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HomeMy WebLinkAbout17-61- Execution of Ground Lease -RESOLUTION NO. 17-61 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, AUTHORIZING THE EXECUTION AND DELIVERY OF A GROUND LEASE, LEASE AGREEMENT, INDENTURE, ESCROW AGREEMENT, BOND PURCHASE CONTRACT AND CONTINUING DISCLOSURE CERTIFICATE IN CONNECTION WITH THE ISSUANCE OF COSTA MESA FINANCING AUTHORITY 2017 LEASE REVENUE BONDS, APPROVING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $33,500,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH BONDS AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY RESOLVES AS FOLLOWS: WHEREAS, the City of Costa Mesa, California (the "City"), is a general law city that is organized and existing under the laws of the State of California; and WHEREAS, the City also previously caused the Costa Mesa Public Financing Authority (the "PFA") to issue the City of Costa Mesa 2007 Certificates of Participation (Police Facility Expansion Project) (the "2007 Certificates"), the proceeds of which financed the acquisition and/or construction of various public capital improvements of the City (the "2007 Project'); and WHEREAS, the City desires to finance the acquisition and/or construction of various additional "public capital improvements" within the meaning of the Marks -Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code (the "Act'), all of which are or shall be located within the boundaries of the City (the "2017 Project'); and WHEREAS, the Costa Mesa Financing Authority (the "Authority") and the City have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the "Costa Mesa Financing Authority 2017 Lease Revenue Bonds" (the 'Bonds") for the purposes of refinancing the 2007 Project and financing the 2017 Project; and WHEREAS, in order to facilitate the issuance of the Bonds, the City and the Authority desire to enter into a Ground Lease (the "Ground Lease") pursuant to which the City will lease certain real property (which real property shall consist of the City's Civic Center Complex and certain other assets that are described in the Ground Lease (collectively, the "Leased Assets")) to the Authority, and a Lease Agreement (the "Lease Agreement'), pursuant to which the City will lease the Leased Assets back from the Authority, and pay certain Base Rental Payments (as such term is defined in the Lease Agreement), which are pledged to the owners of the Bonds by the Authority pursuant to an Indenture by and among U.S. Bank National Association (the 'Trustee'), the City and the Authority (the "Indenture"); and WHEREAS, in order to effect the refunding of the 2007 Certificates, the City and The Bank of New York Mellon Trust Company, N.A., as escrow agent, desire to enter into an Escrow Agreement (2007 Certificates) (the "Escrow Agreement'); and Resolution No. 17-61 Page 1 of 5 WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to refinance the 2007 Project and to finance the 2017 Project through the offering and sale of the Bonds; and WHEREAS, the City and the Authority desire to undertake a negotiated sale of the Bonds to Stifel, Nicolaus & Company, Incorporated, as the underwriter of the Bonds (the "Underwriter") pursuant to a purchase contract by and among the City, the Authority and the Underwriter (the "Bond Purchase Contract'); and WHEREAS, the Bonds will be issued pursuant to the Act; and WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ('Rule 15c2-12") requires that, in order to be able to purchase or sell the Bonds, the Underwriter must have reasonably determined that the City has undertaken in a written agreement or contract for the benefit of the holders of the Bonds to provide disclosure of certain financial information and certain events on an ongoing basis; and WHEREAS, in order to cause such requirement to be satisfied, the City desires to execute and deliver a Continuing Disclosure Certificate (the "Continuing Disclosure Certificate"); and WHEREAS, a form of the Preliminary Official Statement (the "Preliminary Official Statement') has been prepared; and WHEREAS, the City is a member of the Authority and the 2007 Project and the 2017 Project are located within the boundaries of the City; and WHEREAS, the City has, prior to the consideration of this Resolution, held a public hearing on the refinancing of the 2007 Project and the financing of the 2017 Project from the proceeds of the issuance of the Bonds in accordance with Section 6586.5 of the Act, which hearing was held at 77 Fair Drive, Costa Masa, California 92626 on the date of this Resolution; and WHEREAS, in accordance with Section 6586.5 of the Act, notice of such hearing was published once at least five days prior to the hearing in the Daily Pilot, a newspaper of general circulation in the City; and WHEREAS, the City Council has been presented with the form of each document that is referred to herein relating to the refinancing and financing that are contemplated hereby, and the City Council has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such refinancing; and WHEREAS, all acts, conditions and things that are required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the refinancing and financing that are authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such refinancing and financing for the purpose, in the manner and upon the terms herein provided. Resolution No. 17-61 Page 2 of 5 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. Recitals and Findings. Each of the above recitals is true and correct. Following a duly noticed public hearing, the City Council hereby approves the refinancing and financing that are described in this Resolution and further finds and determines that there are significant public benefits to the citizens of the City through the approval of the issuance of the Bonds pursuant to the Act and otherwise hereunder within the meaning of Section 6586(a) through (d), inclusive, of the Act, in that the issuance of the Bonds and related transactions will result in demonstrable savings in effective interest rate to the City. SECTION 2. Approval of Lease Documents. The forms of Ground Lease and Lease Agreement presented at this meeting are hereby approved, and the Mayor, the City Manager, the Finance Director of the City and the City Clerk or the designee of any of the foregoing (the "Authorized Officers"), are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Ground Lease and the Lease Agreement in substantially said forms, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the term of the Ground Lease and the Lease Agreement shall terminate no later than October 1, 2042 (provided that such term may be extended as provided therein) and that the true interest cost applicable to the interest components of the Base Rental Payments shall not exceed 3.75% per annum. SECTION 3. Approval of Indenture. The form of Indenture presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Indenture in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 4. Approval of Bond Purchase Contract. The form of Bond Purchase Contract presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Bond Purchase Contract in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the Underwriter's discount shall not exceed 0.50% of the principal amount of the Bonds. SECTION 5. Approval of Escrow Agreement. The form of Escrow Agreement presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Escrow Agreement in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve. SECTION 6. Approval of Preliminary Official Statement. The form of Preliminary Official Statement presented at this meeting, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Bonds is hereby authorized and approved. Each Authorized Officer is hereby authorized to certify on behalf of the City that the Preliminary Official Statement is deemed final as of its date within the Resolution No. 17-61 Page 3 of 5 meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Bonds a reasonable number of copies of the Preliminary Official Statement. SECTION 7. Authorization of Official Statement. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the City. SECTION 8. Approval of Continuing Disclosure Certificate. The form of Continuing Disclosure Certificate presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Certificate in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced to the execution and delivery thereof. SECTION 9. Authorization to Purchase Bond Insurance. The Authorized Officers are each hereby authorized to evaluate whether the purchase of municipal bond insurance and/or a debt service reserve policy for the Bonds will result in a net debt service savings with respect to the Bonds and, if so, to arrange for the purchase of such municipal bond insurance and/or debt service reserve policy. The Authorized Officers are each hereby authorized to solicit bids from municipal bond insurers, to select an insurer to provide municipal bond insurance with respect to the Bonds and/or a debt service reserve policy, if applicable, and to execute and negotiate any agreements that are necessary in connection with the procurement of such municipal bond insurance and/or debt service reserve policy, provided that such municipal bond insurance policy and/or debt service reserve policy provides debt service savings or other benefits to the proposed transaction, as determined by the Authorized Officers. The City's execution of an insurance commitment shall be conclusive evidence of such determination. Each of the above -referenced officers is hereby authorized to direct Stradling Yocca Carlson & Rauth, Bond Counsel to the City, and/or the City Attorney to make any necessary revisions to the legal documents to effectuate the procurement of municipal bond insurance and/or a debt service reserve fund policy. SECTION 10. Miscellaneous. The officers, employees and agents of the City are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions that are authorized herein and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including but not limited to the execution of documents terminating the recorded leases and related agreements in connection with the City of Costa Mesa Refunding Certificates of Participation (Public Facilities Project) Series 2003 and the 2007 Certificates. All actions heretofore taken by the officers, employees and agents of the City with respect to the transactions that are described in this Resolution are hereby approved, confirmed and ratified. Resolution No. 17-61 Page 4 of 5 SECTION 11. Effective Date. This Resolution shall take effect from and after its date of adoption. PASSED, APPROVED, AND ADOPTED on September 19, 2017. ATTEST: Brenda Green, ty Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) RIT":• g TO FORM: City Attohney I, Brenda Green, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that the above and foregoing is the original of Resolution No. 17-61 and was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 19th day of September, 2017, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: Mansoor, Stephens, Genis, and Foley NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Righeimer IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 20th day of September, 2017. � BRENDA GR N, CITY CLERK Resolution No. 17-61 Page 5 of 5