3. Resolution 4492 - Proposed Amendment - Industrial Development Revenue Note & Call for PHREPORT TO:
FROM:
SUBJECT:
of Kalispell
Post Office Box 1997 • Kalispell, Montana 59903-1997 • Telephone (406) 758-7700 • FAX (406) 758-7758
Mayor Boharski and City Council Members
Amy Robertson, Finance Director
Chris Kukulski, City Manager
Call for public hearing - Refunding Industrial Development Revenue
Note - Kalispell Center Limited Partnership Project
MEETING DATE: July 19, 1999
BACKGROUND: The original note was issued on December 17, 1984 to finance the
acquisition of land and the construction of the Kalispell Center Mall.
The project is currently owned by the Cavanaughs Hospitality
Limited Partnership successor to the Kalispell Center Limited
Partnership. The primary purpose of the refinancing is to lower the
interest rate. The outstanding amount of the note is $7,027,917.
RECOMMENDATION: Adoption of this resolution calling for a public hearing.
FISCAL EFFECTS: The City fee for the refunding is $2.50 per thousand which will
generate $17,570 for the General Fund.
ALTERNATIVES: As suggested by Council.
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— 'CIZ Amy H. Robertson
Finance Director
Report compiled: July 16, 1999
Attachments: none
C "�-' %�
Chris A. Kukulski
City Manager
DORSEY & WHITNEY LLP
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MAE NAN ELLINGSON
ellingson.mae.nan@dorseylaw.com
MEMORANDUM
TO: Attached Distribution List
FROM: Mae Nan Ellingson
DATE: July 8, 1999
RE: First Amended and Restated Industrial Development Revenue Note,
Kalispell Center Limited Partnership Project
CC: Joseph Gonnella
I spoke with Amy Robertson of the City this morning regarding placing the
resolution for this project on an agenda.
They have agreed to put it on the agenda for July 19, 1999. Based on that, if we
can then publish notice on July 25' or August 1S` and have the public hearing on August 16'. I
think we can assume that no problem will arise during the public hearing and that we can have
the bond resolution adopted on the 16t' after the public hearing and then proceed to close.
The City has also forwarded to us a copy of its Ordinance relating to it its charges
for the issuance of the bonds, and have attached a copy of that. I believe that the Borrowers are
aware of the City's charge and that this will not change their desire to proceed.
The City will not require that this be paid until closing, but it can be paid at any
time. Please let me know about that.
Unless we hear otherwise, we will proceed with having the enclosed resolution
acted on at the July 19 meeting.
a LE -ME
Distribution List
First Amended and Restated Industrial Development Revenue Note
Kalispell Center Limited Partnership Project
Melissa Sachs
Washington Trust Bank
P.O. Box 2127
Spokane, WA 99210-2127
Phone: (509) 353-3821
Fax: (509) 353-4005
Tom Bassett, Esq.
Lukins &Annis
1600 Washington Trust Financial Center
717 W. Sprague Ave
Spokane, WA 99201-0466
Telephone: (509) 455-9555
Fax: (509) 747-2323
Richard Barbieri
Art Coffey
Cavanaughs Hospitality Corporation
CHC Building
201 West North River Drive
Spokane, WA 99201
Fax: (509) 325-7324
Glen Neier, Esq.
City of Kalispell
City Attorney
P.O. Box 1997
Kalispell, MT 59903
RESOLUTION NO. 4492
RESOLUTION RELATING TO THE PROPOSED AMENDMENT OF .
TERMS OF THE INDUSTRIAL DEVELOPMENT REVENUE NOTE
(KALISPELL CENTER LIMITED PARTNERSHIP PROJECT) OF THE
CITY; CALLING FOR A PUBLIC HEARING THEREON
BE IT RESOLVED by the City Council of the City of Kalispell, Montana (the "City"),
as follows:
Section 1. Recitals
1.1. Pursuant to Montana Code Annotated, Title 90, Chapter 5, Part 1, as amended (the
"Act"), the City issued its $10,000,000 Industrial Development Revenue Note (Kalispell Center
Limited Partnership Project) (the "Note"), on December 17, 1984, on behalf of Kalispell Center
Limited Partnership, a Washington limited partnership (the "Original Borrower"), in order to
finance the acquisition of certain land in the City and the acquisition, construction and equipping
thereon of an approximately 171,000 square foot commercial shopping mall, a 134-room motor
inn, restaurant, cocktail lounge, banquet facility and related facilities (collectively, the "Project").
The Project is located in an area bounded by Main Street on the east, Center Street on the south,
Railroad Street on the north and Fifth Avenue West on the west in the City. The Project is
currently owned by Cavanaughs Hospitality Limited Partnership, a Delaware limited partnership
and successor to the Original Borrower (the "Borrower").
1.2. The Borrower and Washington Trust Bank, holder of the Note, outstanding as of
the date hereof in the approximate principal amount of $7,027,917, have proposed that the terms
of the Note be amended to fix and, initially reduce, the interest rate thereon and to eliminate
provisions of the Note that require its purchase from the holder by the Borrower. In order to
effectuate the proposed changes, the City would issue an amended and restated note embodying
the proposed changes in exchange for the Note.
Section 2. Public Hearing
2.1. As required by the Internal Revenue Code of 1986, as amended, in order to
preserve the tax exemption of interest on the Note, the City Council must approve the proposed
amendment of terms of the Note, after conducting a public hearing thereon. A public hearing on
the proposal to amend the terms of the Note is hereby called and shall be held on August 16,
1999, at 7:00 p.m., in the City Council Chamber Room, City Hall. The Finance Officer shall
cause notice of the public hearing to be published in Daily Inter Lake, the official newspaper of
the City and a newspaper of general circulation in the City, at least once not less than 14 nor
more than 30 days prior to the date fixed for the public hearing. The notice to be published shall
be in substantially the following form:
Passed and duly adopted by the City Council of the City of Kalispell this 19th day of
July, 1999.
Attest:
Clerk of Council
Mayor
NOTICE OF PUBLIC HEARING ON THE
PROPOSED AMENDMENT OF TERMS OF A
CERTAIN REVENUE NOTE OF THE CITY
ISSUED UNDER MONTANA CODE ANNOTATED,
TITLE 90, CHAPTER 5, PART 1, AS AMENDED
CITY OF KALISPELL, MONTANA
NOTICE IS HEREBY GIVEN that the City Council of the City of Kalispell, Montana
(the "City"), will meet on August 16, 1999, at 7:00 p.m. in the City Council Chamber Room,
City Hall, 312 First Avenue East, Kalispell, Montana, for the purpose of conducting a public
hearing on a proposal that the City approve the amendment of the terms of the Industrial
Development Revenue Note (Kalispell Center Limited Partnership Project), issued by the City on
December 17, 1984 (the "Note") under the Montana Code Annotated, Title 90, Chapter 5, Part 1,
as amended (the "Act"). The Note was issued to finance the acquisition of certain land in the
City and the acquisition, construction and equipping thereon of an approximately 171,000 square
foot commercial shopping mall, a 134-room motor inn, restaurant, cocktail lounge, banquet
facility and related facilities known as Kalispell Center (the "Project"). The Project is located in
an area bounded by Main Street on the east, Center Street on the south, Railroad Street on the
north and Fifth Avenue West on the west in the City. The Project is currently owned by
Cavanaughs Hospitality Limited Partnership, a Delaware limited partnership (and successor to
Kalispell Center Limited Partnership) (the "Borrower"). The Borrower and the holder of the
Note propose that the terms of the Note be amended to fix, and initially reduce, the interest rate
thereon and to eliminate provisions requiring the Borrower to purchase the Note from the holder
thereof. The Note is currently outstanding in the approximate principal amount of $7,027,917.
The Note as proposed to be amended would constitute a special, limited obligation of
the City and principal thereof and interest thereon would be payable solely from the revenues
pledged to the payment thereof. No holder of the Note will ever have the right to compel any
exercise of the taxing power of the City to pay the Note or the interest thereon, nor to enforce
payment against any property of the City except money payable by the Borrower to the City and
pledged to the payment of the Note.
All persons interested may appear and be heard at the time and place set forth above or
may file written comments with the Finance Officer prior to the date of the hearing set forth
Further information may be obtained from the City Manager of the City, City Hall, 312 First
Avenue East, Kalispell, Montana 59903, telephone: (406) 758-7703.
Dated: , 1999.
BY ORDER OF THE CITY COUNCIL
Clerk of Council
ORDINANCE NO. /C C ,
AN ORDINANCE TO ESTABLISH A CITY ADMINISTRATIVE FEE ISSU-
ANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL, AS FOLLOWS:
SECTION I. On all bonds issued by the City pursuant
to the authority granted to the City by Section #90-5-102,
M.C.A., there shall be paid to the City by the lessee of
the project or the borrower of the funds, the sum of $2.50
per $1000.00 face value of said bonds. Such sums paid to
the City shall be for the purpose of defraying administra-
tive expense of the City in connection with the authori-
zation, sale and issuance of said bonds for the project
and shall be considered a cost of the project.
FINALLY PASSED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL AND APPROVED BY THE MAYOR THIS _ DAY OF
, onaa.ry , 198,2.
Mayor
ATTEST:
" ,
Clerk reasurer
CERTIFICATE AS TO RESOLUTION AND VOTE
I, the undersigned, being the duly qualified and acting recording officer of the City of
Kalispell, Montana (the "City"), hereby certify that the attached resolution is a true copy of a
Resolution entitled: "RESOLUTION RELATING TO THE PROPOSED AMENDMENT OF
TERMS OF THE INDUSTRIAL DEVELOPMENT REVENUE NOTE (KALISPELL CENTER
LIMITED PARTNERSHIP PROJECT) OF THE CITY; CALLING FOR A PUBLIC HEARING
THEREON" (the "Resolution"), on file in the original records of the City in my legal custody;
that the Resolution was duly adopted by the City Council of the City at a meeting on July 19,
1999, and that the meeting was duly held by the City Council and was attended throughout by a
quorum, pursuant to call and notice of such meeting given as required by law; and that the
Resolution has not as of the date hereof been amended or repealed.
I further certify that upon vote being taken on the Resolution at said meeting, the
following Councilmembers voted in favor thereof:
voted against the same:
abstained from voting thereon:
or were absent:
WITNESS my hand officially this day of July, 1999.
Clerk of Council