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HomeMy WebLinkAbout2025-08 An Ordinance Concerning the West Middle Creek Housing Development and Authorizing the Leasing of Certain Town Property1 ORDINANCE NO. 8 Series of 2025 AN ORDINANCE CONCERNING THE WEST MIDDLE CREEK HOUSING DEVELOPMENT AND IN CONNECTION THEREWITH AUTHORIZING THE LEASING OF CERTAIN TOWN PROPERTY, THE ADVANCE OF A LOAN TO THE VAIL HOME PARTNERS CORPORATION, AND THE EXECUTION AND DELIVERY OF A SITE LEASE, LEASE PURCHASE AGREEMENT AND OTHER DOCUMENTS; AND DECLARING AN EMERGENCY WHEREAS, pursuant to Article XX, Section 6 of the Colorado Constitution and Section 13.3 of the Town of Vail Home Rule Charter (the "Charter"), the Town is authorized to lease, for such term as the Town Council determines, any real or personal property to or from any person, firm or corporation, public or private, governmental or otherwise; WHEREAS, the Town owns, in fee title, various properties and facilities as defined and more particularly described in Exhibit A to the Lease (the "Leased Property"); WHEREAS, because the demand for workforce housing in the Town exceeds the supply, the Town Council hereby determines that it is in the public interest and is a public purpose for the Town to assist the Vail Home Partners Corporation (the "Corporation") to finance the acquisition, construction, installation, equipping of the West Middle Creek housing development, a for-rent housing development that are offered at rental rates that are attainable to a range of individuals and families (the "Development"), including any legally permitted costs and expenditures in connection therewith, all for public purposes, and as authorized by law, by advancing a loan to the Corporation (the "Project"); WHEREAS, the Town Council hereby determines that it is in the best interests of the Town and the public health, safety and welfare to lease the Leased Property pursuant to a Site Lease (the "Site Lease") between the Town, as lessor, and U.S. Bank Trust Company, National Association, as lessee (the "Trustee") and lease back the Trustee's interest in the Leased Property pursuant to the terms of a Lease Purchase Agreement (the "Lease") between the Trustee, as lessor, and the Town, as lessee; WHEREAS, the Trustee will execute and deliver an Indenture of Trust (the "Indenture") pursuant to which there will be executed and delivered certain certificates of participation (the "Certificates") dated as of their date of delivery, that shall evidence proportionate interests in the right to receive certain revenues including rental payments made by the Town under the Lease; WHEREAS, proceeds of the Certificates, along with approximately $10,000,000 in available funds of the Town, shall be loaned to the Corporation for the construction of a portion of the Development; 2 WHEREAS, the Town’s obligation under the Lease to pay Base Rentals and Additional Rentals will be from year to year only; will constitute a currently budgeted expenditure of the Town; will not constitute a mandatory charge or requirement in any ensuing budget year; and will not constitute a general obligation or other indebtedness or multiple fiscal year direct or indirect Town debt or other financial obligation of the Town within the meaning of any constitutional, statutory, or Charter limitation or requirement concerning the creation of indebtedness or multiple fiscal year financial obligation, nor a mandatory payment obligation of the Town in any ensuing fiscal year beyond any fiscal year during which the Lease shall be in effect; WHEREAS, the Supplemental Public Securities Act, part 2 of Article 57 of Title 11, C.R.S. (the "Supplemental Act"), provides that a public entity, including the Town, may elect in an act of issuance to apply all or any of the provisions of the Supplemental Act to an issue of securities; WHEREAS, no member of the Town Council has any conflict of interest or is interested in any pecuniary manner in the transactions contemplated by this Ordinance; WHEREAS, there have been filed with the Town Clerk proposed forms of: (i) the Site Lease; (ii) the Lease; (iii) the Preliminary Official Statement (the "Preliminary Official Statement") and (iv) a Continuing Disclosure Certificate (the "Continuing Disclosure Certificate") to be delivered by the Town; WHEREAS, pursuant to Section 4.11 of the Charter, because of the urgent need for financing for the Development in order to provide much needed for-rent housing offered at rental rates that are attainable to a range of individuals and families, escalating Project costs, and the current volatility in the municipal bond market, the Town Council determines that an emergency exists and that adoption of this Ordinance as an emergency measure on first and final reading is necessary for the immediate preservation of public property, health, welfare, peace and safety; and WHEREAS, capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Lease. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO, THAT: Section 1. Ratification and Approval of Prior Actions. The Town Council hereby ratifies and approves all action heretofore taken and not inconsistent with this Ordinance by the Town Council or the officers, agents, or employees of the Town relating to the Site Lease, the Lease, the implementation of the Development, and the execution and delivery of the Certificates. Section 2. Finding of Best Interests. The Town Council hereby finds and determines, pursuant to the Colorado Constitution and laws of the State and the Charter, that the implementation of the Development pursuant to the terms set forth in the Site Lease, the Lease, and the Indenture are necessary, convenient, and in furtherance of the Town's purposes and are in the best interests of the inhabitants of the Town and the 3 public health, safety and welfare. The Town Council further finds that the fair value of the Leased Property does not exceed its Purchase Option Price (as defined in the Lease), and the Town Council hereby authorizes and approves the same. Section 3. Supplemental Act Election; Parameters. a. The Town Council hereby elects to apply all of the provisions of the Supplemental Act to the Lease, the Site Lease, and the Certificates, and in connection therewith delegates to the Mayor, Town Manager or Finance Director the independent authority to make any determination delegable pursuant to C.R.S. § 11-57-205(1)(a-i), in relation to the Lease and the Site Lease, and to execute a sale certificate (the "Sale Certificate") setting forth such determinations, including without limitation the term of the Site Lease, the rental amount to be paid by the Trustee pursuant to the Site Lease, the term of the Lease and the rental amount to be paid by the Town pursuant to the Lease, subject to all of the following parameters and restrictions: i. The Site Lease Term shall end no later than December 31, 2074. ii. The Lease Term shall end no later than December 31, 2064. iii. The aggregate principal amount of the Base Rentals payable by the Town under the Lease shall not exceed $80.0 million. iv. The maximum annual repayment cost of Base Rentals payable by the Town shall not exceed $10.0 million, and the total repayment cost shall not exceed $245.0 million. v. The purchase price of the Certificates shall not be less than 98% of the aggregate principal amount. vi. The maximum net effective interest rate on the interest component of the Base Rentals shall not exceed 7.00%. vii. The amount of capitalized interest for deposit into the Base Rentals Fund, if any. viii. The amount deposited to a Reserve Fund, if any. b. Pursuant to C.R.S. § 11-57-205, the Town Council hereby delegates to the Mayor, Town Manager and Finance Director the authority to acknowledge the Indenture and any contract for the purchase of the Certificates between the Trustee and the Purchaser, and to execute any agreement or agreements in connection therewith. In addition, the Mayor, Town Manager and Finance Director are hereby authorized to independently determine if obtaining an insurance policy for all or a portion of the Certificates is in the best interests of the Town, and if so, to select an insurer to issue an insurance policy, execute a commitment relating to the same and execute any related documents or agreements required by such commitment. The Mayor, Town Manager and Finance Director are also hereby authorized to determine if obtaining a reserve fund 4 insurance policy for the Certificates is in the best interests of the Town, and if so, to select a surety provider to issue a reserve fund insurance policy and execute any related documents or agreements required by such commitment. Additionally the Town hereby approves a loan to the Corporation in an amount of approximately $10,000,000 as may be adjusted hereafter for construction and acquisition of the Development pursuant to a Loan Agreement previously approved by Ordinance No. 1, Series of 2025. Section 4. Approval of Documents. The Town Council hereby approves the Site Lease, the Lease, and the Continuing Disclosure Certificate, and the Mayor is hereby authorized and directed for and on behalf of the Town to execute and deliver such documents in substantially the forms and with substantially the same contents as the proposed forms of such documents on file with the Town Clerk, with such changes as may hereafter be approved by the Mayor, Town Attorney or Town Manager. Section 5. Official Statement. The Town Manager or the Finance Director are each independently authorized to prepare or cause to be prepared, and the Mayor is authorized and directed to approve and execute a final Official Statement for use in connection with the offering and sale of the Certificates in substantially the form of the Preliminary Official Statement, but with such amendments, additions, and deletions as are in accordance with the facts and not inconsistent herewith. The execution of a final Official Statement by the Mayor shall be conclusively deemed to evidence the approval of the form and contents thereof by the Town. The distribution of the Preliminary Official Statement and the final Official Statement to all interested persons in connection with the sale of the Certificates is hereby ratified, approved and authorized. Section 6. Collateral Documents. The Mayor, Town Manager and Finance Director are hereby authorized to execute and deliver for and on behalf of the Town any and all certificates, documents, instruments, and other papers and to perform all other acts that they deem necessary or appropriate, in order to implement and carry out the transactions and other matters authorized by this ordinance. The Town Clerk is hereby authorized and directed to attest all signatures and acts of any official of the Town, if so required. The Mayor, Town Manager and Finance Director are authorized to execute on behalf of the Town agreements concerning the deposit and investment of funds in connection with the transactions contemplated by this ordinance. Section 7. No General Obligation Debt. No provision of this Ordinance, the Lease, the Indenture, the Continuing Disclosure Certificate, the Certificates or the Official Statement shall be construed as creating or constituting a general obligation or other indebtedness or multiple fiscal year financial obligation of the Town within the meaning of any constitutional, statutory, or Charter provision, nor a mandatory charge or requirement against the Town in any ensuing fiscal year beyond the then current fiscal year. The Town shall not have any obligation to make any payment with respect to the Certificates except in connection with the payment of the Base Rentals and certain other payments under the Lease, which payments may be terminated by the Town in accordance with the provisions of the Lease. Neither the Lease nor the Certificates shall constitute a 5 mandatory charge or requirement of the Town in any ensuing fiscal year beyond the then current fiscal year or constitute or give rise to a general obligation or other indebtedness or multiple fiscal year financial obligation of the Town within the meaning of any constitutional, statutory or Charter debt limitation and shall not constitute a multiple fiscal year direct or indirect Town debt or other financial obligation whatsoever. No provision of the Lease or the Certificates shall be construed or interpreted as creating an unlawful delegation of governmental powers nor as a donation by or a lending of the credit of the Town within the meaning of Article XI of the Colorado Constitution. Neither the Lease nor the Certificates shall directly or indirectly obligate the Town to make any payments beyond those budgeted and appropriated for the Town's then current fiscal year. Section 8. Reasonableness of Rentals. The Town Council hereby determines and declares that the Base Rentals do not exceed a reasonable amount so as to place the Town under an economic compulsion to renew the Lease or to exercise its option to purchase the Leased Property pursuant to the Lease. The Town Council hereby determines and declares that the period during which the Town has an option to purchase the Leased Property (i.e., the entire maximum term of the Lease) does not exceed the remaining useful life of the Leased Property. Section 9. No Recourse against Officers and Agents. Pursuant to C.R.S. § 11- 57-209, if any Town official or agent acts in good faith, no civil recourse shall be available against such member, officer, or agent for payment of the principal, interest or prior redemption premiums on the Certificates. Such recourse shall not be available either directly or indirectly through the Town Council or the Town, or otherwise, whether by virtue of any constitution, statute, rule of law, enforcement of penalty, or otherwise. By the acceptance of the Certificates and as a part of the consideration of their sale or purchase, any person purchasing or selling such certificate specifically waives any such recourse. Section 10. Repealer. All bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith are repealed to the extent only of such inconsistency. This repealer shall not be construed to revise any bylaw, order, resolution or ordinance, or part thereof, theretofore repealed. Section 11. Charter Controls. Pursuant to Article XX of the Colorado Constitution and the Charter, all State statutes that might otherwise apply in connection with the provisions of this ordinance are hereby superseded to the extent of any inconsistencies or conflicts between the provisions of this ordinance and the Sale Certificate authorized hereby and such statutes. Any such inconsistency or conflict is intended by the Town Council and shall be deemed made pursuant to the Authority of Article XX of the Colorado Constitution and the Charter. Section 12. Emergency Determination. Pursuant to Section 4.11 of the Charter, because of the urgent need for financing for the Development in order to provide much needed for-rent housing offered at rental rates that are attainable to a range of individuals and families, escalating Project costs, and the current volatility in the municipal bond market, the Town Council determines that an emergency exists and that adoption of this 6 Ordinance as an emergency measure on first and final reading is necessary for the immediate preservation of public property, health, welfare, peace and safety, and this Ordinance shall be effective immediately upon final passage and adoption on first reading. Section 13. Severability. If any part, section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not effect the validity of the remaining portions of this ordinance; and the Town Council hereby declares it would have passed this Ordinance, and each part, section, subsection, sentence, clause or phrase thereof, regardless of the fact that any one or more parts, sections, subsections, sentences, clauses or phrases be declared invalid. INTRODUCED, READ ON FIRST READING, APPROVED, AND ADOPTED ON FIRST READING AS AN EMERGENCY ORDINANCE AND ORDERED PUBLISHED this 17th day of April, 2025. ________________________________ Travis Coggin, Mayor ATTEST: _______________________________ Stephanie Johnson, Acting Town Clerk