Loading...
HomeMy WebLinkAbout10907RESOLUTION NO. 10907 A RESOLUTION APPROVING A LETTER OF UNDERSTANDING BETWEEN THE CITY OF PUEBLO AND THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO RELATING TO PARKING GARAGE COST SHARING AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO. that: �yx�rl:.r ►` The Letter of Understanding dated January 8, 2007 between the City of Pueblo and the Urban Renewal Authority of Pueblo relating to parking garage cost sharing, a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. SECTION 2. The President of the City Council is authorized to execute the Letter of Understanding in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. INTRODUCED January 8, 2007 BY Judy Weaver Councilperson APPROVED: President of City Council ATTESTED BY: CITY CLERK 10907 PID:� 0 0 0 Background Paper for Proposed RESOLUTION AGENDA ITEM # S DATE: January 8, 2007 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING A LETTER OF UNDERSTANDING BETWEEN THE CITY OF PUEBLO AND THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO RELATING TO PARKING GARAGE COST SHARING AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME ISSUE Should City Council approve a parking garage cost sharing arrangement with the Urban Renewal Authority? RECOMMENDATION Approve the cost sharing arrangement. BACKGROUND With respect to the operation and maintenance of the proposed 742 space parking garage ( "Garage ") and the Urban Renewal Authority of Pueblo, Colorado ( "Authority ") $9,500,000 Series 2006 Bonds issued by the Authority to finance the construction of the Bonds, the Authority and City have arranged to share on a 40% City, 60% Authority, costs and expenses ratio, as follows: • Debt service on Authority's Bonds. • Operating and maintenance expenses and costs of the Garage. • Fees and expenses of the Pueblo Main Street Garage Corporation. • Expense and rent payments incurred by City under its Garage Lease. • Garage construction management fees and expenses. The Letter of Understanding memorializes such cost and expense sharing arrangement. The Letter of Understanding is contingent upon (a) such cost sharing arrangement not resulting in the disallowance of the qualification of the new market tax credit portion of the financing for the Garage as a qualified low- income community investment under Section 45 of the Internal Revenue Code, and (b) City Council annual budgeting and appropriating City's share of the costs and expenses. FINANCIAL IMPACT See Background. LETTER OF UNDERSTANDING THIS LETTER OF UNDERSTANDING entered into as of January 8, 2007 by and between the City of Pueblo ( "City ") and Urban Renewal Authority of Pueblo, Colorado ( "Authority ") (the City and Authority are sometimes referred to herein collectively as the Parties and individually as a Party), Witnesseth: WHEREAS, City and Authority entered into a Cooperation Agreement Series 2006 Bonds dated as of December 14, 2006, and WHEREAS, City and Authority have entered into various other documents associated with the financing, construction, leasing and operation of an approximately 742 space parking garage ( "Garage Transaction ") including the issuance of $9,500,000 Series 2006 Bonds by the Authority ( "Bonds "), and WHEREAS, City and Authority have arranged to share costs and expenses with respect to the Garage Transaction, and WHEREAS, City and Authority desire to memorialize such cost and expense sharing arrangement. NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein, City and Authority agree as follows: 1. City and Authority agree that Exhibit A attached hereto and incorporated herein sets forth items of Costs and Expenses which shall be shared and paid by City and Authority on a 40 %/60% basis and items to be credited and applied to City Share and Authority Share respectfully of such Costs and Expenses. 2. Payments of City Share of Costs and Expenses is subject to and contingent upon City Council of City, in its sole discretion, annual appropriating funds for such purposes. Nothing contained in this Letter of Understanding shall be or be construed to create or constitute a debt, liability, or other multiple - fiscal year financial obligation of the City. 3. If any one or more provisions of this Letter of Understanding is (a) determined to be invalid or unenforceable, or (b) would result in the disallowance of the qualification of the New Market Tax Credit portion of the financing for the Garage Transaction as a Qualified Low - Income Community Investment under Section 45 of the Internal Revenue Code, as amended, or regulations issued thereunder (the "Code ") (collectively the "Invalid Provision "), such Invalid Provision shall be inoperative and unenforceable. However, all other provisions of this Letter of Understanding shall remain in full force and effect. Within thirty (30) days after written request by either Party, the Parties shall meet in good faith to adopt a new provision which was the subject matter covered by the Invalid Provision which complies with applicable law and the provisions of the Code. 4. This Letter of Understanding shall be binding upon and inure to the benefit of the Parties and their respective successors and may not be assigned by either Party. 5. On or before November 1 of each calendar year (or as otherwise agreed by the Parties) the Parties shall reconcile and set forth in a written instrument the Costs and Expenses and credits allocated to and paid or to be paid by each Party under Exhibit A during each calendar year, and execute such other agreements and subordinate notes as are consistent with the Garage Transaction. 6. If any payment or other material condition, obligation or duty is not timely made, tendered or performed by either Party, then either Party may exercise all rights available at law or in equity, including damages, but such damages shall be limited to the actual amount that such Party is entitled to receive or retain under this Letter of Understanding. No special or punitive damages shall be payable hereunder. Executed at Pueblo, Colorado, the day and year first above written. URBAN RENEWAL AUTHORITY OF CITY OF PUEBLO By President of the City Council Attest: City C&rk -2- PUEBLO, COLORADO EXHIBIT A Costs and Expenses A. Items included in Costs and Expenses to be shared 40% by City (City Share) and 60% by Authority (Authority Share). Debt service on Bonds. 2. Operating and maintenance costs and expenses of the Garage. Fees and expenses of the Pueblo Main Street Garage Corporation. 4. Expenses and rent payments made or incurred by the City under its Garage Lease with Pueblo Main Street Garage Corporation. 5. Garage construction management fees and expenses. B. Items to be credited and applied to Authority Share Rent paid by Cingular Wireless, LLC under its Parking Permit with City for 297 parking spaces in the Garage. 2. Rent or parking fees paid for use of an estimated 145 parking spaces in the Garage to be made available by the City for parking with respect to businesses located in HARP pursuant to appropriate redevelopment agreements for land located within HARP. 3. Costs and Expenses paid by Authority which represent City Share. C. Items to be credited and applied to City Share. Costs and Expenses paid by City which represents Authority Share. 2. 40% of interest on Authority's loan which flows to Authority through the NMTC transaction. 3. Rent or parking fees paid for use of an estimated 300 parking spaces in the Garage allocated to City. D. If any reserve funds established out of the proceeds of the Bonds are paid to Authority, such payment shall be shared 60% by Authority, and 40% by City.