Redevelopment Commission - Regular Meeting

Good afternoon. We'll call the meeting to order as a special meeting of the rele town redevelopment commission meeting for September 23rd, 2024 or 25, I'm sorry. If everyone would please rise as we begin with the pledge of allegiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible with liberty and justice for all. Thank you. Do a roll call vote term forum. Bonita faith here. Bobby Brooks

here. John Spencer is absent. Chuck beaten is also absent. Derrick Combmes is present. And we do have Corum. First order of business is old business. We have um the commons uh two two resolutions for the commons here on the square. Right. J. Yes. We have a resolution 2025 R2 recommending the award of a public property agreement. Matt, would you like to explain it?

Sure, I can explain it. So, um, part of the DOT process is is, you know, as a redevelopment commission, um, last spring, you all authorized the issuance of the RQ, uh, for the Commons and the Short Street Parkway. And so this next step is now that all the uh, proposals are in, they've had, um, you all and Jill have had a chance to review them. Um this step basically is um you are making a recommendation to the council on who to award it to and um the resolution um awards the public private agreement or also known as a b agreement to GM development companies LLC or an affiliate thereof. And the reason we always do the or affiliate thereof language is because sometimes developers like to create a a single purpose entity um when they do a project. And so in in case great marks decides to do that um that's why it has the orate thereof language. Um it does state um it recommends an award in an amount estimated to be approximately uh 2,800,000. you know, that's um pretty similar to the the GMD um that we all received from Mac Instruction and GM Development. Um it also includes um the one add-on um that you all discussed a month or so ago. And the resolution also recommends that the council hold a public hearing, which they're required to do under the BOT statute, and it authorizes, um, the commission to sign, um, BT agreement and any, um, documents relating thereof. And so, um, should you all, um, approve this resolution tonight, um, I went ahead and sent a public hearing notice to Jill for her to get published in the local paper that

that mentions your recommendation and the upcoming council hearing. And so, according to the current timeline, uh, the council is going to hold the public hearing and, uh, make the BOT award, uh, during their October meeting, which is on Monday, October 6th. So happy to answer any questions you all might have about the resolution.

And if I can add the reason that u we're one of the reasons we're doing this and Matt mentioned it's going to go to the council. The city's original authorization or a resolution allowing the use of this side of procurement requires that even though the commission can act on its own then any of those agreements have to go through the city council. So, thank you, Jill. Thank you, Matt. There's no questions. I'll ask for a motion to approve resolution um awarding the uh agreement to GM Development for the price of approximately $2.8 million.

A motion by Bobby. I will second that motion. Second by Man Bonita. Is there any further discussion for a vote to approve? All those in favor, please say I. I. Motion passes. Thank you. Second resolution is a bond resolution for the um same project, right Joe?

Mhm. It is. Um and uh what we had discussed before is issuing some uh short-term debt to help pay for this project as our TIFF revenues might not be sufficient to cover this project and other obligations uh over u 2026 and there's some specific time frames that we're trying to hit with the construction of this project. But it the commission uh would be able to cover that cost if it were spread out a little bit further. So um Matt and his team along with Baker Tilly have provided some information for us. Um and with that Matt I'll turn it over to you to explain anything else related to the resolution.

Sure. Um so as Jill mentioned um this bond resolution uh would provide um interim financing uh for the commons project as well as cover relating costs such as the the cost of issuance of selling and issuing the bond anticipation notes. Um now the bond resolution also authorizes bonds to be issued uh to take out the bond anticipation notes. Now, um I think the hope is is that there'll be enough tiff revenues generated in the next couple years. Um but that that won't be necessary, but in order to get local banks and stuff to purchase these bond anticipation notes, it is necessary to provide a legal mechanism in the bond resolution to uh take out the the short-term financing. Um so the bans according to state law are for a term not to exceed 5 years. Um again that's set by state law. Um we use some parameters that they provided um for some of the other maximum parameters. Again these are just maximum parameters doesn't if if uh interest rates are you know below that then obviously that's fine. Um but the the maximum interest rate is uh uh 6% per year. Um the bond participation notes have a maximum um amount of $3 million. So again, that that covers the project cost based on the the GMP from the developer, um cost of issuance, um debt service reserve if for some reason the the purchaser requires that um the the so as far as like the security of how the financing is secured, the the uh the way that the bond anticipation nodes are structured is is that during the term of the bond anticipation node, um um interest payments are the only thing

that the commission will have to pay twice a year and um and then the principal of the notes will be um secured by the bonds if they're issued. Um I also include language in the bond resolution saying that commission sole discretion um may pay uh principal and notes from any other sources legally available which is basically TE revenues. So um there there is flexibility there. Um the commission does not have to issue bonds if uh if there's enough tiff revenues generated during the term of the note before the note comes due. Um the and so the the interest on the notes as well as the the bonds if they have to be issued are payable from essentially all of the existing tiff areas except for North Kark Hospital which is not generating much at this time. Um so central central Charles Town um Indiana American Renaissance Depot Street Shadow Lake are the the tip area's pledge to the the payment for for the bonds if they need to be issued as well as interest on the bond anticipation notes. So that's what um that's what secures um the debt. In other words, um the bond resolution does describe what the outstanding obligations are that are pledged to tiff. And so um that's what some of the recitals are about um because the the bonds and the interest on the bond participation notes um have to be on a equal footing with those outstanding obligations. So that's why we had to mention all those other obligations that are outstanding. Um the and then again the reason

so there's a lot of I mean there's a lot of other provisions in the bond resolution that are pretty standard um as far as um how how the notes can be solved. Um we anticipate that the notes will be sold um through a private placement with local bank but we also provided other options uh to to provide the maximum flexibility. Um the clerk treasurer um will likely serve as the registar paying agent for the notes. Um and and and really that's there's there's language in here about the the redemption of the notes so that in other words um the notes can be prepaid um without penalty um after one year. Um we Baker Tilly recommended that we have the one year in there um to make the notes more marketable.

The only other thing that I would add Matt is you also I think it's in that resolution uh put in a clause to allow for uh reimbursement. Is it in this one or the other one? It it's it's this one.

This one? Yeah. Um the issue with the commons project in particular and the time frame is we would like to have that project completed as quickly as possible but in hopes of getting that done before the um festival at the end of June, beginning of July and the pavilion itself has a very long lead time and if we can order it in October, it very well may come in April and then it has to be assembled and put on site. So, um, I asked Matt and his team if there's something that they could do that if we could put some provision in there that we won't be able to really award the agreement until the financing is in place, but there's a reimbursement provision there that would allow the city to reimburse the contractor for u allow that expense and reimburse the contractor for the expense of that long lead time if we wish to do so. Yeah, again, just this just provides more flexibility and and to clarify um what we're contemplating doing and it's not in this particular resolution, but um and the council when the council approves their bond resolution um early next month. Um there's also going to be reimbursement language and then u basically then anytime um when the council makes the award October 6th um the bond anticipation notes are planning on closing uh November 4th um so in between October 6th November 4th um with these reimbursement provisions in place um that provides flexibility um for um for those expenses like materials that belong time to go ahead and be ordered um prior to the the short-term financing closing in early November. So, so happy to answer any any questions you all might have about the bond resolution.

So, just to reiterate, the provision for that reimbursement will be added in once council approves their their resolution. Correct. So, we we have reimbursement language in here for tax purposes um because it's it's going to be a tax exempt note, but um in the council B award resolution um next month um we're going to have authorization as well uh that allows the commission to enter into what's called a BOT reimbursement agreement

um with the developer. And the reason really the reason for that is is that if the BOT agreement was just um signed like early October, um there's a risk that something could fall through somehow with the notes and and then the commission would then be on the hook for the the full the full BOT amount. And so the the reimbursement agreement um how that'll be structured is it will authorize um it'll authorize the developer to order materials up to a certain amount whether it's 300,000 or some other amount. So we we've talked about that because just to make sure that we've got enough for that long lead time item.

Yeah. So the bulk I mean really the bulk of the work and everything uh will occur like once the the notes close in early November. But um but but anyways and then in uh earlier during your regular October meeting, we always so because you all meet the day after the council meets um which for this works pretty well. So, at that meeting, um, we're planning on having a resolution, and we did this for a couple of the other BOS in the past, but, um, where you all affirm the council's award to GM development, and in that resolution, we're going to attach a substantially final form of the BT reimbursement agreement as an exhibit, and that resolution is going to also approve entering into the reimbursement agreement. So, council's going to approve the reimbursement agreement and and you guys will as well um at the early October meeting. So,

I thank you for explaining that. I wanted you all to know that because I know that's an issue and getting that item ordered and if we have to wait until November, that pushes us out pretty far. So, thanks, Matt. All right. Thank you both for the detailed explanation of that. I ask for a motion to approve resolution 2025 R3 bond resolution. I make the motion to approve. I second the motion. We have a motion, a second. Is there any further discussion? Ask for a vote to approve. All those in favor, please say I. I.

Motion passes. Thank you. Is there any further discussion tonight? No discussion. Our next meeting is scheduled for October 7th, 2025 at 6 p.m. I'll ask for a motion to adjourn. Make a motion. Second. All those in favor, please. Thank you. Thank you.