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:
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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
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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.