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HomeMy WebLinkAboutBASS PRO SHOP RESOLUTION OF THE AUGUSTA-RICHMOND COUNTY COMMISSION WHEREAS, Development Authority of Richmond County ("Authority") has been informed that Bass Pro, Inc., or a related entity designated by it (the "Company"), proposes to locate a Bass Pro Shop sports and sporting goods facility, consisting of land, buildings, structures, improvements and related property (the "Project") on approximately 15 acres of real property located at the Village at Riverwatch development in Augusta, Georgia ("Augusta"); WHEREAS, the Authority has found and determined in a resolution adopted April 16, 2008 (the "Inducement Resolution") that the proposed Project will increase employment opportunities and sales taxes, and stimulate other development in Augusta, and that its participation therein will further the public purposes of the Development Authorities Law, and specifically will serve to develop and promote for the public good and general welfare trade, commerce and industry in Augusta, and will increase employment therein; and WHEREAS, the proposed Project will reqUITe direct expenditures by the Authority of approximately $19,000,000; and WHEREAS, the Authority previously proposed to issue its tax-exempt revenue bonds (the "Tax- Exempt Bonds") and its taxable revenue bonds (the "Taxable Bonds," and together with the Tax-Exempt Bonds, the "Bonds") in an aggregate amount of up to approximately $24,000,000 for the purpose of financing the Project; and WHEREAS, due to a restructuring of the financing terms, the Authority will be asked to issue Taxable Bonds in an amount of up to approximately $19,000,000 for purpose of financing the Project; and WHEREAS, the Augusta-Richmond County Commission (the "Commission") has adopted a redevelopment plan under the Redevelopment Powers Law that includes the development of the proposed Project; and WHEREAS, the fmancing of the proposed Project and the payment of rent obligations would be as provided in the Summary, of Revised Financing Terms, attached hereto as Exhibit "A" and incorporated by reference herein; and WHEREAS, it will be necessary for the Commission to authorize the lease and sublease of the proposed Project as contemplated hereinbelow; and WHEREAS, it is contemplated that the proposed Project will be owned by the Authority, leased to Augusta for a term extending approximately 20 years beyond the construction period (the "Lease") and will be subleased by Augusta to the Company for the same term; and WHEREAS, the Lease of the Project from the Authority to Augusta would constitute an intergovernmental contract and obligate Augusta to pay rentals equal to debt service on the Bonds; and WHEREAS, use of the Project would be furnished to the Company pursuant to the sublease of the Project to the Company (the "Sublease"), which Sublease will require the Company to pay (in addition to the payment of the Authority's administrative fees, common area maintenance charges, utilities and insurance costs applicable to the Project) rents (the "Sublease Rentals") equal to the debt service on and other costs associated with the Bonds not covered by amounts available each year from the LOST Revenues (as defmed below), ad valorem taxes payable by the Company on the value of its leasehold interest in the proposed Project (the "Sublease Taxes") and certain payments made by the Company in addition to the Sublease Taxes (the "PATS Payments") (in each case, as further described in Exhibit A); and . WHEREAS, sales taxes received by Augusta equal to 1 % of taxable sales at the proposed Project (the "LOST Revenues"), together with Sublease Taxes, PATS Payments and Sublease Rentals paid by the Company, together, are expected to be sufficient to pay the total debt service on the Bonds; and WHEREAS, the Company's obligations under the Sublease, including its obligation to pay Sublease Rentals, will be unconditionally guaranteed by the Company's parent, Bass Pro, Inc. NOW, THEREFORE, BE IT RESOLVED as follows: 1. The Augusta-Richmond County Commission hereby indicates it support of the proposed Project and its willingness to proceed with its involvement in the Project as outlined in the foregoing, subject to the completion of all required proceedings in the preparation of satisfactory documentation. All agreements and documentation with respect to the Bonds must be satisfactory to the Commission and its counsel. 2. The Sublease or a separate agreement must require the Company to pay either directly or indirectly all costs and expenses in connection with the management, operation, maintenance, repair, applicable taxes and insurance with respect to the Project. 3. This Resolution is intended as a statement of intent of the Commission, but the Commission shall bear no liability for reliance hereon or for failure to perform or proceed hereunder. ADOPTED this f)o-rv ;) ;;J, 2009. AUGUSTA-RICHMOND COUNTY COMMISSION By: ~r- - (SEAL) Mayor Attest" IJI',\:;:'" '(':OC #f .5::' -3a~ "J ; ~ q ~ ~ jt1 ...-,'! ;: !; "" '~:l j1'.: 1_':,1 -~ ~ ~ ~ :::; :!. y ~ 0 ~ - ~r'0l ~:,'~J~~ ~..t ~ :ilo :;':;T. ift 0" ,G/ 'fA G"w t~ri.;; fl ,-;''JO' '(A.o 4.,~#I.W 'fA 1;)0"()(l$~8{) L:W ~~ ",y ~~... GEORGll'-~,;::~ .t~,,~1l;\.""~<lo.~ CLERK'S CERTIFICATE The undersigned Clerk of the Augusta-Richmond County Commission hereby certifies that the foregoing pages of typewritten matter constitute a true and correct copy of the Resolution adopted on , 2009 by said Commission at a meeting in accordance with the Open Meetings Law and the procedures of said Commission, duly called and assembled, which was open to the public and at which a quorum was present and acting throughout, that the Resolution was adopted by a vote of _ votes for, votes against, and _ abstentions, and that the original of said Resolution appears of public record in the minute book of said Commission, which is in my custody and control. Given onder my hand and the seal nf said Commission this 9~ ~ "2.L, 2009. ~. ~~. ),C:;#;'~.~.C":iit$ Cl'erk, tf~-; Augusta-RiF~(mQ;.couni)' Commission ~3, ~~~. ?;!"~S{,. ...... . . (SEALj(;<-;' '''.':. ~~b. we(l, , ..-.':" ~~~'~~~,:l~~~~~;':':,._: . . . ' EXHIBIT A Bass Pro Outdoor World Project Summary of Revised Financing Terms The effects of the worldwide credit crunch on fmancial markets, and on the economy in general, have slowed progress on Augusta's Bass Pro Outdoor World Project. Higher financing costs and the desire to better protect Augusta against any project-related debt liability have resulted in a restructuring of the project's financing that will allow the project to proceed. The restructuring will result in a smaller project bond issue, though not a smaller project, and will provide for a Bass Pro guarantee of all project bonds. As before, the Development Authority of Richmond County will issue its revenue bonds to fund a portion of the cost of the construction and equipping of a 11 0,000 square foot Bass Pro Outdoor World retail center on an improved IS-acre site to be donated to the Authority by Augusta Village at Riverwatch, LLC in the proposed Village ofRiverwatch development. However, instead of the originally planned $23 million in bonds, approximately $19 million in bonds is planned, with contributions from Bass Pro, Inc. (the "Company") to cover the difference. As before, the Authority will lease the Project to Augusta for the full term of the bonds, and Augusta will simultaneously sub-lease the Project to the Company for an identical term. Augusta's obligations to the Authority under the lease will be fully offset by the Company's obligations under the sub-lease, which obligations will be unconditionally guaranteed by the Company. The guarantee will cover the payment in full of all debt service on, and all other costs associated with, the bonds, when due. It will constitute a general obligation of the Company and will not, in any way, be conditioned on the success of the Project. Rents payable by the Company under the sub-lease would be offset each year by the incremental ad valorem and local option sales taxes generated by the Project. Specifically, such rents would be reduced by the sum of (i) ad valorem taxes paid to Augusta by the Company on its leasehold interest in the Project for such year, (ii) payments-in-addition-to-taxes made by the Company for such year (under a separate PATS agreement with the Authority) in amounts equal to the total taxes that would be due on the Authority's fee interest in the Project (as if such interest were fully subject to ad valorem taxation) less the amount of taxes paid by the Company on its leasehold interest, and (iii) all local option sales tax revenues ("LOST Revenues") generated on sales at the Proj ect. Because of the Bass Pro rent guarantee, interest on the bonds will be subject to federal income taxation. Because of the high interest rates currently available on fixed rate taxable bonds, the bonds will be issued as variable rate demand bonds, which, under normal market conditions, should reduce interest rates significantly. Bass Pro may arrange some form of financial hedge to assure that such rates do not exceed a certain fixed rate. All liabilities associated with such a hedge would also be covered by the Company's guarantee.