HomeMy WebLinkAbout06. 12-156
APRIL 10, 2012 12-156 RESOLUTION
(CARRIED___5-0____LOST_______LAID OVER________WITHDRAWN_____)
PURPOSE: AMENDED INITIAL RESOLUTION REGARDING MIDWESTERN
DISASTER 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, on September 27, 2011, the City adopted Resolution No. 11-428 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, to finance a
project consisting of 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, to be financed with one or more series of tax-exempt Midwestern Disaster
Area Revenue Bonds and/or taxable bonds in an amount not to exceed $11,000,000;
and
WHEREAS, the parties indentified in the definition of “borrower” in Resolution
No. 11-428 have changed, and such term shall now be defined to include only Oshkosh
Investors, LLC, a Wisconsin limited liability company, and/or a related entity to be
formed (collectively, the “Borrower”); and
WHEREAS, the cost of the Project has increased and is presently estimated to be
$14,000,000, 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
$14,000,000; 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
WHD/8518196.2
WHEREAS, the Borrower has requested that the Issuer now approve an amended
initial resolution (the "Amended Initial Resolution") providing for the financing of the Project
in an amount not to exceed $14,000,000; 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
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 $14,000,000; 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 $14,000,000 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
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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;
(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 Amended 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.
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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
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 Amended 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 Amended 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 Amended 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 $14,000,000. This statement of official intent is
made pursuant to Internal Revenue Code §1.150-2.
Adopted: April 10, 2012
CITY OF OSHKOSH, WISCONSIN
[SEAL]
By:
Burk Tower, Mayor
Attest:
Pamela R. Ubrig, City Clerk
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WHD/8518196.2
EXHIBIT A
NOTICE TO ET ECTORS 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 April 10, 2012,
adopted an Amended Initial Resolution pursuant to Section 66.1103 of the Wisconsin Statutes, as
amended, expressing the intention to issue not to exceed $14,000,000 of Midwestern Disaster Area
Revenue Bonds of the Issuer (the "Bonds") on behalf of Oshkosh Investors, LLC, a Wisconsin
limited liability company, and/or a related entity to be formed (collectively, the "Borrower"). The
Borrower desires to complete a project consisting of 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 Amended 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 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/8518196.2
MAR-30-2012 14 32 UW OSHKOSH FOUNDATION 920 424 7116 P.01/01
Notice of Intent to Obtain a Municipal Industrial Revenue Bond
Section 66.1103(4m) (a) 1 of the Wisconsin Statutes requires the person or business who intends to obtain an industrial revenue bond
issue from a Wisconsin municipality to notify this intention to the Wisconsin Economic Development Corporation and to any collective
bargaining agent in the state with whom the person or business has a collective bargaining agreement. This notification must occur at
least 30 days prior to entering into the revenue agreement or signing the loan contract. The person or business must provide
information on the number of full-time jobs that are expected to be eliminated, created,or maintained at the project site and elsewhere
in Wisconsin as a result of the project which is the subject of this notice. The person or business named below hereby gives notice of
intent to obtain an Industrial Revenue Bond pursuant to s.66.1103 of the Wisconsin Statutes.
I. Project
A. Person:
Business: Oshkosh Investors,LLC
Address: / ,W rill ma 1`Y/ S'f-
Post Office/ZIP: Q sh k sJ-1, L J y 54'7Q/
B. Project site: City of Oshkosh,Wisconsin
(Name of city,village or town in which the project is located)
C. Project type: Expansion at Present Location n Relocation Within Same Municipality
Ti Relocation From Within State Relocation from Out-of-State Li New Business
UBranch-Wisconsin Operation Branch-Out-of-State Operation X Other: acquisition& rehabilitation
of existing hotel
D. Maximum amount of IRB financing: $14,000,000
II. Employment Estimates(to result within the next 3 years)
To Be Net Total
Before Maintained To Be To Be Number of
Number of Full-Time Jobs Project at New Site Created Eliminated Jobs
A. At the Project Site 4 4 40 0 44
B. At All Other Wisconsin Operations 0 0 0 0 0
C. Net Totals 4 4 40 0 44
D. Will any jobs transfer from one or more locations to the project site? Yes n No n
Number of jobs to transfer: N/A
Location(s)the jobs will transfer from: (municipality) N/A
(2c.) k A10 PC§triV March 42012
i ned/Per-• «,m letin this form Title Date
9 p g
q O-- itA • 7/011
Telephone Number
WHD/B109792.I
TOTAL P.01
CITY HALL
215 Church Avenue
P.O.Box 1130
Oshkosh,Wisconsin City of Oshkosh
54903-1130
O.IHKOJH
TO: Honorable Mayor and Members of the Common Council
FROM: Lynn A. Lorenson, City Attorney
DATE: April 4, 2012
RE: Amended Initial Resolution Regarding Midwestern Disaster
Revenue Bond Financing for Downtown Hotel Project
BACKGROUND
By Resolution 11-428 adopted on September 27, 2011, the Council adopted an
initial resolution regarding the issuance of up to $11,000,000 in Midwestern
Disaster Area Revenue Bonds to finance the proposed acquisition, renovation
and rehabilitation of the full service downtown hotel, restaurant, and conference
center located at 1 North Main Street. The parties identified as the Borrower in
that Initial Resolution have changed and now include only Oshkosh Investors,
LLC, a Wisconsin limited liability company, and/or a related entity to be formed.
In addition, the costs estimate of the Project has increased and is presently
estimated to be $14,000,000. Because of these changes, Oshkosh Investors,
LLC is requesting the Council to pass an Amended Initial Resolution regarding
Midwestern Disaster Area Revenue Bond Financing for the Downtown Hotel
Project.
ANALYSIS
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.
As with the original resolution, 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
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Re: MDARB / Downtown Hotel
9/22/11: Page 2
project in an amount not to exceed $14,000,000. The $14,000,000 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.
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, Approved:
Lynn A Lorenson Mark A. Rohloff
City Attorney City Manager