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January 22, 2019 <br /> <br />Background: <br /> <br /> By Resolution 2018-39 and Ordinance 2018-121 adopted on December 11, 2018 <br />City Council authorized the appropriation of not to exceed $5,150,000 from the General <br />Fund Balance to make a short term loan to EDA to reacquire property from Victory <br />Crossing Developers II, LLC. <br /> <br /> In accordance with the Resolution and Ordinance, the loan was made to EDA and <br />EDA closed on reacquisition of the property in December. <br /> <br /> Under the terms of the loan and a Cooperation Agreement between the City and <br />EDA, EDA is to issue bonds during the first quarter of 2019 to repay the loan. <br /> <br /> With the assistance of the City Finance Department, a Request for Proposals has <br />been issued for the sale of the bonds and on January 15, 2019 EDA authorized the bond <br />issuance. <br /> <br /> EDA is now in position to close on issuance of the bonds during the month of <br />January. <br /> <br />Discussion: <br /> <br /> For the EDA bonds to be marketed on favorable terms, they must be backed by <br />the full faith and credit of the City. <br /> <br /> Therefore, a Cooperation Agreement has been prepared for signature by EDA and <br />the City providing that: (1) debt service on the bonds will be paid using EDA funds, <br />including any funds received from the marketing and sale of the reacquired property; and <br />(2) to the extent EDA funds are not available, debt service on the bonds will be paid by <br />the City. <br /> <br /> The proposed Resolution approves execution of the Cooperation Agreement and <br />provides the City’s full faith and credit in support of the bonds. <br /> <br /> The proceeds of the EDA bonds will be used to repay the loan made by the City to <br />EDA in December. <br /> <br /> The City and EDA will work together to determine how best to pay debt service on <br />the EDA bonds. <br /> <br /> EDA will market the reacquired property and it is anticipated that the proceeds from <br />sale of the property will be used to retire the bonds within the next few years. <br /> <br />Financial Impact: <br /> <br /> The approximately $5,150,000 loaned by the City to EDA in December will be <br />returned to the City’s General Fund Balance. <br /> <br /> EDA and the City will work together to service the EDA bond debt. <br /> <br />Next Steps Following Council Action: <br /> <br /> EDA and the City will execute the Cooperation Agreement. <br /> <br /> EDA will issue the bonds and repay the City’s loan. <br /> <br />Motion by Mr. Clark, and seconded by Ms. Psimas, to adopt the following <br />resolution, and was adopted by the following vote: <br /> <br />“RESOLUTION AUTHORIZING THE CITY OF PORTSMOUTH TO ENTER INTO A <br />COOPERATION AGREEMENT TO PROVIDE FOR THE PAYMENT OF NOTES <br />ISSUED BY THE ECONOMIC DEVELOPMENT AUTHORITY AND TO PLEDGE THE <br />CITY'S FULL FAITH AND CREDIT IN CONNECTION THEREWITH. <br /> <br />WHEREAS, <br /> the Economic Development Authority of the City of Portsmouth, <br />Virginia (the "Authority"), has determined that it is advisable to issue its revenue notes <br />(the "Notes") to finance the acquisition of property in the City of Portsmouth, Virginia (the <br />"City") in the Victory Crossing area and costs of issuance associated therewith <br />(collectively, the "Project"); and <br /> <br />WHEREAS, <br /> the terms of the Notes shall be substantially as set forth in a proposal <br />from UBT Municipal Finance, Inc., an affiliate of Union Bank & Trust dated January 9, <br />2019 (as the same may be amended as permitted by this Resolution, the "Proposal"); and <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />