Explanation
Background: In 2016, the City, as lessee, and The RiverSouth Authority (the “Authority”), as lessor, entered into a Master Lease Agreement and First Supplemental Lease Agreement in connection with the Authority’s issuance of its $27,515,000 Scioto Peninsula Area Redevelopment Bonds, Series 2016, (the “2016 Bonds”), to pay for the cost of construction of an approximately 600-space underground public parking garage and related recreational park on the Scioto Peninsula. In 2017, a Second Supplemental Lease Agreement was entered into to deliver the completed project to the City and establish its operational framework, rights, and responsibilities. Interest rates for bonds are now at a level which makes it advantageous to refund all or a portion of the outstanding 2016 Bonds. This ordinance authorizes the City to enter into a Third Supplemental Lease Agreement with the Authority to allow the Authority to issue refunding bonds to refund all or a portion of the 2016 Bonds and realize debt service savings.
Emergency Justification: Emergency action is requested in order to allow for timely issuance of the refunding bonds by the Authority as contemplated by the Third Supplemental Lease Agreement at the most advantageous interest rates thereby also financially benefiting the City through debt service savings.
Fiscal Impact: No funding is required for this legislation. The refunding will generate debt service savings over the remaining life of the bonds.
Title
To authorize the Director of the Department of Development to enter into a Third Supplemental Lease Agreement with The RiverSouth Authority in connection with the issuance of refunding bonds to refund all or a portion of the Authority's Scioto Peninsula Area Redevelopment Bonds, Series 2016; and to declare an emergency. ($0.00)
Body
WHEREAS, The RiverSouth Authority (the “Authority”) was created by Columbus City Council as a new community authority pursuant to Chapter 349 of the Ohio Revised Code (the “Revised Code”) by adoption of its Ordinance No. 1007-2004 on June 21, 2004; and
WHEREAS, pursuant to Ordinance No. 1980-2016, passed by Columbus City Council on July 25, 2016, the City entered into a Master Lease Agreement and a First Supplemental Lease Agreement with the Authority in support of the Authority’s issuance of its $27,515,000 Scioto Peninsula Area Redevelopment Bonds, Series 2016 (the “2016 Bonds”), to pay costs of acquiring and constructing community facilities comprised of an approximately 600-space underground public parking garage and related recreational park on the Scioto Peninsula known as Dorrian Green; and
WHEREAS, pursuant to Ordinance No. 1980-2016, the City entered into a Second Supplemental Lease Agreement dated as of March 1, 2017 whereby the Authority leased the completed project to the City and established the City’s operational rights and responsibilities with respect thereto; and
WHEREAS, the 2016 Bonds are currently outstanding and are callable in whole or in part for optional redemption at a price of par, and current market conditions make it financially advantageous to refund all or a portion of the 2016 Bonds at lower interest rates; and
WHEREAS, the City now desires to enter into a Third Supplemental Lease Agreement with the Authority in support of the Authority’s issuance of its Scioto Peninsula Area Redevelopment Refunding Bonds, Series 2026 (the “2026 Bonds”), in a principal amount of up to $21,750,000, to refund all or a portion of the 2016 Bonds and realize the debt service savings for the City; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development, in that it is immediately necessary to enter into the Third Supplemental Lease Agreement, in order to allow the Authority to timely issue the 2026 Bonds contemplated by the Third Supplemental Lease Agreement at the most advantageous interest rates thereby financially benefiting the City through debt service savings, all for the immediate preservation of the public health, peace, property, safety, and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That Columbus City Council finds that entering into the Third Supplemental Lease Agreement (the “Third Supplement”) by and between the City and the Authority, in the form presently on file with the Department of Development, is in the City’s best interest, which provides for, among other things, the issuance of the 2026 Bonds to refund all or a portion of the 2016 Bonds for debt service savings.
SECTION 2. That the City’s Director of the Department of Development, or his or her designee, is hereby authorized and directed to execute the Third Supplement, along with any changes or amendments thereto not inconsistent with this ordinance and not substantially adverse to the City, which shall be approved by the Director of the Department of Development and the City Attorney.
SECTION 3. That the Director of the Department of Development, the City Auditor, the City Attorney, and any other appropriate officials of the City are hereby authorized to execute other instruments, subject to approval by the City Attorney’s Office, and to take any other actions as may be necessary or appropriate to implement the Third Supplement and this ordinance, and the transactions contemplated by each.
SECTION 4. That for the reasons stated in the preamble hereto, which are 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 after its passage and approval by the Mayor or ten days after its passage if the Mayor neither approves nor vetoes the same.