Loading...
03/30/1992 CITY COMMISSION SPECIAL MEETING March 30, 1992 The City Commission of the City of Clearwater met at City Hall with the following members present: Rita Garvey Mayor/Commissioner Sue Berfield Vice-Mayor/Commissioner Lee Regulski Commissioner William Nunamaker Commissioner Richard Fitzgerald Commissioner Also present were: Michael J. Wright City Manager M. A. Galbraith, Jr. City Attorney Cynthia E. Goudeau City Clerk The Mayor called the meeting to order at 9:01 a.m. for the purpose of discussing the amendment to the lease agreement with the Chi Chi Rodriguez Youth Foundation (Foundation). The 1985 lease agreement between the City and the Foundation provides the City with the right of first refusal to assume up to $2 million in outstanding debt which the Foundation has obtained to construct the golf course located on McMullen-Booth Road. With the balloon payment on the loan coming due in March, the Foundation contacted the City and requested the guarantee be strengthened to include a firm guarantee in lieu of a right of first refusal as well as an increase in the maximum guarantee to $2.5 million. The City's guarantee will apparently allow the Foundation to refinance at more favorable interest rates and the additional $500,000 to be borrowed will be used to purchase additional machinery and carts and to complete construction of golf course facilities. Upon investigating the request, City staff, in conjunction with the City bond counsel, determined that the requested guarantee modifies the arrangements enough to produce new City debt, actually contingent debt, which requires compliance with State law and City Charter provisions. Further, such a guarantee can not be made from ad valorem tax revenues and can not exceed $1 million unless it is first approved by the voters at referendum. With these restrictions in mind, City bond counsel has drafted the lease amendment and ordinance which provide for a $1 million guarantee and a right of first refusal on the remaining debt, not to exceed an additional $1.5 million. An ordinance is required for all City debt under Section 41.11(a) of the City Code of Ordinances. The golf course is currently operational and reporting operating profits. In the event the Foundation defaults on their debt, it is likely the City would exercise the existing right of first refusal and assume operation of the course. City staff has reviewed the Foundation's request and the lease amendment as drafted by bond counsel. The Foundation has agreed to reimburse the City for bond counsel fees and to pay off the remaining balance of the $27,264 on a 1989 City loan used for transportation impact fees out of the refinancing proceeds. This item has been discussed several times by the City Commission with concerns regarding the term of the loan and the assignability of the guarantee being mentioned. These concerns have been addressed and Exhibit A to the Ordinance, which is the amended lease agreement, is now ready for approval. In response to a question, the City Attorney indicated he was comfortable with the changes to the documents. A question was raised regarding whether or not the provision which had been in the documents saying that the loan could be increased and the guarantee with it, was still a part of the document. The City Attorney indicated it had been deleted and there is no longer any provision for future advancements on the loan. Essentially the documents allow the Foundation to borrow $2.5 million and no more. He indicated any changes would require City Commission approval. A question was raised regarding what related improvements would be included in the loan as referenced on page 5. Tim Coop, representing NCNB, indicated this is a proposed middle school and the new entrance to the course. Concerns were raised that due to cuts in the school system, the middle school on the golf course may be affected. It was indicated it should not be as this is a federally funded program. In response to questions, the City Manager indicated that essentially the documents limit the loan amount to $2.5 million with the City's guarantee being limited to $1 million. A question was raised regarding the rate on the loan and it was indicated that it was 8.75%. A concern was raised regarding the assignability of the guarantee and the City Manager indicated the clause which gives the City some control over this, is found on page 6 of the guarantee document. A question was raised regarding the environmental indemnification and it was indicated that this was prepared as the bank did not wish to assume any liabilities for any environmental problems that may exist on the property. Commissioner Regulski moved to approve the amendments to the lease agreement with the Chi Chi Rodriguez Youth Foundation. The motion was duly seconded and carried unanimously. The City Attorney presented Ordinance #5178-92 for second reading and read it by title only. He indicated that the previous motion approves the amended Exhibit A to the ordinance. Commissioner Regulski moved to adopt Ordinance #5178-92 on second reading. The motion was duly seconded and upon roll call, the vote was: "Ayes": Regulski, Nunamaker, Fitzgerald, Berfield and Garvey. "Nays": None. The meeting adjourned at 9:16 a.m.