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HomeMy WebLinkAbout18-80 RESOLUTIONRESOLUTION NO. JK -rt A RESOLUTION AUTHORIZING A MEMORANDUM OF INTENT BY AND BETWEEN THE CITY OF FAYETTEVILLE, ARKANSAS, AND EDMISTON- PREWITT DEVELOPMENT CO., INC., AN ARKANSAS CORPORATION, PERTAINING TO THE ISSUANCE OF TOURISM REVENUE BONDS FOR FINANCING THE COSTS OF ACQUIRING, CONSTRUCTING AND EQUIPPING TOURISM FACILITIES: AND PRESCRIBING OTHER MATTERS RELATING THERETO. BE IT RESOLVED by the Board of Directors of the City of Fayetteville, Arkansas: Section 1: That there be, and there is hereby authorized the execution and delivery of a Memorandum of Intent by and between the City of Fayetteville, Arkansas (the "Municipality"), and Edmiston-Prewitt Development Co., Inc. (the "Company"), in substantially the form and with substantially the contents hereinafter set forth, and the Mayor and City Clerk be, and they are hereby, authorized to execute and deliver the Memorandum of Intent for and on behalf of the Municipality. The form and contents of the Memorandum of Intent, which are approved and which are made a part hereto, shall be substantially as follows: MICROFILM DATE APS 1880 REEL • • • • MEMORANDUM OF INTENT • This MEMORANDUM OF INTENT is between the City of Fayetteville, Arkansas, party of the first part (hereinafter referred to as the "Municipality"), and Edmiston-Prewitt Development Co., Inc., party of the second part (hereinafter referred to as the "Company"). IN CONSIDERATION of the undertakings of the parties set forth herein and the benefits to be derived therefrom and of other good and valuable consideration, receipt of which is hereby acknowledged by the parties, the Municipality and the Company AGREE: 1. Preliminary Statement. (a) The Municipality is a duly organized and existing city of the first class under the laws of the State of Arkansas and is authorized by the laws of the State of Arkansas, including particularly Act No. 380 of 1971, as amended ("Act 380") to issue revenue bonds for financing the costs of acquiring, constructing and equipping tourism facilities (as defined and authorized by Act 380) and to lease and/or sell the same for such rentals and payments and upon such terms and conditions as the Municipality deems advisable. (b) In order to secure and develop tourism which will furnish substantial employment and payrolls (in furtherance of the public purpose of Act 380), it is proposed that a hotel (consisting of lands, buildings, improvements and facilities) (the "Project") be acquired, constructed and equipped. (c) The Company has determined that it must obtain a commitment from the Municipality that it will issue revenue bonds under'Act380 as the Company and the Municipality, upon advice of counsel, shall deem appropriate and make the proceeds available for the permanent financing of any part of the costs and expenses incurred in acquiring, constructing and equipping the Project. (d) The Municipality is willing to so commit and to proceed with the issuance of such bonds as and when requested r 5 by the Company, in principal amounts necessary to furnish such permanent financing subject to compliance with all conditions set forth in Act 380. (e) The Municipality considers that the acquiring, constructing and equipping of the Project and the leasing or sale thereof to the Company, will secure and develop tourism and thereby promote the general health and economic welfare of the inhabitants of the Municipality and adjacent areas. 2. Undertakings on the Part of the Municipality. Subject to the conditions above stated, the Municipality agrees as follows: (a) That when requested by the Company, it will authorize and take, or cause to be taken, the necessary steps to issue bonds under Act 380, in the aggregate principal amount necessary to furnish the permanent financing of any part of the costs of accomplishing the Project. In this regard, it is estimated at this time that the cost of the project will be in an amount not to exceed $3,500,000. Thus, tourism revenue bonds will be issued under Act 380 in such amount as shall be requested by the Company for accomplishing all or any part of the Project (the "Bonds"). (b) That it will, at the proper time and subject in all respects to the recommendations and approval of the Company, have the Bonds underwritten and will adopt, or cause to be adopted, such proceedings and authorize the execution of such documents as may be necessary and advisable for the authorization, sale and issuance of the Bonds, the acquiring, constructing and equipping of the Project, and for the leasing or sale thereof to the Company, all in conformity with Act 380 and any other applicable federal and state laws and upon terms and conditions mutuallysatisfactory to the Municipality and the Company. (c) That the aggregate basic rents or payments (i.e., the rents or payments to be used to pay the principal of, premiums, if any, and interest on the Bonds) payable under lease or sale agreement between the Municipality and the • Company, shall be sufficient to pay the principal of, premiums, if any, and interest on the Bonds when due. The lease or sale agreement shall contain such provisions as are necessary or desirable, consistent with the authority conferred by Act 380. (d) That it will take or cause to be taken such other acts and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may deem appropriate in pursuance thereof. 3. Undertakings on the Part of the Company. Subject to the conditions above stated, the Company agrees as follows: (a) That it will cooperate with the Municipality in the sale and issuance of the Bonds to the end of achieving timely and favorable marketing thereof. (b) That it will enter into such leases, sale agreements or other appropriate agreements with the Municipality under which the Company will obligate itself to pay to the Municipality rents or payments sufficient to pay the principal of, premiums, if any, and interest on the Bonds when due and containing such other provisions as are necessary or desirable consistent with the authority conferred by Act 380. (c) That it will take such further action and adopt such further proceedings as may be required to implement its aforesaid undertakings or as it may deem appropriate in pursuance thereof. 4. General Provisions. (a) This Memorandum shall continue in full force and effect until the Project and their financing by Bonds, as herein specified, is accomplished, and in this regard it is understood that there may be separate issues of Bond, and separate series within.a particular issue, with different maturities, interest rates, redemption provisions and other details. In the case of each issue, and of each series, the Municipality will take appropriate action by ordinance or resolution to sell and authorize the Bonds and to authorize and execute such agreements and documents as may be deteremined necessary or desirable by the Municipality and the Company. • R• • • (b) The Company agrees that if the project is owned by the City and leased to the Company, the Company will make payments in lieu of ad valorem taxes for distribution to the ad valorem taxing authorities on all facilities financed by the Bonds in the same amount as it would have paid in ad valorem taxes had it owned such facilities and assessed and paid ad valorem taxes thereon along with the other properties in the Project. (c) The Company and the City agree that the City shall be under no obligation to issue bonds under Act 380 until such time as the Company submits to the City an audited financial statement of the guarantors of the bonds showing a combined net worth satisfactory to the City and to the underwriters of the bonds. IN WITNESS WHEREOF, the parties hereto have entered into this Memorandum by their officers thereunto duly authorized as of the /OA- day of , 1980. C.‘ATTEST::�y � e•r- -'. • .9 (SEAL)` ATTEST Y. ERK • rS a 1 title •- "i1, -.;";(SEAL) .>� CITY OF FAYETTEVILLE, ARKANSAS BY: EDMISTON-PREWITT DEVELOPMENT CO., INC BY: peels i ent (title) 1• • Section 2. That the Mayor and City Clerk be, and they are hereby authorized and directed, for and on behalf of the Municipality to do all things, execute all instruments and otherwise take all action necessary to the realization of the Municipality's obligations under the Memorandum of Intent. PASSED: / day of , 1980. APPROVED: MAYO r,;(7