HomeMy WebLinkAbout09-377SEPTEMBER 22, 2009 09 -377 RESOLUTION
(CARRIED 7 -0 LOST LAID OVER WITHDRAWN )
PURPOSE: RESOLUTION PRELIMINARILY DETERMINING PROJECT SITE
TO BE BLIGHTED AND DECLARING INTENT REGARDING THE
ISSUANCE OF REVENUE BONDS BY THE REDEVELOPMENT
AUTHORITY TO FINANCE RIVER VALLEY ONE LLC PROJECT
(524 NORTH KOELLER STREET)
INITIATED BY: RIVER VALLEY ONE LLC
REDEVELOPMENT AUTHORITY ACTION: Approved
WHEREAS, the Redevelopment Authority of the City of Oshkosh, Wisconsin (the
"Authority ") is a Redevelopment Authority organized by the City of Oshkosh, Wisconsin
(the "City ") and is authorized by Section 66.1333 of the Wisconsin Statutes, as
amended (the "Act ") to prepare redevelopment plans and urban renewal plans and
undertake and carry out redevelopment and urban renewal projects within the corporate
limits of the City, including but not limited to:
(a) to acquire property necessary or incidental to an urban renewal program
and to lease, sell or otherwise transfer such property to a public body or
private party for use in accordance with a redevelopment plan and to
assist private acquisition, expansion, improvement and development of
blighted property for the purpose of eliminating its status as blighted
property;
(b) to enter into contracts determined to be necessary to effectuate the
purposes of the Act; and
(c) to issue revenue bonds to finance its activities; and
WHEREAS, the City and the Authority have been provided with a blight report
(the "Blight Report "), attached hereto as Exhibit A , with respect to a project site located
at 524 Koeller Street in the City of Oshkosh, Wisconsin (the "Property ") owned by River
Valley One, LLC, a Wisconsin limited liability company (the "Borrower "); and
WHEREAS, the Borrower desires to finance a project consisting of the (a)
acquisition of land, (b) construction of two buildings which will be completed in two
phases, each approximately 10,000 square feet in size, to be located at 524 Koeller
Street in the City of Oshkosh, Wisconsin and (c) payment of financing fees (the
"Project "), which Project will be constructed by the Borrower and leased to Schenck
S.C. and other tenants for office /retail space; and
SEPTEMBER 22, 2009 09 -377 RESOLUTION
CONTD
WHEREAS, the Authority has made a preliminary determination that the Property
is a blighted property in need of rehabilitation and blight elimination in accordance with
Section 66.1333 of the Wisconsin Statutes; and
WHEREAS, the Authority will hold a public hearing in accordance with Section
66.1333(5)(c)(2) on October 21, 2009 to determine if the Property is blighted and will
submit its findings to the City Council; and
WHEREAS, the Authority has also adopted an initial resolution on September 16,
2009 (the "Initial Resolution ") declaring its intent to issue redevelopment revenue bonds
(the "Bonds ") to finance the Project, subject to satisfaction of certain conditions; and
WHEREAS, because the Bonds cannot be issued unless the City Council of the
City makes a determination that the Property is blighted and approves the Project, this
City Council has been asked to make a preliminary determination as to the status of the
Property as blighted property and the issuance of the Bonds by the Authority.
NOW, THEREFORE, BE IT RESOLVED by the City Council:
1. Findings and Determinations Based on the information provided in the
Blight Report, it is preliminarily determined that conditions of blight exist on the Property
and that the Project will promote the elimination of the blighted conditions on the
Property.
Subject to satisfaction of the conditions on the issuance of the Bonds set
forth in Sections 2 and 3 of the Authority's Initial Resolution, the City Council supports
the issuance of Bonds by the Authority to finance the Project.
2. Effective Date: Conformity This resolution shall be effective immediately
upon its passage and approval. To the extent that any prior resolutions of the City are
inconsistent with the provisions hereof, this resolution shall control and such prior
resolutions shall be deemed amended to such extent as may be necessary to bring
them in conformity with this resolution.
Adopted and approved this 22 day of September, 2009.
Attest:
Pamela Ubrig, City Clerk
Mark A. Rohloff, City Manager
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WHD/6661653.1
CERTIFICATION BY CITY CLERK
I, Pamela Ubrig, hereby certify that I am the duly qualified and acting City Clerk of
the City of Oshkosh, Wisconsin (the "City "), and as such I have in my possession, or have
access to, the complete corporate records of the City and of its governing body; that I have
carefully compared the transcript attached hereto with the aforesaid records; and that said
transcript attached hereto is a true, correct and complete copy of all the records in relation
to the adoption of Resolution No. entitled: "RESOLUTION
PRELIMINARILY DETERMINING PROJECT SITE TO BE BLIGHTED AND
DECLARING INTENT REGARDING THE ISSUANCE OF REVENUE BONDS BY THE
REDEVELOPMENT AUTHORITY TO FINANCE RIVER VALLEY ONE, LLC
PROJECT."
I hereby further certify as follows:
1. Said Resolution was considered for adoption by the City Council at a
meeting held at City Hall, 215 Church Avenue, Oshkosh, Wisconsin, at p.m. on
September 22, 2009. Said meeting was a regular meeting of the City Council and was
held in open session.
2. Said Resolution was on the agenda for said meeting and public notice
thereof was given not less than twenty -four (24) hours prior to the commencement of said
meeting in compliance with Section 19.84 of the Wisconsin Statutes, including, without
limitation, by posting on the bulletin board in the City Hall, by notice to those news media
who have filed a written request for notice of meetings, and by notice to the official
newspaper of the City.
3. Said meeting was called to order by , who chaired the
meeting. Upon roll, I noted and recorded that the following alderpersons were present:
and that the following alderpersons were absent:
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WHD/6661653.1
I noted and recorded that a quorum was present. Various matters and business
were taken up during the course of the meeting without intervention of any closed session.
One of the matters taken up was said Resolution, which was introduced, and its adoption
was moved by and seconded by
Following discussion and after all alderpersons who desired to do so had expressed their
views for or against said Resolution, the question was called, and upon roll being called
and the continued presence of a quorum being noted, the recorded vote was as follows:
AYE:
NAY:
ABSTAINED:
Whereupon the meeting chairperson declared said Resolution adopted, and I so
recorded it.
IN WITNESS WHEREOF, I have signed my name hereto as of this 22 day of
September, 2009.
CITY OF OSHKOSH, WISCONSIN
[SEAL]
Pamela Ubrig, City Clerk
4
WHD/6661653.1
EXHIBIT A
BLIGHT REPORT OF PROPERTY LOCATED AT
524 KOELLER STREET IN THE CITY OF OSHKOSH (the "Project Site ")
(River Valley One, LLC Project)
Statutory Definitions of "Blight"
Section 66.1333(2m)(bm) of the Wisconsin Statutes provides a definition of
"blight" and cites certain examples of conditions of blight. Both the broad statutory
definition and the blight finding which have been made by municipalities throughout the
State are much broader than the classic dictionary definition of blight. Essentially the
Statute provides three (3) separate routes to identify blight:
1. Property which by reason of dilapidation, deterioration, age or
obsolescence, inadequate provisions of ventilation, light, air or sanitation, high density
of population and overcrowding, or the existence of conditions which endanger life or
property by fire and other causes, or any combination of such factors, is conducive to ill
health, transmission of disease, infant mortality, juvenile delinquency or crime, and is
detrimental to the public health, safety, morals or welfare; or
2. Property which by reason of faulty lot layout in relation to size, adequacy,
accessibility of usefulness, unsanitary or unsafe conditions, deterioration of site or other
improvements, diversity of ownership, tax or special assessment delinquency exceeding
the fair market value of the land, defective or unusual conditions of title, or the existence
of conditions which endanger life or property by fire and other causes, or any
combination of such factors, substantially impairs or arrests the sound growth of a
village, retards the provisions of housing accommodations or constitutes an economic
or social liability and is a menace to the public health, safety, morals or welfare in its
present condition and use; or
3. Property which is predominantly open and which because of obsolete
platting, diversity of ownership, deterioration of structures or of site improvements or
otherwise, substantially impairs or arrests the sound growth of the community.
Narrative Description of Blight Conditions at the Property
River Valley One, LLC represents that the following conditions of blight either (a)
existed at the Project Site and have been remediated or (b) currently exist and will be
corrected with completion of the Project to be financed with the proceeds of conduit tax -
exempt Bonds:
WM/6661653.1 A -1
CONDITIONS OF BLIGHT
The Project Site suffers from significant challenges that impair efficient economic
development of the site and which will require rehabilitation and or remediation,
including:
The Project Site is located on vacant, undeveloped land. Economic
development of the Project Site would promote sound community
development and growth.
The Project Site is located on a floodplain which affects the use and value
of the affected property, and presents development challenges for the
Borrower. The development of the Project Site will alleviate this condition
by elevating the property which requires an extensive amount of fill.
The land located on the east side of
numerous easements, which makes
negatively affects the value of the property
the Project Site is subject to
the land undevelopable and
WM/6661653.1 A -2
0
f
ON THE WATER
TO: Honorable Mayor and Members of the Common Council
FROM: Jackson Ki y "�
Director of Co unity Development
DATE: September 17, 2009
RE: Approve Resolution Preliminarily Determining Project Site to be Blighted and
Declaring Intent Regarding the Issuance of Revenue Bonds by the Redevelopment
Authority to Finance River Valley One LLC Project (524 North Koeller Street)
(RDA recommends approval)
BACKGROUND /SUBJECT PROPERTY
This Resolution is for a Preliminary Blight Determination and to support the RDA's issuance of
Revenue Bonds for property at 524 North Koeller Street. The Resolution is a necessary step in
enabling River Valley One LLC to avail itself of special bond financing for a commercial project
on its property.
ANATNSTS
The Redevelopment Revenue Bonds, if issued, would fall under the Midwestern Disaster Area
Bond program authorized by Congress in October of 2008. Congress created the bond program
through the Heartland Disaster Tax Relief Act of 2008 to assist states and designated counties
within states that sustained economic losses resulting from flooding that occurred in 2008. In
order for parties to receive tax exempt financing from both federal and state taxes, it is necessary
for projects to be located in either redevelopment districts or for properties to be found to have
spot blight conditions. It is important to note that parties who participate in the program would
not have had to actually sustained flood damage themselves to participate in the program.
Attached to this Memo is a letter from Andy Dumke of River Valley One LLC requesting the
approval of the spot blight determination and support for issuance of the Revenue Bonds. Also
attached is a document prepared by the law firm of Whyte Hirschboeck Dudek which provides
an analysis of applicable State Statutes setting forth the basis and authority for the RDA and City
to act in support of the proposed blight determination and associated bond financing.
It should be recognized this two step process (i.e., the spot blight determination and support of
the bond financing) is aimed at enabling parties such as River Valley One to obtain attractive
financing in support of economic development activities. As noted in the communication from
Whyte Hirschboech Dudek, the State Statutes provide a community with the ability to liberally
construe the determination of blight in these types of circumstances.
DISCLAIMER
This map is neither a legally recorded map nor
a survey and it is not intended to be used as one.
This drawing is a compilation of records, data
and information located in various city, county
and state offices and other sources affecting
the area shown and it is to be used for reference
purposes only. The City of Oshkosh is not re-
sponsible for any inaccuracies herein contained.
If discrepencies are found, please contact the
City of Oshkosh.
500 Block N. Koeller Streeet
50 0 50 100 Feet
N
09 -11 -2009
Scale: 1" = 100'
Source: City of Oshkosh GIS
i
- ` M E N T
August 14, 2009
Mark A. Rohloff, City Manager
Jackson Kinney, Director of Community Development
City of Oshkosh
215 Church Avenue
Oshkosh, WI 54901
RE: 524 N Koeller Street, LLC / Dumke & Associates, LLC
Dear Mark and Jackson:
We are requesting that the Redevelopment Authority of the City of Oshkosh issue conduit tax -
exempt industrial development revenue bonds on behalf of 524 N Koeller Street, LLC / Dumke &
Associates, LLC, to finance a development project in the City of Oshkosh. The proposed project consists of
the (a) construction of an approximately 10,000 square foot office building located at 524 N Koeller Street in
the City of Oshkosh, (b) capitalized interest and (c) payment of financing fees, which project will be
constructed by the company and leased to Schenck S.C. We expect that this project will create approximately
13 full-time jobs.
We have consulted with Whyte Hirschboeck Dudek S.C., who will serve as Bond Counsel, regarding
the bond structure for the requested financing. The Heartland Disaster Tag Relief Act was passed by
Congress last year as a result of the severe storms, tornadoes and flooding throughout the Midwest. This Act
allows tax - exempt Midwestern Disaster Area to be issued for projects like the one proposed by the company.
MDA Bonds, which are industrial development revenue bonds, must finance a project located in one of the
30 southern affected counties of Wisconsin which were declared federal disaster areas, which includes
Winnebago County.
.On August 13, 2009, the RDA approved Initial Resolutions for three (3) other projects we are
developing in Oshkosh. These projects are all located in an established Redevelopment Area. However, in
order for the RDA to be issuer of the proposed bonds for the Koeller site, the property must already be in a
designated redevelopment area ar the RDA and the City can make a spot blight determination. The property
located at 524 N Koeller Street is not in a designated redevelopment area. Therefore, we are requesting that
the RDA make a spot blight determination with respect to the project site. A comprehensive Blight Proposal
will be prepared on our behalf by Whyte Hirschboeck Dudek S.C. and will be provided to the RDA
describing conditions of blight at the project site, and the preliminary resolutions to be considered by the
RDA and the Common Council. If the site is spot blighted, this will allow us to do a single bond issue, with
the RDA as issuer, for the Koeller Street project and the other three projects.
W14D/6629606.1
Mr. Mark A. Rohloff
Mr. Jackson Finney
August 14, 2009
Page 2
We axe requesting that the RDA consider a Preliminary Blight Resolution and an.7tiitial .Bond
.. ....... ......... .....
Resolution on September 16, 2009. We'are also requesting that'the Common Council consider a Preliminary
Blight Resolution on September 22, 2009. Drafts of these resolutions will, be provided by Whyte
Hirschboeck Dudek S.C. At a future date, we will also request that the RDA hold public hearings relating to
the spot'blight and the proposed bond issue, and to consider the Final Blight Resolution and Final Bond
Resolution. The spot blight determination also requires final approval of the Common Council, and we will
request that the Common Council consider a Final Blight Resolution.
'It'is importaiiCfo ricte'that'(i we wffbe responsibleY6r' payment of A`fees'or other costs iiicurxed
by the City and the RDA in connection with the issuance of the bonds, including payment of attorneys' fees
and (u) the bonds will not be general obligations of the City or the RDA. We are asking the City and the
RDA to assist the company with conduit tax- exempt bond financing because the interest on the bonds issued
by the RDA would be exempt from both Federal and State income taxes, which will provide a significant
interest rate savings to the company, thereby promoting the success of our projects in the City during these
difficult economic times.
We are excited about this project and look forward to working with the City. If you have any
questions regarding the project, please do not hesitate to contact me. Thank you.
Very truly yours,
524 N Koeller Street, LLC
By
A�umke
cc: Lynn A. Lorenson, Esq.
Charles L Jarik, Esq.
Lynda R Templen, Esq.
PROPOSAL TO FINANCE
RIVER VALLEY ONE, LLC PROJECT
WITH REDEVELOPMENT AUTHORITY OF
THE CITY OF OSHKOSH
TAX- EXEMPT REDEVELOPMENT
REVENUE BONDS
Respectfully Submitted by:
River Valley One, LLC (the `Borrower ")
September 2, 2009
TABLE OF CONTENTS
1.
2.
3.
4.
PROPOSAL TO FINANCE
RIVER VALLEY ONE, LLC PROJECT
WITH REDEVELOPMENT AUTHORITY
OF THE CITY OF OSHKOSH, WISCONSIN
TAX-EXEMPT REDEVELOPMENT REVENUE BONDS
Introduction
Statutory Authority of the RDA to Act as Issuer for Tax-Exempt Bonds
Proposed Project in Redevelopment Area; or
Proposed Project Site(s) Spot Blight
Authority of RDA to Act with Respect to Proposed Project for River Valley One, LLC
Spot Blight Basis of Blight Findings:
■ Finding 1 - A condition or condition(s) of Blight exists at the site
■ Finding 2 - The Project will eliminate Blight
Statutory Definitions of Blight
5. Summary of Tax-Exempt Revenue Bonds (conduit bonds)
6. "Representative Examples" Conditions of Blight for Prior Projects Financed with Tax-Exempt
Revenue Bonds
7. Municipal Timeline for Resolutions and Public Hearings
WHD/6661658.1
PROPOSAL TO FINANCE RIVER VALLEY ONE, LLC PROJECT
WITH RDA TAX- EXEMPT REDEVELOPMENT REVENUE BONDS
1. INTRODUCTION
River Valley One, LLC, a Wisconsin limited liability company, and /or a related limited liability entity to be
forined (the `Borrower', is requesting that the Redevelopment Authority of the City of Oshkosh, Wisconsin (the
"RDA "), in concert with the City, act as a conduit issuer for tax - exempt revenue bonds, the proceeds which would
be used to finance the Borrower's acquisition and rehabilitation of property located at 524 Koeller Street in the City
of Oshkosh, Wisconsin (the "Project Site "). The proceeds of the bond financing would be used to remediate
existing conditions of "blight" at the Project Site.
The issuance of tax - exempt revenue bonds by a Redevelopment Authority to benefit a local borrower is
based upon statutory authority derived either (a) because the project is located in a redevelopment area or (b) upon a
finding of spot blight, and has been utilized in numerous similar situations in many Wisconsin communities. (See
information at Tab 6). Part of the policy rationale for assisting local borrowers rests in the recognition that the
operations such companies contribute to the economic vitality of the community by employing local residents,
providing services that lessen the burdens of government and provide for the general welfare of the community. In
addition, any project financing spurs additional economic activity through construction jobs and other professional
services.
The following material has been prepared to outline the statutory authority of the RDA to act based upon
blight findings, the support for such blight findings, and a discussion of tax - exempt conduit bonds. We respectfully
request your favorable consideration of this proposal.
2
wHD /6661658.1
PROPOSAL TO FINANCE RIVER VALLEY ONE, LLC PROJECT
WITH RDA TAX - EXEMPT REDEVELOPMENT REVENUE BONDS
2. STATUTORY AUTHORITY OF THE RDA TO ACT
Redevelopment Authorities are independent public bodies created by Wisconsin cities, villages or towns
pursuant to Section 66.1333 of the Wisconsin Statutes to undertake redevelopment and blight elimination and
housing projects. The RDA's powers are limited to those sites in the community that have been found to be
blighted according to the definition of blight as found in Section 66.1333 of the Wisconsin Statutes. This blight
determination can arise in two separate ways:
1. The RDA /City designates an entire area as "blighted," adopts a "redevelopment plan" for the area
and designates the area a "redevelopment area."
-or-
2. The RDA /City makes a spot blight determination with respect to a single site (requires 2/3 vote of
City Council).
A Redevelopment Authority is a separate body for the purpose of carrying out blight elimination, slum
clearance, urban renewal programs and other projects, including housing projects, and has the authority and power
to:
1. Prepare redevelopment plans and urban renewal plans and undertake and carry out redevelopment
and urban renewal projects within the corporate limits of the municipality in which it functions;
2. Enter into any contracts;
3. Assemble land;
4. Borrow money and issue bonds; however, any debt or obligation of the RDA is not the debt or
obligation of the City;
Commence actions in its own name; and
Exercise other powers that may be required or necessary to effectuate the purposes of the Statute.
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VaM /6661658.1
PROPOSAL TO FINANCE RIVER VALLEY ONE, LLC PROJECT
WITH RDA TAX- EXEMPT REDEVELOPMENT REVENUE BONDS
3. AUTHORITY OF REDEVELOPMENT AUTHORITY OF THE CITY OF OSHKOSH TO ACT
WITH RESPECT TO RIVER VALLEY ONE, LLC PROJECT
In order to proceed with the proposed issuance of bonds by the Redevelopment Authority,
Wisconsin Statutes require that the City and the RDA must make findings that:
• Finding # 1 - the identified Project Site is blighted within the meaning of the Statute; and
• Finding # 2 - the Project being proposed serves to eliminate the blight at the Project Site.
We believe that the conditions outlined below support a finding that the Project Site is blighted within the
meaning of the Statute, and that the proposed Project, when completed, will serve to eliminate the blight conditions.
We would also note that the proposed Project includes the costs associated with the elimination of the
blight conditions (as required by the Statute). The total estimated cost of the Project to be financed with Bond
proceeds is approximately $3,500,000.
River Valley One, LLC (the "Borrower ") represents that the following conditions of blight either (a) existed
at the Project Site and have been remediated with borrowed 'money that will be refunded through a Bond financing
or (b) currently exist and will be corrected with completion of the Project to be financed with the proceeds of
conduit Bonds:
• The Project Site is located on vacant, undeveloped land. Economic development of the Project
Site would promote sound community development and growth.
• The Project Site is located on a floodplain which affects the use and value of the affected property,
and presents development challenges for the Borrower. The development of the Project Site will
alleviate this condition by elevating the property which requires an extensive amount of fill.
• The land located on the east side of the Project Site is subject to numerous easements, which makes
the land undevelopable and negatively affects the value of the property.
We are of the opinion that each of the conditions identified above falls within the Statutory definitions
identified herein. Refinancing and financing and development of the Project have and /or will allow the Borrower to
correct these conditions.
We are proposing that the RDA identify the blighted property and recommend to the City that a "spot
blight" finding be made with respect to the Project Site. The Statutes prescribe a specific procedure to be followed
with respect to a "spot blight" finding which requires an informational public hearing, certain notices (which can be
waived by the Borrower as the sole property owner), a RDA resolution making the blight determination and
approving the project and approval of the blight finding by a 2/3 vote of the City Council.
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WHD/6661658.1
PROPOSAL TO FINANCE RIVER VALLEY ONE, LLC PROJECT
WITH RDA TAX- EXEMPT REDEVELOPMENT REVENUE BONDS
4. STATUTORY DEFINITIONS OF "BLIGHT"
Section 66.1333 (2m)(bm) of the Wisconsin Statutes provides a definition of "blight" and cites certain
examples of conditions of blight. Both the broad statutory definition and the blight finding which have been made
by municipalities throughout the State are much broader than the classic dictionary definition of blight. Essentially,
the Statute provides three (3) separate routes to identify blight:
1. Property which by reason of dilapidation, deterioration, age or obsolescence, inadequate provisions
for ventilation, light, air or sanitation, high density of population and overcrowding, or the existence of conditions
which endanger life or property by fire and other causes, or any combination of such factors, is conducive to ill
health, transmission of disease, infant mortality, juvenile delinquency, or crime, and is detrimental to the public
health, safety, morals or welfare; or
2. Property which by reason of faulty lot layout in relation to size, adequacy, accessibility or
usefulness, unsanitary or unsafe conditions, deterioration of site or other improvements, diversity of ownership, tax
or special assessment delinquency exceeding the fair market value of the land, defective or unusual conditions of
title, or the existence of conditions which endanger life or property by fire and other causes, or any combination of
such factors, substantially impairs or arrests the sound growth of a city, retards the provisions of housing
accommodations or constitutes an economic or social liability and is a menace to the public health, safety, morals
or welfare in its present condition and use; or
3. Property which is predominantly open and which because of obsolete platting, diversity of
ownership, deterioration of structures or of site improvements, or otherwise, substantially impairs or arrests the
sound growth of the community.
Section 66.1333 (17) provides that this Statute is to be construed liberally.
We believe that the conditions at the Project Site meet the definitions set forth above.
WHD /6661658.1
PROPOSAL TO FINANCE RIVER VALLEY ONE, LLC PROJECT
WITH RDA TAX- EXEMPT REDEVELOPMENT REVENUE BONDS
5. SUMMARY OF TAX - EXEMPT REVENUE BONDS
Spot blight findings would provide the requisite authority for the RDA to issue conduit revenue Bonds on
behalf of River Valley One, LLC, a Wisconsin limited liability company, and /or a related limited liability entity to be
formed (the `Borrower "), in an amount not to exceed $3,500,000 (the "Bonds ") for the purpose of financing the
blight remediation improvements located at 524 Koeller Street, Oshkosh, Wisconsin. Interest on the Bonds issued
by the RDA would be exempt from both Federal and State income tax — thereby providing an interest rate savings
to the Borrower.
If the RDA issues the Bonds on behalf of the Borrower, the Bonds would be municipal bonds; however,
the Bonds would not be general obligations of the City or the RDA. The RDA would be acting solely as a conduit
to assist the Borrower:
1. Neither the City not the RDA would be liable for payment of the principal and interest on the
Bonds; and
2. Neither the City nor the RDA would have ongoing responsibilities of monitoring or reporting with
regard to the Bonds or the project; and
3. The Bonds would not count against the City's borrowing capacity. The City will not levy a tax for
payment of the Bonds.
The RDA would act strictly as a conduit, which would enable the Borrower to borrow at a lower rate of
interest. The lender for the Borrower (the "Bank "), would issue its direct -pay Letter of Credit to provide for the
timely payment of principal and interest on the Bonds. The Borrower would enter into a Reimbursement
Agreement with the Bank providing for reimbursement of amounts paid by the Bank pursuant to the Letter of
Credit.
Bondholders would not look to the City or the RDA for payment. The RDA would assign all of its
rights, liability and responsibilities under the Bonds to a third party fiduciary Trustee for administration
for the benefit of the Bondholders. The Borrower would be fully responsible for repaying the loan and
would make the arrangements with the Bank for the payment on the Bonds. If the Borrower was not able
to reimburse the Bank for payments of principal and /or interest when due, the Bank would realize on its
collateral and enforce its rights against the Borrower. Neither the City nor the RDA would be liable for
payment. In addition, the bond documents would provide extensive indemnification provisions to provide
for indemnification of the City and the RDA against any claims related to the Bond financing.
As with all conduit financing structures. River Valley One, LLC- the Borrower - would be responsible for
payment of all fees or other costs incurred by the City and the RDA in connection with the issuance of the Bonds,
including payment of attorneys' fees
The foregoing is just a brief discussion of the way in which the City and RDA may assist the Borrower. The
key point to remember is that by assisting the Borrower through a conduit bond issue, the RDA will afford the
Borrower access to an interest rate benefit because the interest on the Bonds will be tax - exempt in the hands of the
bondholders. The interest rate savings afforded the Borrower will allow it to make necessary improvements to its
facilities, which improvements include alleviation of existing blight conditions - at no cost to the RDA or the City.
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wHD/6661658.1
PROPOSAL TO FINANCE RIVER VALLEY ONE, LLC PROJECT
WITH RDA TAX - EXEMPT REDEVELOPMENT REVENUE BONDS
6. " REPRESENTATIVE EXAMPLES" CONDITIONS
OF BLIGHT FOR PRIOR PROJECTS
FINANCED WITH TAX- EXEMPT REVENUE BONDS
City of Fond du Lac
The Redevelopment Authority of the City of Fond du Lac and the City made a blight determination and the
RDA subsequently issued bonds for a project which consisted of an addition to an existing manufacturing facility.
The blight determination was made based upon the following conditions of blight:
• The location of the Rail Line precluded the maximum utilization of space and cost - efficient construction of
additional manufacturing space because an addition of the size needed could not be continued North on
the existing building. Instead, the building had to be redesigned to expand in an "L" to the west,
necessitating reconfiguration of manufacturing flow and building use.
• Construction of new sewer line was required because site could not be utilized to maximum efficiency by
constructing to the North. By undertaking the "L" shaped expansion, the sewer lines needed to be
reconfigured in order to accommodate the location of the building addition.
• Further impediments to development arising from the need to build to the West including substantial
excavation costs of excavating a hill (development North would not have presented the same impediment).
• Expansion of the building to the West led to the need to create a berm in order to provide an aesthetically
pleasing shield to the neighboring property. Upon completion, the berm will be seeded with native
vegetation /prairie grass and will allow for the natural absorption of rain water in an environmentally
friendly manner.
• Ingress and egress to the Project had to be reconfigured due to the inability to build to the North.
• One existing loading dock could not be utilized because of the "L" configuration of the building. This
necessitated demolition/ closing of one loading dock and construction of an alternative loading dock.
City of West Allis
The Community Development Authority of the City of West Allis and the City made a blight determination and the
CDA subsequently issued bonds for a project which consisted of an addition to an existing Hospital. The blight
determination was made based upon the following conditions of blight:
• The original - facility was constructed on an old foundry site and additions and improvements to the site
require disturbance of the underlying soil. Remediation and removal of foundry sand issues is necessary to
allow further improvement of the site and remediation of this environmental problem. The size and scope
of the project includes the remediation of this condition of blight.
• The existing facility has several areas where there if roof leakage and resulting interior damage. To maintain
the appearance, value, health, and safety of the facility, these conditions will be corrected. The size and
scope of the project includes the remediation of this condition of blight.
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The existing entrance to the Hospital is not designed to provide optimal security for patients and staff
entering and exiting the building and does not allow for adequate control by the staff of patient ingress and
egress. The project includes remodeling and reconfiguring the entry and upon completion will provide
optimal security for the health and safety of patients, staff and the community.
The facility has inadequate parking which contributes to traffic flow issues. The project includes providing
additional parking and improvement of traffic flow which will eliminate the current problem.
Prior to the project improvements, the wooded area around the Hospital contained scrub, dead and dying
trees, invasive vegetation and created an unsafe condition allowing potential for loitering and lurking to go
undetected. The overgrowth also created obstruction to visibility on public sidewalks and was an
impediment to potential development and access do a park under consideration for development on a
neighboring property. The project includes landscaping to remove scrub, dead and dying trees, invasive
vegetation and improvement of each of these conditions of blight.
Village of Sussex
The Community Development Authority of the Village of Sussex and the Village made a blight determination and
the CDA subsequently issued bonds for a project which consisted of the construction of a manufacturing facility on
land located in the Sussex Business Park based upon the following conditions of blight:
The Project Engineer has determined that due to blight conditions on the site, the Borrower will be forced
to incur significant expense in order for the Borrower to manage storm water to the Village of Sussex
requirements. This site was originally designed as part of a business park that utilizes the detention pond to
the south of the site to perform the storm water management practices. The storm water system that serves
this site was documented on a plan called "Mindemann Farms Industrial Park - Phase 2 Storm Water
Management" dated November 2000. This design shows the "Lauterbach" site being graded to surface
drain into the detention pond.
A survey of the site has revealed that the site was lower than the "Mindemann Farms Industrial Park - Phase
2 Storm Water Management" design and does not provide for surface drainage to the detention pond.
When analyzing the site, it was determined that in order to provide surface or subsurface drainage to the
detention pond, significant fill materials would have to imported to the site or an alternate on -site storm
water management system would have to be used. The Borrower is exploring an alternate system which
uses a combination of pervious asphalt and a bio- retention pond. These alternate systems will require extra
expenses for the Borrower that would not normally be required if the site did not suffer the conditions
identified above. These conditions constitute a "blight" condition and the project financing will eliminate
these blight conditions on the site.
Village of Hales Corners
The Community Development Authority of Hales Corners and the Village made a blight finding and subsequently
the CDA issued bonds to finance (i) certain improvements to the Grange Campus Site located at 5425 South 111th
Street including, but not limited to, roof repairs, asphalt replacement, and heating and air conditioning
improvements, (ii) certain water and sewer improvements and construction and equipping of an approximately
28,888 square foot gymnasium and community fitness addition to the school facility located at 12300 West Janesville
Road.
The major repairs required at the Grange Campus are:
Replace the asphalt. - The asphalt area is used as a playground for the elementary school students. Our
records indicate that the area is now 20 years old, and was actually built upon an area with unstable soils.
This substructure has allowed for significant pitching and heaving causing uneven surfaces that the students
often stumble or trip over. This surface can no longer be fixed by patching and complete replacement is
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required. We also believe that the repair of this area will help address an unsightly area, by improving the
overall appearance of the property.
Replace a portion of the roof. - This portion is now over 30 years old, and can no longer be adequately
repaired and there are numerous areas where leaks have occurred. These leaks have had undesirable effects
for the health and safety of the faculty and students who use this building. Ceiling tiles and other items have
begun to show the signs of mold, mildew and deterioration after having become dampened by various leaks.
Improve the air flow and air exchange inside the building. - The air exchange is safe per grandfathered
standards of 7 times per hour. However, the ventilating system is growing old and struggling to adequately
maintain this volume of exchange. Current codes currently require air exchange of 15 times per hour, more
than double our current situation. The importance of the increased volume of air exchange has been
exacerbated by the affects from the leaks in the roof.
The major environmental remediation required at the Janesville Campus is:
The sewage lift station is inefficient and upon failure, creates unsafe and unsanitary conditions at the school.
The problems are due in part to the age and size of the existing life station and to the elevation of the
sanitary sewer in Janesville Road being at a higher elevation than the level of the ground on our lot. Sewage
backups are due to a failure of the sanitary pump(s), inadequate alarm systems and holding tank. The
backups occur in the mechanical room which is adjacent to our cafeteria /meeting area. This area is where
our Middle school prepares and serves lunch, and other large school events involving the serving of food
occur. These recurrent sewer backups have also caused a mold problem. We propose to correct this
unsanitary condition with a new lift station that will have updated pumps, a larger holding tank and include
a controls system that will better alarm us of any failures in the system. The capacity of the new system will
be large enough to accommodate campus needs including those necessitated by future growth, including the
gymnasium addition. Full economic development of the site cannot occur unless the sewer lift station is
replaced
Citv of Milwaukee
The Redevelopment Authority of the City of Milwaukee made a spot blight determination and subsequently issued
bonds for a not -for -profit corporation, for costs associated with the acquisition and rehabilitation and equipping of
an existing building. The blight determination was based primarily upon an environmental "hot spot" existing under
the parking lot. The project costs included blacktop capping of the parking lot but there were significant other costs
associated with the remodeling and equipping of the building.
The Redevelopment Authority of the City of Milwaukee made a spot blight determination and subsequently issued
bonds for costs associated with the acquisition and demolition of existing properties, construction of a new facility
on that property, and for improvements to the existing campus. The blight determination at the existing campus
site was based upon a need to upgrade existing HVAC system, however, in addition to the costs associated with the
improvement of the HVAC system, significant other project costs were included in the bond financing.
Town of Jackson
The Community Development Authority of the Town of Jackson made a blight determination and subsequently
issued bonds for costs associated with a gymnasium addition to the Borrower's facility and sewer improvements and
costs of resolving a drainage problem on the site. The blight determination was based on the sewer problems and
drainage problems. The bond - financed project costs included the costs of remedying the drainage problem and
sewer problem, but also the costs for the gymnasium addition.
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Village of Gennessee
The Community Development Authority of the Village of Gennessee made a blight determination and subsequently
issued bonds on behalf of a not - for -profit corporation, for costs associated with rehabilitation of the company's
historic facility, based upon evidence of non - native vegetation, uneven walkways and conditions which arrested the
sound development of the site. The subsequent bonds financed a project which included not only extensive
rehabilitation and equipping of the historic facility, but construction of an additional visitors center building several
hundred feet from the existing historic facility.
City of Delafield
The Community Development Authority of the City of Delafield made a blight determination and subsequently
issued bonds to finance capital improvements on behalf of a private school based on the following spot blight
finding:
■ The roofs of the buildings known as Scott Johnston Hall, Hazelwood Hall, Smythe Hall and
Dekoven /Wells Hall, which are utilized as barracks, academic buildings and administrative buildings needed
replacement to correct conditions which had led to severe leaking problems, interior damage, and other
structural problems.
■ Most of the buildings on the campus are old historic buildings. The oldest building is over a century old
and most are of stone construction. Scott Johnston Hall, Hazelwood Hall, Smythe Hall and
Dekoven /Wells Hall all required extensive tuck -point and other stone work to repair conditions that had
led to severe leaking problems, interior damage, and other structural problems.
■ General rehabilitation and refurbishment of Scott Johnston Hall, Hazelwood Hall, Smythe Hall and
DeKoven /Wells Hall including but not limited to equipment and structural improvement to promote better
air quality, lighting and security.
■ During the rehabilitation of Scott Johnston Hall, Hazelwood Hall and Smythe Hall, asbestos was detected
and remediation was undertaken.
■ While completing rehabilitation and refurbishment of Dekoven /Wells Hall, additional asbestos problems
were discovered and remediation was undertaken.
• To assure the continued health and safety of the students, security cameras, new and improved door
hardware, improved lighting and other structural changes were required in the barracks facilities.
• For the continued health and well-being of the students, upgrades were made to all shower and restroom
facilities in the barracks buildings.
• To assure safe and adequate supplies of drinking water, a new well is required, water treatment equipment
will be installed and a structure built to house the water treatment equipment.
• The existing competitive track is the old cinder -type track. For safety reasons the cinder track will be
replaced with an all- weather surface.
■ The existing baseball field is non - compliant with competitive standards and must be improved to allow
maximum educational participation by cadets.
The exiting tennis courts have deteriorated to the point that they create a safety issue for the cadets.
Currently, temporary, portable bleachers are used by spectators at various sports events. To improve safety
for spectators and cadets, new, permanent seating will be installed.
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• Currently, temporary restroom facilities are used by spectators and cadets at various sporting events. For
health and sanitation reasons, these facilities will be replaced with permanent restroom facilities.
• Currently concessions are provided to spectators from a "trailer and for health reasons, a permanent facility
will be constructed.
• The locker facility available to cadets and their competitors has deteriorated to point where it was a safety
concern. The locker facility will be razed and replaced with a permanent structure.
• The obstacle course equipment and rappel tower are currently not fenced. These areas will be fenced to
provide greater safety and security.
• There is no surfaced parking available for spectators attending competitions and any available parking is on
grass areas. Designated surface parking areas will be constructed for the safety of spectators and cadets.
City of Wausau
The existing facility has been vacant and underutilized for over a year.
The property has not been maintained to the standards of the community and significant rehabilitation and
refurbishment is required.
There has been deterioration of paving of parking areas at the site:
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PROPOSAL TO FINANCE RIVER VALLEY ONE, LLC PROJECT
WITH RDA TAX- EXEMPT REDEVELOPMENT REVENUE BONDS
7. MUNICIPAL TIMELINE FOR RESOLUTIONS AND PUBLIC HEARINGS
$3,500,000
Redevelopment Authority of the City of Oshkosh, Wisconsin
Redevelopment Revenue Bonds, Series 2009
(River Valley One, LLC Project)
MUNICIPAL TIMELINE
FOR RESOLUTIONS AND PUBLIC HEARINGS
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AUGUST
' RDA considers Preliminary Blight Resolution (see Tab #7)
September 16, 2009
S M T W T F S
September 22, 2009
City Council considers Preliminary Blight Resolution (see Tab #9)
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MUNICIPAL TIMELINE
FOR RESOLUTIONS AND PUBLIC HEARINGS
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SEPTE
' RDA considers Preliminary Blight Resolution (see Tab #7)
September 16, 2009
S M T W T F S
September 22, 2009
City Council considers Preliminary Blight Resolution (see Tab #9)
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MUNICIPAL TIMELINE
FOR RESOLUTIONS AND PUBLIC HEARINGS
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0' 3 w , t' Da A `�`"" ¢ °�,��' `tea
h✓c'c .e';aa'k`. o. +,� T . <�„�:;': S. � J Y g $ � , .?:' y . d�''�,L
OCTOBER
' RDA considers Preliminary Blight Resolution (see Tab #7)
September 16, 2009
S M T W T F S
September 22, 2009
City Council considers Preliminary Blight Resolution (see Tab #9)
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MUNICIPAL TIMELINE
FOR RESOLUTIONS AND PUBLIC HEARINGS
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' RDA considers Preliminary Blight Resolution (see Tab #7)
September 16, 2009
• RDA considers Initial Resolution for Bonds (see Tab #8)
September 22, 2009
City Council considers Preliminary Blight Resolution (see Tab #9)
September 29, 2009
WHD publishes Notice of Public Hearing (Blight); Public Hearing to be held by RDA on
October 21, 2009 ( Publisbed as a Class 2 Notice on October 6, 2009 and October 13, 2009)
September 29, 2009
WHD publishes Notice of Public Hearing (MFRA for Bonds); Public Hearing to be held by
RDA on October 21, 2009 (Published as a Class 1 Notice on October 6, 2009)
October 21, 2009
■ RDA holds informational Public Hearing on blight determination
• RDA considers Final Blight Resolution
• RDA holds TEFRA Public Hearing for Bonds
• RDA considers Final Bond Resolution
October 27, 2009
City Council considers Final Blight Resolution
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