Special Board of Aldermen 11-24-2020 Page 10
Celia Leonard, Deputy Corporation Counsel
Ok thank you John and thank you President. Good evening everyone. So! am going to talk about action
items which are reflected in the Omnibus for consideration in front of you today. There’s a $21 million
dollar bond which has been authorization and we’ve gone through the flow of funds, how that’s going to
work. And so the City has action items to get there. | am going to do them in order, both looking at the
Omnibus Resolution and | keep looking to the left because my screen is up on the left and also Tim’s
awesome graph where he put the approvals with the lines, even with my reading glasses it is a little hard
for me to see so we will wing it here. But overall approval of the deal as John was saying, the New Market
Tax Credit deal has a lot of variables as the overall projects sponsor, the City has responsibilities for
various guarantees and documents. And approval of one is a general Omnibus Approval within an
Omnibus. Even if we don’t know the name of the document now, if it comes up in the next two weeks, if it
helps to effectuate and is necessary, which actually is pretty much more where we are at now. We are
doing the necessary — it will be approved and we can move forward with confidence that the Board
understands and approves the actions the City needs to take.
We don’t anticipate much unanticipated, but of course that’s in here, so that’s why that’s one is there, that’s
why it is up at the top. Approval One — this is the structure and you agree that the City can forward under
these known details. Approval Two — is authorizing the transfer of title from the City who purchased it from
Alec’s Shoe Store to the QALIGB, the Impact Corp. there. That is the sale, it will net or bring $2 million
back to the City. The next approval is the City and these aren’t necessarily sequential, honestly it’s how |
thought of them in my mind, so that’s how it came out on the approval list. So the City will — on the other
side you can see Approval Three is the City entering into the Master Tenancy that has been discussed.
And also entering into equipment leases to fit up the Performing Arts Center with the specialty equipment
and AV and everything that goes into that, two separate documents, but Approval Three covers both of
them.
Approval Four has 3 parts; one is the loan which was discussed in detail by Niel of the $7 million, the
number says “up to $8 million” because at the time of drafting, there were still questions as to how much
exactly would have to go in. This number is driven exactly by how much New Market Tax Credit equity is
available. So that number, depending on how much equity is going to be — would have changed but we are
very confident it is pretty much going to be this $7,108,850.00 or whatever Niel said. But it will not be more
than $8 million. The next 4B is the payment or the transfer of the not to exceed $14 million; it is around
$13,8 million | think from Niel’s presentation apparently. That transfer of money to 201 Main Street Real
Estate Corp. and then Niel explained how that comes back up in to Impact Corp. the QALICB borrower.
And | think, I’m not positive if John mentioned it, but I'll just say again that Impact Corp. is a taxable entity
and that does impact the lease in that the City will issue real estate tax to Impact Corp. for holding,
obviously the real estate at what we call 201 Main Street. That is factored into the lease payments and will
be a circular transaction back to the City.
The Third Approval 4C is that in addition to the loan and the transfer of those bond funds, there’s various
documents that need signing, closing statements, department certificates, settlement statements, etc., and
this authorizes the City to not only do those discreet transactions but all of the dozens, I’m trying to think,
we go through a closing agenda now twice a week of what over 100 documents that we are looking at,
different discreet. Approval 5 is authorizing the City as Master Tenant to enter into an agreement with
Spectacle. Now the Board has already approved an MOU as | recall, put it in the whereas is. And this is
further authorization that the final agreement can be entered into. The Reference Community Benefits
Agreement which | know is very important to the Board and to the City is also important to our investor and
to the overall New Market Tax Credit structure and portions of that — important portions about tracking the
community benefits are going to be incorporated via contract into that Spectacle Management Contract.
We have been in negotiations and discussions with Spectacle and they have been really open and excited
to participate with the City.
