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HomeMy WebLinkAbout11-428SEPTEMBER 27, 2011 11 -428 RESOLUTION (CARRIED 6 -0 LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVAL OF INITIAL RESOLUTION REGARDING MIDWESTERN DISATER AREA REVENUE BOND FINANCING FOR THE DOWNTOWN HOTEL PROJECT INITIATED BY: LEGAL DEPARTMENT WHEREAS, Section 66.1103 of the Wisconsin Statutes (the "Act ") authorizes the City of Oshkosh, Wisconsin (the "Issuer"), to authorize the issuance and sale of bonds by the Issuer to construct, equip, re- equip, acquire by gift, lease or purchase, install, reconstruct, rebuild, rehabilitate, improve, supplement, replace, maintain, repair, enlarge, extend or remodel industrial projects; and WHEREAS, Brian Wogernese and Mark Pomerenke, and /or Oshkosh Investors, LLC, a Wisconsin limited liability company, and /or WHG Companies, LLC, a Wisconsin limited liability company, and /or University of Wisconsin Oshkosh Foundation, Inc., a Wisconsin nonstock, nonprofit corporation, and /or a related entity to be created (collectively, the "Borrower "), desires to complete a project consisting of financing the (i) acquisition, renovation and rehabilitation of a 179 room full service hotel, restaurant and conference center located at 1 North Main Street in the City of Oshkosh, Wisconsin, (ii) acquisition and installation of nonmovable equipment and (iii) payment of certain professional costs and costs of issuance (collectively, the "Project "), all of which would contribute to the well -being of the City of Oshkosh, Wisconsin; and WHEREAS, the cost of the Project is presently estimated to be $11,000,000, and the amount proposed to be financed with one or more series of tax - exempt Midwestern Disaster Area Revenue Bonds and /or taxable bonds does not exceed $11,000,000; and WHEREAS, it is the public interest of the Issuer to promote, attract, stimulate, rehabilitate and revitalize commerce, industry and manufacturing, to promote the betterment of the economy of the Issuer; and WHEREAS, the Borrower has requested that the Issuer now approve an initial resolution (the "Initial Resolution ") providing for the financing of the Project in an amount not to exceed $11,000,000; and WHEREAS, the Issuer is a municipality organized and existing under and pursuant to the laws of the State of Wisconsin, and is authorized to enter into revenue agreements with eligible participants with respect to the Project whereby eligible participants agree to cause said Project to be constructed and to pay the Issuer an amount of funds sufficient to wHDis 109659. z provide for the prompt payment when due of the principal and interest on said Midwestern Disaster Area Revenue Bonds. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Oshkosh, Wisconsin, as follows: 1. Based upon representations of the Borrower, it is the finding and determination of the City Council that the Project is a qualified "project" within the meaning of the Act and that the Borrower is an "eligible participant" within the meaning of the Act. The Issuer shall: (a) Finance the Project in an amount not to exceed $11,000,000; and (b) Issue Midwestern Disaster Area Revenue Bonds in one or more series of tax - exempt and /or taxable bonds (the "Bond(s) "), in an amount not to exceed $11,000,000 in order to finance costs of the Project. 2. The aforesaid plan of financing contemplates, and is conditioned upon, the following: (a) The Bonds shall never constitute an indebtedness of the Issuer within the meaning of any state constitutional provision or statutory limitation; (b) The Bonds shall not constitute or give rise to a pecuniary liability of the Issuer or a charge against its general credit or taxing powers; including but not limited to: 1. Liability for failure to investigate or negligence in the investigation of the financial position or prospects of the Borrower, a user of the Project or any other person or for failure to consider, or negligence concerning, the adequacy of terms of, or collateral security for, the Bonds or any related agreement to protect interests of holders of the Bonds; and 2. Any liability in connection with the issuance or sale of the Bonds, for representations made, or for the performance of the obligation of any person who is a party to a related transaction or agreement except as specifically provided in the Act or by an express provision of the Bonds or a related written agreement to which the Issuer is a party; (c) The Project shall be subject to property taxation in the same amount and to the same extent as though the Project were not financed with industrial development revenue bonds; (d) The Borrower shall find a purchaser for all of the Bonds; 2 WHD /8109659.2 (e) The City's out -of- pocket costs, including but not limited to reasonable legal fees and Trustee's fees, in connection with the issuance and sale of the Bonds shall be paid by the Borrower; and (f) A notice of public hearing required by federal law for purposes of Section 147(f) of the Internal Revenue Code, as amended, shall be published in a newspaper of general circulation in the City of Oshkosh and a public hearing shall be held to provide interested individuals or parties the opportunity to testify as to the Project and the issuance of the Bonds. 3. The aforesaid plan of financing shall not be legally binding upon the Issuer nor be finally implemented unless and until: (a) The details and mechanics of the same are authorized and approved by a further resolution of the City Council which shall be solely within the discretion of the City Council; (b) The City Clerk shall cause notice of adoption of this Initial Resolution, in the form attached hereto as Exhibit A , to be published once in a newspaper of general circulation in the City of Oshkosh, and the electors of the City of Oshkosh shall have been given the opportunity to petition for a referendum on the matter of the aforesaid Bond issue, all as required by law; (c) Either no such petition shall be timely filed or such petition shall have been filed and said referendum shall have approved the Bond issue; (d) The City Clerk shall have received an employment impact estimate issued under Section 560.034 of the Wisconsin Statutes; (e) All documents required to consummate the financing have been duly authorized and delivered; (f) The Issuer and the Borrower have resolved all land use and special use issues with respect to the affected property and the Project; and (g) The Borrower receives an appropriate designation for Midwestern Disaster Area Revenue Bonds from the Governor. 4. Pursuant to the Act, all requirements that the Project be subject to the contracting requirements contained in Section 66.1103 are waived, the Borrower having represented that it is able to negotiate satisfactory arrangements for completing the Project and that the Issuer's interests are not prejudiced thereby. 5. The Issuer hereby finds that the Project is adjacent to an existing convention center, is located adjacent to area previously determined to be a "blighted 3 WHD/8109659.2 area" pursuant to Section 66.1105 of the Wisconsin Statutes, as amended, and will significantly increase the number of persons traveling to the City of Oshkosh for business or recreation. 6. The City Clerk is directed, following adoption of this Initial Resolution (i) to publish notice of such adoption not less than one time in the official newspaper of the City of Oshkosh, Wisconsin, such notice to be in substantially the form attached hereto as Exhibit A and (ii) to file a copy of this Initial Resolution, together with a statement indicating the date the Notice to Electors was published, with the Wisconsin Economic Development Corporation within twenty (20) days following the date of publication of such notice. 7. This Initial Resolution is an "initial resolution" within the meaning of the Act and official action toward issuance of the Bonds for purposes of Sections 103 and 144 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. Furthermore, it is the reasonable expectation of the Issuer that proceeds of the Bonds may be used to reimburse expenditures made on the Project prior to the issuance of the Bonds. The maximum principal amount of debt expected to be issued for the Project on the date hereof is $11,000,000. This statement of official intent is made pursuant to Internal Revenue Code §1.150 -2. Adopted: September 27, 2011 [SEAL] CITY OF OSHKOSH, WISCONSIN Burk Tower, Mayor Attest: Pamela R. Ubrig, City Clerk 4 W ID/8109659.2 FXHIRIT A NOTICE TO ELECTORS OF THE CITY OF OSHKOSH, WISCONSIN TAKE NOTICE that the City Council of the City of Oshkosh, Wisconsin (the "Issuer "), at a regular meeting held at City Hall, 215 Church Avenue, Oshkosh, Wisconsin, on September 27, 2011, adopted an Initial Resolution pursuant to Section 66.1103 of the Wisconsin Statutes, as amended, expressing the intention to issue not to exceed $11,000,000 of Midwestern Disaster Area Revenue Bonds of the Issuer (the "Bonds ") on behalf of Brian Wogernese and Mark Pomerenke, and/or Oshkosh Investors, LLC, a Wisconsin limited liability company, and /or WHG Companies, LLC, a Wisconsin limited liability company, and /or University of Wisconsin Oshkosh Foundation, Inc., a Wisconsin nonstock, nonprofit corporation, and /or a related entity to be created (collectively, the "Borrower "). The Borrower desires to complete a project consisting of financing the (i) acquisition, renovation and rehabilitation of a 179 room full service hotel, restaurant and conference center located at 1 North Main Street in the City of Oshkosh, Wisconsin, (ii) acquisition and installation of nonmovable equipment and (iii) payment of certain professional costs and costs of issuance (collectively, the "Project "). The Borrower has represented that the net number of full -time equivalent jobs which the Project is expected to create on the Project site is 40. The Project will significantly increase the number of persons traveling to the City of Oshkosh for business or recreation. Pursuant to the terms of Section 66.1103 of the Wisconsin Statutes, all requirements that the Project be subject to the contracting requirements contained in Section 66.1103 are waived, the Borrower having represented that it is able to negotiate satisfactory arrangements for completing the Project and that the Issuer's interests are not prejudiced thereby. THE BONDS SHALL NEVER CONSTITUTE AN INDEBTEDNESS OF THE ISSUER, NOR SHALL THE BONDS GIVE RISE TO ANY PECUNIARY LIABILITY OF THE ISSUER, NOR SHALL THE BONDS BE A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF THE ISSUER. RATHER, THE BONDS SHALL BE PAYABLE SOLELY FROM THE REVENUES AND OTHER AMOUNTS TO BE DERIVED PURSUANT TO THE REVENUE AGREEMENT RELATING TO SAID PROJECT TO BE ENTERED INTO BETWEEN THE ISSUER AND THE BORROWER. The Initial Resolution may be inspected in the office of the City Clerk at 215 Church Avenue, Oshkosh, Wisconsin, during business hours. TAKE FURTHER NOTICE THAT THE ELECTORS OF THE CITY OF OSHKOSH MAY PETITION FOR A REFERENDUM ON THE QUESTION OF THE BOND ISSUE. Unless within thirty (30) days from the date of the publication of this Notice a petition signed by not less than five percent (5 %) of the registered electors of the City of Oshkosh is filed with the City Clerk requesting a referendum on the question of the issuance of the Bonds, the Issuer will issue the Bonds without submitting the proposition for the electors' approval. If such petition is filed as aforesaid, then the Bonds shall not be issued until WHD/8109659.2 approved by a majority of the electors of the City of Oshkosh voting thereon at a general or special election. Pamela R. Ubrig, City Clerk City of Oshkosh, Wisconsin WHD/8109659.2 CITY HALL 215 Church Avenue P.O. Box 1130 Oshkosh, Wisconsin 903 -1130 City of Oshkosh 0 C) /NKn 7P TO: Honorable Mayor and Members of the Common Council FROM: Lynn A. Lorenson, City Attorney DATE: September 22, 2011 RE: Initial Resolution Regarding Midwestern Disaster Revenue Bond Financing for Downtown Hotel Project BACKGROUND Brian Wogernese, Mark Pomerenke, Oshkosh Investors, LLC, a Wisconsin limited liability company, WHG Companies, LLC, a Wisconsin limited liability company, University of Wisconsin Oshkosh Foundation, Inc., a Wisconsin nonstock, nonprofit corporation, and /or a related entity to be created (collectively, the "Borrower "), are requesting the City of Oshkosh pass an initial resolution regarding the issuance of Midwestern Disaster Area Revenue Bonds to finance the proposed acquisition, renovation and rehabilitation of the 179 room full service downtown hotel, restaurant, and conference center located at 1 North Main Street in the City of Oshkosh, Wisconsin, including the acquisition and installation of nonmovable equipment and payment of certain professional costs and costs of issuance. ►IV I► -11 W&A LS Federal and state law require that the authorization for issuance for revenue bonds including Midwestern Disaster Area Revenue Bonds, be done in two stages, by consideration of an initial and final resolution related to the project. The initial resolution is not a commitment to issue the bonds, but merely indicates the City's "official intent" to issue the bonds pending satisfactory negotiation of the terms of the bonds. The proposed project relates to the acquisition and renovation of the Downtown Hotel located at 1 North Main Street, adjacent to the City's Convention Center. The proposed bonds would provide financing for the project in an amount not to exceed $11,000,000. The $11,000,000 figure is the total amount for the project and may be reduced prior to the presentation of the final resolution should the borrower determine to use other means to finance the project. Re: MDARB /Downtown Hotel 9/22/11: Page 2 FISCAL IMPACT There is no anticipated fiscal impact to the City from the proposed borrowing. The Initial Resolution would provide the property owner with the opportunity to secure lower interest rate, tax - exempt bonds in support of the proposed project. The bonds would not be general obligations of the City of Oshkosh and do not count against the City's borrowing capacity. The City of Oshkosh would not be liable for payment of principal or interest on the bonds and would not have any ongoing responsibilities for monitoring or reporting with regard to the bonds or the proposed projects. Respectfully Submitted, N . Lorenson City Attorney Approved: Mark A. Rohloff City Manager