HomeMy WebLinkAbout01. 17-65FEBRUARY 21, 2017 17-65 RESOLUTION
(CARRIED LOST LAID OVER WITHDRAWN )
PURPOSE: APPROVE ACQUISITION OF INTEREST OF U.S. SMALL BUSINESS
ADMINISTRATION IN PROPERTY LOCATED AT 1118 AND 1212 S.
MAIN STREET (FORMER BUCKSTAFF PROPERTY) AND
AUTHORIZE ISSUANCE OF MUNICIPAL REVENUE OBLIGATION
INITIATED BY: CITY ADMINISTRATION
WHEREAS, the City of Oshkosh is acquiring property located at 1118 and 1212 South
Main Street (the former Buckstaff property) pursuant to a nuisance action and settlement; and
WHEREAS, the City plans to convey the property to a developer in connection with the
creation of a Tax Incremental Financing District; and
WHEREAS, the developer plans to develop the property with an arena facility and
other improvements which are anticipated to generate tax increment; and
WHEREAS, the U.S. Small Business Administration (SSA) has an interest in the
property by virtue of certain mortgages and UCC filings pertaining to loans secured by the
property; and
WHEREAS, in order to obtain clear title to the property it is necessary to acquire the
interests of the SSA; and
WHEREAS, the SSA is willing to release its interests in the property for the payment of
$140,000 plus interest payable through TIF funding.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Oshkosh that the proper City officials are hereby authorized to issue a Tax Increment Project
Municipal Revenue Obligation in the principal amount of $140,000.00 plus 4% simple interest
per annum payable from tax increments to be generated from proposed Tax Incremental
Financing District No. 31, in substantially the same form as attached hereto, any changes in
the execution copy being deemed approved by their respective signatures, and said City
officials are authorized and directed to take those steps necessary to implement the terms and
conditions of the Obligation.
UNITED STATES OF AMERICA
STATE OF WISCONSIN
COUNTY OF WINNEBAGO
CITY OF OSHKOSH
TAXABLE TAX INCREMENT PROJECT MUNICIPAL REVENUE OBLIGATION ("MRO")
Number Date of Original Issuance Amount
February , 2017 $140,000.00
FOR VALUE RECEIVED, including the release of all interest in property located at 1118
and 1212 South Main Street in the City of Oshkosh and including but not limited to the release of
certain mortgages and security interests dated September 5, 2007 and recorded in the office of the
Register of Deeds for Winnebago County, Wisconsin, on September 14, 2007 as Documents Nos.
1448277, 1448278, 1448280, 1448281, 1448282, 1448283, 14482884 and UCC Financing
Statement Amendment recorded on July 20, 2012 as Document no. 1609402, the City of Oshkosh,
Winnebago County, Wisconsin (the "City"), promises to pay to The U.S. Small Business
Administration (the "SBA"), in the manner, at the times, from the source of revenue and to the
extent hereinafter provided, the principal amount not to exceed $140,000.00 [with interest
thereon at the rate of four percent (4%) per annum].
Interest shall begin to accrue on the date on which this MRO is issued. This MRO shall be
payable in installments on or before November 1 (the "Payment Dates") in each of the years set
forth in Schedule 1 attached hereto in the amount of ten thousand dollars ($10,000.00). Payments
shall be applied first to accrued interest and second to unpaid principal. Payments on this MRO
shall be made only to the extent that the City has received Tax Increments.
This MRO has been issued for the purpose of acquiring property within the City's Tax
Incremental District No. 31 ("District") and is payable only from the income and revenues herein
described, which income and revenues have been set aside as a special fund for that purpose and
identified as the "Special Redemption Fund" provided for under the Resolution adopting TIF No.
31 on February 28, 2017 by the Common Council of the City (the "Resolution"). This MRO is
issued pursuant to the Resolution and pursuant to the terms and conditions of the Tax Incremental
District No. 31. This MRO does not constitute an indebtedness of the City within the meaning of
any constitutional or statutory limitation or provision. This MRO shall be payable solely from Tax
Increments generated by the Project located within the District and appropriated by the Common
Council to the payment of this MRO (the "Revenues"). Reference is hereby made to the
Resolution for a more complete statement of the revenues from which and conditions and
limitations under which this MRO is payable and the general covenants and provisions pursuant
to which this MRO has been issued. The Resolution is incorporated herein by this reference.
The City's payment obligations hereunder are subject to appropriation, by the Common
Council, of Available Tax Increments to make payments due on this MRO. When the amount of
Revenue has been appropriated and applied to payment of this MRO, the MRO shall be deemed
to be paid in full and discharged, and the City shall have no further obligation with respect hereto.
This MRO is a special, limited revenue obligation and not a general obligation of the City
and is payable by the City only from the sources and subject to the qualifications stated,
incorporated or referenced herein. This MRO is not a general obligation of the City, and neither
the full faith and credit nor the taxing powers of the City are pledged to the payment of the principal
of this MRO. Further, no property or other asset of the City, except the above -referenced
Revenues, is or shall be a source of payment of the City's obligations hereunder.
This MRO is issued by the City pursuant to, and in full conformity with, the Constitution
and laws of the State of Wisconsin.
This MRO may be transferred or assigned, in whole or in part, only with the consent of the
City. Interests in this MRO may not be split, divided or apportioned. In order to transfer or assign
the MRO, the transferee or assignee shall surrender the same to the City either in exchange for a
new, fully -registered municipal revenue obligation or for transfer of this MRO on the registration
records for the MRO maintained by the City. Each permitted transferee or assignee shall take this
MRO subject to the foregoing conditions and subject to all provisions stated or referenced herein.
It is hereby certified and recited that all conditions, things and acts required by law to exist
or to be done prior to and in connection with the issuance of this MRO have been done, have
existed and have been performed in due form and time.
IN WITNESS WHEREOF, the City Council of the City of Oshkosh has caused this MRO
to be signed on behalf of the City by its duly qualified and acting City Manager and City Clerk,
and its corporate seal to be impressed hereon, all as of the date of original issue specified above.
CITY OF OSHKOSH
By:
Name:
Title:
By:
Name:
Title:
By:
Name
Title:
Mark A. Rohloff
City Manager
Pamela R. Ubrig
City Clerk
Trena Larson
Finance Director
By:
Name: Lynn A. Lorenson
Title: City Attorney
City of Oshkosh
$140,000 SBA Loan Repayment Schedule for Tax Incremental District No. 31
Dated November 1, 2018
Debt Service Schedule -- Accrual Basis
Calendar
Year
Principal
Coupon
Interest
Total P+I
2018
-
-
-
-
2019
7,653.66
4.000%
5,600.00
13,253.66
2020
7,959.80
4.000%
5,293.85
13,253.65
2021
8,278.19
4.000%
4,975.46
13,253.65
2022
8,609.32
4.000%
4,644.33
13,253.65
2023
8,953.70
4.000%
4,299.96
13,253.66
2024
9,311.84
4.000%
3,941.81
13,253.65
2025
9,684.32
4.000%
3,569.34
13,253.66
2026
10,071.69
4.000%
3,181.97
13,253.66
2027
10,474.56
4.000%
2,779.10
13,253.66
2028
10,893.54
4.000%
2,360.12
13,253.66
2029
11,329.28
4.000%
1,924.38
13,253.66
2030
11,782.45
4.000%
1,471.20
13,253.65
2031
12,253.75
4.000%
999.91
13,253.66
2032
12,743.90
4.000%
509.76
13,253.66
-
$140,000.00
-
$45,551.19
$185,551.19
Yield Statistics
Bond Year Dollars$1,138.78
Average Life
8.134 Years
Average Coupon4.0000002%
_
- - -
.............._...
Net Interest Cost (NIC)
4.0000002%
True Interest Cost (TIC)
3.9607804%
Bond Yield for Arbitrage Purposes
3.9607804%
All Inclusive Cost (AIC)
3.9607804%
IRS Form 8038
Net Interest Cost
4.0000002%
.._..._..
Weighted Average Maturity
......... .........
......... ......... ........._
....................
8.134 Years
Sample Issue I SINGLE PURPOSE 1 2/17/2017 1 3:58
TO; Mayor and Members of the City Council
FROM; Lynn A. Lorenson, City Attorney
DATE: February 17, 2017
RE: APPROVE ACQUISITION OF INTEREST OF U.S. SMALL BUSINESS
ADMINISTRATION IN PROPERTY LOCATED AT 1118 AND 1212 S. MAIN
STREET (FORMER BUCKSTAFF PROPERTY) AND AUTHORIZE ISSUANCE OF
MUNICIPAL REVENUE OBLIGATION
BACKGROUND
The existing settlement agreement between the City, FirstMerit Bank and Mr. Cowie pertaining
to the former Buckstaff property anticipated that the City would acquire title to the property
upon the completion of demolition of all the structures on the property. In order to facilitate the
pending arena development deal, the City has negotiated an earlier transfer of the south and
east portion of the property, with transfer of the northwest corner parcel upon completion of the
demolition of the remaining structures.
The existing settlement agreement provided that the City would receive the property with the
only liens on the property being the outstanding property tax liens. When the City obtained the
title commitment for the property there were additional liens identified in relation to prior SBA
loans to Oshkosh Industries which had not been cleared.
These liens would have been extinguished in the foreclosure action had the Bank concluded the
Sheriff's sale. Further complicating the matter was the Bank's release of mortgages covering the
property which most probably was done upon confirmation of the sale of the other two parcels.
The Release included the main factory parcel in the description, despite the fact that the Bank
did not at that time desire to complete the process for obtaining a Sheriff's deed for that parcel.
The effect of all of this was to give the junior lienholder, the SBA, now a first position as to
mortgages on the property. The SBA mortgages were for original amounts of $405,000 and
$338,000, The SBA may have some additional interest in the property by virtue of a UCC filing
pertaining to loans for equipment.
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5000 http://www.ci,oshkosh,wi.us
ANALYSIS
We have been in discussion with the SBA for several weeks and the SBA is unwilling at this time
to release their loans without some compensation. While the City may have other options for
obtaining title to the property, pursuing these options would require additional time and would
hold up the current planned development on the site.
The assessed value for the land only established for 2017 for the entire parcel is $140,000. SBA
has indicated that they are willing to release all their interest in the property for $140,000. They
have also indicated that they are willing to accept payment of the $140,000 with 4% interest over
a period of time which would allow the City to pay this amount from the TID proceeds. Since
this cost pertains directly to the acquisition of the property itis an eligible TIF expense.
FISCAL IMPACT
The $140,000.00 payment will be paid solely through TIP funds generated from TID #31. The
obligation will be a revenue obligation of the TIF and not a general obligation of the City.
RECOMMENDATION
Staff recommends approval of the resolution.
City Hall, 215 Church Avenue P.O. Box 1 130 Oshkosh, wl 54903-1130 920.236.5000 hitp://www.ci,oshkosh.wi,us