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HomeMy WebLinkAbout10852RESOLUTION NO. 10852 A RESOLUTION EXERCISING THE CITY OF PUEBLO'S OPTION TO PURCHASE THE PUBLIC WORKS BUILDING AND TRANSFERRING $1,388,000.00 FROM THE POLICE BUILDING FUND THEREFOR WHEREAS, the City of Pueblo (the "City ") and the City of Pueblo, Colorado Municipal Building Corporation (the "Corporation ") entered into a Public Works Lease Purchase Agreement dated as of June 1, 2000 (the "Lease "), and WHEREAS, the Corporation and the Bank of Cherry Creek, N.A. as Trustee (the "Trustee ") entered into a Mortgage and Indenture of Trust dated as of June 1, 2000 (the "Indenture "), and WHEREAS, under the Lease and Indenture the City of Pueblo has the option to purchase the Public Works Building (the "Building "), unimproved land adjacent to the Building (the "Land "), and one overhead lift and one hydraulic lift located in the Building (the "Equipment ") (the Building, Land and Equipment are herein collectively referred to as the "Public Works Building "), and WHEREAS, in order to exercise its option to purchase the Public Works Building, the City must pay the applicable Purchase Option Price as defined in the Lease, and WHEREAS, the applicable Purchase Option Price under the Lease on December 15, 2006 is $1,388,000.00, and WHEREAS, upon payment of the applicable Purchase Option Price in the amount of $1,388,000.00 to the Trustee, the Indenture shall be discharged as provided in Article VI of the Indenture and the Public Works Building shall be transferred and conveyed to the City as provided in Article XI of the Lease, and WHEREAS, upon transfer and conveyance of the Public Works Building to the City, the Land adjacent to the Building will become available for development and use as part of the Police Building Project including a parking garage, and WHEREAS, the City Council hereby determines that it is in the best interest of the City and its residents and in furtherance of the Police Building Project to exercise the City's option pursuant to Lease and Indenture to purchase the Public Works Building. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The City does hereby exercise its option pursuant to the Lease and Indenture to purchase the Public Works Building for the applicable Purchase Option Price of $1,388,000.00. SECTION 2 The applicable Purchase Option Price of $1,388,000.00 is hereby transferred from the Police Building Fund and shall be paid and distributed to the Trustee for the purchase of the Public Works Building. In addition, an additional amount not to exceed $15,000.00 is transferred from the Police Building Fund for fees, costs and expenses associated with the purchase of the Public Works Building. SECTION 3 The City does hereby request the Trustees to discharge the Indenture and deliver to the City the Deed and Bill of Sale held in escrow by the Trustee pursuant to the Indenture. SECTION 4 The City Manager is authorized to take all action necessary or reasonably required by the Lease and Indenture to effectuate the purchase of the Public Works Building and the President of the City Council is authorized to execute in the name of the City all documents to be delivered in connection with the purchase of the Public Works Building. SECTION 5 This Resolution shall become effective upon final approval and passage. BY Jeff Chostner Councilperson APPROVED: President of Cit Council ATTESTED BY: CITY CLERK INTRODUCED October 23, 2006 E ED Background Paper for Proposed RESOLUTION AGENDA ITEM # 1(O DATE: October 23, 2006 DEPARTMENT: Law Department TITLE A RESOLUTION EXERCISING THE CITY OF PUEBLO'S OPTION TO PURCHASE THE PUBLIC WORKS BUILDING AND TRANSFERRING $1,388,000.00 FROM THE POLICE BUILDING FUND THEREFOR ISSUE Should the City exercise its option to purchase the Public Works Building? Exercise the option to purchase. BACKGROUND Pursuant to the Lease and Indenture relating to the certificates of participation issued for the Public Works Building, the City has the option to purchase the Public Works Building for the applicable purchase option price of $1,388,000. Such purchase will release and discharge the Public Works Building and surrounding unimproved lands from the Indenture. Such land will become available for development and use as part of the Police Building Project including a parking garage. The $1,388,000 will be transferred from the Police Building Fund. The annual debt service for the certificate of deposit for nine (9) years (2007 through 2015) in the approximate amount of $201,000 per year will not be required under the discharged Indenture and may, at City Council's discretion, be used to reimburse the Police Building Fund or to finance other capital projects. FINANCIAL IMPACT See Background.