Minutes 12/11/2018 - Laserfiche WebLink

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December 11, 2018 BE IT FURTHER RESOLVED that it approves and authorizes issuance of the Loan to EDA in accordance with the terms and conditions set forth in this Resolution; and BE IT FURTHER RESOLVED that it authorizes the City Manager and/or City Attorney to execute the Settlement Agreement, Cooperation Agreement, loan agreements memorializing the Loan, and such other documents or instruments as may be necessary or desirable to effectuate the intent of this Resolution, and further authorizes the City Manager and/or City Attorney and their designated staff to take such additional actions as are necessary or desirable to effectuate the intent of this Resolution.” Ayes: Clark, Lucas-Burke, Moody, Psimas, Smith, Rowe Nays: None 18 - 469 - Adoption of a resolution approving the issuance of not-to-exceed $4,800,000 tax exempt Portsmouth Port and Industrial Commission Bank Qualified Revenue Bonds (CYA Sport & Community Center Project), Series 2019. Background:  PPIC was created pursuant to Chapter 157 of the Acts of Assembly of 1954, as amended, and has among its powers the authority to issue revenue bonds to pay all or any part of the cost of “facilities” for a 501(c)(3) by assisting in the acquisition, construction, equipping, expansion, enlargement, improvement, financing, and refinancing of such facilities.  The Fieldhouse is a non-profit youth sports venue in the Chantilly section of Fairfax County, Virginia. The owner of The Fieldhouse (CYA Sport & Community Center, LLC) has applied to PPIC for the issuance of bonds in connection with the acquisition of The Fieldhouse property and operation of the facility. CYA Sport & Community Center, LLC is wholly owned by its sole member, Chantilly Youth Association, Inc., and leases The Fieldhouse to CYA Facility Management, LLC (also wholly owned by Chantilly Youth Association, Inc.), which runs the daily operations of the facility.  The applicant seeks bonds for longer-term working capital, which will be used to refinance its acquisition loan for The Fieldhouse property. Discussion:  While the Internal Revenue Code allows the PPIC to issue up to $10,000,000 in “bank-qualified” bonds per year, applications for issuances are rare because (1) the bank- qualified bonds can be used only for governmental or 501(c)(3) non-profit facilities and (2) bond issuances are only cost-effective for applicants/borrowers if the principal amount of the issuance is high enough to justify the higher transactional costs of bond issuances (as opposed to other financing mechanisms), but still under $10 million.  As a result, this is only the second bond application received by PPIC within the past five years.  The bonds will not constitute debt of PPIC or the City of Portsmouth and will not be payable from tax revenue. By issuing the bonds PPIC merely serves as an authorized conduit under the Internal Revenue Code for the purpose of making interest on the bonds exempt from taxation.  The bonds will not create liability for PPIC or the City.  The only material impact on PPIC from issuing the bonds will be the creation of a small stream of revenue through the receipt of an annual administrative fee. The fee is based on the outstanding principal amount of the bonds and is estimated at roughly $5,000-6,000 for the first several years.  On the morning of December 11, PPIC will hold a public hearing at 8:00 A.M. to take public comment on the proposed bond issuance. After the public hearing, PPIC will consider adoption of a Resolution to authorize the issuance of the Bonds and to recommend that City Council approve the issuance.