HomeMy WebLinkAbout28. 17-614 DECEMBER 12, 2017 17-614 RESOLUTION
(CARRIED 5-1P LOST LAID OVER WITHDRAWN )
PURPOSE: APPROVE AMENDMENT TO DEVELOPMENT AGREEMENT/TIF
31 /FOX VALLEY PRO BASKETBALL, INC.
INITIATED BY: CITY ADMINISTRATION
WHEREAS, the City of Oshkosh, the Redevelopment Authority of the City of
Oshkosh and Fox Valley Pro Basketball, Inc. previously entered into a Development
Agreement and Ground Lease pertaining to Tax Incremental District No. 31 for the
purposes of redevelopment of certain property located at 1118 and 1212 South Main Street
in the City of Oshkosh; and
WHEREAS, Fox Valley Pro Basketball, Inc. has requested an amendment to the
Development Agreement to address concerns related to the annual appropriation of TIF
funds for the Project raised by their proposed lender.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Oshkosh that the proper City officials are hereby authorized to execute and deliver an
appropriate Amendment to the Tax Incremental District No. 31 Development Agreement
with Fox Valley Pro Basketball, Inc and to the Ground Lease for Property Located at 1118
and 1212 South Main Street in the City of Oshkosh in substantially the same form as
attached, 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 Agreement as amended.
SECOND AMENDMENT TO
TAX INCREMENTAL DISTRICT NO. 31
DEVELOPMENT AGREEMENT WITH
FOX VALLEY PRO BASKETBALL, INC.
The City of Oshkosh and the Redevelopment Authority of the City of Oshkosh, hereinafter referred
to as CITY, and Fox Valley Pro Basketball, Inc., hereinafter referred to as DEVELOPER, entered into a
Development Agreement dated March 17, 2017 and as amended on October 27, 2017 pertaining to City of
Oshkosh Tax Incremental District No. 31 for purposes of redevelopment of certain property located at 1118
and 1212 South Main Street in the City of Oshkosh and the construction of a sports arena and supporting
infrastructure.
DEVELOPER is obtaining permanent financing for the Arena, and DEVELOPER'S lender has
requested changes be made to the Agreement to remove references to the annual statutory appropriation of
funds by the Common Council. The Parties hereby agree as follows:
1. ARTICLE IV. City's Obligations. Paragraphs C. and D. shall be amended to read as
follows:
C. Ci1y Grant. In each year beginning in 2019 and ending in 2045 (or, if earlier, when the
total amount of the "Developer Incentive Principal" as set forth on Exhibit C plus interest has
been reimbursed to Developer under this Agreement), in consideration of the Developer
undertaking its obligations under this Agreement, the amount of the Available Tax Increment
shall be applied to make payments under this Agreement to pay the Developer the City Grant.
The City Grant constitutes eligible Projects Costs within the meaning of Section 66.1105(2) of
the Wisconsin Statutes. The first payment shall not be made until the first day of the second
November after the date of this Agreement provided that there is Available Tax Increment.
Such payments shall be made in accordance with the terms of this Agreement, as further
described in this Section N.C. and the City MRO. The amount of the City Grant shall be equal
to the final amount of Project Costs, less Acquisition Costs, Administrative Costs, and any
WEDC grant funds received pursuant to Section N.B., above. The City Grant shall be paid by
the City only out of the Available Tax Increment, subject to the provisions of this Agreement
and the City MRO. The City covenants and agrees that funds in the special fund of the Property
attributable to the Available Tax Increment generated from the Property (and all improvements
and personal property thereon) shall not be used to pay any other project costs of the District
until the City has applied to the payment due hereunder, in any year, the Available Tax
Increments generated by the Property (and all improvements and personal property thereon)
that this Agreement provides will be applied to payment due hereunder.
Developer acknowledges that, subject to the provisions of this Agreement: (i) only the
Available Tax Increments generated by the Property (and all improvements and personal
property thereon) shall be used to make payments to the Developer; and (ii) if, on November
1, 2045, the amount of the Available Tax Increments to be paid under this Agreement proved
insufficient to pay the entire City Grant, the City shall have no obligation or liability therefor.
The City shall take no action to terminate or dissolve the District early prior to
November 1, 2045, unless the City first pays the outstanding balance due under the City Grant,
subject to the provisions of this Agreement, including, but not limited to, the annual
appropriation of the City Common Council of such outstanding balance due.
Page 1 of 5
Attached hereto as Exhibit E is the City's projection of revenues and expenditures for
the District over its term, with the City Grant labeled as "Developer Incentive Payments"
thereon. Exhibit E is provided for illustrative purposes only, and Developer acknowledges that
the amounts set forth thereon are estimates only.
D. City Grant not to be Considered Indebtedness. In no circumstances shall amount of the
City Grant due Developer hereunder be considered an indebtedness of the City, and the
obligation of the City hereunder is limited to the Available Tax Increment and only to the extent
as provided in this Agreement. Amounts due hereunder are a special and limited obligation
subject to the terms of this Agreement and Wisconsin Statutes, are not a general obligation of
the City of Oshkosh, and shall not count against the City's constitutional debt limitation, and
no taxes will be levied for its payment or pledged to its payment other than Tax Increment
which has been appropriated for that purpose.
2. ARTICLE VII. Warranties and Representations. Paragraph B. shall be amended to read
as follows:
B. The City hereby warrants and represents to the Developer that:
1. Subject to the approval of City Common Council, the execution and delivery of
this Agreement has been duly authorized and approved by the City, and no other or further
acts or proceedings of the City or its officials are necessary to authorize and approve the
execution and delivery of this Agreement. This Agreement, the exhibits, documents, and
instruments associated herewith and made a part hereof, have, if applicable, been duly
executed and delivered by the City and constitute the legal, valid, and binding agreement
and obligation of the City, enforceable against the City in accordance with their respective
terms, except as the enforceability thereof may be limited by applicable law.
All other terms in the March 17, 2017 Development Agreement and as amended on October 27,
2017 shall remain unchanged and in effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the date stated
below.
[REMAINDER OF PAGE LEFT INTENTIONALL Y BLANK,
SIGNATURE PAGE FOLL0WSJ
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STATE OF )
) SS
COUNTY OF
FOX VALLEY PRO BASKETBALL, INC.
Its:
Date:
Personally came before me this day of , 2017, the above-named
, to me known to be the person who executed the foregoing instrument.
Notary Public, State of
My Commission:
Page 3 of 5
CITY OF OSHKOSH, WISCONSIN
LIN
Approved as to form:
am
Lynn A. Lorenson, City Attorney
Date:
STATE OF Wisconsin )
) SS
COUNTY OF Winnebago )
Mark A. Rohloff, City Manager
Date:
Pamela R. Ubrig, City Clerk
Date:
Personally came before me this day of December, 2017, the above named City Manager and
City Clerk, to me known to be the persons who executed the foregoing instrument.
Notary Public, State of Wisconsin
My Commission:
Page 4 of 5
REDEVELOPMENT AUTHORITY OF THE
CITY OF OSHKOSH, WISCONSIN
By:
Date:
By:
Date:
STATE OF Wisconsin )
)SS
COUNTY OF Winnebago )
Chair
Executive Director
Personally came before me this day of , 201_, the above named Chair
and Executive Director, to me known to be the person who executed the foregoing instrument.
Notary Public, State of Wisconsin
My Commission:
Page 5 of 5
:615 �5s rv._
Oshkosh
TO: Honorable Mayor and Members of the Common Council
FROM: Mark A. Rohloff, City Manager
DATE: December 8, 2017
RE: Approve Amendment to Development Agreement / TIF 31 /
Fox Valley Pro Basketball, Inc.
BACKGROUND
As Council is aware, the city entered into an agreement with Fox Valley Pro Basketball
Incorporated to reimburse them for infrastructure costs and extraordinary development
costs associated with the redevelopment of the former Buckstaff property into the
Menominee Nation Arena. An amendment was approved earlier this year that provided
for additional PAYGO TIF assistance due to the increased scope of the arena project. The
amendment also gave Fox Valley Pro Basketball the ability to secure any loans needed to
complete the financing for the project. Fox Valley Pro Basketball is in the process of
finalizing a loan and their proposed lender has requested language changes to our
current agreement to give them greater comfort in providing a loan to the arena
development. No additional funding is being requested through this proposed
amendment.
ANALYSIS
The City Attorney and attorneys representing Fox Valley Pro Basketball have identified
a way to provide comfort to the bank without posing any additional risk to the city. The
current agreement refers to the city appropriating funds for the annual TIF payment;
these funds are already required of the city in the development agreement. The bank has
requested that the annual appropriation not be specifically mentioned in the agreement.
Because the city is already mandated to make these payments to Fox Valley Pro
Basketball and would have to make these payments even without Council appropriation,
staff believes we can remove this reference without additional risk. This will not prevent
us from appropriating the funds, as Finance Director Larson has made a point of getting
funds appropriated in all TIF districts. As an added protection for the city, City Attorney
Lorenson and our outside counsel have added additional language that this agreement
does not create a general obligation of the city to make these payments under the
development agreement. In fact, it reemphasizes that the TIF district is the only source of
income that will be repaid to Fox Valley Pro Basketball under this agreement.
FISCAL IMPACT
Without this proposed change, Fox Valley Pro Basketball could see the value of their loan
reduced. Because this does not pose any additional risk to the city, and will benefit Fox
Valley Pro Basketball in securing financing for their project, staff is comfortable with the
changes and recommends approval.
cc: Lynn Lorenson, City Attorney
Trena Larson, Finance Director
Allen Davis, Director of Community Development
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