Loading...
HomeMy WebLinkAbout1979-11-13 Minutes197 MINUTES OF A SPECIAL MEETING OF THE BOARD OF DIRECTORS A special meeting of the Board of Directors was held on Tuesday, November 13, 1979, at 4:30 P.M. in the Directors Room, City Administration Building, Fayette- ville, Arkansas. PRESENT: Mayor David Malone, Directors Lancaster, Todd, Noland, Osborne, Colwell, and Henry; City Manager Don Grimes, City Attorney Jim McCord, City Clerk Angie Medlock and Administrative Assistant David McWethy. Q) ABSENT: None. COOTHERS PRESENT: Members of the audience and representatives of the news media. C CALL TO ORDER Q The mayor called the meeting to order at 4:35 P.M. GOLD KIST INC. The board first discussed a resolution authorizing the mayor and city clerk 197.1 to execute a memorandum of intent with Gold Kist, Inc., regarding the issuance of Act 9 industrial development revenue bonds for $2,500,000 for the construction of a hatchery and related facilities. Mayor Malone noted that the bond ordinance will provide for a payment in lieu 197.2 of taxes, since this will technically be a city -owned facility. Malone noted that Gold Kist has entered into a bill of assurance that the property would not be used for construction or operation of a feed mill and any facility built would be in compliance with all Pollution Control standards. In response to the mayor, City Engineer Don Bunn stated that he doesn't see 197.3 any particular problems with the discharge for the hatchery itself. He said Gold Kist is planning to have a pre-treatment facility and are expecting water usage to be about 4500 gallons per day. Bunn said if the plant expands within the next few years, the City may need to reexamine the facility, but at the present time, he doesn't see any problems. Director Todd asked how the City would monitor the facility to be sure there 197.4 are no problems and Don Bunn explained that the City would have the right to inspect the pre-treatment facility periodically. Director Noland asked if the City would pick up Gold Kist's solid waste and Bunn said he felt they would. Director Todd then moved to adopt a resolution authorizing the mayor and city clerk •to execute a memorandum of intent with Gold Kist Inc. Director Noland seconded the motion. The recorded vote was: Ayes: Todd, Noland, Osborne, Malone, Colwell, Henry, Lancaster. Nays: None. The mayor declared the resolution passed. 1 RESOLUTION NO. 111-79 APPEARS ON PAGE 109 OF ORDINANCE AND RESOLUTION BOOK VIII. HILTON HOTEL Next for consideration was a resolution authorizing a memorandum of intent for Tourism Bonds for the Hilton Hotel project to be built on the northeast corner of the Fayetteville Square. 197.5 f 11-13-79 198 198.1 The mayor explained that Sumner and Greener, a partnership, had indicated they were confident that financing for the Hilton Hotel project could be arranged. He said the developers are now ready to start with construction of the facility, and the city attorney had checked and found out that the project could be developed through tourism bonds, which are somewhat like Act 9 industrial development bonds. He explained that with tourism bonds, in the event of default, the bondholders could look solely to the facility for which the bonds were issued and could not look to the City for payment. Malone said a provision for a payment in lieu of taxes would be provided should the City own the property. 198.2 Malone explained that the developers were hoping to get a memorandum of intent authorized as soon as possible, as money spent before the memorandum of intent is authorized may not be reimbursable through the bond issue. He said the developers feel the bonds may be sold to a private lender. The city attorney clarified that if the facility is privately owned, it would be subject to property. taxes. 198.3 The mayor introduced Charlie Greener and Garland Melton. Malone explained that Sumner and Greener, the development partnership would be signing the tourism bonds, if approved. Greener stated that they would hope to issue the bonds in the first quarter of next year. 198.4 Greener explained that they had anticiapted the cost of the facility to be approximately 9.4 million dollars, and they feel they should ask for the maximum amount of bonds. Greener said they had reouested a 6.2 million dollar con- struction loan and have committed 4 million dollars of their own money in order to increase the size of the facility from 180 rooms to 250 rooms. He said Leaventhal, a hotel building consultant, had recommended they increase the capacity of the hotel. Greener said they would hope to replace the permanent financing with the bond issue money. 198.5 Mayor Malone asked if the bonds were not issued, could the developers still construct the facility and Mr. Greener said they would definitely be going ahead with the hotel. He said they plan to be completed with the project within 12-14 months after construction has begun. 198.6 Director Colwell was concerned that if the developers default, it would still hurt the City in that the bonds have the City of Fayetteville's name on them. Colwell stated also that he doesn't think the citizens have had an opportunity to express their opinions on the bond issue. 198.7 The city attorney commented that a bond ordinance will have to be passed at some point in the future and a provision for a referendum petition will be provided to put the question to the voters, should someone want to call for an election on the question of the tourism bonds. 198.8 Garland Melton stated that the only way the hotel can get in financial trouble is if the Continuing Education Center is a failure, and that possibility is quite remote, unless there is a total failure in the economy. 198.9 Mr. Greener noted that the hotel chain had done a complete survey on the Fayetteville area, and Leaventhal, the hotel building consultant, had also reviewed the conditions in the City before making a recommendation. Greener pointed out also that because of the announcement of the Hilton, and a few years ago, the announcement of a Sheraton Inn, hotel/motel construction in Fayetteville has been virtually at a standstill. He noted also, that if the owner of the Bassett Mountain Inn converts that to another facility, Fayetteville will lose another 70-80 rooms. 198.10 Director Todd asked if the partnership is planning to sign an agreement that they will pay off the bonds, in case of default, and Greener said they would. Tedd noted that their financial statements indicate they have assets totalling 17 million dollars. 1 1 11-13-79 199 The city attorney confirmed that there would be a separate guarantee that 199.1 III says the owners will pay off the remaining bonds in case of default. Director Henry noted that the bonds will save the developers a lot of money, 199.2 but pointed out Director Colwell's concerns if it is proper to authorize the bonds, without studying this in more detail. In response to the mayor, Mr. Greener said the facility should employ 199.3 approximately 150 people. Malone noted that according to the financial state- ments submitted to the Board, Greener and Sumner, architects, and Sumner and Greener, a partnership, appear to be worth 27 million dollars. Director Osborne then moved to adopt the resolution authorizing the mayor 199.4 and city clerk to execute a memorandum of intent with Sumner and Greener. a partnership„ for tourism bonds fnr the Hilton Hotel project. Director Noland 0) seconded the motion. O Director Todd asked for a certified financial statement from the two 199.5 CO businesses. Greener said they do not normally certify the worth of the partner- ship, but the figures are taken from audited financial statements. He said he could furnish audited financial statements. The recorded vote was: C Ayes: Todd, Noland, Osborne, Malone, Henry, Lancaster. (Cr Nays: Colwell. The mayor declared the resolution passed. RESOLUTION NO. 110-79 APPEARS ON PAGE I o 3 OF ORDINANCE AND RESOLUTION BOOK VIII. There being no further business, the meeting adjourned at 5:22 P.M.