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200 S. Anaheim Blvd. Suite #643 Anaheim, CA 92805 Tel: (714) 765-5195 Fax: (714) 765-5260 www.anaheim.net HOUSING AND PUBLIC IMPROVEMENTS AUTHORITY AGENDA REPORT City of Anaheim FINANCE DEPARTMENT DATE: JULY 22, 2014 FROM: FINANCE DEPARTMENT SUBJECT: APPROVING THE ISSUANCE OF NOT TO EXCEED $300,000,000 AGGREGATE PRINCIPAL AMOUNT OF LEASE REVENUE BONDS OF THE ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS AUTHORITY ATTACHMENT YES ITEM # 27 RECOMMENDATION: That the Board of Directors of the Anaheim Housing and Public Improvements Authority (Authority), by Resolution: 1) Approve an issuance of not to exceed $300,000,000 of Lease Revenue Bonds; 2) Authorize the execution and delivery of an Indenture of Trust with respect to Lease Revenue Bonds by and between the Authority and U.S. Bank National Association; 3) Authorize the execution and delivery of the Site and Facility Lease by and between the City of Anaheim (City) and the Authority; 4) Authorize the execution and delivery of the Lease Agreement by and between the City and the Authority; 5) Authorize the execution and delivery of the Purchase Contract by and between the City, the Authority, and Citigroup Global Markets, Inc.; 6) Authorize distribution of the Preliminary Official Statement and the execution and distribution of the Official Statement in connection with the Lease Revenue Bonds; 7) Approve the selection of the financing team, which includes Orrick, Herrington & Sutcliffe LLP as bond counsel, Public Financial Management, Inc. as financial advisor, and Citigroup Global Markets Inc., Stifel, Nicholaus & Company, Incorporated, Merrill Pierce, Fenner & Smith Incorporated, and Wells Fargo Bank N.A. as the underwriters for the Bonds; and 8) Authorize and direct each member of the Board of Directors of the Authority, and the Executive Director, Treasurer and Auditor of the Authority to take any and all actions necessary to complete the transactions contemplated by the financing and ratifying any such actions previously taken. DISCUSSION: On September 14, 2010, the City Council, by Resolution, established the Anaheim Tourism Improvement District (ATID) for the promotion of local tourism and ---PAGE BREAK--- APPROVING THE ISSUANCE OF NOT TO EXCEED $300,000,000 AGGREGATE PRINCIPAL AMOUNT OF LEASE REVENUE BONDS OF THE ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS AUTHORITY July 22, 2014 Page 2 of 2 convention-related programs as well as transportation improvements within the Anaheim Resort and Platinum Triangle. These local hoteliers agreed to self-assess 2% of hotel room rent within the ATID boundaries. Of the revenues collected from the ATID, 75%of the funds are dedicated to marketing, promotion, and related activities and 25% are dedicated to transit projects including the operation and maintenance of the Anaheim Rapid Connection (ARC) project. Because the City would no longer be committed to paying for the marketing and promotions of the Anaheim destination (approximately $6 million in 2010), the City committed to re-dedicating those funds to the rapid expansion of the Anaheim Convention Center (ACC) and the addition of the Grand Plaza. Therefore, on September 14, 2010, the City Council, by Resolution, also approved the improvement and expansion of the ACC and the related financing. The improvement and expansion were to generally consist of a new plaza area, approximately 200,000 net square feet of additional meeting space, plus support space, new and replacement parking facilities, and related remodeling, furnishings, equipment, improvements, and betterments. The first phase of the improvement and expansion of the ACC was the addition of the new Grand Plaza area last year. The second phase of the improvement and expansion of the Anaheim Convention Center is the 200,000 net square feet of additional meeting space plus support space, replacement parking facilities, and related remodeling, furnishings, equipment, improvements, and betterments. Lease Revenue Bonds in the aggregate principal amount of not to exceed $300,000,000 will be issued to fund these improvements and to refinanced certain completed capital improvements. The Authority Lease Revenue Bonds and amounts due under the Bond Indenture would be payable only from amounts received from the City pursuant to the Lease Agreement. IMPACT ON BUDGET: There is no net budget impact to the Authority. Debt service requirements will be funded by lease payments from the City. Respectfully submitted, Deborah A. Moreno Authority Auditor Attachments: 1. Resolution 2. Indenture of Trust 3. Lease Agreement 4. Site and Facility Lease 5. Purchase Contract 6. Preliminary Official Statement