring of reserve funds by the FCCFA; to provide consent, on behalf of the City, to the issuance of refunding bonds by the FCCFA; and to declare an emergency.
Body
WHEREAS, the City Council (the “Council”) of the City of Columbus, Ohio (the “City”) has heretofore found and hereby confirms that it is in the best interest of the residents of the City, and a proper public purpose of the government of the City, to promote and publicize the City as a desirable location for conventions, trade shows and similar events; and
WHEREAS, the Franklin County Convention Facilities Authority (the “FCCFA”) has been established by the Board of County Commissioners of the County of Franklin, Ohio (the “County”) pursuant to Chapter 351 of the Ohio Revised Code (the “Act”) as a body corporate and politic performing essential governmental functions, to, among other things, (a) acquire, purchase, construct, furnish, equip, lease or rent, and operate, “facilities”, as defined in the Act, within the County; and (b) issue obligations, from time to time, anticipating “revenues”, as defined in the Act, in such principal amounts as are necessary to pay any part of the “cost” of such facilities, as defined in the Act; and
WHEREAS, the FCCFA presently owns a convention facility known as “The Greater Columbus Convention Center” (the “GCCC”); and
WHEREAS, pursuant to a Cooperative Agreement among the FCCFA, the City and the County, dated as of January 1, 2010 (the “Original Cooperative Agreement”), the FCCFA (a) has constructed a full service convention center hotel known as “The Hilton Columbus Downtown” (the “Existing Facility”), and (b) financed the Existing Facility, in part, by issuing its $160,000,000 Lease Revenue Anticipation Bonds, Series 2010 (County of Franklin, Ohio, Lessee) (Federally Taxable - Build America Bonds - Direct Payment), dated February 10, 2010 (the “Series 2010 Bonds”) with the financial support of the City and the County; and
WHEREAS, the Series 2010 Bonds are secured by a Trust Agreement by and between the FCCFA and the Bank of New York Melon Trust Company, N.A., as trustee, dated as of January 1, 2010 (the “Indenture”); and
WHEREAS, pursuant to a First Supplement to the Cooperative Agreement among the FCCFA, the City and the County dated as of May 1, 2019 (the “First Supplement”), the FCCFA (a) has constructed a new tower to the Existing Facility referred to as the “Phase II Project” therein (the “New Facility” and together with the “Existing Facility” the “Expanded Facility”), and (b) financed costs related to the Expanded Facility, in part, by issuing (i) its $151,815,000 Hotel Project Revenue Bonds, Series 2019 (Greater Columbus Convention Center Hotel Expansion Project), dated December 4, 2019, secured by the revenues of the Expanded Facility, and (ii) its $91,765,000 Lease Appropriation Bonds, Series 2019 (Greater Columbus Convention Center Hotel Expansion Project), dated December 4, 2019, with the financial support of the City and the County; and
WHEREAS, the FCCFA is proposing to issue its Lease Revenue Anticipation Refunding Bonds, Series 2024 (County of Franklin, Ohio, Lessee) in a principal amount not to exceed $160,000,000 (the “Refunding Bonds”) as “Additional Bonds” pursuant to the Indenture in order to (i) refund or redeem all or a portion of the outstanding Series 2010 Bonds, (ii) restructure the existing Rental Reserve Fund and Debt Service Reserve Fund into a single, new reserve fund (the “New Reserve”) ahead of any pledge of revenues for repayment of debt service by either the City or the County, (iii) fund the New Reserve from proceeds of the Refunding Bonds and/or existing reserves, including funds in the existing Rental Reserve Fund and/or Debt Service Reserve Fund, and (iv) pay certain costs of issuance in connection therewith (collectively, the “Series 2024 Hotel Transaction”), all pursuant to the Act and all of which will benefit the FCCFA, the City, the County, and their respective citizens and taxpayers; and
WHEREAS, the issuance of the Refunding Bonds will achieve financial benefits, specifically (i) eliminating the subsidy risk associated with the Series 2010 Bonds, (ii) recapitalization of the New Reserve, and (iii) future optionality for a par call with respect to the Refunding Bonds which may lead to future interest cost savings, all of which will benefit the FCCFA, the County, the City and their respective citizens and taxpayers; and
WHEREAS, this Council desires to authorize the City’s participation in the Series 2024 Hotel Transaction, including the negotiation, execution and delivery of any documents in connection with the 2024 Hotel Transaction, including but not limited to a supplement to the Cooperative Agreement (the “Second Supplement” and together with the Original Cooperative Agreement and the First Supplement, the “Cooperative Agreement”), and taking certain other actions, making determinations as required by the Act, and entering into other agreements related to the Series 2024 Hotel Transaction; and
WHEREAS, an emergency exists in the offices of the City Auditor and City Attorney in that the timely issuance of the Refunding Bonds will allow the Series 2024 Hotel Transaction to proceed as quickly as possible and allow the FCCFA to achieve financial benefits in issuing the Refunding Bonds, the passage of this ordinance is necessary for the immediate preservation of the public peace, property, health or safety; Now, Therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS, OHIO:
SECTION 1. The Mayor, City Auditor and the Director of Finance and Management, or any of them acting singly, are each hereby authorized to negotiate, execute and deliver the Second Supplement in such form and substance as is not substantially adverse to the City as may be permitted by law and approved by the officers executing the same on behalf of the City without further action of this Council. The approval of the Second Supplement by such officers, and that such Second Supplement is not substantially adverse to the City, shall be conclusively evidenced by the execution thereof.
SECTION 2. In accordance with the provisions of certain lease and sublease agreements among the FCCFA, the City and the County with respect to the GCCC, and certain agreements between the FCCFA and the City with respect to the Expanded Facility, the City hereby consents to the issuance of the Refunding Bonds by the FCCFA.
SECTION 3. The Mayor, the City Auditor, the Director of Finance and Management, the City Treasurer, and the City Clerk, or other appropriate officers of the City, are each hereby separately authorized to take any and all actions and to execute such other instruments that may be necessary or appropriate in the opinion of the City Attorney in order to effect the intent of this ordinance and that of the Cooperative Agreement.
SECTION 4. It is hereby found and determined that all formal actions of this Council concerning and relating to the passage of this ordinance were passed in an open meeting of this Council, and that all deliberations of this Council and of any of its committees that resulted in such formal action, were in meetings open to the public, in compliance with the law, including Section 121.22 of the Ohio Revised Code.
SECTION 5. In accordance with Section 22 of the Charter of the City of Columbus, Ohio, and for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and immediately after its passage and approval by the Mayor, or ten (10) days after passage if the Mayor neither approves nor vetoes the same.