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HomeMy WebLinkAbout2010-10-05 Agenda and Support Documentation Town Council Evening Session VAIL TOWN COUNCIL EVENING SESSION AGENDA TM Ova VAIL TOWN COUNCIL CHAMBERS 75 S. Frontage Road W. Vail, CO 81657 6:00 P.M., OCTOBER 5, 2010 NOTE: Times of items are approximate, subject to change, and cannot be relied upon to determine at what time Council will consider an item. 1. ITEM /TOPIC: Council will convene as the Vail Reinvestment Authority (VRA) at 6:00 pm to consider Resolution No. 3, Series of 2010, a resolution authorizing, approving and directing the issuance, sale and delivery by the Authority of tax - exempt tax increment revenue bonds, Series 2010A and taxable tax increment revenue bonds (direct pay Build America Bonds), series 20108, in the combined maximum aggregate principal amount of $17,200,000; approving documents in connection therewith; and ratifying prior actions. (60 minutes) PRESENTER(S): Judy Camp,Jonathan Heroux and Dee Wisor ACTION REQUESTED OF COUNCIL: Consider Resolution No. 3, Series of 2010, authorizing the issuance tax increment financing (TIF) bonds to fund certain projects in the LionsHead TIF district. BACKGROUND: On August 17, the Commissioners directed staff to begin the process to issue bonds in support of public improvements in the LionsHead area consistent with the LionsHead Public Facilities Improvement Plan. On September 21, direction was given to include the following projects in the TIF financing for a total project cost of $15.0 million: LionsHead Transit and Welcome Center; East LionsHead Portal Improvements; West LionsHead Portal Improvements; Vail Public Library remodel; and surface parking on the charter bus lot. Resolution No. 3 authorizes issuance of bonds within the parameters outlined in the resolution and delegates to each the Chairman of the Board of the Authority (Dick Cleveland) and the Secretary/Executive Director (Stan Zemler) the authority to execute documents necessary to complete the issuance of the bonds. STAFF RECOMMENDATION: Approve, approve with amedment, or deny Resolution No. 3 as presented. 2. ITEM /TOPIC: Citizen Participation (15 min.) 3. ITEM /TOPIC: Town Manager's Report: (15 min.) Revenue Highlights Update (15 min.) PRESENTER(S): Stan Zemler 4. ITEM /TOPIC: Commission on Special Events board appointment. (5 min.) 10/5/2010 PRESENTER(S): Pam Brandmeyer ACTION REQUESTED OF COUNCIL: The staff requests the Town Council appointment one new member to the Commission on Special Events (CSE). STAFF RECOMMENDATION: The staff requests the Town Council appoint one new member to the Commission on Special Events (CSE). 5. ITEM /TOPIC: An appeal, pursuant to Section 12 -3 -3, Appeals, Vail Town code, of the Town of Vail Design Review Boards's approval of a deisgn review application, pursuant to Section 12 -11, Design Review, Vail Town Code, to allow for a change to the approved sidewalk paver blend, located at 141 East Meadow Drive. (25 minutes) PRESENTER(S): Warren Campbell, Michael Suman, Peter Knobel ACTION REQUESTED OF COUNCIL: The Vail Town Council shall uphold, modify, or overturn the Design Review Board's approval. BACKGROUND: On September 7, 2010, the Vail Town Council voted to call -up the Design Review Board's August, 18, 2010, approval of a change to the paver colors on the north side of the Solaris development. On November 20, 1991, the Town of Vail adopted the Streetscape Master Plan which established the paver design and color blend for pedestrian areas. The paver pattern for pedestrian areas was established to be herringbone and the paver color was a unique "Vail Blend" which was a "charcoal grey with reddish /black accent ". These patterns and color blends were reaffirmed in the adoption of the 2003 Streetscape Master Plan Addendum. STAFF RECOMMENDATION: The Community Development Department recommends that the "Vail Blend" be utilized for the pedestrain sidewalk on the north side of the Solaris development pursuant to the adopted Town of Vail Streetscape Master Plan and the Streetscape Master Plan Addendum.. 6. ITEM /TOPIC: A request to provide one year dispensation to Vail Commons Residential Homeowner's Association required land lease payment to the Town of Vail. (15 Minutes) PRESENTER(S): Ethan Moore, Nina Timm ACTION REQUESTED OF COUNCIL: Provide Staff direction on how to amend the Capital Projects Fund to reflect any changes Town Council would like made to the Vail Commons Residential Homeowner's Association land lease payment. BACKGROUND: Pursuant to the request from the Vail Commons Residential Homeowners Association "to defer the land lease fee for the maintanance on capital projects" Staff has prepared a memorandum outlining the terms of the Vail Commons Residential Land Lease as well as the terms for other employee housing developments on Town land. STAFF RECOMMENDATION: Staff does not recommend providing lease 10i5i2010 payment dispensation for the Vail Commons Residential Land Lease. 7. ITEM /TOPIC: First reading of Ordinance No. 15, Series of 2010, an ordinance amending Chapter 12 -6, Residential Districts, Vail Town Code, to establish the Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. (60 minutes) PRESENTER(S): Rachel Friede Dimond, Planner and Dominic Mauriello, Mauriello Planning Group ACTION REQUESTED OF COUNCIL: The Vail Town Council shall approve, approve with modifications, or deny the first reading of Ordinance No. 15, Series of 2010. BACKGROUND: On August 23, 2010 the Planning and Environmental Commission forwarded a recommendation of approval, with modifications, by a vote of 5 -0 -0, to the Vail Town Council for prescribed regulation amendments to Chapter 12 -6, Residential District, Vail Town Code, pursuant to Section 12 -3 -7, Amendment, Vail Town Code, to establish a new zone district, Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. STAFF RECOMMENDATION: The Planning and Enviromental Commission recommends the Vail Town Council approves the first reading of Ordinance No. 15, Series of 2010, with the following modifications: - The gross residential floor area standards should allow a 1.35 GRFA ratio. - The parking standards should include the applicant's proposed language allowing parking in the front setback and street right -of -way. - The setback standards should be 20 feet as recommended in the Staff memorandum. 8. ITEM /TOPIC: Resolution 23, Series of 2010, a resolution amending Chapter VII, Vail Village Sub - Areas, East Gore Creek Sub -Area ( #6) to include recommendations related to a new Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. (10 minutes) PRESENTER(S): Rachel Friede Dimond, Planner and Dominic Mauriello, Mauriello Planning Group ACTION REQUESTED OF COUNCIL: The Vail Town Council shall discuss the proposed resolution and table the final decision on Resolution 23, Series of 2010 to coincide with the second reading of the related Ordinance No. 15, Series of 2010. BACKGROUND: Resolution 23, Series of 2010, is associated with the Town Council's review of Ordinance No. 15, Series of 2010, an ordinance to establish the Vail Village Townhouse (VVT) District.On August 23, 2010 the Planning and Environmental Commission forwarded a recommendation of approval, with modifications, by a vote of 5 -0 -0, to the Vail Town Council for amendments to Chapter VII, Vail Village Sub - Areas, East Gore Creek Sub - Area ( #6), Vail Village Master Plan, pursuant to Chapter VIII, Implementation and Amendment, Vail Village Master Plan, to include recommendations related to a new Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. The Planning and Environmental Commission forwarded a recommendation with the following modification to the 10i5i2010 applicant's proposal: the applicant's proposed language about the Town vacating the Meadow Drive street right -of -way should be removed from the Vail Village Master Plan amendment. STAFF RECOMMENDATION: Staff recommends the Vail Town Council discuss the proposed resolution and table the final decision on Resolution 23, Series of 2010 to coincide with the second reading of the related Ordinance No. 15, Series of 2010. 9. ITEM /TOPIC: Resolution No. 24, Series of 2010, a Resolution Approving an Intergovernmental Agreement Between the Town of Vail and the Colorado Department of Transportation Regarding Highway Maintenance; and Setting Forth Details in Regard Thereto. (5 min.) PRESENTER(S): Greg Hall ACTION REQUESTED OF COUNCIL: Approve the IGA, and authorize the Town Manager to sign and enter into the IGA with CDOT. BACKGROUND: The Colorado Department of Transportation ( "CDOT ") is required to maintain State highways including highways extending through a city or an incorporated town. The Town of Vail and CDOT wish to enter into an Intergovernmental Agreement authorizing the Town to maintain the highways within town limits, and for the State of Colorado to pay a fee of $120,998.00 for such services. STAFF RECOMMENDATION: Approve the IGA, and authorize the Town Manager to sign and enter into the IGA with the CDOT in a form approved by the Town Attorney. 10. ITEM /TOPIC: Adjournment (9:30 p.m.) 10i5i2010 TOWN (ffr VA M VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: October 5, 2010 ITEM /TOPIC: Council will convene as the Vail Reinvestment Authority (VRA) at 6:00 pm to consider Resolution No. 3, Series of 2010, a resolution authorizing, approving and directing the issuance, sale and delivery by the Authority of tax - exempt tax increment revenue bonds, Series 2010A and taxable tax increment revenue bonds (direct pay Build America Bonds), series 20108, in the combined maximum aggregate principal amount of $17,200,000; approving documents in connection therewith; and ratifying prior actions. PRESENTER(S): Judy Camp,Jonathan Heroux and Dee Wisor ACTION REQUESTED OF COUNCIL: Consider Resolution No. 3, Series of 2010, authorizing the issuance tax increment financing (TIF) bonds to fund certain projects in the LionsHead TIF district. BACKGROUND: On August 17, the Commissioners directed staff to begin the process to issue bonds in support of public improvements in the LionsHead area consistent with the LionsHead Public Facilities Improvement Plan. On September 21, direction was given to include the following projects in the TIF financing for a total project cost of $15.0 million: LionsHead Transit and Welcome Center; East LionsHead Portal Improvements; West LionsHead Portal Improvements; Vail Public Library remodel; and surface parking on the charter bus lot. Resolution No. 3 authorizes issuance of bonds within the parameters outlined in the resolution and delegates to each the Chairman of the Board of the Authority (Dick Cleveland) and the Secretary/Executive Director (Stan Zemler) the authority to execute documents necessary to complete the issuance of the bonds. STAFF RECOMMENDATION: Approve, approve with amedment, or deny Resolution No. 3 as presented. ATTACHMENTS: Memo and bond documents VRA Agenda 100510 10/5/2010 MEMORANDUM To: Vail Reinvestment Authority Commissioners From: Stan Zemler, Judy Camp Date: September 30, 2010 Subject: Vail Reinvestment Authority 2010 Bonds On Tuesday, you will be asked to approve Resolution No. 3, Series 2010, authorizing the issuance of tax - increment financing bonds to fund $15 million of project costs in the LionsHead redevelopment area. Issuance of the bonds is the next step in the process begun in 1999 with the adoption of the LionsHead Redevelopment Master Plan. Subsequent steps have included establishment of the Vail Reinvestment Authority (VRA) in 2003 to facilitate urban renewal within the town, the adoption of the LionsHead Public Facilities Investment Plan in 2004 and addition of tax increment financing (TIF) to the plan in 2005. This memo provides background and history of the urban renewal and tax increment financing process. The following attached documents relate specifically to the 2010 bonds: Resolution and Related Documents to be Approved by the Resolution • Resolution No. 3, Series 2010, the bond parameters resolution, for your approval - sets the maximum amount of bond principal at $17.2 million to cover: $15.0 million for project funding; $1.5 million debt service reserve fund; $0.3 million costs; $0.4 million contingency for changes in market conditions to assure $15.0 million project funding is available - sets maximum net effective interest rates at 4% for tax - exempt bonds and 7% for taxable Build America Bonds (BAB's) (see additional information on BAB's below) - delegates certain authority to the Chairman of the Board of the Authority (Dick Cleveland), the Secretary/Executive Director (Stan Zemler) and the Treasurer (Judy Camp) to execute documents acting within the parameters outlined above - approves the following documents, also attached: Indenture; Bond Purchase Agreement; Filing Agent Agreement; Continuing Disclosure Certificate; and Preliminary Official Statement. • Draft Indenture of Trust between VRA and U.S. Bank as Trustee for your review as to form; specific details concerning structure of the bonds to be included when finalized • Draft Bond Purchase Agreement for your review as to form; specifics to be added when finalized; bond parameters resolution delegates authority for either the Chairman or the Secretary /Executive Director to accept and sign the bond purchase agreement • Filing Agent Agreement for your review; names US Bank as agent to file certain documents with the IRS in connection with the BAB's; authority to execute the filing agent agreement is delegated to the Secretary /Executive Director and the Treasurer • Continuing Disclosure Certificate for your review; commits the VRA to make certain disclosures to the Municipal Securities Rulemaking Board annually and if certain events occur; the Secretary /Executive Director and the Treasurer are authorized to sign • Draft of Preliminary Official Statement (POS) for your review as to form; specific details of principal amounts and maturities will be included in this document when it is posted to the investment community on October 12; interest rates and yields will be added in the Final Official Statement to be distributed on October 21 after the bonds are priced and marketed Bond Structure Piper Jaffray has provided the recommended structure for the bonds to include a $15 million project fund as directed on September 21. The recommended structure minimizes interest costs by combining tax - exempt bonds for maturities through 2017 and taxable Build America 1 10/5/2010 1 -I -I Bonds (BAB's) for later maturities with a resulting all- inclusive total interest cost of 4.2 %. The illustration is based on market conditions as of September 22 and is subject to change when the bonds are marketed to the investment community on October 19. The illustration shows total principal of $16.7 million plus $0.1 million premium on tax - exempt bonds to provide $15 million project fund, $1.5 million debt service reserve fund, and $0.3 million costs. Resolution No. 3 adds $0.4 million to the maximum principal amount as a contingency against a potential change in the market. Staff and Piper Jaffray will, of course, make every effort to keep the principal as low as possible. Documents attached to this memo regarding the bond structure include: • Memo from Sherman and Howard outlined specific requirements related to BAB's, which has been reviewed with staff for compliance • Net debt repayment comparison schedule from Piper Jaffray demonstrating the savings from using Build America Bonds in combination with tax - exempt bonds as opposed to using tax - exempt bonds only • Bond structure illustration Background and History The LionsHead area was originally developed in 1972 -1974 as the base for Vail Resorts' LionsHead gondola. According to the LionsHead Public Facilities Investment Plan, lodging, condominiums and retail were constructed over a period of years, often without coordinated planning of circulation and public transportation facilities in the area. The LionsHead parking garage was built in 1981 significantly increasing pedestrian traffic. Around the same time, the bus system developed as the major means of moving people around Vail. As a result of rapid development, the traffic and transportation network for personal vehicles, pedestrians and delivery vehicles did not work well and there were many vehicle /pedestrian conflicts creating unsafe conditions. The Vail Public Library was constructed in LionsHead in 1983, providing an important amenity to Vail residents and guests. The LionsHead Redevelopment Master Plan, adopted in 1999, identified specific public infrastructure improvements that needed to occur and provided incentives for private redevelopment. A major implementation action was the redevelopment of the gondola and Sun Bird building sites into a high -end hotel as well as the remodeling of the Marriott and Antler properties. These action items have been accomplished with the Marriott and Antler's remodels completed by 2005 and the Arrabelle at Vail Square completed in 2008. In addition, significant private investment has been made in Ritz Carlton Residences, Lion Square Lodge North, Landmark Condominiums, Gore Creek Residences, Montaneros, and the Lodge at LionsHead. The 1999 master plan acknowledged an increase in the number of residents and guests in LionsHead would occur as a result of redevelopment projects and went on to recommend several public projects needed to properly support major private reinvestment in the area. These projects included upgrading the transportation infrastructure; constructing or reconstructing streets and sidewalks; building a transit center to accommodate increased usage in the area; and improving the frontage roads to serve increased traffic. In 2002 and 2003, the LionsHead Task Force, consisting of Town Council members, LionsHead property owners, and Vail Resorts, evaluated ways to finance the public improvements needed in LionsHead. Their recommendation was tax increment financing through an Urban Renewal Authority. A citizen's petition was submitted and a blight study was conducted as required by the Colorado Urban Renewal Law. In November 2003, the Town Council approved Resolution 2 10/5/2010 1 -1 -2 No. 12, series 2003, establishing the Vail Reinvestment Authority to address issues identified in the blight study and to facilitate redevelopment of public infrastructure. As also required by the Urban Renewal Law, the LionsHead Public Facilities Investment Plan was initially adopted in March 2004 including the following objectives: • Create a sense of place and an improved aesthetic character for LionsHead for both residents and guests. • Renovate or redevelop the deteriorated and /or outdated residential and commercial buildings and provide enhanced amenities. • Enhance the aesthetic appearance of the area to make it more appealing. • Improve pedestrian, bicycle, mass transit and auto accessibility and circulation. • Eliminate impediments to the redevelopment of key facilities with the Plan Area. • Upgrade and restore public infrastructure including transportation facilities, parking, sidewalks and streetscapes. On June 7, 2005, the LionsHead Public Facilities Investment Plan was amended to include tax increment financing (TIF) as the primary method of financing redevelopment projects under the plan. Although the Urban Renewal Law allows TIF based on sales tax, the town chose to limit its TIF to property tax. 2004 became the base year for TIF, meaning incremental property tax revenue generated as a result of redevelopment occurring after 2004 is remitted to the Vail Reinvestment Authority. This incremental property tax is based on mil levies assessed by all jurisdictions included in the area, with the specific exclusion of the Vail Square Metropolitan Districts. The incremental property tax revenue generated is expected to be $2,056,000 in 2010 and $2,880,000 in 2011. Incremental property tax revenue has been used to fund studies for skier drop -off at the North Day Lot and parking expansion. More recently, construction of the LionsHead Transit Center is underway and design of the LionsHead Welcome Center is progressing with partial funding from TIF. In the spring of 2010, three voter initiated items were placed on the statewide ballot for November. Two of these, Amendments 60 and 61 would limit the amount of future revenue and bonding capacity of the Vail Reinvestment Authority. After a series of meetings to consider what the town could do to mitigate the impact of the two amendments on the ability to finance the redevelopment specified in the LionsHead Public Facilities Investment Plan, Council gave direction on September 21 to proceed with the necessary steps to issue bonds in support of the following projects: LionsHead Transit and Welcome Center $7.8 million (net of $5 million federal grant); East LionsHead Portal $3.6 million; West LionsHead Portal $750,000; Vail Public Library — Phase 1 $475,000 and Phase II $1,475,000; and surface parking at the charter bus lot $900,000. Conclusion Each of the projects proposed for TIF funding supports the objectives of the LionsHead Redevelopment Master Plan and the LionsHead Public Facilities Investment Plan. Proceeding with these projects now allows the VRA to take advantage of low interest rates, including BAB's bonds authorized by the American Recovery and Reinvestment Act, and reduced construction costs. Proceeding with the projects now also helps the local economy by providing construction jobs when private redevelopment is winding down. 3 10/5/2010 1 -1 -3 VAIL REINVESTMENT AUTHORITY RESOLUTION NO. 3 RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE VAIL REINVESTMENT AUTHORITY AUTHORIZING, APPROVING AND DIRECTING THE ISSUANCE, SALE AND DELIVERY BY THE AUTHORITY OF TAX- EXEMPT TAX INCREMENT REVENUE BONDS, SERIES 2010A AND TAXABLE TAX INCREMENT REVENUE BONDS (DIRECT PAY BUILD AMERICA BONDS), SERIES 2010B, IN THE COMBINED MAXIMUM AGGREGATE PRINCIPAL AMOUNT OF $17,200,000; APPROVING DOCUMENTS IN CONNECTION THEREWITH; AND RATIFYING PRIOR ACTIONS. WHEREAS, the Vail Reinvestment Authority (the "Authority ") is a public body corporate and politic, and has been duly created, organized, established and authorized by the Town of Vail, Colorado (the "Town ") to transact business and exercise its powers as an urban renewal authority, all under and pursuant to the Colorado Urban Renewal Law, constituting part 1 of article 25 of title 31, Colorado Revised Statutes, as amended (the "Act "); and WHEREAS, an urban renewal plan, known as the "Lionshead Public Facilities Development Plan" was duly and regularly approved by the Town Council of the Town on March 16, 2004 for urban renewal projects under the Act, and amended on June 7, 2005 (as so amended, the "Plan "); and WHEREAS, all applicable requirements of the Act and other provisions of law for and precedent to the adoption and approval by the Town of the Plan have been duly complied with; and WHEREAS, pursuant to Section 31 -25 -109 of the Act, the Authority has the power and authority to issue bonds to finance the activities or operations of the Authority permitted and authorized under the Act; and WHEREAS, the Authority is authorized to issue bonds without an election; and WHEREAS, the Board of Commissioners of the Authority (the "Board ") has determined and hereby determines that it is in the best interests of the Authority and the citizens and taxpayers of the Town that the Authority now issue its "Vail Reinvestment Authority, Tax - Exempt Tax Increment Revenue Bonds, Series 2010A" (the "2010A Bonds ") and its "Vail Reinvestment Authority, Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 201013" (the "2010B Bonds" and together with the 2010A Bonds, the "Bonds ") in the combined maximum aggregate principal amount of $17,200,000 in order to finance the acquisition, construction and installation of an urban renewal project (the "2010 Project ") within the Lionshead Urban Renewal Area, pursuant to and in accordance with the Plan and the Act; and 10/5/2010 1 -1 -4 WHEREAS, the Bonds will be issued under and pursuant to the Indenture of Trust dated as of the date of delivery of the Bonds (the "Indenture ") between the Authority and U.S. Bank National Association, as trustee (the "Trustee "); and WHEREAS, the Bonds shall be sold and delivered by the Authority to Piper Jaffray & Co. (the "Underwriter ") pursuant to the provisions of a Bond Purchase Agreement (the "Bond Purchase Agreement ") between the Authority and the Underwriter; and WHEREAS, it is expected that the 2010B Bonds will be issued as Build America Bonds pursuant to the provisions of the American Recovery and Reinvestment Act and the Authority desires to enter into an agreement (the "Filing Agent Agreement ") with the Trustee relating to filing certain documents with the Internal Revenue Service with respect to the federal subsidy to be paid to the Authority in connection with the Build America Bonds; and WHEREAS, Section 11 -57 -204 of the Supplemental Public Securities Act, constituting Title 11, Article 57, Part 2, Colorado Revised Statutes (the "Supplemental Act "), provides that a public entity, including the Authority, may elect in an act of issuance to apply all or any of the provisions of the Supplemental Act; and WHEREAS, there are on file with the Clerk of the Board (the "Clerk "): (a) the proposed form of the Indenture; (b) the proposed form of the Bond Purchase Agreement; (c) the proposed form of the Filing Agent Agreement, (d) the proposed form of the Preliminary Official Statement (the "Preliminary Official Statement ") prepared for distribution to the purchasers of the Bonds, and (e) the proposed form of the Continuing Disclosure Certificate (the "Continuing Disclosure Certificate ") to be provided by the Authority in connection with the Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE VAIL REINVESTMENT AUTHORITY, COLORADO, THAT: Section 1. All actions (not inconsistent with the provisions of this Resolution) heretofore taken by the Board and the employees, agents, officials and officers of the Authority directed toward financing the 2010 Project and the issuance and sale of the Bonds are hereby ratified, approved and confirmed. Section 2. To provide funds to finance the costs of the 2010 Project, to fund certain funds in connection therewith and to pay certain incidental costs incurred in connection with the issuance of the Bonds, there are hereby authorized and created an issue of revenue bonds of the Authority designated as its "Tax- Exempt Tax Increment Revenue Bonds, Series 2010A" and an issue of revenue bonds of the Authority designated as its "Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 201013" in the combined maximum aggregate original principal amount of $17,200,000, in accordance with the provisions of the Indenture. The Bonds shall be dated, shall bear interest, shall be subject to redemption prior to maturity and shall mature as provided in the Indenture, and as set forth in the Sale Certificate (hereinafter defined). Section 3. The Board hereby elects to apply all of the Supplemental Act to the Bonds and in connection therewith delegates to each of the Chair of the Board (the "Chair ") and the Secretary /Executive Director of the Authority (the "Secretary /Executive Director ") the 10/5/2019 1 -1 -5 independent authority to make any determination delegable pursuant to Section I1- 57- 205(1)(a- i), Colorado Revised Statutes, to accept and sign the Bond Purchase Agreement, to make determinations in relation to the Bonds, and to execute a sale certificate (the "Sale Certificate ") setting forth such determinations, subject to the following parameters and restrictions: (a) the combined aggregate principal amount of the Bonds shall not exceed $17,200,000; (b) the Bonds shall mature no later than June 1, 2030; (c) the net effective interest rate on the 2010A Bonds shall not exceed 4.00 %; (d) the net effective interest rate on the 2010B Bonds shall not exceed 7.00 %, without taking into account any BAB Credit (as defined in the Indenture); (e) the purchase price of the 2010A Bonds shall not be less than 98% of the original principal amount of the 2010A Bonds; and (f) the purchase price of the 2010B Bonds shall not be less than 98% of the original principal amount of the 2010B Bonds. The Chair or the Secretary /Executive Director are hereby independently authorized to determine if obtaining municipal bond insurance for all or a portion of the Bonds is in the best interests of the Authority, and if so, to select a bond insurer to issue a municipal bond insurance policy, execute a commitment relating to the same and execute any related documents or agreements required by such commitment. The Chair or the Secretary /Executive Director are hereby independently authorized to determine if obtaining a reserve fund insurance policy for deposit into the Reserve Fund is in the best interests of the Authority, and if so, to select a surety provider to issue a reserve fund insurance policy for all or any portion of the Reserve Fund Requirement related to the Bonds and execute any related documents or agreements required by such commitment. The delegation set forth in this Section 3 shall be effective for one year following the date hereof. Section 4. The forms, terms and provisions of the Indenture, the Bond Purchase Agreement, the Filing Agent Agreement and the Continuing Disclosure Certificate (collectively, the "Documents ") are hereby authorized and approved, and the Authority shall enter into the Documents in substantially the forms on file with the Clerk, but such documents may be completed, corrected or revised as deemed necessary by the parties thereto in order to carry out the purposes of this Resolution and as the Secretary /Executive Director shall approve, the execution thereof being deemed conclusive approval of any such changes by the Authority. The Secretary /Executive Director and the Treasurer of the Authority are each hereby authorized and directed to execute and deliver the Indenture, the Filing Agent Agreement and the Continuing Disclosure Certificate for and on behalf of the Authority. The Clerk is hereby authorized and directed to affix the seal of the Authority to, and to attest those Documents requiring the attestation of the Clerk. The Bond Purchase Agreement and the Sale Certificate shall be executed by either the Chair or the Secretary/Executive Director as authorized pursuant to Section 3 hereof. Section 5. A final Official Statement, in substantially the form of the Preliminary Official Statement on file with the Clerk, is in all respects approved and authorized. The Chair is hereby authorized and directed, for and on behalf of the Authority, to execute and deliver the final Official Statement in substantially the form and with substantially the same content as the Preliminary Official Statement on file with the Clerk, with such changes as may be approved by the Chair or the Secretary /Executive Director. The distribution of the Preliminary 10/5/201 1 -1 -6 Official Statement and the final Official Statement to all interested persons in connection with the sale of the Bonds is hereby ratified, approved and authorized. Section 6. The form, terms and provisions of the Bonds, in the form contained in the Indenture and upon the terms to be set forth in the Sale Certificate, are hereby approved, with such changes therein as are approved by the Secretary /Executive Director; and the manual or facsimile signature of the Secretary /Executive Director is hereby authorized and directed to be placed on the Bonds, the seal of the Authority, or a facsimile thereof, is hereby authorized and directed to be affixed to the Bonds, and the Clerk is hereby authorized and directed to attest the Bonds, in accordance with the Indenture. Section 7. The officers of the Authority shall take all action which they deem necessary or reasonably required in conformity with the Act to issue the Bonds, including the paying of issuance expenses, which are hereby authorized to be paid, and for carrying out, giving effect to and consummating the transactions contemplated by this Resolution, the Documents and the Official Statement, including, without limitation, the preparation of supplemental written procedures relating to the issuance of direct pay Build America Bonds and the execution and delivery of any necessary or appropriate closing documents to be delivered in connection with the issuance, sale and delivery of the Bonds. The execution of any document or instrument by the aforementioned officials or employees of the Authority shall be conclusive evidence of the approval by the Authority of such document or instrument in accordance with the terms hereof and thereof. Section 8. The Authority hereby determines that neither the Authority nor any entity subordinate thereto reasonably anticipates issuing more than $30,000,000 face amount of tax - exempt governmental bonds or any other similar obligations during calendar year 2010, which obligations are taken into account in determining if the Authority can designate the 2010A Bonds as qualified tax - exempt obligations as provided in the following sentence. For the purpose of Section 265(b)(3)(B) of the Internal Revenue Code, the Authority hereby designates the 2010A Bonds as qualified tax- exempt obligations. Section 9. The Bonds, together with interest payable thereon, are special and limited obligations of the Authority payable solely as provided in the Indenture. The principal of, premium, if any, and interest on the Bonds shall not constitute an indebtedness of the Town or the State of Colorado or any political subdivision thereof, and neither the Town, the State of Colorado nor any political subdivision thereof shall be liable thereon, nor in any event shall the principal of, premium, if any, and interest on the Bonds be payable out of funds or properties other than the Trust Estate, as such term is defined in the Indenture. Neither the Commissioners of the Authority nor any persons executing the Bonds shall be liable personally on the Bonds. Section 10. After the Bonds are issued, this Resolution shall be and remain irrepealable, and may not be amended except in accordance with the Indenture, until the Bonds and the interest thereon shall have been fully paid, canceled and discharged in accordance with the Indenture. Section 11. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of 10/5/2014 1 -1 -7 such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution. Section 12. All bylaws, orders and resolutions, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed as reviving any bylaw, order or resolution or part thereof. Section 13. This Resolution shall be in full force and effect immediately upon its passage and approval. PASSED, ADOPTED AND APPROVED this October 5, 2010. (SEAL) Chair of the Board of Commissioners ATTEST: Secretary /Executive Director of the Board of Commissioners 1oi5i204 1 -1 -s STATE OF COLORADO ) ) SS. VAIL REINVESTMENT AUTHORITY ) I, the Secretary /Executive Director of the Vail Reinvestment Authority (the "Authority "), do hereby certify that: 1. The foregoing pages are a true and correct copy of a resolution (the "Resolution ") passed and adopted by the Board of Commissioners of the Authority (the "Board ") at a regular meeting held on October 5, 2010. 2. The Resolution was duly moved and seconded and the Resolution was adopted at the meeting of October 5, 2010, by an affirmative vote of a majority of the members of the Board as follows: Name "Yes" "No" Absent Abstain Dick Cleveland, Chair Kim Newbury Kerry Donovan Susie Tjossem Margaret Rogers Andy Daly Kevin Foley 3. The members of the Board were present at such meetings and voted on the passage of such Resolution as set forth above. 4. The Resolution was approved and authenticated by the signature of the Chair of the Board, sealed with the Authority seal, attested by the Secretary /Executive Director of the Board and recorded in the minutes of the Board. 5. There are no bylaws, rules or regulations of the Board which might prohibit the adoption of said Resolution. 6. Notice of the meeting of October 5, 2010, in the form attached hereto as Exhibit A was posted at , in the Town of Vail, not less than twenty -four hours prior to the meeting in accordance with law. 1oi5i204 1 -1 -9 WITNESS my hand and the seal of said Authority affixed this October , 2010. (SEAL) Secretary /Executive Director 10151201W 1 -1 -10 EXHIBIT A (Form of Notice of Meeting) A -1 10/5/2010 1 -1 -11 INDENTURE OF TRUST between VAIL REINVESTMENT AUTHORITY and U.S. BANK NATIONAL ASSOCIATION, as Trustee authorizing Vail Reinvestment Authority Tax - Exempt Tax Increment Revenue Bonds Series 2010A and Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 2010B Dated as of October 28, 2010 10/5/2010 1 -1 -12 TABLE OF CONTENTS Page ARTICLEI DEFINITIONS ............................................................................ ............................... 3 ARTICLEII THE BONDS ............................................................................ ............................... 12 Section 2.01 Authorized Amount of Bonds; Supplemental Act ......... ............................... 12 Section2.02 Bond Details ................................................................... ............................... 12 Section 2.03 Execution; Limited Obligation; Use of Proceeds of Series 2010 Bonds...... 14 Section 2.04 Authentication ................................................................ ............................... 15 Section 2.05 Form of Series 2010 Bonds ............................................ ............................... 15 Section 2.06 Delivery of Series 2010 Bonds ...................................... ............................... 16 Section 2.07 Mutilated, Lost, Stolen or Destroyed Bonds .................. ............................... 16 Section 2.08 Registration and Exchange of Bonds; Persons Treated as Owners .............. 16 Section 2.09 Destruction of Bonds ..................................................... ............................... 17 Section 2.10 Book - Entry -Only System ............................................... ............................... 17 Section 2.11 Payments and Notices to Cede & Co ............................. ............................... 19 Section 2.12 Additional Bonds and Subordinate Debt ....................... ............................... 19 ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY ............ ............................... 21 Section 3.01 Redemption Dates and Prices ........................................ ............................... 21 Section 3.02 Notice of Redemption .................................................... ............................... 23 Section 3.03 Redemption Payments ................................................... ............................... 24 Section 3.04 Cancellation ................................................................... ............................... 24 Section 3.05 Partial Redemption of Bonds ......................................... ............................... 24 ARTICLE IV REVENUES AND FUNDS .................................................... ............................... 25 Section 4.01 Source of Payment of Bonds; Irrevocable Pledge ......... ............................... 25 Section 4.02 Creation of Funds ........................................................... ............................... 25 Section 4.03 Custody of Funds ........................................................... ............................... 26 Section 4.04 Revenue Fund ................................................................ ............................... 26 Section4.05 Bond Fund ...................................................................... ............................... 27 Section 4.06 Reserve Fund ................................................................. ............................... 28 Section 4.07 Construction Fund .......................................................... ............................... 29 Section 4.08 Nonpresentment of Bonds .............................................. ............................... 30 Section 4.9 Moneys to Be Held in Trust ........................................... ............................... 30 Section 4.10 Excesses in Trust Funds ................................................. ............................... 30 Section4.11 Rebate Fund ................................................................... ............................... 31 Section 4.12 Budget and Appropriation of Sums ............................... ............................... 31 ARTICLE V GENERAL COVENANTS ...................................................... ............................... 31 Section 5.01 Payment of Principal, Premium, if Any, and Interest .... ............................... 31 Section 5.02 Performance of Covenants; Authority ........................... ............................... 32 Section 5.03 Instruments of Further Assurance .................................. ............................... 32 Section 5.04 Inspection of Records .................................................... ............................... 32 Section 5.05 List of Owners ................................................................ ............................... 32 Section 5.06 Completion of 2010 Project; Amendment to Plan ......... ............................... 32 Section 5.07 Use of Proceeds .............................................................. ............................... 33 Section 5.08 Books and Accounts; Financial Statements ................... ............................... 33 -i- 10/5/2010 1 -1 -13 Section 5.09 Protection of Security and Rights of Owners ................ ............................... 33 Section 5.10 Certain Tax Covenants ................................................... ............................... 33 Section 5.11 Maintenance of Existence .............................................. ............................... 34 Section 5.12 Representations and Warranties of the Authority .......... ............................... 34 ARTICLE VI INVESTMENT OF MONEYS SECTION ............................. ............................... 35 Section 6.01 Investment of Moneys .................................................... ............................... 35 ARTICLE VII DISCHARGE OF LIEN AND DEFEASANCE OF BONDS .............................. 36 Section 7.01 Discharge of Lien and Defeasance of Bonds ................. ............................... 36 ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND OWNERS ....................................................................................................... ............................... 37 Section 8.01 Defaults; Events of Default ............................................ ............................... 37 Section 8.02 Remedies, Rights of Owners .......................................... ............................... 38 Section 8.03 Right of Owners to Direct Proceedings ......................... ............................... 38 Section 8.04 Appointment of Receivers ............................................. ............................... 39 Section8.05 Waiver ............................................................................ ............................... 39 Section 8.06 Application of Moneys .................................................. ............................... 39 Section 8.07 Remedies Vested in Trustee ........................................... ............................... 40 Section 8.08 Rights and Remedies of Owners .................................... ............................... 40 Section 8.09 Termination of Proceedings ........................................... ............................... 41 Section 8.10 Waivers of Events of Default ......................................... ............................... 41 Section 8.11 Notice of Defaults Under Section 8.01(c); Opportunity to Cure .................. 41 ARTICLEIX TRUSTEE ............................................................................... ............................... 42 Section 9.01 Representations and Warranties of the Trustee .............. ............................... 42 Section 9.02 Acceptance of Trusts ...................................................... ............................... 42 Section 9.03 Fees, Charges and Expenses of Trustee ......................... ............................... 45 Section 9.04 Notice to Owners if Default Occurs ............................... ............................... 45 Section 9.05 Intervention by Trustee .................................................. ............................... 45 Section 9.06 Successor Trustee ........................................................... ............................... 45 Section 9.07 Resignation by Trustee .................................................. ............................... 45 Section 9.08 Removal of Trustee ........................................................ ............................... 45 Section 9.09 Appointment of Successor Trustee by Owners .............. ............................... 46 Section 9.10 Acceptance by Any Successor Trustee .......................... ............................... 46 ARTICLE X SUPPLEMENTAL INDENTURES ......................................... ............................... 47 Section 10.01 Supplemental Indentures Not Requiring Consent of Owners ....................... 47 Section 10.02 Supplemental Indentures Requiring Consent of Owners .............................. 47 ARTICLE XI MISCELLANEOUS ............................................................... ............................... 48 Section 11.01 Consents of Owners ....................................................... ............................... 48 Section 11.02 Limitation of Rights ....................................................... ............................... 49 Section 11.03 No Recourse Against Officers and Agents .................... ............................... 49 Section 11.04 Limitation of Actions ..................................................... ............................... 49 Section 11.05 Severability .................................................................... ............................... 49 Section11.06 Notices ........................................................................... ............................... 49 Section 11.07 Payments Due on Saturdays, Sundays and Holidays ..... ............................... 50 Section 11.08 Counterparts ................................................................... ............................... 50 -ii- 10/5/2010 1 -1 -14 Section 11.09 Applicable Provisions of Law ........................................ ............................... 50 Section 11.10 Rules of Interpretation ................................................... ............................... 50 Section11.11 Captions ......................................................................... ............................... 50 EXHIBIT A FORM OF 2010A BOND EXHIBIT B FORM OF 2010B BOND EXHIBIT C FORM OF PROJECT ACCOUNT REQUISITION -iii - 10/5/2010 1 -1 -15 INDENTURE OF TRUST THIS INDENTURE OF TRUST (this "Indenture ") is dated as of October 28, 2010, and is entered into by and between VAIL REINVESTMENT AUTHORITY (the "Authority "), a body corporate and politic of the State of Colorado (the "State ") duly organized and existing as an urban renewal authority under the laws of the State and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly organized and validly existing under the laws of the United States, as Trustee (the "Trustee "); WITNESSETH: WHEREAS, the Authority is a public body corporate and politic duly established by the Town of Vail, Colorado (the "Town ") on November 4, 2003, under and pursuant to the laws of the State of Colorado (the "State ") and Resolution No. 12, Series 2003 adopted by the Town Council of the Town (the "Town Council ") on November 4, 2003; and WHEREAS, the Town is a political subdivision of the State, a body corporate and politic, and a home -rule municipality pursuant to Article XX of the State Constitution and the Charter of the Town (the "Charter "); and WHEREAS, the Authority is authorized to transact business and exercise its powers as an urban renewal authority, all under and pursuant to the Charter and the Colorado Urban Renewal Law, constituting part 1 of article 25 of title 31, Colorado Revised Statutes (the "Act "); and WHEREAS, the Town Council by Resolution No. 11, Series of 2004 approved and adopted on March 16, 2004 has authorized and approved the "Lionshead Public Facilities Development Plan" as an urban renewal plan under the Act, and the Town Council by Resolution No. 9, Series of 2005 approved and adopted on June 7, 2005, approved the "Amended Lionshead Public Facilities Development Plan" (as so amended, the "Plan ") for the Amended Lionshead Urban Renewal Area described therein (the "Plan Area "), which Plan has not been further amended or modified since June 7, 2005; and WHEREAS, all applicable requirements of the Act and other provisions of law for and precedent to the adoption and approval by the Town of the Plan have been duly complied with; and WHEREAS, pursuant to and in accordance with the Act, the Plan provides for the undertaking of an urban renewal project within the meaning of the Act; and WHEREAS, pursuant to Section 31 -25 -109 of the Act, the Authority has the power and authority to issue bonds to finance the activities or operations of the Authority permitted and authorized under the Act; and WHEREAS, the Board of Commissioners of the Authority (the "Board ") has determined that it is in the best interests of the Authority and the citizens and taxpayers of the Town that the Authority now issue its "Vail Reinvestment Authority, Tax - Exempt Tax Increment Revenue Bonds, Series 2010A" (the "2010A Bonds ") and its "Vail Reinvestment Authority, Taxable Tax 10/5/2010 1 -1 -16 Increment Revenue Bonds (Direct Pay Build America Bonds), Series 201013" (the "2010B Bonds" and together with the 2010A Bonds, the "Series 2010 Bonds ") in the combined aggregate principal amount of $ in order to finance the acquisition, construction and installation of an urban renewal project (the "2010 Project ") within the Lionshead Urban Renewal Area, pursuant to and in accordance with the Plan, the Act, the Supplemental Act (as hereinafter defined) and this Indenture, which shall be payable solely from the Trust Estate (defined below); and WHEREAS, the Authority is authorized to issue the Series 2010 Bonds without an election; and WHEREAS, the Board has determined, and hereby determines, that it is necessary, desirable and in the best interest of the Authority to authorize, approve and direct the issuance, sale and delivery of the Series 2010 Bonds to finance the 2010 Project, and to authorize, approve and direct the execution and delivery of this Indenture, and certain other documents, agreements and instruments in connection therewith, all as more fully set forth herein. WHEREAS, all things necessary to make the Series 2010 Bonds, when authenticated by the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of the Authority according to the import thereof, and to constitute this Indenture a valid assignment and pledge of the amounts pledged to the payment of the principal of, premium, if any, and interest on the Series 2010 Bonds, have been done and performed, and the creation, execution and delivery of this Indenture, and the creation, execution and issuance of the Series 2010 Bonds, subject to the terms of this Indenture, have in all respects been duly authorized. NOW, THEREFORE, THIS INDENTURE OF TRUST WITNESSETH: That the Authority in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Series 2010 Bonds by the Owners thereof (as hereinafter defined), and for other good and valuable consideration, the receipt of which is hereby acknowledged, in order to secure the payment of the principal of, premium, if any, and interest on the Series 2010 Bonds and any Additional Bonds (hereinafter defined) according to their tenor and effect, and to secure the performance and observance by the Authority of all of the covenants expressed or implied herein and in the Series 2010 Bonds and any Additional Bonds, does hereby assign and grant a security interest in the following (collectively, the "Trust Estate ") to U.S. Bank National Association, organized under the laws of the United States of America, with a Corporate Trust Office located in Denver, Colorado, serving in its capacity hereunder, as trustee, and its successors in trust and assigns forever, in order to secure the performance of the obligations of the Authority hereinafter set forth: (a) The Pledged Revenues, as hereinafter defined; and (b) All moneys and securities from time to time held by the Trustee under the terms of this Indenture in the Trust Funds (as hereinafter defined). TO HAVE AND TO HOLD all and singular such Trust Estate, whether now owned or hereafter acquired and conveyed (by supplemental indenture or otherwise), unto the Trustee and its respective successors in said Trust and assigns forever; -2- 10/5/2010 1 -1 -17 IN TRUST NEVERTHELESS, upon the terms and trusts in this Indenture set forth for the equal and proportionate benefit, security and protection of all present and future Owners of the Series 2010 Bonds and any Additional Bonds from time to time issued under and secured by this Indenture, without privilege, priority or distinction as to the lien or otherwise of any of the Series 2010 Bonds or Additional Bonds over any of the other Series 2010 Bonds or Additional Bonds; PROVIDED, HOWEVER, that if the Authority, its successors or assigns shall well and truly pay, or cause to be paid, the principal of, premium, if any, and interest on the Series 2010 Bonds and any Additional Bonds due or to become due thereon, at the times and in the manner set forth in the Series 2010 Bonds and any Additional Bonds according to the true intent and meaning thereof, and shall cause the payments to be made on the Series 2010 Bonds and any Additional Bonds as required under Article V hereof, or shall provide, as permitted hereby, for the payment thereof in accordance with Article VII hereof, and shall well and truly cause to be kept, performed and observed all of its covenants and conditions pursuant to the terms of this Indenture, and shall pay or cause to be paid to the Trustee all sums of money due or to become due to the Trustee in accordance with the terms and provisions of this Indenture, then upon the final payment thereof, this Indenture and the rights hereby granted shall cease, determine and be void; otherwise this Indenture shall remain in full force and effect. THIS INDENTURE OF TRUST FURTHER WITNESSETH, and it is expressly declared, that all Series 2010 Bonds and any Additional Bonds issued and secured hereunder are to be issued, authenticated and delivered and all said property, rights and interests, including, without limitation, the Trust Estate, are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as in this Indenture expressed, and the Authority has agreed and covenanted and does hereby agree and covenant with the Trustee and with the respective Owners of the Bonds as follows: ARTICLE I DEFINITIONS As used in this Indenture, the following terms shall have the following meanings: "Act" means the Colorado Urban Renewal Law, constituting part 1 of article 25 of title 31, Colorado Revised Statutes, as from time to time amended and supplemented. "Additional Bonds" means any notes, bonds, interim certificates or receipts, temporary notes, certificates of indebtedness, debentures or other obligations issued by the Authority pursuant to Section 2.12 of this Indenture subsequent to the date of this Indenture and having a claim upon all or a portion of the Trust Estate on a parity with the Series 2010 Bonds. "Authority" means the Vail Reinvestment Authority, an urban renewal authority duly organized and existing under the Act, and its successors and assigns. "Authority Representative" means the Chair, the Secretary /Executive Director and any Person at the time designated to act on behalf of the Authority by written certificate furnished to the Trustee containing the specimen signature of such Person and signed on behalf of the -3- 10/5/2010 1 -1 -18 Authority by the Chair or Secretary /Executive Director. Such certificate may designate an alternate or alternates. "Authorized Denomination" means $5,000 and integral multiples thereof. "Average Annual Debt Service Requirements" means the total Debt Service Requirements of the Outstanding Series 2010 Bonds and other obligations for which the computation is being made, divided by the number of years to maturity. "BAB Credit" means the credit claimed by the Authority pursuant to Section 6431 of the Tax Code in lieu of any credit otherwise available to the bondholders of BABs under Section 54AA(a) of the Tax Code. "BABs" means the 2010B Bonds and any future Additional Bonds with respect to which the Authority expects to receive a BAB Credit. "Beneficial Owners" means the owners of Bonds whose ownership is recorded under the book - entry -only system maintained by DTC. "Board" means the Board of Commissioners of the Authority. "Bond Counsel" means an attorney or firm of attorneys of nationally recognized standing on the subject of municipal bonds. "Bond Fund" means the Trust Fund by that name established pursuant to Section 4.02 hereof, which consists of the 2010A Debt Service Account and the 2010B Debt Service Account. "Bond Purchase Agreement" means the Bond Purchase Agreement between the Underwriter and the Authority. "Bond Register" means the registration records of the Authority kept by the Trustee to evidence the registration and transfer of Bonds. "Bond Resolution" means the resolution adopted by the Board on October 5, 2010 authorizing the execution of this Indenture, the issuance, sale and delivery of the Series 2010 Bonds, the financing of the 2010 Project, and certain other matters, as from time to time amended in accordance herewith. "Bondholder" or "Owner" means the person or persons in whose name or names a Bond shall be registered on the Bond Register in accordance with the terms of this Indenture. "Bonds" means, collectively, the Series 2010 Bonds and any Additional Bonds. "Business Day" means any day other than a Saturday, Sunday or legal holiday or day on which banking institutions in the Town in which the Trustee has its Principal Corporate Trust Office are authorized or required by law to close. -4- 10/5/2010 1 -1 -19 "Chair" means the Chair of the Board of Commissioners of the Authority, or any presiding officer or titular head of the Board, or his or her successor in functions. "Clerk" means the Clerk of the Board of Commissioners of the Authority. "Closing Date" means the date of execution and delivery of the Series 2010 Bonds. "Construction Fund" means the Trust Fund by that name established pursuant to Section 4.02 hereof, which consists of the 2010A Project Account, the 2010B Project Account and the 2010 Costs of Issuance Account. "Cooperation Agreement" means the Cooperation Agreement executed in December 2003 between the Town and the Authority. "Costs of Issuance" means administrative costs of issuance of any Bonds, any fees and expenses of any underwriter or financial advisor services in connection with the issuance of any Bonds, any fees or expenses of the Trustee in connection therewith, legal fees and expenses, costs incurred in obtaining ratings from rating agencies, bond insurance premiums, costs of immediately available funds, costs of publication, printing and engraving, accountants' fees and recording and filing fees. "County" means Eagle County, Colorado or its successors. "Debt Service Requirements" means the aggregate amount of the principal of, premium, if any, and interest coming due on all Outstanding Series 2010 Bonds, or any other obligation for which the computation is being made, during any Fiscal Year, whether by maturity, mandatory sinking fund redemption, or otherwise. For purposes of this definition, "interest" on any BAB (including the 2010B Bonds) shall be treated as the amount of interest to be paid by the Authority on such BAB without a deduction for the BAB Credit. "Default" and "Event of Default" mean any occurrence or event specified and defined in Section 8.01 hereof. "Districts" means, collectively, Vail Square Metropolitan District No. 1, Vail Square Metropolitan District No. 2 and Vail Square Metropolitan District No. 3. "DTC" means The Depository Trust Company, New York, New York, and any successor corporation. "Extraordinary Event" means an event causing the BAB Credit expected to be received with respect to the 2010B Bonds to be eliminated or reduced, as reasonably determined by the Secretary /Executive Director, which determination shall be conclusive, as a result of: (1) a material adverse change to Section 54AA or 6431 of the Tax Code, (2) guidance published by the Internal Revenue Service or the United States Treasury with respect to such Sections, or -5- 10/5/2010 1 -1 -20 (3) determination by the Internal Revenue Service or the United States Treasury, which determination is not the result of a failure of the Authority to satisfy the requirements of Section 5.10 of this Indenture. "Federal Securities" means bills, certificates of indebtedness, notes, bonds or other similar instruments which are direct non - callable obligations of the United States of America or which are fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America. "Fiscal Year" means the fiscal year of the Authority, which currently begins on January 1 of each year and ends on December 31 of such year, or any other fiscal year of the Authority in the event the fiscal year of the Authority shall be modified. "Indenture" means this Indenture of Trust and any indenture supplemental hereto or amendment hereto from time to time entered into in accordance with the provisions hereof. "Interest Payment Date" means each date set for the payment of interest hereunder, being each June 1 and December 1, commencing June 1, 2011. "Intergovernmental Agreement" means the Intergovernmental Agreement dated as of December 8, 2005, by and between the Authority, the Districts and The Vail Corporation, d /b /a/ Vail Associates, as it may be amended from time to time. "Investment Instructions" means the investment instructions delivered by the Authority to the Trustee, and such amendments or supplements thereto as shall be delivered by the Authority to the Trustee. "Make -Whole Redemption Price" means the amount equal to the greater of the following: (1) the issue price of the 2010B Bonds set forth in the Bond Purchase Agreement related to the 2010B Bonds (but not less than 100 %) of the principal amount of the 2010B Bonds to be redeemed; or (2) the sum of the present value of the remaining scheduled payments of principal and interest on the 2010B Bonds to be redeemed to the first optional redemption date, not including any portion of those payments of interest accrued and unpaid as of the date on which the 2010B Bonds are to be redeemed, discounted to the date on which the 2010B Bonds are to be redeemed on a semi - annual basis, assuming a 360 -day year containing twelve 30 -day months, at the Treasury Rate, plus 100 basis points; plus, in each case, accrued interest on the 2010B Bonds to be redeemed to the redemption date. For purpose of determining the Make -Whole Redemption Price, "Treasury Rate" means, with respect to any extraordinary redemption date for a particular 2010B Bond, the yield to maturity as of such extraordinary redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the extraordinary redemption date (excluding inflation - indexed securities) (or, if such Statistical Release is no longer -6- 10/5/2010 1 -1 -21 published, any publicly available source of similar market data)) most nearly equal to the period from the extraordinary redemption date to the first optional redemption date of the 2010B Bonds; provided, however that if the period from the extraordinary redemption date to the first optional redemption date of the 2010B Bonds is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. "Maximum Annual Debt Service Requirements" means the maximum amount of all Debt Service Requirements on Outstanding Series 2010 Bonds, and any other obligations for which the computation is being made, which will become due in any Fiscal Year. " Moody's" means Moody's Investor Service and its successors and assigns. "Outstanding," "Outstanding Bonds" or "Bonds Outstanding" means all Bonds which have been authenticated and delivered by the Trustee under this Indenture, except: (a) Bonds canceled after purchase in the open market or because of payment at or redemption prior to maturity; (b) Bonds paid or deemed to be paid in accordance with the provisions of Article VII of this Indenture; and (c) Bonds in lieu of which others have been authenticated under Section 2.07 or Section 2.08 hereof. "Owner" means the registered owner of any Bond as shown in the registration records of the Trustee. "Participant" means those broker- dealers, banks and other financial institutions reflected on the books of DTC. "Permitted Investments" means any lawful investment permitted for the investment of funds of the Authority by the laws of the State. "Person" means any natural person, firm, corporation, partnership, limited liability company, state, political subdivision of any state, other public body or other organization or association. "Plan" means the Lionshead Public Facilities Development Plan approved by the Town Council on March 16, 2004, by Resolution No. 11, Series of 2004, as amended on June 7, 2005, which Amended Lionshead Public Facilities Development Plan was approved by the Town Council on June 7, 2005 by Resolution No. 9, Series of 2005, as further amended or supplemented in accordance with the Act. "Plan Area" means the Amended Lionshead Urban Renewal Area described as such in the Plan, as amended on June 7, 2005, which has been found to be blighted and which the Town has designated as appropriate for an urban renewal project. -7- 10/5/2010 1 -1 -22 "Pledged Property Tax Revenues" means, for each Fiscal Year, that portion of ad valorem property taxes produced by the levy at the rates fixed each year by and for each governing body of the various taxing jurisdictions within or overlapping the Plan Area upon that portion of the valuation for assessment of all taxable property within the Plan Area which is in excess of the Property Tax Base Amount; provided, however, that such Revenues shall be reduced by any lawful collection fee charged by the County; and provided further, however, that in the event of a general reassessment of taxable property in the Plan Area, the valuation for assessment of taxable property within the Plan Area shall be proportionately adjusted in accordance with such general reassessment in the manner provided by the Act; and provided further that Pledged Property Tax Revenues shall not extend to any property taxes that are placed in the Property Tax Reserve Fund for refunds of overpayments by taxpayers pursuant to Section 31- 25- 107(9)(b) of the Act; and provided further that Pledged Property Tax Revenues shall not include any property taxes that the Authority is required to remit or cause to be remitted to the Districts, or to any trustee or escrow agent engaged to administer receipts and payments in connection with the District's bonds, in accordance with the terms and provisions of the Intergovernmental Agreement. "Pledged Revenues" means (a) the Pledged Property Tax Revenues, (b) the BAB Credit received by the Authority with respect to the 2010B Bonds, and any other BAB Credit received in connection with the issuance of any additional BABs in the future but only to the extent specifically included in the definition of Pledged Revenues by the ordinance, indenture or other document or instrument authorizing the issuance of any such additional BABs, and (c) all income derived from the investment and reinvestment of the Funds established by the Indenture, except the Rebate Fund. "Principal Corporate Trust Office" means the corporate trust office of the Trustee at 950 17 Street, 12 Floor, Denver, Colorado 80202, provided that with respect to payments on the Bonds and any registration, exchange, transfer, or surrender of the Bonds, means c/o U.S. Bank National Association, 60 Livingston Avenue, St. Paul, Minnesota 55107, or such other or additional offices as may be specified by the Trustee. "Project" means the 2010 Project and any project constituting a portion of the Urban Renewal Project which may be designated as a project by any resolution or supplemental indenture. "Project Costs" means, with respect to a Project, all costs and expenses to be incurred, and the reimbursement to the Authority for all costs and expenses heretofore incurred by the Authority prior to the completion date of such Project (except as otherwise provided below), including, without limitation: (a) the purchase price, and other costs incurred in connection with the purchase, of property or obtaining, or confirming, the title thereto; (b) obligations incurred or assumed for labor, materials and equipment; (c) the cost of performance and payment bonds and of insurance of all kinds (including, without limitation, title and liability insurance) that may be necessary or appropriate; -8- 10/5/2010 1 -1 -23 (d) the costs of engineering, architectural and other professional and technical services, including obligations incurred or assumed for preliminary design and development work, test borings, surveys, estimates, plans and specifications; (e) administrative costs related to the Project incurred prior to the date of its completion, including supervision of the construction, acquisition, renovation and installation as well as the performance of all of the other duties required by or consequent from the Project, including, without limitation, costs of preparing and securing all project documents, architectural, engineering and other professional and technical fees, legal fees and expenses, appraisal fees, independent inspection fees, auditing fees and advertising expenses in connection with the Project; (f) all costs which are considered to be a part of the costs of the Project in accordance with generally accepted accounting principles; (g) interest on the Bonds issued to finance the Project through its date of completion, to the extent the other moneys in the Bond Fund are not sufficient to pay such interest; (h) payments to the Reserve Fund or any reserve fund created in connection with the issuance of Additional Bonds to establish or maintain the applicable Reserve Fund Requirement; and (i) the actual costs incurred by the Authority in acquiring any property or making any improvements for which moneys are transferred to the Authority. "Property Tax Base Amount" means the amount certified by the County Assessor as the valuation for assessment of all taxable property within the Plan Area on or about December 10, 2004; and provided, however, that in the event of a general reassessment of taxable property in the Plan Area, the valuation for assessment of taxable property within the Plan Area shall be proportionately adjusted in accordance with such general reassessment in the manner required by the Act. "Property Tax Reserve Fund" means any special reserve fund created by the Authority pursuant to Section 31- 25- 107(9)(a)(III) of the Act to provide for the Authority's pro rata portion of any property taxes that are refunded by the County to the taxpayer to the extent that there are not sufficient property taxes due to the Authority for the County Treasurer to offset the Authority's pro rata portion of any such refunds against any subsequent payments due to the Authority for the urban renewal project, all as provided in such Section of the Act. "Rebate Fund" means the fund by that name established pursuant to Section 4.02 hereof, which consists of the 2010A Rebate Account and the 2010B Rebate Account. "Record Date" means the fifteenth (15th) day of the calendar month (whether or not a Business Day) immediately preceding any Interest Payment Date. "Recovery Act" means the Colorado Recovery and Reinvestment Finance Act of 2009, Title 11, Article 59.7, et seq. -9- 10/5/2010 1 -1 -24 "Representation Letter" means the Blanket Letter of Representations from the Authority to DTC. "Reserve Fund" means the fund by that name established pursuant to Section 4.02 hereof, which consists of the 2010A Reserve Account and the 2010B Reserve Account. The Reserve Fund shall secure only the payment of the Debt Service Requirements on the Series 2010 Bonds, unless otherwise provided in the resolution or indenture authorizing the issuance of Additional Bonds. "Reserve Fund Requirement" means the least of (a) 10% of the stated principal amount of the Series 2010 Bonds and any Additional Bonds that are secured by the Reserve Fund, (b) the Maximum Annual Debt Service Requirements on the Outstanding Series 2010 Bonds and any Additional Bonds that are secured by the Reserve Fund, or (c) 125% of the Average Annual Debt Service Requirements on the Outstanding Series 2010 Bonds and any Additional Bonds that are secured by the Reserve Fund. "Revenue Fund" means the fund by that name established pursuant to Section 4.02 hereof. "S &P" means Standard & Poor's Ratings Services, a division of the McGraw Hill Companies, Inc., and its successors and assigns. "Secretary /Executive Director" means the Secretary /Executive Director of the Authority or his or her successor in functions. "Securities Depository" means DTC or any successor securities depository appointed pursuant to Section 212 hereof. "Series 2010 Bonds" means, collectively, the 2010A Bonds and the 2010B Bonds. "Special Record Date" means a special date fixed to determine the names and addresses of Owners for purposes of paying defaulted interest on a special interest payment date, all as further provided in Section 2.02 of this Indenture. "State" means the State of Colorado. "Subordinate Debt" means any obligation issued or incurred by the Authority and payable from the Trust Estate on a basis (a) which is subordinate to the claim thereon which secures the Bonds and (b) for which no payment of principal or interest may be paid in any Fiscal Year before all deposits required by Section 4.04(b)(i) through (iii) hereof for such Fiscal Year have been made or provided for. "Supplemental Act" means the Supplemental Public Securities Act, constituting part 2 of article 57 of title 11, Colorado Revised Statutes, as from time to time amended and supplemented. "Tax Code" means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder. -10- 10/5/2010 1 -1 -25 "Tax Compliance Certificate" means one or more Tax Compliance Certificates delivered by the Authority in connection with the initial issuance and delivery of the Series 2010 Bonds, as modified from time to time pursuant to its terms. "Town" means the Town of Vail, Colorado, and its successors and assigns. "Town Council" means the Town Council of the Town. "Treasurer" means the Treasurer of the Authority. "Trust Estate" means and shall consist of the Pledged Revenues and the rights, property and interests pledged and assigned by the Authority under this Indenture to the Trustee pursuant to the Granting Clauses of this Indenture. "Trust Funds" means all funds and accounts established under Section 4.02 of this Indenture, except the Rebate Fund. Notwithstanding the foregoing, or any other provisions hereof, the Reserve Fund created under this Indenture shall only secure the payment of the Series 2010 Bonds, and not any Additional Bonds hereafter issued, unless the resolution or indenture authorizing the issuance of Additional Bonds provides that such Additional Bonds shall be secured by the Reserve Fund. "Trustee" means U.S. Bank National Association, duty organized and existing under and by virtue of the laws of the United States of America, having a Corporate Trust Office in Denver, Colorado, and its successors, and any successor Trustee at the time serving as successor trustee hereunder. "2010 Costs of Issuance Account" means the account of the Construction Fund established with that name pursuant to Section 4.02 hereof. "2010 Project" means the acquisition, construction and installation of the urban renewal project being financed with the net proceeds of the Series 2010 Bonds. "2010A Bonds" means the Vail Reinvestment Authority, Tax - Exempt Tax Increment Revenue Bonds, Series 2010A. "2010A Debt Service Account" means the account of the Bond Fund established with that name pursuant to Section 4.02 hereof. "2010A Project Account" means the account of the Construction Fund established with that name pursuant to Section 4.02 hereof. "201013 Bonds" means the Vail Reinvestment Authority, Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 2010B. "2010B Debt Service Account: means the account of the Bond Fund established with that name pursuant to Section 4.02 hereof. -11- 10/5/2010 1 -1 -26 "2010B Project Account" means the account of the Construction Fund established with that name pursuant to Section 4.02 hereof "Underwriter" means Piper Jaffray & Co., the underwriter of the Series 2010 Bonds. "Urban Renewal Area" means the area subject to the Plan, as set forth in Figure 1 to the Plan. "Urban Renewal Project" means the urban renewal project, as defined by the Act, to be undertaken by the Authority within the Urban Renewal Area pursuant to the Plan. ARTICLE II THE BONDS Section 2.01 Authorized Amount of Bonds; Supplemental Act. No Bonds may be issued under the provisions of this Indenture except in accordance with this Article. The total principal amount of Bonds that may be issued by the Authority and which may be secured in any manner by the Trust Estate is hereby expressly limited to (a) $ in aggregate principal amount of the 2010A Bonds, (b) $ in aggregate principal amount of the 2010B Bonds, (c) any Bonds issued pursuant to Section 2.07 of this Indenture and (d) any Additional Bonds issued by the Authority pursuant to Section 2.12 of this Indenture. The Authority may also issue any Subordinate Debt payable from the Trust Estate on a subordinate basis as set forth in Section 2.12 of this Indenture. Section 11 -57 -204 of the Supplemental Act provides that a public entity, including the Authority, may elect in an act of issuance to apply any or all of the provisions of the Supplemental Act to the Series 2010 Bonds. The Authority hereby elects to apply all of the Supplemental Act to the Series 2010 Bonds. The Series 2010 Bonds are issued under the authority of the Act and the Supplemental Act and shall so recite on each Series 2010 Bond, the forms of which are attached as Exhibit A and Exhibit B hereto. Pursuant to Section 11 -57 -210, Colorado Revised Statutes, such recital conclusively imparts full compliance with all the provisions of said sections, and the Series 2010 Bonds issued containing such recital shall be incontestable for any cause whatsoever after their delivery for value. Section 2.02 Bond Details. (a) The 2010A Bonds shall be designated "Vail Reinvestment Authority, Tax - Exempt Tax Increment Revenue Bonds, Series 2010" and the 2010B Bonds shall be designated "Vail Reinvestment Authority, Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 201013" and shall be issued pursuant to the Act, the Supplemental Act, the Bond Resolution and this Indenture. In addition, the 2010B Bonds shall be issued pursuant to the Recovery Act. The Series 2010 Bonds shall be issuable only as fully registered bonds without coupons, shall be numbered in such manner as determined by the Trustee in order to distinguish each Bond from any other Bond and shall be in Authorized Denominations. (b) The Series 2010 Bonds shall be dated as of their date of delivery and shall bear interest from their date until maturity or prior redemption, except that any Series 2010 Bond -12- 10/5/2010 1 -1 -27 which is reissued upon transfer, exchange or other replacement shall bear interest from the most recent payment date to which interest has been paid, or if no interest has been paid, from the date of the Series 2010 Bonds. (c) The aggregate principal amount of the 2010A Bonds shall be $ The 2010A Bonds shall mature on June 1 in each of the principal amounts and years and shall bear interest at the interest rates per annum set forth below: Interest Rate Maturity Principal Amount Per Annum 6/1/2011 6/1/2012 6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017 Interest on the 2010A Bonds shall be calculated on the basis of a 360 -day year of twelve 30 -day months, payable semiannually on each Interest Payment Date. (d) The aggregate principal amount of the 2010B Bonds shall be $ The 2010B Bonds shall mature on June I in each of the principal amounts and years and shall bear interest at the interest rates per annum set forth below: Interest Rate Maturity Principal Amount Per Annum 6/1/2020 6/1/2025 6/1/2030 Interest on the 2010B Bonds shall be calculated on the basis of a 360 -day year of twelve 30 -day months, payable semiannually on each Interest Payment Date. (e) The principal of any Series 2010 Bond shall be payable when due to an Owner upon presentation and surrender of such Series 2010 Bond at the Principal Corporate Trust Office of the Trustee. Interest on any Series 2010 Bond shall be paid on each Interest Payment Date by check mailed by the Trustee on that date to the Person in whose name the Series 2010 Bond is registered at the close of business on the Record Date applicable to that Interest Payment Date on the Bond Register at the address appearing therein. Notwithstanding the foregoing and while the Series 2010 Bonds are held by a Depository, interest on any Series 2010 Bond shall be paid by wire transfer in immediately available funds to the bank account number and address filed with the Trustee by such Owner or in accordance with the provisions of the Representation Letter. If and to the extent, however, that payment of interest on any Series 2010 Bond on any Interest Payment Date is not made, that interest shall cease to be payable by -13- 10/5/2010 1 -1 -28 the Authority to the Person who was the Owner of that Series 2010 Bond as of the applicable Record Date. When moneys become available for payment of the interest, the Trustee shall establish a Special Record Date for the payment of that interest which shall be not more than 15 nor fewer than 10 days prior to the date of the proposed payment, and the Trustee shall cause notice of the proposed payment and of the Special Record Date to be mailed by first class mail, postage prepaid, to such Owner at its address as it appears on the Bond Register no fewer than 10 days prior to the Special Record Date and thereafter the interest shall be payable to the Persons who are the Owners of the Series 2010 Bonds at the close of business on the Special Record Date. The principal of and interest on the Series 2010 Bonds shall be payable in lawful money of the United States of America without deduction for the services of the Trustee. Section 2.03 Execution; Limited Obligation; Use of Proceeds of Series 2010 Bonds. (a) The Series 2010 Bonds shall be executed in the name and on behalf of the Authority by the manual or facsimile signature of the Secretary /Executive Director and the Treasurer and its corporate seal, or a facsimile thereof, shall be thereunto affixed, imprinted, engraved or otherwise reproduced thereon and attested by the manual or facsimile signature of the Clerk. In case any officer who shall have signed any of the Series 2010 Bonds shall cease to be such officer of the Authority before the Series 2010 Bonds have been authenticated by the Trustee or delivered or sold, such Series 2010 Bonds with the signatures thereto affixed may, nevertheless, be authenticated by the Trustee, and delivered, and may be sold by the Authority, as though the person or persons who signed such Series 2010 Bonds had remained in office. (b) All Bonds issued under this Indenture and at any time Outstanding shall in all respects be equally and ratably secured hereby, without preference, priority or distinction on account of the date or dates or the actual time or times of the issuance of the Bonds, so that all Bonds at any time issued and Outstanding hereunder shall have the same right and preference under and by virtue of this Indenture, and shall all be equally and ratably secured hereby. The Series 2010 Bonds shall be special, limited obligations of the Authority secured by an irrevocable pledge of and payable solely from the Trust Estate, except to the extent otherwise provided herein. The Owners of the Series 2010 Bonds may not look to any general or other fund of the Authority for the payment of principal of or interest thereon except the Trust Estate. The Series 2010 Bonds shall not constitute a debt or indebtedness of the State or of any county, municipality or public body of the State, other than the Authority, within the meaning of any Constitutional, home rule charter, or statutory debt limitation or restriction. In no event shall the Series 2010 Bonds give rise to a general obligation or liability of the Authority, the Town, the State, or any of its political subdivisions, or give rise to a charge against their general credit or taxing powers, or be payable out of any funds or properties other than the Trust Estate. Neither the members, officials, staff, attorneys or consultants of the Authority, or the Town, nor any Persons executing the Series 2010 Bonds, shall be personally liable on the Series 2010 Bonds or subject to any personal liability or accountability by reason of the issuance thereof. (c) The Series 2010 Bonds shall constitute an irrevocable and first lien (but not necessarily an exclusive first lien) upon the Trust Estate. Any reimbursement obligations the Authority incurs to the Town for the use of the Town's employees pursuant to Section 1.1 of the Cooperation Agreement shall be junior and subordinate to the Authority's obligation to pay the Series 2010 Bonds from the Pledged Revenues. -14- 10/5/2010 1 -1 -29 (d) The net proceeds of the 2010A Bonds ($ received by the Authority shall be paid or deposited with the Trustee as follows: (i) an amount equal to $ shall be deposited in the 2010A Reserve Account; (ii) an amount equal to $ shall be deposited in the 2010 Costs of Issuance Account; and (iii) an amount equal to $ shall be deposited in the 2010A Project Account. (e) The net proceeds of the 2010B Bonds ($ received by the Authority shall be paid or deposited with the Trustee as follows: (i) an amount equal to $ shall be deposited in the 2010B Reserve Account; (ii) an amount equal to $ shall be deposited in the 2010 Costs of Issuance Account; and (iii) an amount equal to $ shall be deposited in the 2010B Project Account. Section 2.04 Authentication. No Series 2010 Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Indenture unless and until a Certificate of Authentication on such Series 2010 Bond substantially in the form set forth in Exhibit A or Exhibit B, as the case may be, to this Indenture shall have been duly executed by the Trustee, and such executed Certificate of Authentication of the Trustee upon any such Series 2010 Bond shall be conclusive evidence that such Series 2010 Bond has been authenticated and delivered under this Indenture. The Certificate of Authentication of the Trustee on any Series 2010 Bond shall be deemed to have been executed by the Trustee if manually signed by an authorized officer of the Trustee, but it shall not be necessary that the same officer execute the Certificate of Authentication on all of the Series 2010 Bonds. Section 2.05 Form of Series 2010 Bonds. The 2010A Bonds and the Certificate of Authentication of the Trustee to be endorsed on the 2010A Bonds shall be in substantially the form set forth in Exhibit A to this Indenture, with appropriate variations, omissions and insertions as permitted or required by this Indenture or deemed necessary by the Trustee and the Authority. The 2010B Bonds and the Certificate of Authentication of the Trustee to be endorsed on the 2010B Bonds shall be in substantially the form set forth in Exhibit B to this Indenture, with appropriate variations, omissions and insertions as permitted or required by this Indenture or deemed necessary by the Trustee and the Authority. -15- 10/5/2010 1 -1 -30 Section 2.06 Delivery of Series 2010 Bonds. (a) Upon the execution and delivery of this Indenture, the Authority shall execute and deliver the Series 2010 Bonds to the Trustee, and the Trustee shall authenticate the Series 2010 Bonds. The Trustee shall thereupon deliver the Series 2010 Bonds to the Underwriter pursuant to the Bond Purchase Agreement as directed by the Authority and as provided in this Section. (b) Prior to the delivery by the Trustee of the Series 2010 Bonds there shall be filed with or provided to the Trustee: (i) a copy of the Bond Resolution; (ii) original executed counterparts of this Indenture; (iii) a request and authorization to the Trustee on behalf of the Authority and signed by its Chair or the Secretary /Executive Director to authenticate and deliver the Series 2010 Bonds to the Underwriter upon payment by the Underwriter of the amounts due under the Bond Purchase Agreement; and (iv) such other closing documents and opinions of counsel as the Trustee or the Authority may reasonably require. Section 2.07 Mutilated, Lost, Stolen or Destroyed Bonds. In the event that any Bond is mutilated, lost, stolen or destroyed, the Authority shall execute and the Trustee shall authenticate a new Bond of like maturity, series, interest rate and denomination to that mutilated, lost, stolen or destroyed, provided that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the Authority, and in the case of any lost, stolen or destroyed Bond, there first shall be furnished to the Authority and the Trustee evidence of such loss, theft or destruction satisfactory to the Authority and the Trustee, together with an indemnity satisfactory to them. In the event that any such Bond shall have matured, instead of issuing a duplicate Bond, the Authority may pay the same without surrender thereof, making such requirements as it deems fit for its protection, including a lost instrument bond. The Authority and the Trustee may charge the Owner of any mutilated, lost, stolen or destroyed Bond with their reasonable fees and expenses for such service. Section 2.08 Registration and Exchange of Bonds; Persons Treated as Owners. (a) The Authority shall cause books for the registration and for the transfer of the Bonds as provided in this Indenture to be kept by the Trustee. Subject to the limitations of this Section 2.08, upon surrender for transfer of any Bond at the Principal Corporate Trust Office of the Trustee, duly endorsed for transfer or accompanied by an assignment duly executed by the Owner or the attorney for such Owner duly authorized in writing, the Authority shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds for a like aggregate principal amount, in an authorized denomination or denominations, and of like maturity, series and interest rate. -16- 10/5/2010 1 -1 -31 (b) Bonds may be exchanged at the designated operations office of the Trustee for a like aggregate principal amount of Bonds of the same date, maturity, series and interest rate, or for a like aggregate principal amount of Bonds of other authorized denominations of the same date, maturity, series and interest rate. The Authority shall execute and the Trustee shall authenticate and deliver Bonds which the Owner making the exchange is entitled to receive, bearing numbers not then Outstanding. The execution by the Authority of any Bond of any authorized denomination shall constitute full and due authorization of such denomination, and the Trustee shall thereby be authorized to authenticate and deliver such Bond. (c) The Trustee shall not be required to transfer or exchange any Bond during the period commencing on the Record Date and ending on the immediately following Interest Payment Date nor to transfer or exchange any Bond after the mailing of notice calling such Bond or portion thereof for redemption has been given as provided herein, nor during the period of fifteen (15) days next preceding the giving of such notice of redemption. (d) In each case, the Trustee shall require the payment by the Owner requesting exchange or transfer only of any tax, fee, or other governmental charge required to be paid with respect to such exchange or transfer and a reasonable exchange or transfer fee. (e) The Authority and the Trustee may deem and treat the Person in whose name any Bond shall be registered upon the Bond Register as the absolute Owner thereof, whether the Bond shall be overdue or not, for the purpose of making payment thereof and for all other purposes whatsoever; and payment of, or on account of, the Debt Service Requirements of any Bond shall be made only to, or upon the order of, such Owner or his or her legal representative. All such payments shall be valid and effectual to satisfy and to discharge the liability upon the Bonds to the extent of the sum or sums so paid. Section 2.09 Destruction of Bonds. Whenever any Outstanding Bond shall be delivered to the Trustee for cancellation pursuant to this Indenture, upon payment of the principal amount and interest represented thereby, or for replacement pursuant to Section 2.07, such Bond shall be promptly canceled and cremated or otherwise destroyed by the Trustee, and counterparts of a certificate of destruction evidencing such cremation or other destruction shall be furnished by the Trustee to the Authority. Section 2.10 Book - Entry -Only System. (a) The Series 2010 Bonds initially shall be evidenced by one Series 2010 Bond for each series, maturity and interest rate in denominations equal to the aggregate principal amount of the Series 2010 Bonds. Such initially delivered Series 2010 Bonds shall be registered in the name of "Cede & Co." as nominee for The Depository Trust Company, the securities depository for the Series 2010 Bonds. The Series 2010 Bonds may not thereafter be transferred or exchanged except: (1) to any successor of The Depository Trust Company or its nominee, which successor must be both a "clearing corporation" as defined in Section 4- 8- 102(a)(5), C.R.S. and a qualified and registered "clearing agency" under Section 17A of the Securities Exchange Act of -17- 10/5/2010 1 -1 -32 1934, as amended; or (2) upon the resignation of The Depository Trust Company or a successor or new depository institution under clause (1) or this clause (2) of this paragraph (a), or a determination by the Board that The Depository Trust Company or such successor or a new depository institution is no longer able to carry out its functions, and the designation by the Board of another depository institution acceptable to the Board and to the depository then holding the Series 2010 Bonds, which new depository must be both a "clearing corporation" as defined in Section 4- 8- 102(a)(5), C.R.S. and a qualified and registered "clearing agency" under Section 17A of the Securities Exchange Act of 1934, as amended, to carry out the functions of The Depository Trust Company or such successor new depository institution; or (3) upon the resignation of The Depository Trust Company or a successor or new depository institution under clause (1) above or designation of a new depository institution pursuant to clause (2) above, or a determination of the Board that The Depository Trust Company or such successor or depository institution is no longer able to carry out its functions, and the failure by the Board, after reasonable investigation, to locate another depository institution under clause (2) to carry out such depository institution functions. (b) In the case of a transfer to a successor of The Depository Trust Company or its nominee as referred to in clause (1) or (2) of paragraph (a) hereof, upon receipt of the outstanding Series 2010 Bonds by the Trustee together with written instructions for transfer satisfactory to the Trustee, a new Series 2010 Bond for each maturity and interest rate of the Series 2010 Bonds then outstanding shall be issued to such successor or new depository, as the case may be, or its nominee, as is specified in such written transfer instructions. In the case of a resignation or determination under clause (3) of paragraph (a) hereof and the failure after reasonable investigation to located another qualified depository institution for the Series 2010 Bonds as provided in clause (3) of paragraph (a) hereof, and upon receipt of the outstanding Series 2010 Bonds by the Trustee, together with written instructions for transfer satisfactory to the Trustee, new Series 2010 Bonds shall be issued in authorized denominations as provided in and subject to the limitations of this Indenture, registered in the names of such Persons, as are requested in such written transfer instructions; however, the Trustee shall not be required to deliver such new Series 2010 Bonds within a period of less than 60 days from the date of receipt of such written transfer instructions. (c) The Authority and the Trustee shall endeavor to cooperate with The Depository Trust Company or any successor or new depository named pursuant to clause (1) or (2) of paragraph (a) hereof in effectuating payment of the principal amount of the Series 2010 Bonds upon maturity or prior redemption by arranging for payment in such a manner that funds representing such payments are available to the depository on the date they are due. -18- 10/5/2010 1 -1 -33 (d) Upon any partial redemption of any maturity and interest rate of the Series 2010 Bonds, Cede & Co. (or its successor) in its discretion may request the Authority to issue and authenticate a new Series 2010 Bond or shall make an appropriate notation on the Series 2010 Bond indicating the date and amount of prepayment, except in the case of final maturity, in which case the Series 2010 Bond must be presented to the Trustee prior to payment. The records of the Trustee shall govern in the case of any dispute as to the amount of any partial prepayment made to Cede & Co. (or its successor). (e) The Authority and the Trustee shall be entitled to treat the Owner of any Series 2010 Bond as the absolute owner thereof for all purposes hereof and any applicable laws, notwithstanding any notice to the contrary received by any or all of them and the Authority and the Trustee shall have no responsibility for transmitting payments or notices to the Beneficial Owners of the Series 2010 Bonds held by The Depository Trust Company or any successor or new depository named pursuant to paragraph (a) hereof. With respect to Bonds registered in the Bond Register in the name of DTC, or its nominee, the Authority and the Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of whom such a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the Authority and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, its nominee or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other Person, other than a Bondholder as shown in the Bond Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other Person, other than a Bondholder as shown in the Bond Register, of any amount with respect to principal of or interest on, the Bonds. Section 2.11 Payments and Notices to Cede & Co. Notwithstanding any other provision of this Indenture to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of and interest on the Bonds and all notices with respect to the Bonds shall be made and given, respectively, in the manner provided in the Representation Letter. Section 2.12 Additional Bonds and Subordinate Debt. Additional Bonds may be issued, authenticated and delivered for the purpose of providing the Authority with funds for any lawful purpose of the Authority, so long as (i) no Default or Event of Default has occurred and is at the time continuing under this Indenture, (ii) all amounts required to be on deposit in the funds and accounts established under this Indenture are on deposit therein, or will be on deposit therein upon the issuance of such Additional Bonds, and (iii) the requirements set forth below have been satisfied. The Additional Bonds of each such series shall be authenticated by the Trustee and, upon payment to the Trustee of the proceeds of said sale of such Additional Bonds, such Additional Bonds shall be delivered by the Trustee to or upon the order of the original purchaser thereof, but only upon there being filed with the Trustee, such original purchaser, and the Authority: (a) original, executed counterparts of a resolution authorizing the issuance of the Additional Bonds and an indenture, or similar document, related thereto; -19- 10/5/2010 1 -1 -34 (b) an opinion of Bond Counsel to the effect that the issuance of the Additional Bonds and the execution thereof have been duly authorized, all conditions precedent to the delivery thereof have been fulfilled, and that the exclusion from gross income for federal income tax purposes of the interest on the 2010A Bonds will not be adversely affected by the issuance of the proposed Additional Bonds, and that the 2010B Bonds will not be disqualified as Build America Bonds by the issuance of the proposed Additional Bonds; (c) a certificate of the Authority Representative addressed to the Trustee establishing that the Pledged Revenues for any period of 12 consecutive calendar months out of the 18 calendar months next preceding the date of the issuance of such Additional Bonds were at least 125% of the Average Annual Debt Service Requirements of the combination of the Bonds then Outstanding, and the Additional Bonds proposed to be issued; provided, however, that any Bonds to be refunded with the proceeds of any such Additional Bonds shall be excluded for purposes of such calculation; and (d) a written order to the Trustee by the Authority to authenticate and deliver the Additional Bonds to the original purchaser therein identified upon payment to the Trustee of a specified sum plus any accrued interest. Notwithstanding the foregoing, in the case of Additional Bonds issued for the purpose of refunding less than all of the Bonds then Outstanding, compliance with Section 2.12(c) shall not be required so long as the Debt Service Requirements payable on all Bonds Outstanding after the issuance of such Additional Bonds in each Fiscal Year does not exceed the Debt Service Requirements payable on all Bonds Outstanding prior to the issuance of such Additional Bonds in each Fiscal Year. For purposes of Section 2.12(c), when computing the Average Annual Debt Service Requirements for any issue of securities bearing interest at a variable, adjustable, convertible or other similar rate that is not fixed for the entire term thereof, the rate of interest on such securities shall be assumed to be a rate equal to the average per annum rate of interest on such securities during the preceding twelve month period, plus 100 basis points. If such securities have not been outstanding during the preceding twelve month period, the assumed rate of interest on such securities shall be determined by reference to the preceding 12 month average of an index comparable to that utilized in connection with such securities, plus 100 basis points. It shall further be assumed that any such securities which may be tendered prior to maturity for purchase at the option of the Owner thereof will mature on their stated maturity dates or mandatory redemption dates and not on any tender option date. The Authority shall be permitted to treat any fixed rate payable on an interest rate exchange agreement or "swap" contract as the interest rate on any such issue of securities if the counterparty to such agreement or contract has unconditionally agreed to pay all interest due on such securities. Each series of Additional Bonds issued pursuant to this Section 2.12 shall be equally and ratably secured with the Series 2010 Bonds and all other series of Additional Bonds, if any, theretofore issued pursuant to this Section 2.12, without preference, priority or distinction of any such Bonds over any other thereof. -20- 10/5/2010 1 -1 -35 Notwithstanding anything contained in this Indenture to the contrary, the Authority may, subject to applicable law, issue or incur Subordinate Debt from time to time as determined by the Authority without the consent of or notice to the Owners of the Bonds at the time Outstanding or any other Person; provided, however, that no Subordinate Debt may be issued if and for so long as any Event of Default shall have occurred and be continuing under this Indenture. The Authority shall not issue bonds or other securities payable from the Pledged Revenues that have a lien on all or a portion of the Pledged Revenues that is prior and superior to the lien thereon of the Bonds without the prior written consent of the owners of 100% of the aggregate principal amount of the Outstanding Bonds. ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY Section 3.01 Redemption Dates and Prices. (a) Optional Redemption of Series 2010 Bonds. The Series 2010 Bonds shall be subject to option redemption as follows: (i) The 2010A Bonds shall not be subject to optional redemption prior to their respective maturity dates. (ii) The 2010B Bonds maturing on or prior to June 1, 2020 shall not be subject to optional redemption prior to their respective maturity dates. The 201013 Bonds maturing on and after June 1, 2021 shall be subject to redemption prior to their respective maturity dates at the option of the Authority, in whole or in part, in integral multiples of $5,000, and if in part in such order of maturities as the Authority shall determine and by lot within a maturity, on June 1, 2020, and on any date thereafter, at a redemption price equal to the principal amount of the 2010B Bonds so redeemed plus accrued interest to the redemption date without a premium. (b) Sinking Fund Redemption. The Series 2010B Bonds shall be subject to mandatory sinking fund redemption as follows; (i) The 2010B Bonds maturing on June 1, 20 (hereinafter referred to as a "Term Bond ") are subject to mandatory sinking fund redemption at a price equal to the principal amount thereof plus accrued interest thereon to the redemption date. Such 2010B Bonds are to be selected by lot in such manner as the Authority shall determine (giving proportionate weight to 2010B Bonds in denominations larger than $5,000). As and for a sinking fund for the redemption of the 2010B Bonds maturing on June 1, 2020, the Town shall deposit in the 2010B Debt Service Account moneys which are sufficient to redeem (after any credit as provided below) the following principal amount of the 2010B Bonds maturing on June 1, 2020: -21- 10/5/2010 1 -1 -36 Redemption Date Principal Amount June 1 2018 2019 The remaining $ of the 2010B Bonds maturing on June 1, 2020 shall be paid upon presentation and surrender at maturity unless redeemed pursuant to optional redemption prior to maturity. (ii) The 2010B Bonds maturing on June 1, 2025 (hereinafter referred to as a "Term Bond ") are subject to mandatory sinking fund redemption at a price equal to the principal amount thereof plus accrued interest thereon to the redemption date. Such 2010B Bonds are to be selected by lot in such manner as the Authority shall determine (giving proportionate weight to 2010B Bonds in denominations larger than $5,000). As and for a sinking fund for the redemption of the 2010B Bonds maturing on June 1, 2025, the Town shall deposit in the 2010B Debt Service Account moneys which are sufficient to redeem (after any credit as provided below) the following principal amount of the 2010B Bonds maturing on June 1, 2025: Redemption Date Principal Amount June 1 2021 2022 2023 2024 The remaining $ of the 2010B Bonds maturing on June 1, 2025 shall be paid upon presentation and surrender at maturity unless redeemed pursuant to optional redemption prior to maturity. (iii) The 2010B Bonds maturing on June 1, 2030 (hereinafter referred to as a "Term Bond ") are subject to mandatory sinking fund redemption at a price equal to the principal amount thereof plus accrued interest thereon to the redemption date. Such 2010B Bonds are to be selected by lot in such manner as the Authority shall determine (giving proportionate weight to 2010B Bonds in denominations larger than $5,000). As and for a sinking fund for the redemption of the 2010B Bonds maturing on June 1, 2030, the Town shall deposit in the 2010B Debt Service Account moneys which are sufficient to redeem (after any credit as provided -22- 10/5/2010 1 -1 -37 below) the following principal amount of the 2010B Bonds maturing on June 1, 2030: Redemption Date Principal Amount June 1 2026 2027 2028 2029 The remaining $ of the 2010B Bonds maturing on June 1, 2030 shall be paid upon presentation and surrender at maturity unless redeemed pursuant to optional redemption prior to maturity. (iv) At its option, to be exercised on or before the forty -fifth day next preceding each sinking fund redemption date, the Authority may (i) purchase and cancel any Series 2010 Bonds with the same maturity date as the Series 2010 Bonds subject to such sinking fund redemption and (ii) receive a credit in respect of its sinking fund redemption obligation for any Series 2010 Bonds of the same series with the same maturity date as the Series 2010 Bonds subject to such sinking fund redemption which prior to such date have been redeemed (otherwise than through the operation of the sinking fund) and cancelled and not theretofore applied as a credit against any sinking fund redemption obligation. Each Series 2010 Bond so purchased and cancelled or previously redeemed shall be credited at the principal amount thereof to the obligation of the Authority on such sinking fund redemption date, and the principal amount of Series 2010 Bonds to be redeemed by operation of such sinking fund on such date shall be accordingly reduced. (c) Extraordinary Optional Redemption. From the date of issuance of the 2010B Bonds up to, but not including, the first optional redemption date of the 2010B Bonds, the 2010B Bonds are subject to extraordinary optional redemption prior to their respective maturity dates, on any date at the option of the Authority, upon the occurrence of an Extraordinary Event from any source of available funds, in whole or in part, by lot, at the Make -Whole Redemption Price. (d) In case a Bond is of a denomination larger than $5,000, a portion of such Bond may be redeemed, but Bonds shall be redeemed only in the principal amount of $5,000 or any integral multiple thereof. Section 3.02 Notice of Redemption. (a) Bonds shall be called for optional redemption by the Trustee as herein provided upon receipt by the Trustee at least forty (40) days prior to the redemption date (or such lesser number of days agreed to by the Trustee) of a certificate of the Authority specifying the redemption date, the principal amount of the Bonds to be called for redemption, the applicable -23- 10/5/2010 1 -1 -38 redemption price or prices and, in the case of redemption of less than all of the Outstanding Bonds, the maturities of the Bonds chosen by the Authority that shall be called from redemption, provided that such certificate shall not be required with respect to a sinking fund redemption pursuant to Section 3.01(b) hereof and Bonds shall be called for redemption by the Trustee pursuant to such Section without the necessity of any action by the Authority. (b) Notice of optional or mandatory redemption shall be given by the Trustee in the name of the Authority by sending a copy of such notice by first- class, postage prepaid mail, or in the event that the Bonds to be redeemed are registered in the name of the Depository, such notice may, in the alternative, be given by electronic means in accordance with the requirements of the Depository, not more than sixty nor less than thirty days prior to the redemption date to each Owner at his or her address as it last appears on the registration books kept by the Trustee, as registrar; but neither failure to give such notice nor any defect therein shall affect the redemption of any other Bond. Such notice shall identify the Bonds to be so redeemed (if less than all are to be redeemed) and the redemption date, and shall further state that on such redemption date there will become and be due and payable upon each Bond so to be redeemed, at the Trustee, the principal amount thereof, accrued interest to the redemption date, and the stipulated premium, if any, and that from and after such date interest will cease to accrue. Notice having been given in the manner hereinabove provided, the Bond or Bonds so called for redemption shall become due and payable on the redemption date so designated; and upon presentation thereof at the Trustee, the Trustee will pay the Bond or Bonds so called for redemption. (c) Notwithstanding the provisions of this Section, any notice of redemption may contain a statement that the redemption is conditioned upon the receipt by the Trustee on or before the redemption date of funds sufficient to pay the redemption price of the Bonds so called for redemption, and that if such funds are not available, such redemption shall be canceled by written notice to the Owners of the Bonds called for redemption in the same manner as the original redemption notice was delivered. Section 3.03 Redemption Payments. On or prior to the date fixed for redemption, funds shall be deposited with the Trustee to pay, and the Trustee is hereby authorized and directed to apply such funds to the payment of the Bonds or portions thereof called, together with accrued interest thereon to the redemption date and any required premium. No further interest shall accrue on the principal of any such Bond called for redemption from and after the redemption date, provided sufficient funds are deposited with the Trustee and available on the redemption date. Section 3.04 Cancellation. All Bonds which have been redeemed shall not be reissued but shall be canceled and cremated or otherwise destroyed by the Trustee in accordance with Section 2.09 hereof. Section 3.05 Partial Redemption of Bonds. Upon surrender of any Bond for redemption in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof a new Bond or Bonds of the same date, maturity, series and interest rate, of authorized denomination or denominations, in an aggregate principal amount equal to the unredeemed portion of the Bond surrendered. -24- 10/5/2010 1 -1 -39 ARTICLE IV REVENUES AND FUNDS Section 4.01 Source of Payment of Bonds; Irrevocable Pledge. The Bonds are and shall be special and limited obligations of the Authority equally secured by an irrevocable pledge of, and payable as to principal, premium, if any, and interest thereon, from the Trust Estate, except to the extent otherwise provided herein, without priority for number, date of sale, date of execution or date of delivery, except as provided herein. The Owners of the Bonds may not look to any general or other fund of the Authority for the payment of principal of or interest thereon except the Trust Estate. Principal of, premium, if any, and interest on the Bonds shall not constitute an indebtedness, financial obligation or liability of the Town or the State or any county, municipality or public body thereof, and neither the Town, the State nor any political subdivision thereof shall be liable thereon, nor in any event shall the principal of, premium, if any, or interest on the Bonds be payable out of any funds or properties other than the Trust Estate. Further, the Bonds shall not constitute a debt, indebtedness, financial obligation or liability of the Town within the meaning of any constitutional, statutory or charter debt limitation or provision. The Authority hereby irrevocably pledges, but not necessarily exclusively, the Trust Estate to the payment of the Debt Service Requirements of the Bonds. This pledge shall be valid and binding from and after the date of the delivery of the Bonds. The creation, perfection, enforcement, and priority of the pledge of revenues to secure or pay the Bonds as provided herein shall be governed by § 11 -57 -208 of the Supplemental Act, the Bond Resolution and this Indenture. The revenues pledged for the payment of the Bonds, as received by or otherwise credited to the Authority, shall immediately be subject to the lien of such pledge without any physical delivery, filing, or further act. The lien of such pledge on the revenues pledged for payment of the Bonds and the obligation to perform the contractual provisions made herein shall have priority over any or all other obligations and liabilities of the Authority except any Additional Bonds hereafter authorized and issued in accordance with the provisions of this Indenture. The lien of such pledge shall be valid, binding, and enforceable as against all persons or entities having claims of any kind in tort, contract, or otherwise against the Authority (except as herein otherwise provided) irrespective of whether such persons or entities have notice of such liens. Section 4.02 Creation of Funds. There is hereby created by the Authority and ordered established with the Trustee the following Trust Funds: (a) the Vail Reinvestment Authority Revenue Fund (the "Revenue Fund "); (b) the Vail Reinvestment Authority Bond Fund (the "Bond Fund "), and within the Bond Fund, two separate accounts to be known as the "2010A Debt Service Account" and the "2010B Debt Service Account;" (c) the Vail Reinvestment Authority, Series 2010 Reserve Fund (the "Reserve Fund ") and within the Reserve Fund, two separate accounts to be known as the "2010A Reserve Account" and the "201013 Reserve Account;" and -25- 10/5/2010 1 -1 -40 (d) the Vail Reinvestment Authority, Series 2010 Construction Fund (the "Construction Fund "), and within the Construction Fund, the "2010A Project Account," the "2010B Project Account" and the "2010 Costs of Issuance Account." Moneys and investments in each of the Funds shall be used only and exclusively as provided herein. In addition there is hereby created, to the extent funded, the Vail Reinvestment Authority, Series 2010 Rebate Fund (the "Rebate Fund "), and within the Rebate Fund, the "2010A Rebate Account" and the "2010B Rebate Account" which fund and accounts shall not constitute a Trust Fund for purposes of this Indenture, but shall be used and applied as set forth herein. Section 4.03 Custody of Funds. All Funds created under Section 4.02 of this Indenture shall be in the custody of the Trustee, but in the name of the Authority, and the Authority hereby authorizes and directs the Trustee to apply moneys and investments in such Funds as set forth herein, which authorization and direction the Trustee hereby accepts. Section 4.04 Revenue Fund. (a) After all payments and deposits that are required to be made to the Property Tax Reserve Fund, if any, have been made or provided for, on or prior to the last day of each month the Authority shall remit to the Trustee for deposit in the Revenue Fund all Pledged Property Tax Revenues received by the Authority, until such time as no further deposits are required therein as set forth in subsection (c) below. In addition, upon receipt of the BAB Credit relating to the 2010B Bonds, the Authority shall remit such BAB Credit to the Trustee for deposit to the Revenue Fund. The Authority may also direct that the BAB Credit relating to the 2010B Bonds be paid directly to the Trustee. (b) Amounts deposited in the Revenue Fund shall be applied by the Trustee to the following purposes in the following order of priority in each Fiscal Year: (i) All amounts deposited in the Revenue Fund during any Fiscal Year shall be transferred to the Bond Fund until the total of the amounts on deposit in the Bond Fund shall equal the Debt Service Requirements on the Series 2010 Bonds for such Fiscal Year, on a pari passu basis with any transfers required to be made to any separate bond funds created in connection with the issuance of Additional Bonds. (ii) All amounts deposited in the Revenue Fund during any Fiscal Year remaining after the transfers required by subsection (b)(i) of this Section 4.04 have been made or provided for shall be transferred to the Reserve Fund, to the extent that the amount on deposit in the Reserve Fund is less than the then - applicable Reserve Fund Requirement, on a pari passu basis with any transfers required to be made to any separate reserve fund securing Additional Bonds. (iii) All amounts deposited in the Revenue Fund during any Fiscal Year remaining after the transfers required by subsections (b)(i) and (b)(ii) of this Section 4.04 have been made or provided for shall be transferred to the Rebate -26- 10/5/2010 1 -1 -41 Fund to the extent required by Section 4.11 hereof on a pari passu basis with any transfers required to be made to any separate rebate fund created in connection with the issuance of any Additional Bonds. (iv) All amounts deposited in the Revenue Fund during any Fiscal Year remaining after the transfers required by subsections (b)(i) through (b)(iii) of this Section 4.04 have been made or provided for shall be applied, at the written direction of the Authority, to the payment of any Subordinate Debt. (c) After there is on deposit in the Revenue Fund sufficient money to make all payments and transfers from the Revenue Fund as required by subsections (b)(i) through (b)(iv) of this Section 4.04 for the remainder of the then current Fiscal Year, the Authority shall no longer be required to remit Pledged Property Tax Revenues to the Trustee (but shall be required to continue to remit the BAB Credit relating to the 2010B Bonds) and any excess amounts remaining on deposit with the Trustee in the Revenue Fund (other than amounts on deposit attributable to the BAB Credit relating to the 2010B Bonds) after all such required amounts are on deposit in such funds shall be transferred to the Authority for any lawful purpose of the Authority. If during any Fiscal Year the Authority has deposited all required Pledged Property Tax Revenues to the Revenue Fund and is no longer making deposits to the Revenue Fund, and thereafter it is determined by the Trustee that further expenditures are required pursuant to the provisions of this Article IV, the Trustee shall notify the Authority in writing and the Authority shall resume transferring Pledged Property Tax Revenues for deposit to the Revenue Fund. Section 4.05 Bond Fund. There shall be transferred from the Revenue Fund to the Bond Fund, on a pari passu basis among the 2010A Debt Service Account, the 2010B Debt Service Account and any separate bond funds created in connection with the issuance of Additional Bonds, together with all other amounts required to be deposited to the Bond Fund in accordance with this Indenture, the following amounts: (a) Interest Payments Monthly, commencing on the first day of the first month following the date of delivery of the Series 2010 Bonds, an amount in equal monthly installments necessary, together with any other moneys from time to time available therefor from whatever source, to pay the next maturing installment of interest on the Series 2010 Bonds then Outstanding, and monthly thereafter, commencing on each interest payment date, one -sixth of the amount necessary, together with any other moneys from time to time available therefor and on deposit therein from whatever source, to pay the next maturing installment of interest on the Series 2010 Bonds then Outstanding. (b) Principal Payments Monthly, commencing on the first day of the first month following the date of delivery of the Series 2010 Bonds, an amount in equal monthly installments necessary, together with any other moneys from time to time available therefor from whatever source, to pay the next installment of principal of the Series 2010 Bonds coming due at maturity, and monthly thereafter, commencing on each principal payment date, one - twelfth of the amount necessary, together with any other moneys from time to time available therefor and on deposit therein from whatever source, to pay the next installment of principal of the 2010 Bonds coming due at maturity. Any mandatory sinking fund redemption shall be treated as an installment of principal for purposes of this Section 4.05(b). -27- 10/5/2010 1 -1 -42 The amounts deposited to the 2010A Debt Service Account shall be in an amount sufficient to pay the Debt Service Requirements due on the 2010A Bonds and the amounts deposited to the 2010B Debt Service Account shall be in an amount sufficient to pay the Debt Service Requirements on the 2010B Bonds. The moneys deposited in the 2010A Debt Service Account shall be used to pay the Debt Service Requirements on the 2010A Bonds and the moneys deposited in the 2010B Debt Service Account shall be used to pay the Debt Service Requirements of the Series 2010B Bonds, as the same shall become due, except as otherwise provided in this Indenture. The Bond Fund shall be maintained as a sinking fund for the mandatory redemption of any Term Bonds. If prior to any interest payment date or maturity date there has been accumulated in each account of the Bond Fund the entire amount necessary to pay the next maturing installment of interest or principal, or both, on the Outstanding Series 2010 Bonds the payment required in paragraph (a) or (b) (whichever is applicable) of this Section 4.05, may be appropriately reduced; but the required monthly amounts again shall be so credited to such account commencing on such interest payment date or maturity date. Section 4.06 Reserve Fund. There shall be deposited in the 2010A Reserve Account and the 2010B Reserve Account the amounts set forth in Section 2.03(d) hereof, which is an amount equal to the Reserve Fund Requirement for the Series 2010 Bonds, and any amounts required by a resolution or indenture authorizing the issuance of Additional Bonds if such Additional Bonds are secured by the Reserve Fund. The 2010A Reserve Account shall be maintained as a continuing reserve for the payment of the Debt Service Requirements of the 2010A Bonds and the 2010B Reserve Account shall be maintained as a continuing reserve for the payment of the Debt Service Requirements of the 2010B Bonds. In the event that the amount on deposit in the Reserve Fund falls below the Reserve Fund Requirement, there shall be deposited in the Reserve Fund such Pledged Revenues as may be needed to accumulate or reaccumulate the amount therein so that at all times the amount of the Reserve Fund equals the Reserve Fund Requirement. The moneys in the Reserve Fund shall be set aside, accumulated, and, if necessary, reaccumulated as provided herein, from time to time, and maintained as a continuing reserve to be used only to prevent deficiencies in the Bond Fund resulting from failure to deposit therein sums sufficient to pay such Debt Service Requirements of each separate series of Bonds as the same become due. In the event that, on the Business Day immediately prior to any Interest Payment Date, the amount on deposit in the Bond Fund shall be less than the Debt Service Requirements payable on such Interest Payment Date, an amount equal to such deficiency shall be transferred from the Reserve Fund to the Bond Fund. The amount so transferred from each Account of the Reserve Fund shall be equal to a prorata portion of the deficiency based on the Debt Service Requirements due on each series of Series 2010 Bonds. Within 120 days of any such transfer from the Reserve Fund, the money so used shall be replaced prorata to the Reserve Accounts in the Reserve Fund from moneys deposited in the Revenue Fund after the deposits required by Section 4.04(b)(i) hereof has been made. Amounts on deposit in the Reserve Fund may also be used to make the final debt service payments due on the Series 2010 Bonds and any Additional Bonds secured by the Reserve Fund or for the purpose of discharging this Indenture in accordance with Article VII by paying or providing for the payment of such Bonds. -28- 10/5/2010 1 -1 -43 Nothing in this Indenture shall be construed as limiting the right of the Authority to substitute for the cash deposit required to be maintained in the Reserve Fund a letter of credit, surety bond, insurance policy, agreement guaranteeing payment or other undertaking by a Financial institution to ensure that cash in the amount otherwise required to be maintained in the Reserve Fund will be available to the Authority as needed. Any such credit instrument shall be deposited with the Trustee, who shall ascertain the necessity for a claim against or draw upon the credit instrument and provide notice to the issuer of such credit instrument in accordance with its terms prior to the Interest Payment Date. If a letter of credit is substituted for the cash deposit required to be maintained hereunder, the Trustee shall draw upon such letter of credit prior to its expiration or termination unless an alternate credit instrument conforming with the provisions hereof has been substituted therefor or the amount otherwise required to be maintained hereunder is on deposit in the Reserve Fund. Notwithstanding any other provisions in this Indenture to the contrary, moneys on deposit in the 2010B Reserve Account shall only be used to pay debt service on the 2010B Bonds to the extent of any deficiency in the Bond Fund or may be applied to the defeasance of the 2010B Bonds, unless the Trustee receives an opinion of Bond Counsel that any other use of moneys on deposit in the 2010B Reserve Account will not disqualify the 2010B Bonds as Build America Bonds under Section 54AA of the Tax Code. Section 4.07 Construction Fund. (a) There shall be deposited in the 2010A Project Account, the 2010B Project Account and the 2010 Costs of Issuance Account proceeds of the sale of the Series 2010 Bonds in the amounts set forth in Section 2.03 of this Indenture, and any additional amounts that are transferred or deposited therein in accordance with the terms and provisions of this Indenture. (b) Moneys held in the 2010 Costs of Issuance Account shall be used to pay Costs of Issuance related to the Series 2010 Bonds as directed in writing by the Authority. Any amounts held in the 2010 Costs of Issuance Account that are attributable to the proceeds of the 2010A Bonds and that are not required to pay such Costs of Issuance shall, at the written direction of the Authority, be transferred either to the 2010A Project Fund or to the 2010A Debt Service Fund. Any amounts held in the 2010 Costs of Issuance Account that are attributable to the proceeds of the 2010B Bonds and that are not required to pay such Costs of Issuance shall be transferred to the 2010B Project Account. (c) So long as no Event of Default shall have occurred, moneys held in the 2010A Project Account and the 2010B Project Account shall be disbursed to pay the Project Costs with respect to the 2010 Project upon receipt of a requisition executed by an authorized representative of the Authority in substantially the form attached hereto as Exhibit C. The Authority shall pay any capital expenditures relating to the 2010 Project from amounts on deposit in the 2010B Project Fund prior to paying for any such Project Costs from moneys on deposit in the 2010A Project Account. If an Event of Default shall have occurred, the Trustee, with the consent of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, shall either disburse moneys held in the 2010A Project Account as provided in the preceding sentence or apply such moneys as provided in Section 8.06 hereof. No moneys on deposit in the 2010B Project Account shall be applied as provided in Section 8.06 hereof unless -29- 10/5/2010 1 -1 -44 the Authority or the Trustee receives an opinion of Bond Counsel that such application will not disqualify the 2010B Bonds as Build America Bonds under Section 54AA of the Tax Code. Upon completion of the 2010 Project, the Authority shall deliver to the Trustee a certificate that the 2010 Project has been completed. Such certification may specify an amount that shall be retained in the 2010A Project Account and the 2010B Project Account to pay Project Costs related to the 2010 Project not then due and payable. Upon receipt of such certification by the Trustee, the remaining amounts then held in the 2010A Project Account (other than those amounts which are to be retained therein to pay such Project Costs not then due and payable) shall, except as hereinafter provided, be transferred by the Trustee to the 2010A Debt Service Account, and the remaining amounts then held in the 2010B Project Account (other than those amounts which are to be retained therein to pay such Project Costs not then due and payable) shall be remitted to the Authority and used by the Authority to pay for capital expenditures of the Authority, unless the Authority obtains an opinion of Bond Counsel that any such excess moneys may be applied to other purposes without disqualifying the 2010B Bonds as Build America Bonds under Section 54AA of the Tax Code. Notwithstanding the foregoing, at the written direction of the Authority, all or a portion of such excess remaining amounts on deposit in the 2010A Project Account may, at the written direction of the Authority, be used to redeem Series 2010 Bonds in accordance with the provisions of Article III hereof. Section 4.08 Nonpresentment of Bonds. In the event that any Bond shall not be presented for payment when the principal thereof becomes due, either at maturity, or at the date fixed for redemption thereof, or otherwise, if funds sufficient to pay such Bond shall have been made available to the Trustee for the benefit of the Owner thereof, all liability of the Authority to the Owner thereof for the payment of such Bond shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such funds without liability to the Owner for further interest thereon for a period of two (2) years subsequent to the final maturity date of the Bond, for the benefit of the Owner of such Bond who shall thereafter be restricted exclusively to such funds, for any claim of whatever nature on the part of such Owner under this Indenture or on, or with respect to, such Bond. Subsequent to the aforementioned period the Trustee shall pay to the Authority such funds held by the Trustee and the Owner of such Bond shall thereafter be restricted exclusively to seeking payment from the Authority which shall not be required to place such moneys in any trust fund or other special fund or account for the benefit of the Owner of such Bond. Section 4.9 Moneys to Be Held in Trust. All moneys required to be deposited with or paid to the Trustee for deposit in any fund or account created under Section 4.02 hereof shall be held by the Trustee in trust and (except for moneys deposited in the Rebate Fund or in any defeasance escrow account) shall, while held by the Trustee, constitute part of the Trust Estate and be subject to the lien or security interest created hereby. Section 4.10 Excesses in Trust Funds. Any amounts remaining in any Trust Fund after payment in full of the principal of, premium, if any, and interest on the Bonds, the reasonable fees, charges and expenses of the Trustee and all other amounts required to be paid hereunder, shall be paid to the Authority to be used for any lawful purpose of the Authority, provided that any such remaining amounts on deposit in any Trust Fund attributable to the -30- 10/5/2010 1 -1 -45 proceeds of the 2010B Bonds shall be used by the Authority to pay capital expenditures of the Authority. Section 4.11 Rebate Fund. Upon written request of the Authority, there shall be deposited into the 2010A Rebate Account and the 2010B Rebate Account amounts transferred from the Revenue Fund as required to comply with Section 148(f) of the Tax Code and the Tax Compliance Certificate. In addition, notwithstanding any other provision of this Indenture, upon the written request of the Authority, any investment income or other gain on moneys in any of the funds or accounts may be transferred to the Rebate Fund to enable the Authority to satisfy the requirements of Section 148(f) of the Tax Code. Moneys in the Rebate Fund shall be paid to the United States in the amounts and at the times required by the Tax Code. Any excess moneys contained in the Rebate Fund shall, at the written request of the Authority, be transferred to the Bond Fund. Moneys held in the Rebate Fund shall not be part of the Trust Estate and shall not be subject to the lien created by this Indenture. The Trustee shall not be responsible for calculating rebate amounts or for the adequacy or correctness of any rebate report. The Trustee shall be deemed conclusively to have complied with the provisions of this Indenture and any other agreement relating to the Bonds regarding calculation and payment of rebate if it follows the directions of the Authority, and it shall have no independent duty to review or enforce the Authority's compliance with such rebate requirements. Section 4.12 Budget and Appropriation of Sums. The sums required to make the payments specified in this Article IV are hereby appropriated for said purposes, and said amount for each year shall be included in the annual budget and the appropriations resolution or measures to be adopted or passed by the Board in each year while any of the Bonds, as to either principal or interest, are Outstanding and unpaid. No provisions of any constitution, charter, statute, ordinance, resolution, or other order or measure enacted after the issuance of the Bonds shall in any manner be construed as limiting or impairing the obligation of the Authority to keep and perform the covenants contained in this Indenture so long as any of the Bonds remain Outstanding and unpaid. ARTICLE V GENERAL COVENANTS Section 5.01 Payment of Principal, Premium, if Any, and Interest. The Authority covenants that it shall promptly pay the principal of, premium, if any, and interest on every Bond issued under this Indenture at the place, on the dates and in the manner provided herein and in said Bonds according to the true intent and meaning thereof. The principal of, premium, if any, and interest on the Bonds shall be payable solely from the Trust Estate and shall not constitute an indebtedness, financial obligation or liability of the Town, the State or any political subdivision thereof, and neither the Town, the State nor any political subdivision thereof shall be liable thereon. Further, the Bonds shall not constitute a debt, indebtedness, financial obligation or liability of the Town within the meaning of any constitutional, statutory or charter debt limitation or provision applicable to the Town. Neither the members, officials, staff, attorneys or consultants of the Authority, or the Town, nor any Persons executing the Bonds, shall be liable -31- 10/5/2010 1 -1 -46 personally on the Bonds or subject to any personal liability or accountability by reason of the issuance thereof. Section 5.02 Performance of Covenants; Authority. The Authority shall faithfully perform at all times any and all covenants, requirements, undertakings, stipulations and provisions set forth in this Indenture, in any and every Bond executed, authenticated and delivered hereunder and in all of its proceedings pertaining hereto. The Authority is duly authorized under the Constitution and laws of the State, including particularly and without limitation the Act and the Supplemental Act, to issue the Series 2010 Bonds authorized hereby and to execute this Indenture, and to pledge the receipts and amounts hereby pledged in the manner and to the extent set forth herein. All action taken by the Authority in connection with the issuance of the Series 2010 Bonds and the execution and delivery of this Indenture, has been duly and effectively taken, and the Series 2010 Bonds in the hands of the Owners thereof are and shall be valid and enforceable obligations of the Authority according to the terms thereof and of this Indenture. Section 5.03 Instruments of Further Assurance. The Authority shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, such indentures supplemental hereto and such further acts, instruments and transfers as the Trustee may reasonably require for the better assuring, transferring, conveying, pledging, assigning and confirming unto the Trustee all and singular the amounts pledged hereby to the payment of the principal of, premium, if any, and interest on the Bonds. The Authority, except as specifically provided herein, shall not encumber or otherwise dispose of all or any part of the Trust Estate or the Rebate Fund. Section 5.04 Inspection of Records. All books and records in the possession of the Authority relating to the 2010 Project, the Plan, the Pledged Revenues and the Trust Estate shall at all reasonable times be open to inspection by such accountants or other agents as the Trustee may from time to time designate. Section 5.05 List of Owners. The Trustee shall keep the registration books of the Authority, together with the principal amounts and numbers of each series of Bonds. At reasonable times and under reasonable regulations established by the Trustee, the registration books of a series of Bonds may be inspected and copied by the Authority or by Owners (or a designated representative thereof) of twenty -five percent (25 %) or more in principal amount of such series of Bonds then Outstanding, such possession or ownership and the authority of such designated representative to be evidenced to the satisfaction of the Trustee. Section 5.06 Completion of 2010 Project; Amendment to Plan. The Authority covenants and agrees that the Authority shall diligently and in a sound and economical manner carry out and continue to completion, or cause to be carried out and continued to completion, with all practicable dispatch, the 2010 Project in accordance with its duty so to do under and in accordance with the Act and the Plan. The Plan may be amended by the Town, but the Authority shall not request that an amendment be made and shall contest or cause to be contested any amendment proposed by the Town unless the Authority shall have received an opinion of counsel to the Authority and reasonably acceptable to the Trustee, to the effect that such amendment would not (a) result in a failure of the Plan, as so amended, to comply with the -32- 10/5/2010 1 -1 -47 requirements of this Indenture, (b) result in an Event of Default by the Authority under this Indenture, and (c) adversely and materially affect the security for the Bonds. Section 5.07 Use of Proceeds. The Authority covenants and agrees that the proceeds of the sale of the Bonds will be deposited and used as provided in this Indenture. Section 5.08 Books and Accounts; Financial Statements. The Authority covenants and agrees that it shall at all times keep, or cause to be kept, proper and current books and accounts (separate from all other records and accounts) in which complete and accurate entries shall be made of all transactions relating to the 2010 Project, the Pledged Revenues, the Trust Funds and all other funds and accounts relating to the 2010 Project, and shall prepare within one hundred eighty days (six months) after the close of each Fiscal Year a complete financial statement or statements for such year in reasonable detail covering the 2010 Project, the Pledged Revenues, the Trust Funds and all other funds or accounts, certified by a certified public accountant or firm of certified public accountants selected by the Authority, and shall furnish a copy of such statement or statements to any Owner upon written request therefor and to the Trustee. Section 5.09 Protection of Security and Rights of Owners. To the extent permitted by law, the Authority covenants and agrees to preserve and protect the security of the Bonds and the rights of the Owners and to defend their rights under all claims and demands of all Persons. Without limiting the generality of the foregoing, the Authority covenants and agrees to contest or cause to be contested by litigation, court action or otherwise, to the extent permitted by law, (a) any action or claim made in any action or proceeding to which the Authority is a party or in which the subject of such action or claim is that the Pledged Revenues or Trust Funds pledged hereunder cannot be paid to or by the Authority for the Debt Service Requirements on the Bonds, or any other action or claim affecting the validity of the Bonds or diluting or adversely affecting the security therefor, and (b) any assertion by the United States of America or any department or agency thereof or any other Person that the interest received by the Owners is includible in gross income for purposes of federal income taxation. The Authority covenants and agrees to knowingly take no action which would result in (i) the Pledged Revenues being withheld from the Trustee, or (ii) the interest received by the Owners becoming includible in gross income for purposes of federal income taxation. Section 5.10 Certain Tax Covenants. (a) The Authority hereby covenants for the benefit of each Owner of the 2010A Bonds that it will not take any action or omit to take any action with respect to the 2010A Bonds, the proceeds thereof, any other funds of the Authority or the facilities financed by the proceeds of the 2010A Bonds if such action or omission (i) would cause the interest on the 2010A Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Tax Code, (ii) would cause interest on the 2010A Bonds to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code, or (iii) would cause interest on the 2010A Bonds to lose its exclusion from State taxable income under present State law. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the 2010A Bonds until the date on which all obligations of the Authority in fulfilling the above covenant under the Tax Code have been met. -33- 10/5/2010 1 -1 -48 (b) The Authority hereby makes an irrevocable election that Section 54AA of the Tax Code shall apply to the 2010B Bonds and that subsection (g) of Section 54AA will also apply to the 2010B Bonds so that the Authority will receive the BAB Credit. None of the Owners of the 2010B Bonds shall be entitled to any credit under Section 54AA of the Tax Code. The Authority covenants that it will not take any action or omit to take any action with respect to the 2010B Bonds, the proceeds thereof, any other funds of the Authority or the 2010 Project if such action or omission would case the Authority to not be entitled to the BAB Credit with respect to the 2010B Bonds. In furtherance of this covenant, the Authority agrees to comply with the procedures set forth in the Tax Compliance Certificate with respect to the 2010B Bonds. The foregoing covenants shall remain in full force and effect notwithstanding the payment in full or defeasance of the 2010B Bonds until the date on which all obligations of the Authority in fulfilling the above covenant have been met. The Authority shall timely file or cause to be filed any document required by the Internal Revenue Service to be filed in order to claim the BAB Credit. (c) For the purpose of Section 265(b)(3)(B) of the Tax Code, the Authority hereby designates the 2010A Bonds as qualified tax - exempt obligations. Section 5.11 Maintenance of Existence. To the extent permitted by law, the Authority covenants and agrees to take no action to terminate its existence as a public body corporate and politic so long as any Bonds remain Outstanding, and to initiate litigation if any such action is taken by any Person that is not in compliance with the Act. Section 5.12 Representations and Warranties of the Authority. The Authority hereby represents, covenants and warrants that: (a) The Authority is a body corporate and politic of the State duly organized and existing as an urban renewal authority under the laws of the State. (b) The grant of the Trust Estate to the Trustee pursuant to this Indenture is in the best interests of the Authority. (c) The 2010 Project is advantageous to the Authority. (d) The execution, delivery and performance of this Indenture by the Authority has been duly authorized by the Authority. (e) This Indenture is enforceable against the Authority in accordance with its terms, limited only by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally, by equitable principles, whether considered at law or in equity, by the exercise by the State of Colorado and its governmental bodies of the police power inherent in the sovereignty of the State of Colorado and by the exercise by the United States of America of the powers delegated to it by the Constitution of the United States of America. (f) The execution, delivery and performance of the terms of this Indenture by the Authority does not and will not conflict with or result in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Authority is now a party or by which the Authority is bound, or constitute a default under any of the foregoing, or, -34- 10/5/2010 1 -1 -49 except as specifically provided in this Indenture, result in the creation or imposition of any lien or encumbrance whatsoever upon any of the property or assets of the Authority. (g) There is no litigation or proceeding pending or threatened in writing against the Authority or any other Person affecting the right of the Authority to execute, deliver or perform its obligations under this Indenture. ARTICLE VI INVESTMENT OF MONEYS SECTION Section 6.01 Investment of Moneys. (a) Any moneys held as part of any Trust Fund shall be invested and reinvested by the Trustee, at the written direction of the Authority, in Permitted Investments in accordance with the provisions of the Investment Instructions. All Investment Instructions shall comply with applicable law and with the provisions set forth in the Tax Compliance Certificate and this Indenture. Any such investments shall be held in the name of the Trustee, as Trustee under this Indenture. The Trustee shall sell and reduce to cash a sufficient amount of such investments whenever the cash balance in any Trust Fund is insufficient to make a required payment from such Trust Fund or upon the written direction of the Authority. The Trustee shall incur no liability for any such investments or reinvestments hereunder except in the case of its negligence or failure to comply with any provision of the Investment Instructions. (b) The Authority covenants and certifies to the Trustee and to and for the benefit of the purchasers and Owners of the Outstanding Bonds that so long as any of the Bonds remain Outstanding, moneys on deposit in any Trust Fund or on deposit in any other fund or account created in connection with the Bonds, whether or not such moneys were derived from the proceeds of the sale of the Bonds or from any other sources, will be invested in accordance with the Investment Instructions, the Tax Compliance Certificate and this Indenture. Pursuant to such covenants, the Authority obligates itself to comply throughout the term of the issue of the Bonds with the requirements of the Tax Code and any regulations promulgated thereunder. The Authority shall direct the Trustee to take all such action as shall be necessary to insure compliance with such covenants of the Authority. (c) Obligations purchased as a result of an investment or reinvestment of moneys in any of the Trust Funds and the Rebate Fund shall be deemed at all times to be a part of such fund and the accounts therein, provided that the interest accruing on the Reserve Fund and on the Bond Fund (once all the deposits required in a given Fiscal Year have been made) and any gain realized from such investment or reinvestment on the Reserve Fund and the Bond Fund (once all the deposits required in a given Fiscal Year have been made) shall be credited to the Revenue Fund. Any interest accruing on or any gain realized from the investment or reinvestment of the Revenue Fund, the Bond Fund (prior to all required deposits being made in a given Fiscal Year), the Construction Fund or Rebate Fund shall be credited or retained in such fund. Any loss resulting from any authorized investment or reinvestment of moneys in any of the Trusts Funds and the Rebate Fund shall be charged to such fund or account without liability to the Authority or the Trustee or to the commissioners, officers, staff, attorneys, consultants, -35- 10/5/2010 1 -1 -50 agents and employees thereof. When a transfer from one Fund or Account to any other Fund or Account is required or permitted under this Indenture, the Trustee may transfer investments from one Fund or Account to another Fund or Account in lieu of cash. For the purpose of determining at any given time the balance in any fund or account, any such investment or reinvestment constituting a part of such fund or account shall be valued at fair market value. (d) The Trustee shall be entitled to assume that any investment, which at the time of purchase is a Permitted Investment, remains a Permitted Investment thereafter absent receipt of written notice or information to the contrary. Investments permitted under this Section 6.01 may be purchased from the Trustee or from any of its affiliates. The Trustee shall not be liable for any loss resulting from any such investment, nor from failure to preserve rights against endorsers or other prior parties to instruments evidencing any such investment. The Trustee shall have no liability or responsibility for any loss or for failure to maximize earnings resulting from any investment made in accordance with the provisions of the Section 6.01. (e) The Authority acknowledges that regulations of the Comptroller of the Currency grant the Authority the right to receive brokerage confirmations of the security transactions as they occur. The Authority specifically waives such notification to the extent permitted by law and will receive periodic cash transaction statements from the Trustee which will detail all investment transactions. ARTICLE VII DISCHARGE OF LIEN AND DEFEASANCE OF BONDS Section 7.01 Discharge of Lien and Defeasance of Bonds. (a) If the Authority shall pay or cause to be paid, or there shall otherwise be paid or provision for payment made, to the Owners of the Bonds the principal of, premium, if any, and interest due thereon at the times and in the manner stipulated therein, and if the Authority shall not then be in Default of any of the other covenants and promises in the Bonds and in this Indenture expressed as to be kept, performed and observed by it or on its part, and if the Authority shall pay or cause to be paid to the Trustee all sums of money due or to become due according to the provisions of this Indenture, then these presents and the estate and rights hereby granted shall cease, terminate and be void, whereupon the Trustee shall cancel and discharge the lien of this Indenture, and execute and deliver to the Authority such instruments in writing as shall be requisite to release the lien of this Indenture, and reconvey, release, assign and deliver unto the Authority any and all of the estate, right, title and interest in and to any and all rights or property conveyed, assigned or pledged to the Trustee or otherwise subject to the lien of this Indenture, except moneys held by the Trustee for the payment of the principal of, premium, if any, and interest on the Bonds. (b) Any Bond shall be deemed to be paid within the meaning of the Act, this Article VII and for all purposes of this Indenture when payment of the principal of, premium, if any, and interest due on such Bond to the due date thereof (whether such due date is by reason of maturity or upon redemption as provided herein) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided by irrevocably -36- 10/5/2010 1 -1 -51 depositing with the Trustee or any other commercial bank or trust company organized under the laws of the United States of America or any state thereof, in trust and irrevocably set aside exclusively for such payment, (A) moneys sufficient to make such payment, (B) Federal Securities, maturing as to principal and interest in such amount and at such time as will insure the availability of sufficient moneys to make such payment, or (C) a combination of cash and Federal Securities. At such times as a Bond shall be deemed to be paid hereunder, as aforesaid, such Bond shall no longer be secured by or entitled to the benefits of this Indenture, except for the purposes of any such payment from such moneys or Federal Securities. (c) In the case of the 2010B Bonds, the Authority is obligated to contribute additional securities or monies to the escrow or trust if necessary to provide sufficient amounts to satisfy the payment obligations on the 2010B Bonds. (d) Notwithstanding the foregoing, no deposit under clause (b)(ii) of the immediately preceding subsection shall be deemed a payment of such Bonds as aforesaid until the Trustee has received irrevocable instructions from the Authority to give proper notice of redemption of such Bonds in accordance with Article III of this Indenture, or in the event said Bonds are not to be called for prior redemption or are not by their terms subject to redemption within the next succeeding 60 days, until the Authority shall have given the Trustee, in a form reasonably satisfactory to the Trustee, irrevocable instructions to notify, as soon as practicable, the Owners of the Bonds, in accordance with Article III hereof, that the deposit required by (b)(ii) above has been made and that said Bonds are deemed to have been paid in accordance with this Article and stating the maturity or redemption date upon which moneys are to be available for the payment of the principal of and the applicable redemption premium, if any, on said Bonds, plus interest thereon to the due date thereof. (e) Notwithstanding any provision of any other Article of this Indenture which may be contrary to the provisions of this Article, all moneys or Federal Securities set aside and held in trust pursuant to the provisions of this Article for the payment of Bonds (including interest and premium thereon, if any) shall be applied to and used solely for the payment of the particular Bonds (including interest and premium thereof, if any) with respect to which such moneys and Federal Securities have been so set aside in trust. ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND OWNERS Section 8.01 Defaults; Events of Default. The occurrence of any of the following events is hereby declared to constitute an "Event of Default ": (a) Default in the due and punctual payment of interest on any Bond; (b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond, whether at the stated maturity thereof, or upon proceedings for redemption thereof, (c) a material default in the performance or observance of any other of the covenants, requirements, agreements or conditions on the part of the Authority set forth in this -37- 10/5/2010 1 -1 -52 Indenture or in the Bonds and failure to remedy the same after notice thereof pursuant to Section 8.11 hereof, or (d) the Authority shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition seeking reorganization of the Authority under the federal bankruptcy laws or any other applicable law of the United States of America, which petition, if filed without the consent of the Authority, shall be determined by the court to be meritorious, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Authority, or of the whole or ten percent (10 %) or more of its property. Section 8.02 Remedies, Rights of Owners. (a) Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Bonds; provided that acceleration shall not be a remedy available to enforce such payment. (b) If an Event of Default shall have occurred and be continuing and if requested to do so by the Owners of twenty -five percent (25 %) in aggregate principal amount of Outstanding Bonds and provided that indemnification is furnished as set forth in Section 9.02(m) hereof, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Section 8.02, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Owners. (c) No remedy conferred upon or reserved to the Trustee (or to the Owners) by the terms of this Indenture is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or to the Owners hereunder or now or hereafter existing at law or in equity. (d) No delay or omission to exercise any right or power accruing upon an Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein; such right or power may be exercised from time to time as often as may be deemed expedient. (e) No waiver of an Event of Default hereunder, whether by the Trustee or by the Owners, shall extend to or shall affect any subsequent Event of Default or shall impair any rights or remedies consequent thereon. Section 8.03 Right of Owners to Direct Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Outstanding Bonds shall have the right, at any time, by an instrument or instruments in writing executed and delivered to the Trustee, to direct the method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Indenture, or for the appointment of a receiver or any other proceedings hereunder, provided that such direction shall not be otherwise than in accordance with the provisions of law and of this Indenture. -38- 10/5/2010 1 -1 -53 Section 8.04 Appointment of Receivers. Upon the occurrence of an Event of Default, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Owners under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Trust Estate and of the revenues, earnings, income, products and profits thereof, pending a determination of such proceedings, with such powers as the court making such appointment shall confer. Section 8.05 Waiver. Upon the occurrence of an Event of Default, to the extent that such rights may then lawfully be waived, neither the Authority, nor anyone claiming through or under it, shall set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption laws of any jurisdiction now or hereafter in force, in order to prevent or hinder the enforcement of this Indenture, and the Authority, for itself and all who may claim through or under it, hereby waives, to the extent that it lawfully may do so, the benefit of all such laws. Section 8.06 Application of Moneys. All moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article shall, after payment of the reasonable costs and expenses of the proceedings resulting in the collection of such moneys and of the fees, expenses, liabilities and advances incurred or made by the Trustee including additional reasonable compensation for the Trustee's time and efforts in such proceedings, be deposited in the Bond Fund and all moneys in the Bond Fund shall be applied as follows: FIRST, to the payment to the Persons entitled thereto of all installments of interest then due on the Bonds, in the order of the maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or privilege; and SECOND, to the payment to the Persons entitled thereto of the unpaid principal of and premium, if any, on any of the Bonds which shall have become due (other than Bonds matured or called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture), with interest on such Bonds from the respective dates upon which they became due (with interest on overdue installments of interest, to the extent permitted by law, at the rate of interest borne by the respective Bond) and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment ratably, according to the amount of principal due on such date, to the Persons entitled thereto without any discrimination or privilege; and THIRD, to be held for the payment to the Persons entitled thereto as the same shall become due of the principal of and premium, if any, and interest on the Bonds which may thereafter become due either at maturity or upon call for redemption prior to maturity and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with interest then due and owing thereon, payment shall be made ratably according to the amount of principal due on such date to the Persons entitled thereto without any discrimination or privilege. -39- 10/5/2010 1 -1 -54 Whenever moneys are to be applied pursuant to the provisions of this Section 8.06, such moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, and shall not be required to make payment to the Owner of any Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Whenever the principal of, premium, if any, and interest on all Bonds have been paid under the provisions of this Section 8.06 and all reasonable expenses and charges of the Trustee have been paid, any balance remaining in the Bond Fund shall be disbursed as provided in Section 4.10 hereof. Notwithstanding the foregoing or any other provisions to the contrary in this Indenture, no proceeds of the 2010B Bonds shall be applied to the foregoing purposes unless the Authority or the Trustee has received an opinion of Bond Counsel that such application shall not disqualify the 2010B Bonds as Build America Bonds under Section 54AA of the Tax Code. Section 8.07 Remedies Vested in Trustee. All rights of action (including the right to file proof of claims) under this Indenture or under any of the Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding relating thereto, any such suit or proceeding instituted by the Trustee shall be brought in its name as the Trustee without the necessity of joining as plaintiffs or defendants any Owner of the Bonds, and any recovery of judgment shall be for the equal and ratable benefit of the Owners of the Outstanding Bonds. Section 8.08 Rights and Remedies of Owners. No Owner shall have any right to institute any suit, action or proceeding at law or in equity for the enforcement of this Indenture or for the execution of any trust hereof or for the appointment of a receiver or any other remedy hereunder, unless, (a) a Default has occurred of which the Trustee has been notified as provided in Section 9.02(h) hereof, or of which by said subsection it is deemed to have notice, unless such Default shall have become an Event of Default and the Owners of twenty -five percent (25 %) in aggregate principal amount of Outstanding Bonds shall have made written request to the Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in their own name or names, they have offered to the Trustee indemnity as provided in Section 9.02(m) hereof, nor unless the Trustee shall thereafter fail or refuse to exercise the powers hereinbefore granted, or to institute such action, suit or proceeding in its own name. Such notification, request and offer of indemnity are hereby declared in every case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of this Indenture, and to any action or cause of action for the enforcement of this Indenture, or for the appointment of a receiver or for any other remedy hereunder; it being understood and intended that no one or more Owners of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Indenture by -40- 10/5/2010 1 -1 -55 its, his, her or their action or to enforce any right hereunder except in the manner provided herein, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner provided herein and for the equal and ratable benefit of the Owners of all Outstanding Bonds. However, nothing set forth in this Indenture shall affect or impair the right of any Owner to enforce the payment of the principal of, premium, if any, and interest on any Bond at and after the maturity thereof, or the obligation of the Authority to pay the principal of, premium, if any, and interest on each of the Bonds issued hereunder to the respective Owners at the time, place, from the source and in the manner expressed in the Bonds. Section 8.09 Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the Authority, the Trustee and the Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken. Section 8.10 Waivers of Events of Default. The Trustee may, with the consent of the Owners of a majority in aggregate principal amount of Bonds then Outstanding, waive any Event of Default hereunder and its consequences, and notwithstanding anything else to the contrary contained in this Indenture, shall do so upon the written request of the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding; provided, however, that there shall not be waived any Event of Default in the payment of the principal of or interest on any Outstanding Bonds unless prior to such waiver or rescission, all arrears of principal and interest, both, to the extent permitted by law, with interest at the rate of interest borne by the respective Bond on overdue installments, and all expenses of the Trustee in connection with such Event of Default shall have been paid or provided for. In case of any such waiver or rescission, then and in every such case the Authority, the Trustee and the Owners shall be restored to their former positions and rights hereunder, respectively, but no such waiver or rescission shall extend to any subsequent or other Default, or impair any right consequent thereon. Section 8.11 Notice of Defaults Under Section 8.01(c); Opportunity to Cure. Anything herein to the contrary notwithstanding, including but not limited to Section 8.05 of this Indenture, no Default under Section 8.01(c) hereof shall constitute an Event of Default until actual notice of such Default by registered or certified mail shall be given to the Authority by the Trustee or by the Owners of not less, than twenty -five percent (25 %) in aggregate principal amount of all Outstanding Bonds and the Authority shall have had 30 days after receipt of such notice to correct said Default or cause said Default to be corrected, and shall not have corrected said Default or caused said Default to be corrected within the applicable period; provided, however, if said Default be such that it cannot be corrected within the applicable period, it shall not constitute an Event of Default if corrective action is instituted by the Authority within the applicable period and diligently pursued until the Default is corrected. -41- 10/5/2010 1 -1 -56 ARTICLE IX TRUSTEE Section 9.01 Representations and Warranties of the Trustee. The Trustee hereby represents, covenants and warrants that: (a) The Trustee is a national banking association that is duly organized, validly existing and in good standing under the laws of the United States of America and is duly qualified to do business in the State, to accept the grant of the Trust Estate from the Authority hereunder and to execute, deliver and perform its obligations under this Indenture. (b) The execution, delivery and performance of this Indenture by the Trustee has been duly authorized by the Trustee. (c) This Indenture is enforceable against the Trustee in accordance with its terms, limited only by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally, by equitable principles, whether considered at law or in equity, by the exercise by the State and its governmental bodies of the police power inherent in the sovereignty of the State and by the exercise by the United States of America of the powers delegated to it by the Constitution of the United States of America. (d) The execution, delivery and performance of the terms of this Indenture by the Trustee does not and will not conflict with or result in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Trustee is now a party or by which the Trustee is bound, or constitute a default under any of the foregoing or result in the creation or, except as specifically provided in this Indenture, imposition of a lien or encumbrance whatsoever upon the Trust Estate or any of the property or assets of the Trustee. (e) There is no litigation or proceeding pending or threatened in writing against the Trustee affecting the right of the Trustee to execute, deliver or perform its obligations under this Indenture. Section 9.02 Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions: (a) The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in the exercise of such rights and powers as an ordinary prudent trustee would exercise or use under an indenture similar to this Indenture. (b) The Trustee may execute any of the trusts or powers of this Indenture and perform any of its duties by or through attorneys, agents, receivers or employees, but shall not be responsible for the acts of any agents or attorneys appointed by it unless such appointment was -42- 10/5/2010 1 -1 -57 the result of its negligence or willful misconduct, and shall be entitled to advice of counsel concerning its duties hereunder, and may in all cases pay such reasonable compensation to all such attorneys, agents, receivers and employees as may reasonably be employed in connection with the trusts hereof. The Trustee may act upon the opinion or advice of any attorney (who may be the attorney or attorneys for the Authority) approved by the Trustee in the exercise of reasonable care. (c) The Trustee shall not be responsible for any recital herein or in the Bonds (except with respect to the certificate of the Trustee endorsed on the Bonds), or for the validity of the execution by the Authority of this Indenture or of any supplements hereto or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby, and the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions or agreements on the part of the Authority, except as set forth in subsection 9.02(h) of this Indenture; but the Trustee may require of the Authority full information and advice as to the performance of the covenants, conditions and agreements aforesaid. The Trustee shall have no obligation to perform any of the duties of the Authority hereunder. The Trustee shall have no responsibility with respect to any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the Bonds. The Trustee shall not be required to monitor the financial condition of the Authority or the physical condition of the 2010 Project. Unless otherwise expressly provided, the Trustee shall be under no obligation to analyze, review or make any credit decisions with respect to any financial statements, reports, notices, certificates or documents received hereunder but shall hold such financial statements reports, notices, certificates and documents solely for the benefit of, and review by, the Owners and such other parties to whom the Trustee may provide such information pursuant to this Indenture. (d) The Trustee shall not be accountable for the use of any Bonds authenticated or delivered hereunder. The Trustee may become the Owner of Bonds secured hereby and may otherwise deal with the Authority with the same rights which it would have if it were not the Trustee. (e) The Trustee shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram or other paper or document reasonably believed to be genuine and correct and to have been signed or sent by the proper Person or Persons. Any action taken by the Trustee pursuant to this Indenture upon the request or authority or consent of any Person who at the time of making such request or giving such authority or consent is the Owner of any Bond shall be conclusive and binding upon all future Owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof. (f) As to the existence or nonexistence of any fact or as to the sufficiency or. validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a certificate signed by the Authority Representative as sufficient evidence of the facts therein contained and prior to the occurrence of a Default of which the Trustee has been notified as provided in Section 9.02(h) hereof, or of which by Section 9.02(h) hereof it shall be deemed to have notice, may also accept a similar certificate to the effect that any particular dealing, transaction or action under this Indenture is necessary or expedient, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be -43- 10/5/2010 1 -1 -58 bound to secure the same. The Trustee may accept a certificate of such officials of the Authority who executed the Bonds (or their successors in office) under the seal of the Authority to the effect that a resolution in the form therein set forth has been adopted by the Authority as conclusive evidence that such resolution has been duly adopted and is in full force and effect. (g) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty, and the Trustee shall not be answerable for other than its negligence or willful misconduct, including without limitation a breach of fiduciary duty or gross negligence, or failure to comply with applicable law. (h) The Trustee shall not be required to take notice or be deemed to have notice of any Default hereunder (except failure by the Authority to file with the Trustee any document required by Section 5.04 of this Indenture) unless the Trustee shall be specifically notified in writing of such Default by the Authority or by the Owners of at least twenty -five percent (25 %) in aggregate principal amount of Outstanding Bonds, and all notices or other instruments required by this Indenture to be delivered to the Trustee, must, in order to be effective, be delivered at the Principal Corporate Trust Office of the Trustee, and in the absence of such notice so delivered the Trustee may conclusively assume there is no Default except as aforesaid. (i) All moneys received by the Trustee shall, until used or applied or invested as provided herein, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by this Indenture or by law. 0) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right fully to inspect any and all of the books and records of the Authority pertaining to the 2010 Project, the Pledged Revenues and the Bonds, and to make such copies and memoranda from and with regard thereto as may be desired. (k) The Trustee shall not be required to give any note or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises. (1) Notwithstanding anything elsewhere in this Indenture with respect to the authentication of any Bonds, the withdrawal of any cash, the release of any property or any action whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, in addition to that by the terms hereof required as a condition of such action, by the Trustee deemed desirable for the purpose of establishing the right of the Authority to the authentication of any Bonds, the withdrawal of any cash or the taking of any other action by the Trustee. (m) Before taking the action referred to in Sections 8.02 or 8.07 hereof, the Trustee may require that a satisfactory indemnity bond be furnished by or on behalf of the Owners for the reimbursement of all expenses to which it may be caused to incur and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence, default or non - conformity with applicable law in connection with any such action. -44- 10/5/2010 1 -1 -59 (n) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder, if it shall have reasonable grounds for believing repayment of such funds or adequate indemnity against such risk is not reasonably assured to it. Section 9.03 Fees, Charges and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement for all fees as set forth in accordance with its agreement with the Authority, which, notwithstanding any other provision hereof, may be amended at any time by agreement of the Authority and the Trustee without the consent of or notice to the Owners. The Trustee's rights to the payment of its fees and expenses shall survive its resignation or removal and the final payment or defeasance of the Bonds. Section 9.04 Notice to Owners if Default Occurs. If a Default occurs of which the Trustee is by Section 9.02(h) hereof required to take notice or if notice of Default be given as provided herein, then the Trustee shall promptly give notice thereof by registered or certified mail to the Owner of each Bond required by the terms of Section 5.06 hereof to be kept at the Principal Corporate Trust Office of the Trustee. Section 9.05 Intervention by Trustee. In any judicial proceeding to which the Authority is a party and which in the reasonable opinion of the Trustee and its counsel has a substantial bearing on the interests of the Owners of the Bonds, the Trustee may intervene on behalf of Owners and shall do so if requested in writing by the Owners of at least twenty -five percent (25 %) of the aggregate principal amount of Outstanding Bonds. Section 9.06 Successor Trustee. Any corporation or association into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, shall be and become successor Trustee hereunder and vested with all of the title to the Trust Estate and all the trusts, powers, discretions, immunities, privileges, duties, obligations, responsibilities and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 9.07 Resignation by Trustee. The Trustee and any successor Trustee may at any time resign from the trusts hereby created by giving 30 days written notice thereof by registered or certified mail (a) to the Authority and (b) to the Owner of each Bond as shown by the list of Owners required by Section 5.06 hereof to be kept by the Trustee, and such resignation shall not take effect until the appointment of a successor Trustee by the Owners or by the Authority. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. Section 9.08 Removal of Trustee. The Trustee may be removed at any time, after payment of all outstanding fees and expenses, by resolution of the Board or by an instrument or concurrent instruments in writing delivered to the Trustee and to the Authority and signed by the -45- 10/5/2010 1 -1 -60 Owners of a majority in aggregate principal amount of Outstanding Bonds. No removal of the Trustee shall be effective until the appointment of a successor Trustee by the Authority or by the Owners, as the case may be. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after receipt by the Trustee of an instrument of removal of the Trustee, the Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. Section 9.09 Appointment of Successor Trustee by Owners. In case the Trustee shall resign or be removed, or be dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable of acting, or in case it shall be taken under the control of any public officer or officers, or of a receiver appointed by a court, a successor may be appointed by the Owners of a majority in aggregate principal amount of Outstanding Bonds by an instrument or concurrent instruments in writing signed by such Owners, or by their attorneys in fact duly authorized, a copy of which shall be delivered personally or sent by registered mail to the Authority. In case of any such vacancy, the Authority, by an instrument executed, attested and sealed by those of its officials who executed and attested the Bonds or their successors in office, may appoint a temporary Trustee to fill such vacancy until a successor Trustee shall be appointed by the Owners in the manner above provided; and such temporary Trustee so appointed by the Authority shall immediately and without further act be superseded by the Trustee appointed by the Owners. Every such Trustee appointed pursuant to the provisions of this Section shall be a trust company or bank in good standing having a reported capital and surplus of not less than $50,000,000 if there be such an institution willing, qualified and able to accept the trust upon customary terms. Section 9.10 Acceptance by Any Successor Trustee. Every successor Trustee appointed shall execute, acknowledge and deliver to its predecessor and also to the Authority an instrument in writing accepting such appointment, and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties, obligations and responsibilities of its predecessor; but such predecessor shall, nevertheless, on the written request of the Authority, or of its successor, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys, documents and records held by it as the Trustee hereunder to its successor. Should any instrument in writing from the Authority be required by any successor Trustee for more fully and certainly vesting in such successor estate, rights, powers and duties hereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority. The resignation of any Trustee and the instrument or instruments removing any Trustee and appointing a successor hereunder, together with all other instruments provided for in this Article, shall be filed or recorded by the successor Trustee in each recording office where the Indenture shall have been filed or recorded, if any. -46- 10/5/2010 1 -1 -61 ARTICLE X SUPPLEMENTAL INDENTURES Section 10.01 Supplemental Indentures Not Requiring Consent of Owners. The Authority and the Trustee may, without consent of or notice to any of the Owners (except any consent required by Section 2.12 hereof with respect to a supplemental indenture described in subsection (e) hereof), enter into an indenture or indentures supplemental to this Indenture for any one or more of the following purposes so long as such action does not materially adversely affect the rights of the Owners hereunder: (a) to cure any ambiguity or formal defect or omission in this Indenture; (b) to grant to or confer upon the Trustee for the benefit of the Owners any additional rights, remedies, powers or authorities that may lawfully be granted to or conferred upon the Owners or the Trustee, or to impose any additional covenants, duties or responsibilities upon the Trustee for the benefit of the Owners or the Authority; (c) to subject to this Indenture additional revenues, properties or collateral; (d) to modify, amend or supplement this Indenture or any indenture supplemental hereto in such manner as to permit the qualification hereof and thereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect or to permit the qualification of the Bonds for sale under the securities laws of any of the states of the United States of America; (e) to provide for the issuance of Additional Bonds pursuant to and subject to the provisions of Section 2.12 hereof; (f) to evidence the succession of a new Trustee hereunder; (g) To preserve or protect the excludability from gross income for federal income tax purposes of the interest allocable to the 2010A Bonds; (h) To maintain the status of the 2010B Bonds as qualified Build America Bonds under Section 54AA of the Tax Code; (i) to permit continued compliance with the Tax Compliance Certificate; or 0) to make any other amendment to the terms and provisions of this Indenture that is not materially adverse to the interests of the Owners of the Bonds. Section 10.02 Supplemental Indentures Requiring Consent of Owners. Exclusive of supplemental indentures permitted by Section 10.01 hereof and subject to the terms and provisions set forth in this Section 10.02, and not otherwise, the Owners of not less than two - thirds (2/3) in aggregate principal amount of the Outstanding Bonds shall have the right, from time to time, anything set forth in this Indenture to the contrary notwithstanding, to consent to and approve the execution by the Authority and the Trustee of such other indenture or indentures -47- 10/5/2010 1 -1 -62 supplemental hereto as shall be deemed necessary and desirable by the Authority for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions set forth in this Indenture or in any supplemental indenture; provided, however, that nothing in this Section or in Section 10.01 hereof set forth shall permit, or be construed as permitting, without the consent of the Owners of all Bonds Outstanding who are materially adversely affected thereby, (a) an extension of the maturity of the principal of, or the interest on, any Bond issued hereunder, or (b) a reduction in the principal amount of, or redemption premium on, any Bond or the rate of interest thereon, or (c) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (d) a reduction in the aggregate principal amount of the Bonds required for consent to such supplemental indentures, or (e) the creation of any lien ranking prior to or on a parity with the lien of this Indenture on the Trust Estate or any part thereof, except as hereinbefore expressly permitted, or (f) the deprivation of the Owner of any Outstanding Bond of the lien hereby created on the Trust Estate. If at any time the Authority shall request the Trustee to enter into any such supplemental indenture for any of the purposes of this Section, the Trustee shall, upon being satisfactorily indemnified with respect to reasonable actual expenses, cause notice of the proposed execution of such supplemental indenture to be given by registered or certified mail to the Owner of each Bond. Such notices shall briefly set forth the nature of the proposed supplemental indenture and shall state that copies thereof are on file at the Principal Corporate Trust Office of the Trustee for inspection by all Owners. If, within 60 days or such longer period as shall be prescribed by the Authority following such notices, the Owners of not less than two - thirds (2/3) in aggregate principal amount of the Bonds Outstanding or of all Bonds Outstanding who are materially adversely affected thereby, as the case may be, at the time of the execution of any such supplemental indenture shall have consented to and approved the execution thereof as provided herein, no Owner of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Authority from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such supplemental indenture as in this Section 10.02 permitted and provided, this Indenture shall be and be deemed to be modified and amended in accordance therewith. ARTICLE XI MISCELLANEOUS Section 11.01 Consents of Owners. Any consent, request, direction, approval, objection or other instrument required by this Indenture to be signed and executed by the Owners may be in any number of concurrent documents and may be executed by such Owners in person or by an agent appointed in writing. Proof of the execution of any such consent, request, direction, approval, objection or other instrument or of the written appointment of any such agent or of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Indenture, and shall be conclusive in favor of the Trustee with regard to any action taken by it under such request or other instrument, namely: (a) The fact and date of the execution by any Person of any such writing may be proved by the certificate of any officer in any jurisdiction who by law has power to take -48- 10/5/2010 1 -1 -63 acknowledgments within such jurisdiction that the Person signing such writing acknowledged before him or her the execution thereof, or by an affidavit of any witness to such execution. (b) The fact of ownership of Bonds and the amount or amounts, numbers and other identification of such Bonds, and the date of holding the same shall be proved by the registration books of the Authority maintained by the Trustee pursuant to Section 5.06 hereof. For all purposes of this Indenture and of the proceedings for the enforcement hereof, such Person shall be deemed to continue to be the Owner of such Bond until the Trustee shall have received notice in writing to the contrary. Section 11.02 Limitation of Rights. With the exception of any rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Indenture or the Bonds is intended or shall be construed to give to any Person or company other than the parties hereto, and the Owners of the Bonds, any legal or equitable right, remedy or claim under or with respect to this Indenture or any covenants, conditions and provisions herein contained; this Indenture and all of the covenants, conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and the Owners of the Bonds as provided herein. Section 11.03 No Recourse Against Officers and Agents. Pursuant to § 11 -57 -209 of the Supplemental Act, if a member of the Board, or any officer or agent of the Authority acts in good faith, no civil recourse shall be available against such Board member, officer, or agent for payment of the principal or interest on the Bonds. Such recourse shall not be available either directly or indirectly through the Board or the Authority, or otherwise, whether by virtue of any constitution, statute, rule of law, enforcement of penalty, or otherwise. By the acceptance of the Bonds and as a part of the consideration of their sale or purchase, any person purchasing or selling such Bonds specifically waives any such recourse. Section 11.04 Limitation of Actions. Pursuant to Section 11 -57 -212 of the Supplemental Act, no legal or equitable action brought with respect to any legislative acts or proceedings of the Board in connection with the authorization or issuance of the Bonds shall be commenced more than thirty days after the authorization of the Bonds. Section 11.05 Severability. If any provision of this Indenture shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatever. Section 11.06 Notices. Any notice, request, complaint, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, postage prepaid, or sent by telegram, addressed as follows: if to the Authority, to Vail Reinvestment Authority, c/o the Town of Vail, 75 South Frontage Road, Vail, Colorado 81657, Attention: Secretary /Executive Director; if to the Trustee, to U.S. Bank National Association, 950 17 Street, 12 Floor, Denver, Colorado 80202, Attention: Corporate Trust Services. A duplicate copy of each notice required to be given hereunder by the Trustee or the Authority shall also be given to counsel designated by the Authority. The Authority and the Trustee may designate by written notice given by each to the others any further or different -49- 10/5/2010 1 -1 -64 means by which communication may be given and any further or different addresses to which subsequent notices, certificates or other communications shall be sent when required as contemplated by this Indenture. Section 11.07 Payments Due on Saturdays, Sundays and Holidays. In any case where the date of maturity of interest on or principal of the Bonds or the date fixed for redemption of any Bonds shall be in the Town of the Trustee's Principal Corporate Trust Office a Saturday, Sunday or a legal holiday or a day on which banking institutions are authorized by law to close, then payment of principal, premium, if any, or interest need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity, the interest payment date, or the date fixed for redemption, and no interest shall accrue for the period after such date. Section 11.08 Counterparts. This Indenture may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 11.09 Applicable Provisions of Law. This Indenture shall be governed by and construed in accordance with the laws of the State. Section 11.10 Rules of Interpretation. (a) In this Indenture, unless the context otherwise requires: (i) the terms "herein," "hereunder," "hereby," "hereto," "hereof and any similar terms refer to this Indenture as a whole and not to any particular article, section or subdivision hereof, and the term "heretofore" means before the date of execution of this Indenture, the term "now" means at the date of execution of this Indenture, and the term "hereafter" means after the date of execution of this Indenture; (ii) words of the masculine gender include correlative words of the feminine and neuter genders and words importing the singular number include the plural number and vice versa; and (b) Nothing expressed or implied in this Indenture is intended or shall be construed to confer upon or to give any Person, other than the Authority, the Trustee and the registered owners of the Bonds, any right, remedy or claim under or by reason of this Indenture or any covenant, agreement, condition or stipulation hereof. Section 11.11 Captions. The captions and headings in this Indenture are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Sections of this Indenture. -50- 10/5/2010 1 -1 -65 IN WITNESS WHEREOF, the Authority and the Trustee have executed this Indenture as of the date first above written. VAIL REINVESTMENT AUTHORITY By: Secretary /Executive Director By: Treasurer [SEAL] ATTEST: By: Clerk of the Board of Commissioners U.S. BANK NATIONAL ASSOCIATION, as Trustee By Title: -51- 10/5/2010 1 -1 -66 EXHIBIT A FORM OF 2010A BOND Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ( "DTC "), to the Registrar for registration of transfer, exchange, or payment, and any bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. Vail Reinvestment Authority Tax - Exempt Tax Increment Revenue Bond Series 2010A No. R- $ Ori Dated Interest Rate Maturity Date Date CUSIP Number October 28, 2010 REGISTERED OWNER: CEDE & CO PRINCIPAL AMOUNT: DOLLARS THIS CERTIFIES THAT, for value received, Vail Reinvestment Authority (the "Authority ") promises to pay to the registered owner specified above or registered assigns, but solely from the sources and in the manner referred to herein, the principal amount specified above on the aforesaid Maturity Date at the principal corporate trust office of the below - defined Trustee in Denver, Colorado, unless this bond (this "2010A Bond ") is called for earlier redemption, and to pay from those sources interest thereon at the rates per annum determined as described herein. The 2010A Bonds and any other bonds issued by the Authority pursuant to and in accordance with the Indenture of Trust dated as of October 28, 2010 (the "Indenture ") between the Authority and U.S. Bank National Association, as trustee (the "Trustee ") are referred to herein as the `Bonds." Interest on this Bond is payable on June 1 and December 1, beginning 1, 20, by check, draft or wire of the Trustee to be sent on or before each interest payment date (or, if such payment date is not a Business Day, on or before the next succeeding Business Day) to the person in whose name this Bond is registered in the registration records of the Trustee, and at the address appearing thereon, at the close of business on the fifteenth day of the calendar month (whether or not a business day) immediately preceding the month in which such payment date occurs (the "Record Date "). Any such interest not timely paid shall cease to be payable to the person who is the Owner hereof at the close of business on the Record Date and shall be payable to the person who is the Owner hereof at the close of business A -1 10/5/2010 1 -1 -67 on a Special Record Date, as provided in the Indenture, for the payment of such defaulted interest. Such Special Record Date shall be fixed by the Trustee pursuant to the terms of the Indenture. Alternative means of payment of interest may be used if mutually agreed to in writing between the Owner of any Bond and the Trustee, as provided in the Indenture. Capitalized terms used but not defined herein have the meanings assigned to them in the Indenture. This 2010A Bond bears interest, matures, is payable, is subject to redemption, and is transferable as provided in the Indenture. This 2010A Bond is one of an authorized issue of bonds designated the "Vail Reinvestment Authority Tax - Exempt Tax Increment Revenue Bonds, Series 2010A," limited, except as provided with respect to Additional Bonds, in aggregate principal amount to $ , issued by the Authority for the purpose of providing funds to finance the 2010 Project in accordance with the Colorado Urban Renewal Law, constituting part 1 of article 25 of title 31, Colorado Revised Statutes (the "Act "), as from time to time amended and supplemented. The 2010A Bonds are issued under the authority of the Act, the Supplemental Public Securities Act, constituting part 2 of article 57 of title 11, Colorado Revised Statutes (the "Supplemental Act "), as from time to time amended and supplemented, and under the authority of, and in full conformity with, the Constitution and the laws of the State of Colorado. Pursuant to Section 1I- 57 -210 of the Supplemental Act, this recital that the 2010A Bonds are issued pursuant to the Supplemental Act shall be conclusive evidence of the validity and regularity of the issuance of the 2010A Bonds after their delivery for value. The 2010A Bonds are and shall be special obligations of the Authority equally secured by an irrevocable pledge of, and payable as to principal, premium, if any, and interest from, the Trust Estate, except to the extent otherwise provided therein, without priority for number, date of sale, date of execution or date of delivery, except as provided in the Indenture. The Owners of the 2010A Bonds may not look to any general or other fund of the Authority for the payment of the principal of or interest thereon except the Trust Estate. Principal of, premium, if any, and interest on the 2010A Bonds shall not constitute an indebtedness, financial obligation or liability of the Town, the State or any political subdivision thereof, and neither the Town, the State nor any political subdivision thereof shall be liable thereon, nor in any event shall the principal of, premium, if any, or interest on the 2010A Bonds be payable out of any funds or properties other than the Trust Estate. Further, the 2010A Bonds shall not constitute a debt, indebtedness, financial obligation or liability within the meaning of any constitutional, statutory or charter debt limitation or provision applicable to the Town. Neither the members, officials, staff, attorneys or consultants of the Authority, or the Town, nor any persons executing the 2010A Bonds, shall be personally liable on the 2010A Bonds or subject to any personal liability or accountability by reason of the issuance thereof. The 2010A Bonds constitute an irrevocable first lien (but not necessarily an exclusive first lien) upon the Trust Estate, which includes but is not limited to the Pledged Property Tax Revenues. The Authority is issuing, simultaneously with the 2010A Bonds, its Vail Reinvestment Authority Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 201013, in the aggregate principal amount of $ , which have a lien on the Trust Estate on a parity with the 2010A Bonds. A -2 10/5/2010 1 -1 -68 Reference is hereby made to the Indenture, and to any and all modifications and amendments thereof, for a description of the provisions, terms and conditions upon which the 2010A Bonds of this issue are issued and secured, including, without limitation, the nature and extent of the security for the Bonds, the conditions for issuing Additional Bonds that are on a parity with the 2010A Bonds, provisions with respect to the custody and application of the proceeds of the 2010A Bonds, the collection and disposition of the revenues and moneys charged with and pledged to the payment of the principal of, interest on and any premium due in connection with the redemption of the 2010A Bonds, the terms and conditions on which the 2010A Bonds are issued, a description of the special funds created in the Indenture and the nature and extent of the security and pledge afforded thereby for the payment of the principal of, interest on and any premium due in connection with the redemption of the 2010A Bonds, and the manner of enforcement of said pledge, the terms and conditions upon which the 2010A Bonds will be deemed to be paid at or prior to maturity or redemption of the 2010A Bonds upon the making of provision for the full or partial payment thereof, the rights of the Owners upon the occurrence of an Event of Default, the rights, duties, immunities and obligations of the Authority and the members of the Board of the Authority and also the rights and remedies of the registered owners of the Bonds. Subject to the provisions of the Indenture, upon surrender for transfer of any Bond at the principal corporate trust office of the Trustee, duly endorsed for transfer or accompanied by an assignment duly executed by the Owner or the attorney for such Owner duly authorized in writing, the Authority shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds for a like aggregate principal amount, in an authorized denomination or denominations, and of like maturity, series and interest rate. Bonds may be exchanged at the principal corporate trust office of the Trustee for a like aggregate principal amount of Bonds of the same date, maturity, series and interest rate, or for a like aggregate principal amount of Bonds of other authorized denominations of the same date, maturity, series and interest rate. The Authority shall execute and the Trustee shall authenticate and deliver Bonds which the Owner making the exchange is entitled to receive, bearing numbers not then Outstanding. The execution by the Authority of any Bond of any authorized denomination shall constitute full and due authorization of such denomination, and the Trustee shall thereby be authorized to authenticate and deliver such Bond. The Trustee shall not be required to transfer or exchange any Bond during the period commencing on the Record Date and ending on the immediately following Interest Payment Date nor to transfer or exchange any Bond after the mailing of notice calling such Bond or portion thereof for redemption has been given as provided herein, nor during the period of fifteen (15) days next preceding the giving of such notice of redemption. In each case, the Trustee shall require the payment by the Owner requesting exchange or transfer only of any tax, fee, or other governmental charge required to be paid with respect to such exchange or transfer and a reasonable exchange or transfer fee. The Indenture permits amendments thereto with the approval of the Owners of not less than two- thirds or, in certain instances, 100% in aggregate principal amount of the Bonds at the time Outstanding, as defined in the Indenture. The Indenture also contains provisions permitting A -3 10/5/2010 1 -1 -69 the Authority and the Trustee to enter into amendments to the Indenture without the consent of the Owners of the Bonds for certain purposes, as set forth in the Indenture. This Bond is issued with the intent that the laws of the State of Colorado shall govern its legality, validity, enforceability and construction. For the purpose of Section 265(b)(3)(B) of the Internal Revenue Code, the Authority has designated the 2010A Bonds as qualified tax - exempt obligations. It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the execution and delivery of the Indenture, and the issuance of this 2010A Bond do exist, have happened and have been performed in due time, form and manner as required by law. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture, unless it shall have been authenticated by an authorized signatory of the Trustee. IN WITNESS WHEREOF, the Vail Reinvestment Authority has caused this 2010A Bond to be executed in its name by the signature of its Secretary /Executive Director and Treasurer and its corporate seal to be hereunto impressed or imprinted hereon and attested by the signature of its Clerk of the Board of Commissioners as of the date specified above. VAIL REINVESTMENT AUTHORITY B Secretary /Executive Director By: Treasurer [SEAL] ATTEST: By: Clerk of the Board of Commissioners A -4 10/5/2010 1 -1 -70 CERTIFICATE OF AUTHENTICATION This bond is one of the 2010A Bonds of the issue described in the above - referenced Indenture. U.S. BANK NATIONAL ASSOCIATION, as Trustee Dated: October 28, 2010 By Authorized Officer A -5 10/5/2010 1 -1 -71 ASSIGNMENT (The Trustee may require the payment, by the Owner of any Bond requesting transfer, of any reasonable charges, as well as any taxes, transfer fees or other governmental charges required to be paid with respect to such transfer.) FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the records kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed by a Member Of a Medallion Signature Program: Address of transferee: Social Security or other tax Identification number of transferee: NOTE: The signature to this Assignment must correspond with the name as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. A -6 10/5/2010 1 -1 -72 PAYMENT PANEL The following installments of principal (or portions thereof) of this Bond have been paid in accordance with the terms of the Indenture of Trust. Date of Principal Signature of Authorized Payment Prepaid Representative of the Owner [End of Form of 2010A Bond] A -7 10/5/2010 1 -1 -73 EXHIBIT B FORM OF 2010B BOND Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ( "DTC "), to the Registrar for registration of transfer, exchange, or payment, and any bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. Vail Reinvestment Authority Taxable Tax Increment Revenue Bond (Direct Pay Build America Bonds), Series 2010B No. R- $ Ori Dated Interest Rate Maturity Date Date CUSIP Number October 28, 2010 REGISTERED OWNER: CEDE & CO PRINCIPAL AMOUNT: DOLLARS THIS CERTIFIES THAT, for value received, Vail Reinvestment Authority (the "Authority ") promises to pay to the registered owner specified above or registered assigns, but solely from the sources and in the manner referred to herein, the principal amount specified above on the aforesaid Maturity Date at the principal corporate trust office of the below - defined Trustee in Denver, Colorado, unless this bond (this "2010B Bond ") is called for earlier redemption, and to pay from those sources interest thereon at the rates per annum determined as described herein. The 2010B Bonds and any other bonds issued by the Authority pursuant to and in accordance with the Indenture of Trust dated as of October 28, 2010 (the "Indenture ") between the Authority and U.S. Bank National Association, as trustee (the "Trustee ") are referred to herein as the `Bonds." Interest on this Bond is payable on June 1 and December 1, beginning 1, 20, by check, draft or wire of the Trustee to be sent on or before each interest payment date (or, if such payment date is not a Business Day, on or before the next succeeding Business Day) to the person in whose name this Bond is registered in the registration records of the Trustee, and at the address appearing thereon, at the close of business on the fifteenth day of the calendar month (whether or not a business day) immediately preceding the month in which such payment date occurs (the "Record Date "). Any such interest not timely paid shall cease to be payable to the person who is the Owner hereof at the close of business on the Record Date and shall be payable to the person who is the Owner hereof at the close of business B -1 10/5/2010 1 -1 -74 on a Special Record Date, as provided in the Indenture, for the payment of such defaulted interest. Such Special Record Date shall be fixed by the Trustee pursuant to the terms of the Indenture. Alternative means of payment of interest may be used if mutually agreed to in writing between the Owner of any Bond and the Trustee, as provided in the Indenture. Capitalized terms used but not defined herein have the meanings assigned to them in the Indenture. This 2010B Bond bears interest, matures, is payable, is subject to redemption, and is transferable as provided in the Indenture. This 2010B Bond is one of an authorized issue of bonds designated the "Vail Reinvestment Authority Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 2010B," limited, except as provided with respect to Additional Bonds, in aggregate principal amount to $ , issued by the Authority for the purpose of providing funds to finance the 2010 Project in accordance with the Colorado Urban Renewal Law, constituting part 1 of article 25 of title 31, Colorado Revised Statutes (the "Act "), as from time to time amended and supplemented. The 2010B Bonds are issued under the authority of the Act, the Supplemental Public Securities Act, constituting part 2 of article 57 of title 11, Colorado Revised Statutes (the "Supplemental Act "), as from time to time amended and supplemented, the Colorado Recovery and Reinvestment Finance Act of 2009, Title 11, Article 59.7, et seq., as from time to time amended and supplemented, and under the authority of, and in full conformity with, the Constitution and the laws of the State of Colorado. Pursuant to Section 11 -57 -210 of the Supplemental Act, this recital that the 2010B Bonds are issued pursuant to the Supplemental Act shall be conclusive evidence of the validity and regularity of the issuance of the 2010B Bonds after their delivery for value. The 2010B Bonds are and shall be special obligations of the Authority equally secured by an irrevocable pledge of, and payable as to principal, premium, if any, and interest from, the Trust Estate, except to the extent otherwise provided therein, without priority for number, date of sale, date of execution or date of delivery, except as provided in the Indenture. The Owners of the 2010B Bonds may not look to any general or other fund of the Authority for the payment of the principal of or interest thereon except the Trust Estate. Principal of, premium, if any, and interest on the 2010B Bonds shall not constitute an indebtedness, financial obligation or liability of the Town, the State or any political subdivision thereof, and neither the Town, the State nor any political subdivision thereof shall be liable thereon, nor in any event shall the principal of, premium, if any, or interest on the 2010B Bonds be payable out of any funds or properties other than the Trust Estate. Further, the 2010B Bonds shall not constitute a debt, indebtedness, financial obligation or liability within the meaning of any constitutional, statutory or charter debt limitation or provision applicable to the Town. Neither the members, officials, staff, attorneys or consultants of the Authority, or the Town, nor any persons executing the 2010B Bonds, shall be personally liable on the 2010B Bonds or subject to any personal liability or accountability by reason of the issuance thereof. The 2010B Bonds constitute an irrevocable first lien (but not necessarily an exclusive first lien) upon the Trust Estate, which includes but is not limited to the Pledged Property Tax Revenues. The Authority is issuing, simultaneously with the 2010B Bonds, its Vail Reinvestment Authority Tax - Exempt Tax Increment Revenue Bonds, Series 2010A, in the B -2 10/5/2010 1 -1 -75 aggregate principal amount of $ , which have a lien on the Trust Estate on a parity with the 2010B Bonds. Reference is hereby made to the Indenture, and to any and all modifications and amendments thereof, for a description of the provisions, terms and conditions upon which the 2010B Bonds of this issue are issued and secured, including, without limitation, the nature and extent of the security for the Bonds, the conditions for issuing Additional Bonds that are on a parity with the 2010B Bonds, provisions with respect to the custody and application of the proceeds of the 2010B Bonds, the collection and disposition of the revenues and moneys charged with and pledged to the payment of the principal of, interest on and any premium due in connection with the redemption of the 2010B Bonds, the terms and conditions on which the 2010B Bonds are issued, a description of the special funds created in the Indenture and the nature and extent of the security and pledge afforded thereby for the payment of the principal of, interest on and any premium due in connection with the redemption of the 2010B Bonds, and the manner of enforcement of said pledge, the terms and conditions upon which the 2010B Bonds will be deemed to be paid at or prior to maturity or redemption of the 2010B Bonds upon the making of provision for the full or partial payment thereof, the rights of the Owners upon the occurrence of an Event of Default, the rights, duties, immunities and obligations of the Authority and the members of the Board of the Authority and also the rights and remedies of the registered owners of the Bonds. Subject to the provisions of the Indenture, upon surrender for transfer of any Bond at the principal corporate trust office of the Trustee, duly endorsed for transfer or accompanied by an assignment duly executed by the Owner or the attorney for such Owner duly authorized in writing, the Authority shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds for a like aggregate principal amount, in an authorized denomination or denominations, and of like maturity, series and interest rate. Bonds may be exchanged at the principal corporate trust office of the Trustee for a like aggregate principal amount of Bonds of the same date, maturity, series and interest rate, or for a like aggregate principal amount of Bonds of other authorized denominations of the same date, maturity, series and interest rate. The Authority shall execute and the Trustee shall authenticate and deliver Bonds which the Owner making the exchange is entitled to receive, bearing numbers not then Outstanding. The execution by the Authority of any Bond of any authorized denomination shall constitute full and due authorization of such denomination, and the Trustee shall thereby be authorized to authenticate and deliver such Bond. The Trustee shall not be required to transfer or exchange any Bond during the period commencing on the Record Date and ending on the immediately following Interest Payment Date nor to transfer or exchange any Bond after the mailing of notice calling such Bond or portion thereof for redemption has been given as provided herein, nor during the period of fifteen (15) days next preceding the giving of such notice of redemption. In each case, the Trustee shall require the payment by the Owner requesting exchange or transfer only of any tax, fee, or other governmental charge required to be paid with respect to such exchange or transfer and a reasonable exchange or transfer fee. B -3 10/5/2010 1 -1 -76 The Indenture permits amendments thereto with the approval of the Owners of not less than two - thirds or, in certain instances, 100% in aggregate principal amount of the Bonds at the time Outstanding, as defined in the Indenture. The Indenture also contains provisions permitting the Authority and the Trustee to enter into amendments to the Indenture without the consent of the Owners of the Bonds for certain purposes, as set forth in the Indenture. This Bond is issued with the intent that the laws of the State of Colorado shall govern its legality, validity, enforceability and construction. The Authority has designated this 2010B Bond as a Build America Bond pursuant to Section 54AA of the Internal Revenue Code of 1986, as amended (the "Tax Code "). Although this 2010B Bond is issued by the Authority, which is a political subdivision of the State, interest on this 2010B Bond is not excludable from gross income for federal income tax purposes under Section 103 of the Tax Code. It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the execution and delivery of the Indenture, and the issuance of this 2010B Bond do exist, have happened and have been performed in due time, form and manner as required by law. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture, unless it shall have been authenticated by an authorized signatory of the Trustee. IN WITNESS WHEREOF, the Vail Reinvestment Authority has caused this 2010B Bond to be executed in its name by the signature of its Secretary /Executive Director and Treasurer and its corporate seal to be hereunto impressed or imprinted hereon and attested by the signature of its Clerk of the Board of Commissioners as of the date specified above. VAIL REINVESTMENT AUTHORITY By: Secretary /Executive Director By: Treasurer [SEAL] ATTEST: By: Clerk of the Board of Commissioners B -4 10/5/2010 1 -1 -77 CERTIFICATE OF AUTHENTICATION This bond is one of the 2010B Bonds of the issue described in the above - referenced Indenture. U.S. BANK NATIONAL ASSOCIATION, as Trustee Dated: October 28, 2010 By Authorized Officer B -5 10/5/2010 1 -1 -78 ASSIGNMENT (The Trustee may require the payment, by the Owner of any Bond requesting transfer, of any reasonable charges, as well as any taxes, transfer fees or other governmental charges required to be paid with respect to such transfer.) FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the records kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed by a Member Of a Medallion Signature Program: Address of transferee: Social Security or other tax Identification number of transferee: NOTE: The signature to this Assignment must correspond with the name as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. B -6 10/5/2010 1 -1 -79 PAYMENT PANEL The following installments of principal (or portions thereof) of this Bond have been paid in accordance with the terms of the Indenture of Trust. Date of Principal Signature of Authorized Payment Prepaid Representative of the Owner [End of Form of 2010B Bond] B -7 10/5/2010 1 -1 -80 EXHIBIT C FORM OF PROJECT ACCOUNT REQUISITION 2010[A] [B] PROJECT ACCOUNT REQUISITION NO. U.S. Bank National Association 950 17 Street, 12 Floor Denver, Colorado 80202 Attention: Corporate Trust Services Re: Direction to Make Disbursements from 2010[A][B] Project Account Established by Indenture of Trust dated as of October 28, 2010 between Vail Reinvestment Authority and U.S. Bank National Association, as trustee As Trustee under that certain Indenture of Trust dated as of October 28, 2010 (the "Indenture "), between Vail Reinvestment Authority (the "Authority ") and U.S. Bank National Association, you are hereby directed to pay the following from the 2010[A][B] Project Account created in Section 4.07 of the Indenture for the Project Costs (as defined in the Indenture) related to the 2010 Project described below: Payee Amount Purpose Payment Instructions The undersigned hereby certifies (a) that none of the items for which the payment is requisitioned has been the subject of any payment heretofore made from the Construction Fund; (b) that the item(s) for which payment is sought is or was reasonable and necessary in connection with the acquisition, construction and installation of the 2010 Project pursuant to the Indenture, and in all cases is a proper charge against the 2010[A][B] Project Account; (c) that all previously disbursed amounts from the 2010[A][B] Project Account have been spent in accordance with the related requisition; and (d) that no Event of Default (as defined in the Indenture) has occurred or is continuing or will occur as a result of the payment on this Requisition. The undersigned hereby further certifies that to the extent this requisition is made from the 2010B Project Account, all Project Costs to be paid or reimbursed are capital expenditures. The undersigned hereby certifies that the undersigned is authorized to execute and deliver this requisition on behalf of the Authority. Dated this day of , 20. VAIL REDEVELOPMENT AUTHORITY By Authority Representative C -1 10/5/2010 1 -1 -81 BOND PURCHASE AGREEMENT October 19, 2010 Vail Reinvestment Authority 75 South Frontage Road, Vail, Colorado 81657 Vail Reinvestment Authority, Colorado Tax - Exempt Tax Increment Revenue Bonds, Series 2010A Vail Reinvestment Authority, Colorado Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 2010B Ladies and Gentlemen: Upon the terms and conditions, and on the basis of the representations set forth in this Bond Purchase Agreement (this "Agreement "), in the Official Statement as described herein, and in the Sale Certificate attached hereto as Exhibit A , Piper Jaffray & Co. (the "Underwriter ") agrees to purchase $ aggregate principal amount of the "Vail Reinvestment Authority, Colorado, Tax - Exempt Tax Increment Revenue Bonds, Series 2010A" (the "2010A Bonds ") and $ aggregate principal amount of the Vail Reinvestment Authority, Colorado, Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 2010B (the "2010B Bonds" and together with the 2010A Bonds, the "Bonds ") issued by the Vail Reinvestment Authority, Colorado (the "Authority ") under and pursuant to an Indenture of Trust dated as of October 28, 2010 (the "Indenture ") between the Authority and U.S. Bank National Association, as trustee (the "Trustee "). The Bonds and the interest on the Bonds are payable from the Trust Estate, as defined in the Indenture, and such other amounts as described in the Indenture. The Underwriter agrees to purchase the Bonds for an aggregate purchase price of $ , which is equal to (i) with respect to the 2010A Bonds, the par amount of the 2010A Bonds of $ , less Underwriter's compensation of $ , plus original issue premium of $ and (ii) with respect to the 2010B Bonds, the par amount of the 2010B Bonds of $ , less Underwriter's compensation of $ The Authority's obligation to execute and deliver the Bonds shall be conditioned upon the acceptance of and payment for the entire aggregate principal amount of the Bonds by the Underwriter at the Closing (as defined in Section 2 hereof), and the Underwriter's obligation to purchase and accept delivery of the Bonds shall be conditioned upon the tender for sale and delivery of the entire aggregate principal amount of the Bonds. All capitalized terms used but not defined herein shall have the meanings assigned to them in the Indenture. 10/5/2010 1 -1 -82 The Authority has previously caused to be prepared a Preliminary Official Statement concerning the Bonds, dated October , 2010 which is deemed final as of its date (the "Preliminary Official Statement ") for purposes of allowing the Underwriter to comply with Rule 15c2 -12 of the Securities and Exchange Commission (the "Rule "), except for the information specifically permitted to be omitted by the Rule. The Authority authorizes and ratifies the distribution of the Preliminary Official Statement to any potential customers (as defined in the Rule) until the Final Official Statement (defined below) is available. A Final Official Statement to be dated as of the date of its delivery to the Underwriter (the "Final Official Statement ") is hereby approved in substantially the form of the Preliminary Official Statement with such changes as may be approved by the Chair of the Board of the Authority (the "Chair "), and the Chair's execution thereof shall be conclusive evidence of such approval. The Final Official Statement, together with any and all supplements and amendments which may be approved by the Authority and the Underwriter, is referred to herein as the "Official Statement." The Authority authorizes and approves the use of the Official Statement in connection with the offering of the Bonds. Within seven business days of the date hereof and, in any event, unless otherwise agreed to by the parties hereto, at least three business days prior to Closing (as hereinafter defined), the Authority will deliver to the Underwriter copies of the Official Statement hereof in sufficient quantities to enable the Underwriter to comply with the Rule and other applicable rules of the Securities and Exchange Commission and the Municipal Securities Rulemaking Board. The expense of preparing, printing and /or posting the Preliminary Official Statement, the Official Statement and any attorneys' fees will be an expense of the authorization, sale and delivery of the Bonds. The Underwriter shall submit a copy of the Official Statement to the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System for municipal securities disclosures. Section 1. The Authority, by its acceptance of this Agreement, represents to the Underwriter that: (a) the Authority is a public body corporate and politic duly established by the Town of Vail, Colorado (the "Town "), under and pursuant to the laws of the State of Colorado (the "State ") and is authorized to transact business and exercise its powers as an urban renewal authority, all under and pursuant to the Colorado Urban Renewal Law, constituting part 1 of article 25 of title 31, Colorado Revised Statutes (the "Act "); (b) the Authority has full legal right, power and authority to consummate all transactions contemplated to be consummated by it under (i) the resolution passed and approved by the Board of Commissioners of the Authority (the "Board ") on October 5, 2010 (the "Resolution ") authorizing the issuance of the Bonds, the execution and delivery of the Indenture and other matters related thereto; (ii) the Bonds, the Indenture, the Filing Agent Agreement, dated October 28, 2010, between the Authority and the Trustee, as filing agent (the "Filing Agent Agreement "), the Continuing Disclosure Certificate executed by the Authority relating to the Bonds (the "Continuing Disclosure Certificate ") and this Agreement (collectively with the Resolution, the "Principal Documents "); and -2- 10/5/2010 1 -1 -83 (iii) all certificates and other documents executed and delivered by the Authority in connection with the execution and delivery of the Principal Documents; (c) the Authority has, or prior to the Closing (as defined in Section 2 hereof) will have, duly authorized and taken all necessary action to be taken by it for: the execution, delivery, receipt and due performance of the Principal Documents and the carrying out, giving effect to and consummation of the transactions contemplated to be consummated by it under the Principal Documents; (d) there are no legal or governmental actions, suits, proceedings, inquiries or investigations pending or threatened in writing against the Authority in which an unfavorable decision, ruling or finding would materially adversely affect the validity of or the transactions contemplated by the Principal Documents, the ability of the Authority to assign the Trust Estate to the Trustee pursuant to the Indenture, or the ability of the Authority otherwise to comply with its obligations under the Principal Documents, except as disclosed in the Official Statement; (e) no approval, authorization, consent or other order of any public board or body which has not been obtained, other than registration under and compliance with the securities laws of the various states as to which no representation is made by the Authority, is legally required for the consummation of the provisions of the Principal Documents by the Authority or any other transaction by the Authority contemplated by the Principal Documents; (f) the execution, delivery and due performance of and compliance with the Principal Documents by the Authority and the consummation of the transactions contemplated by the Principal Documents by the Authority do not conflict with or result in a breach of or default under any existing administrative or court order or decree or the terms, conditions or provisions of any restriction or any agreement or instrument to which the Authority is now a party or by which the Authority is bound, or constitute a default under any of the foregoing in a manner which affects the validity or enforceability of the provisions of the Principal Documents; (g) the Principal Documents shall, at the Closing, have been duly authorized, executed, received and delivered by the Authority and, assuming their enforceability against the other parties thereto, as applicable, constitute valid, legal and binding obligations of the Authority, enforceable in accordance with their terms, subject only to bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally and equitable principles, whether considered at law or in equity; and (h) any certificate signed by any of the Authority's authorized officials or officers and delivered to the Underwriter shall be deemed a representation and warranty by the Authority to the Underwriter as of the Closing as to the statements made therein. Section 2. In this Agreement, the term "Closing" means the consummation of the issuance and sale of the Bonds by the Authority and the purchase of the Bonds by the Underwriter. The Closing is currently scheduled to occur at the offices of Sherman & -3- 10/5/2010 1 -1 -84 Howard L.L.C., Denver, Colorado, at 9:00 a.m. on October 28, 2010, and may occur at such different place or time as may be agreed to by the Authority and the Underwriter. At the Closing, the Authority will cause the Trustee to authenticate and deliver the Bonds in definitive form to The Depository Trust Company ( "DTC ") for the account of the Underwriter against receipt by the Authority of the full amount of the purchase price. Physical delivery of the Bonds shall be made to the Trustee, as agent for DTC under the Fast Automated Securities Transfer system, or as otherwise instructed by the Authority. Section 3. The obligations of the Underwriter under this Agreement shall be subject to the due performance by the Authority, the Town and the Trustee of their respective obligations and agreements to be performed at or prior to the Closing, to the execution and delivery of the Bonds by the Authority and to the accuracy of and compliance with the Authority's representations contained in this Agreement as of the date of this Agreement and as of the Closing. The Underwriter's obligations under this Agreement also are subject to the Underwriter's receipt of each of the following in form and substance satisfactory to the Underwriter: (a) A certified copy of the Resolution; (b) Executed copies of the Indenture, the Filing Agent Agreement and the Continuing Disclosure Certificate; (c) The approving opinion of Sherman & Howard L.L.C., as bond counsel to the Authority ( "Bond Counsel "), to the effect that (A) the Bonds are valid and binding, special, limited obligations of the Authority payable solely from the Pledged Revenues and from funds and accounts pledged therefor under the Indenture; (B) the Indenture constitutes a valid and binding obligation of the Authority; (C) the Indenture creates a valid lien on the Pledged Revenues pledged therein for the security of the Bonds; and (D) interest on the 2010A Bonds is excluded from gross income for federal income tax purposes, from alternative minimum taxable income for federal income tax purposes, and from all taxes by the State; (d) The letter of Sherman & Howard L.L.C., as special counsel to the Authority in connection with the Official Statement ( "Special Counsel "), to the effect that in their assistance in the preparation of the Official Statement nothing has come to their attention which would lead them to believe that the Official Statement (except for any financial statements, demographic, economic, engineering, financial or statistical data, any statements of trends, forecasts, estimates, projections, assumptions or any expressions of opinion, and information concerning The Depository Trust Company and its procedures contained in the Official Statement and its appendices, as to which no view need be expressed) contained any untrue statement of a material fact or omitted any material fact required to be stated therein or necessary to make the statements in the Official Statement, in light of the circumstances under which they were made, not misleading; (e) A certificate signed by the Chair, Treasurer and Secretary /Executive Director of the Authority to the effect that: (A) the Authority has duly performed all of -4- 10/5/2010 1 -1 -85 its obligations to be performed at or prior to the Closing, and each of its representations and warranties in this Agreement are true as of the Closing; (B) the Authority has authorized, by all necessary action, the execution, delivery, receipt and due performance of the Principal Documents; (C) to the Authority's knowledge, no litigation is pending or threatened in writing against the Authority to restrain or enjoin or in any way affecting any authority for or the validity of the Principal Documents or the Authority's existence, except as disclosed in the Official Statement; (D) to the Authority's knowledge, the execution, delivery, receipt and due performance of the Principal Documents, and the Authority's compliance with the provisions of those documents, will not conflict with or constitute on its part a breach of or default under any existing administrative or court order or decree against the Authority or any agreement, indenture, mortgage, lease or other instrument to which the Authority is subject or by which it is bound; and (E) the information set forth in the Official Statement (other than the information concerning The Depository Trust Company and information set forth therein under any caption where a source other than the Authority is indicated, as to which no belief need be expressed) as of its date does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (f) The legal opinion of the Authority's Attorney, that the Authority is a body corporate and politic, duly organized and existing as an urban renewal authority under the Act; that the execution and delivery of the Principal Documents have been duly authorized by all necessary corporate action of the Authority and the Principal Documents have been duly executed on behalf of the Authority and constitute valid and binding obligations of the Authority; that to her knowledge, the execution and delivery of the Principal Documents, the fulfillment of or compliance with the terms and conditions thereof and the performance of the obligations of the Authority thereunder do not conflict with or result in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Authority is now a party or by which the Authority is bound, or constitute a default under any of the foregoing and do not conflict with or constitute a violation of any order, rule, regulation, decree or ordinance of any court, government or governmental authority having jurisdiction over the Authority or its property and which conflict or violation will have a material adverse effect on the Authority or the Pledged Revenues; that there is no litigation or proceeding pending for which the Authority has been duly served or, to her knowledge, threatened against the Authority affecting the right of the Authority to execute and deliver the Principal Documents or to comply with its obligations thereunder, except as disclosed in the Official Statement; (g) A certificate of the Trustee, executed by an authorized officer of the Trustee, to the effect that: (A) the Trustee has duly executed and delivered the Indenture and the Filing Agent Agreement, has duly accepted the duties and obligations imposed upon it pursuant to the Indenture and the Filing Agent Agreement, and has duly authenticated the Bonds pursuant to the Indenture; and (B) to the knowledge of the Trustee, there is no litigation or proceeding pending or threatened against the Trustee or any other person affecting the right of the Trustee to authenticate the Bonds, to execute and deliver any of the Principal Documents to which the Trustee is a party, or the ability -5- 10/5/2010 1 -1 -86 of the Trustee otherwise to comply with its obligations under the Principal Documents; and (h) Such additional certificates, opinions, instruments and other documents as the Underwriter or Bond Counsel may reasonably request to evidence performance of or compliance with the transactions and requirements contemplated by this Agreement and by the Official Statement. (i) All proceedings and related matters in connection with the Principal Documents shall have been satisfactory to Bond Counsel, and Bond Counsel shall have been furnished with all papers, certificates and information as it may have reasonably requested to enable it to pass upon the matters referred to in its opinion. If any condition stated in this Section is not satisfied at or prior to the Closing, this Agreement may be terminated by the Underwriter by notifying the Authority in writing, and in that event, neither the Underwriter nor the Authority shall have any further obligation under or by virtue of this Agreement, except for the obligations of the parties to pay expenses as specified in Section 6 hereof. The Underwriter may waive compliance by the Authority with or extend the time for performance of any one or more of the conditions stated in this Section; and, by accepting delivery of the Bonds, shall be deemed to have waived compliance by the Authority with any condition stated in this Section that has not been complied with. Section 4. The Underwriter shall have the right to cancel its obligations hereunder to purchase the Bonds by notifying the Authority in writing or by telephonic facsimile of its election to do so between the date hereof and the Closing, if at any time hereafter and prior to the Closing, any of the following events occur which, in the Underwriter's reasonable judgment materially adversely affects the market price of the Bonds: (a) a tentative decision with respect to legislation shall be reached by a committee of the House of Underwriter or the Senate of the Congress of the United States of America, or legislation shall be favorably reported by such a committee or be introduced by amendment or otherwise, in, or be passed by, the House of Underwriter or the Senate, or recommended to the Congress of the United States of America for passage by the President of the United States of America, or be enacted by the Congress of the United States of America, or a decision by a court established under Article III of the Constitution of the United States, or the Tax Court of the United States, shall be rendered, or a ruling, regulation or order of the Treasury Department of the United States of America or the Internal Revenue Service shall be made or proposed, or any other event shall have occurred which results in the imposition of federal income taxation upon interest received on obligations of the general character of the 2010A Bonds, or the 2010A Bonds, or results in the loss of the BAB Credit with respect to the 2010B Bonds; (b) any legislation, ordinance, rule or regulation shall be introduced in or be enacted by any governmental body, department or agency in the State of Colorado or a decision by any court of competent jurisdiction within the State of Colorado shall be rendered which, in the Underwriter reasonable opinion materially adversely affects the market price of the Bonds; -6- 10/5/2010 1 -1 -87 (c) a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction over the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all the underlying obligations, as contemplated by the Principal Documents or by the Official Statement, is in violation or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; (d) legislation shall be introduced in or enacted by the Congress of the United States of America, or a decision by a court established under Article III of the Constitution of the United States, or the Tax Court of the United States, shall be rendered, or a ruling, regulation or official statement of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that obligations of the general character of the Bonds, or the Bonds, including all the underlying obligations, are not exempt from registration under or from other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; (e) any event shall have occurred, or information become known, which, in the Underwriter's reasonable opinion, makes untrue in any material respect any statement or information contained in the Official Statement or has the effect that the Official Statement contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, to the extent that the Official Statement cannot be amended or supplemented prior to Closing; (f) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (g) the New York Stock Exchange or any national securities exchange, or any governmental authority, shall have imposed, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force or being enforced, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; (h) a general banking moratorium shall have been established by federal or State of Colorado authorities; or (i) a war involving the United States of America shall have been declared, or any conflict involving the armed forces of the United States of America shall have escalated, or any other national emergency relating to the effective operation of government or the financial community shall have occurred. -7- 10/5/2010 1 -1 -88 Section 5. The Authority's obligations under this Agreement are subject to the performance by the Underwriter of its obligations and agreements under this Agreement and are also subject to the following conditions: (a) As of the Closing, the opinions and other items referred to in Section 3 of this Agreement shall have been executed and delivered. (b) All opinions, certificates and other documents relating to the Authority's participation in the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Authority. The Authority may waive compliance by the Underwriter with or extend the time for performance of any one or more of the conditions stated in this Section; and, by accepting payment for the Bonds, shall be deemed to have waived compliance by the Underwriter with any condition stated in this Section that has not been complied with. Section 6. All expenses incident to the issuance of the Bonds, including, without limitation, the costs of printing of the Bonds, advertising costs, the costs of printing, duplicating and mailing the Official Statement, the fees of consultants and rating agencies, the initial fees of the Trustee in connection with the Bonds, the fees and expenses of Bond Counsel and Special Disclosure Counsel, and the fees and expenses of counsel for the Authority, shall be paid from proceeds of the Bonds. All out -of- pocket expenses of the Underwriter, including travel and other expenses, shall be paid by the Underwriter. If the Underwriter terminates this Agreement for a reason other than a reason permitted hereunder, and if at the time of such termination the Authority has satisfied the conditions to the Underwriter's obligations contained herein, the Underwriter agrees to pay all out -of- pocket expenses incurred by the Authority, including reasonable attorney's fees and disbursements, which relate to the financing. Such payment by the Underwriter shall constitute full liquidated damages for such termination and for any and all defaults on the part of the Underwriter and shall constitute a full release and discharge of all claims and damages for such termination and for any and all such defaults. Section 7. Any notice or other communication to be given to the Authority under this Agreement may be given by mailing or delivering the notice or communication in writing to Vail Reinvestment Authority, Colorado, 75 South Frontage Road, Vail, Colorado 81657; Attention: Treasurer; any notice or other communication to be given to the Underwriter under this Agreement may be given by mailing or delivering the notice or communication in writing to Piper Jaffray & Co., 1200 17" Street, Suite 1250, Denver, Colorado 80202. Section 8. This Agreement shall be governed by the laws of the State of Colorado. Section 9. This Agreement may be executed in several counterparts, each of which shall be regarded as an original document and all of which shall constitute one and the same document. Section 10. No official, officer, agent or employee of the Authority or member of its Board shall be charged personally or in his or her official capacity by the Underwriter with any liability, or held liable to the Underwriter under any term or provision of this Agreement, or -8- 10/5/2010 1 -1 -89 because of its execution or attempted execution, or because of any breach, or attempted or alleged breach, of this Agreement. Section 11. This Agreement shall become effective upon the execution of the acceptance by the Authority as specified below and shall be valid and enforceable as of the time of acceptance. Section 12. Time shall be of the essence in this Agreement. Very truly yours, PIPER JAFFRAY & CO. By: Title: -9- 10/5/2010 1 -1 -90 Accepted as of p.m. on October 19, 2010; such execution having been authorized by a resolution of the Board of the Authority passed and adopted on October 5, 2010. VAIL REINVESTMENT AUTHORITY, COLORADO By: Secretary /Executive Director -10- 10/5/2010 1 -1 -91 EXHIBIT A (Attach Sale Certificate) A -1 10/5/2010 1 -1 -92 FILING AGENT AGREEMENT This FILING AGENT AGREEMENT (this "Agreement ") is entered into as of October 28, 2010, by and between the Vail Reinvestment Authority, a Colorado urban renewal authority (the "Issuer ") and U.S. Bank National Association (the "Bank "), as Filing Agent. RECITALS WHEREAS, the Issuer has duly authorized, sold and provided for the issuance of its Tax Exempt Tax Increment Revenue Bonds, Series 2010A (the "2010A Bonds ") and its Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 2010B (the "2010B Bonds" or, together with the 2010A Bonds, the `Bonds ") in an aggregate principal amount of $ to be issued as fully registered bonds without coupons; WHEREAS, the Issuer will ensure that all things necessary to make the 2010B Bonds the valid obligations of the Issuer, in accordance with their terms, will be done upon the issuance and delivery thereof, WHEREAS, the Issuer and the Bank wish to provide the terms under which the Bank will act as Filing Agent for the purpose of requisitioning from the United States Treasury, Internal Revenue Service ( "IRS "), on a semiannual basis, the federal subsidy payment equal to 35% of the amount of each interest payment on the 2010B Bonds (the "Direct Payment ") pursuant to the American Recovery and Reinvestment Act of 2009 (the "Recovery Act "); WHEREAS, the Bank has agreed to serve in such capacity for and on behalf of the Issuer in addition to its service as trustee under an Indenture of Trust, dated as of October 28, 2010 (the "Indenture "), between the Issuer and the Bank, as trustee; and WHEREAS, the Issuer has duly authorized the execution and delivery of this Agreement, and all things necessary to make this Agreement a valid agreement have been done. NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE DEFINITIONS Section 1.01. Definitions. For all purposes of this Agreement except as otherwise expressly provided or unless the context otherwise requires: "Bank" means U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America. "Direct Payment" has the meaning set out in the Recitals. 10/5/2010 1 -1 -93 "Interest Payment Date" means, with respect to the Bonds, each June 1 and December 1, commencing June 1, 2011 through June 1, 2030. "IRS" means the United States Treasury, Internal Revenue Service. "Issuer" means Vail Reinvestment Authority, an urban renewal authority, its successors and assigns. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government or any entity whatsoever. "Recovery Act" means the American Recovery and Reinvestment Act of 2009. ARTICLE TWO APPOINTMENT OF BANK AS FILING AGENT Section 2.01. Appointment and Acceptance. The Issuer hereby appoints the Bank to act as Filing Agent with respect to the 2010B Bonds for the specific purpose of requisitioning from the IRS on a semiannual basis the Direct Payment pursuant to the Recovery Act, as more specifically described in Article Three. The Bank hereby accepts its appointment and agrees to act as Filing Agent hereunder in accordance with the terms and provisions set forth in this Agreement. Section 2.02. Compensation. As compensation for the Bank's services as Filing Agent, the Issuer hereby agrees to pay the Bank the fee set forth fee schedule attached hereto as Exhibit A and made a part of this Agreement ( "Fee Schedule "). In addition, the Issuer agrees to reimburse the Bank, within 30 days of its written request, for all reasonable and necessary out -of- pocket expenses, disbursements, and advances, including without limitation the reasonable fees, expenses, and disbursements of its agents and attorneys, made or incurred by the Bank in connection with performing under this Agreement. ARTICLE THREE DUTIES Section 3.01. Duties of Filing Agent. As Filing Agent, the Bank agrees to and shall, between the 45 and 9& days prior to each Interest Payment Date, file with the IRS a completed and executed Form 8038 -CP requesting the Direct Payment with respect to the 2010B Bonds or any other form or agreement as may be hereafter required by the IRS in order for the Issuer to receive its BAB subsidy. After preparing the Form 8038 -CP and prior to filing with the IRS, the Bank will submit the Form 8038 -CP to the Issuer to review and execute. A blank Form 8038 -CP together with the Instructions for Form 8038 -CP (April 2010) are attached hereto as Exhibit B and are made a part of this Agreement. To the extent that the IRS revises Form 8038 -CP or requires an additional or different form to be filed with the IRS to receive the Direct Payment, the Bank, as Filing Agent, agrees to file 2 10/5/2010 1 -1 -94 with the IRS a completed and executed copy of any such amended or additional form and to provide any such amended or additional form to the Authority for its review and execution prior to filing with the IRS. Section 3.02. Duties of Issuer The Issuer agrees to cooperate with the Filing Agent, upon its request, in the completion and execution of each Form 8038 -CP so filed with the IRS, including without limitation furnishing to the Filing Agent a complete debt service schedule that provides a list of each Interest Payment Date, the total interest payable on such date, the total principal amount of 2010B Bonds expected to be outstanding on such date, the Direct Payment expected to be required from the Internal Revenue Service on such date, and the earliest date that 2010B Bonds can be called for optional redemption. ARTICLE FOUR THE ISSUER Section 4.01. Issuer Agreements. The Issuer agrees that: (a) Within twenty (20) business days following issuance of the 2010B Bonds, it will file with the IRS, and provide a copy to the Filing Agent a completed and executed Form 8038 -B with an attached complete debt service schedule, titled "Fixed Rate Bond — Debt Service Schedule," that provides the information described in the debt service schedule provided for in Section 3.02 above; (b) On each Interest Payment Date, the Issuer will cause 100% of the interest and/or principal payment then due on the 2010B Bonds to be paid to the Bank, as Trustee with respect to the 2010B Bonds, in accordance with the provisions of the Indenture. The Issuer shall have the option of having the Direct Payment paid by the IRS directly to the Bank, as trustee under the Indenture, or directly to the Issuer in partial reimbursement to the Issuer for payment of interest on the 2010B Bonds on such date; and (c) It will review each Form 8038 -CP prior to submission to the IRS by the Filing Agent and will cause it to be signed by an authorized official of the Issuer. The signature of the Secretary /Executive Director or the Treasurer of the Issuer shall serve as confirmation to the Filing Agent that the Issuer has reviewed the 8038 -CP and confirms that the information contained thereon is complete and accurate. (d) No implied duties or obligations shall be read into this Agreement against the Authority. ARTICLE FIVE THE BANK Section 5.01. Agreements of Bank. The Bank undertakes to perform the duties set forth herein. No implied duties or obligations shall be read into this Agreement against the Bank. 3 10/5/2010 1 -1 -95 Section 5.02. Reliance on Documents, etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank by the Issuer. (b) The Bank shall not be liable for any error of judgment made in good faith. The Bank shall not be liable for other than its negligence or willful misconduct in connection with any act or omission hereunder. (c) No provision of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder or in the exercise of any of its rights or powers. (d) The Bank may rely, or be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. (e) The Bank may consult with counsel, and the written advice or opinion of counsel shall be full authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith and reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys and shall not be liable for the actions of such agent or attorney if appointed by it with reasonable care. (g) The Bank shall not be liable for the failure of the IRS to make timely Direct Payments so long as the Bank timely files with the IRS a complete Form 8038 -CP requesting the Direct Payment with respect to the 2010B Certificates. Section 5.03. Other Transactions. The Bank may engage in or be interested in any financial or other transaction with the Issuer. Section 5.04. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in a court of competent jurisdiction. The Issuer and the Bank further agree that the Bank has the right to file an action in interpleader in any court of competent jurisdiction to determine the rights of any person claiming any interest herein. Section 5.05. Sovereign Immunity Notwithstanding anything to the contrary in this Agreement, the Issuer does not waive or limit the rights, limitations, and procedures afforded it under the Colorado Governmental Immunity Act (Title 24, Article 10, C.R.S.). 4 10/5/2010 1 -1 -96 ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02. Assignment This Agreement may not be assigned by either party without the prior written consent of the other party. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed, faxed, sent PDF or delivered to the Issuer or the Bank, respectively, at the address shown below, or such other address as may have been given by one party to the other by fifteen (15) days written notice: If to the Issuer: Vail Reinvestment Authority 75 South Frontage Road Vail, Colorado 81657 Attn: Executive Director If to the Bank: U.S. Bank National Association Attn: Corporate Trust 950 17 Street, 12 Floor Denver, CO 80202 Section 6.04. Force Majeure In no event shall the Bank be liable for any failure or delay in the performance of its obligations hereunder because of circumstances beyond the Bank's control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, strikes or work stoppages for any reason, embargo, government action, including any laws, ordinances, regulations or the like which restrict or prohibit the providing of the services contemplated by this Agreement, inability to obtain material, equipment, or communications or computer facilities, or the failure of equipment or interruption of communications or computer facilities, and other causes beyond the Bank's control whether or not of the same class or kind as specifically named above. Section 6.05. Successors and Assigns. All covenants and agreements herein by the Issuer and the Bank shall bind their successors and assigns, whether so expressed or not. Section 6.06. Severability If any provision of this Agreement shall be determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. Section 6.07. Entire Agreement This Agreement shall constitute the entire agreement between the parties hereto relative to the Bank acting as Filing Agent. 5 10/5/2010 1 -1 -97 Section 6.08. Counterparts This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.09. Term and Termination This Agreement shall be effective from and after its date through the last Interest Payment Date or until the Bank resigns or is removed. The Bank may resign at any time by giving 30 days written notice thereof to the Authority. The Authority may remove the Bank as Filing Agent at any time and terminate this Agreement upon 30 days written notice to the Bank. Section 6.10. Governing Law This Agreement shall be construed in accordance with and shall be governed by the laws of Colorado. Section 6.11. Patriot Act Compliance To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non - individual person such as a business entity, a charity, a trust or other legal entity the Bank will ask for documentation to verify its formation and existence as a legal entity. The Bank may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation. 6 10/5/2010 1 -1 -98 IN WITNESS WHEREOF, the Issuer and the Bank have caused this Agreement to be executed in their respective names by their duly authorized representatives, in two counterparts, each of which shall be deemed an original. VAIL REINVESTMENT AUTHORITY, COLORADO By: Secretary /Executive Director By: Treasurer [SEAL] ATTEST: By: Cleric of the Board of Commissioners U.S. BANK NATIONAL ASSOCIATION, as Filing Agent By Authorized Representative 7 10/5/2010 1 -1 -99 Exhibit A Schedule of Compensation for Services as Filing Agent 8 10/5/2010 1 -1 -100 Exhibit B IRS Form 8038 -CP and Instructions (attached hereto and made a part hereof) 1226546.1 10/5/2010 1 -1 -101 CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate ") is executed and delivered by the Vail Reinvestment Authority, Colorado (the "Authority "), in connection with the issuance of its Tax Exempt Tax Increment Revenue Bonds, Series 2010A (the "2010A Bonds ") and its Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 2010B (the "2010B Bonds" or, together with the 2010A Bonds, the "Bonds "). The Bonds are being issued pursuant to a resolution (the "Resolution ") adopted by the Board of Commissioners of the Authority on October 5, 2010 and pursuant to an Indenture of Trust dated as of October 28, 2010 (the "Indenture ") between the Authority and U.S. Bank National Association, as trustee. The Authority covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate This Disclosure Certificate is being executed and delivered by the Authority for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with Rule 15c2- 12(b)(5) of the Securities and Exchange Commission (the "SEC "). SECTION 2. Definitions In addition to the definitions set forth in the Resolution or parenthetically defined herein, which apply to any capitalized terms used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Authority pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Dissemination Agent" shall mean, initially, the Authority, or any successor Dissemination Agent designated in writing by the Authority and which has filed with the Authority a written acceptance of such designation. "Material Events" shall mean any of the events listed in Section 5 of this Disclosure Certificate. "MSRB" shall mean the Municipal Securities Rulemaking Board. The MSRB's required method of filing is electronically via its Electronic Municipal Market Access (EMMA) system available on the Internet at http: / /emma.msrb.org. "Participating Underwriter" shall mean the original underwriter of the Bonds required to comply with the Rule in connection with an offering of the Bonds. "Rule" shall mean Rule 15c2- 12(b)(5) adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time. SECTION 3. Provision of Annual Reports (a) The Authority shall, or shall cause the Dissemination Agent to, not later than nine (9) months following the end of the Authority's Fiscal Year of each year, commencing nine (9) months following the end of the Authority's Fiscal Year ending December 31, 2010, provide to the MSRB in an electronic format as prescribed by the MSRB, an Annual Report 10/5/2010 1 -1 -102 which is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than five (5) business days prior to said date, the Authority shall provide the Annual Report to the Dissemination Agent (if other than the Authority). The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross - reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Authority may be submitted separately from the balance of the Annual Report. (b) If the Authority is unable to provide to the MSRB an Annual Report by the date required in subsection (a) of this Section, the Authority shall send or cause to be sent a notice in substantially the form attached as Exhibit "A" to the MSRB. (c) The Dissemination Agent shall: i. determine each year prior to the date for providing the Annual Report the appropriate electronic format prescribed by the MSRB; ii. if the Dissemination Agent is other than the Authority, send written notice to the Authority at least 45 days prior to the date the Annual Report is due stating that the Annual Report is due as provided in Section 3(a) hereof, and iii. if the Dissemination Agent is other than the Authority, file a report with the Authority certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the entities to which it was provided. SECTION 4. Content of Annual Reports The Authority's Annual Report shall contain or incorporate by reference the following: (a) A copy of its annual financial statements prepared in accordance with generally accepted accounting principles audited by a firm of certified public accountants. If audited annual financial statements are not available by the time specified in Section 3(a) above, unaudited financial statements will be provided as part of the Annual Report and audited financial statements will be provided when and if available. (b) An update of the type of information identified in Exhibit `B" hereto, which is contained in the tables in the Official Statement with respect to the Bonds. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Authority or related public entities, which are available to the public on the MSRB's Internet Website or filed with the SEC. The Authority shall clearly identify each such document incorporated by reference. SECTION 5. Reporting of Material Events The Authority shall provide or cause to be provided, in a timely manner, notice of any of the following events with respect to the Bonds, if such event is material, to the MSRB: 2 10/5/2010 1 -1 -103 (a) Principal and interest payment delinquencies; (b) Non - payment related defaults; (c) Unscheduled draws on debt service reserves reflecting financial difficulties; (d) Unscheduled draws on credit enhancements reflecting financial difficulties; (e) Substitution of credit or liquidity providers or their failure to perform; (f) Adverse tax opinions or events affecting the tax - exempt status of the Bonds; (g) Modifications to rights of Bond holders; (h) Bond calls; (i) Defeasances; (j) Release, substitution or sale of property securing repayment of the Bonds; or (k) Rating changes. SECTION 6. Identifying Information All documents provided to the MSRB pursuant to this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB. SECTION 7. Termination of Reporting Obligation The Authority's obligations under this Disclosure Certificate shall terminate upon the earliest o£ (i) the date of legal defeasance, prior redemption or payment in full of all of the Bonds; (ii) the date that the Authority shall no longer constitute an "obligated person" within the meaning of the Rule; or (iii) the date on which those portions of the Rule which require this written undertaking are held to be invalid by a court of competent jurisdiction in a non - appealable action, have been repealed retroactively or otherwise do not apply to the Bonds. SECTION 8. Dissemination Agent The Authority may, from time to time, appoint or engage a Dissemination Agent to assist the Authority in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. SECTION 9. Amendment; Waiver Notwithstanding any other provision of this Disclosure Certificate, the Authority may amend this Disclosure Certificate and may waive any provision hereof, without the consent of the holders and beneficial owners of the Bonds, if such amendment or waiver does not, in and of itself, cause the undertakings herein (or action of any Participating Underwriter in reliance on the undertakings herein) to violate the Rule, but taking into account any subsequent change in or official interpretation of the Rule. The Authority will provide notice of such amendment to the MSRB. SECTION 10. Additional Information Nothing in this Disclosure Certificate shall be deemed to prevent the Authority from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the Authority chooses to include any information in any Annual Report or notice of occurrence of a 3 10/5/2010 1 -1 -104 Material Event in addition to that which is specifically required by this Disclosure Certificate, the Authority shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. SECTION 11. Default In the event of a failure of the Authority to comply with any provision of this Disclosure Certificate, any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Authority to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the Authority to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 12. Beneficiaries This Disclosure Certificate shall inure solely to the benefit of the Authority, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. DATED: October 28, 2010. VAIL REINVESTMENT AUTHORITY, COLORADO By: Secretary /Executive Director By: Treasurer [SEAL] ATTEST: By: Clerk of the Board of Commissioners 4 10/5/2010 1 -1 -105 EXHIBIT "A" NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name: Vail Reinvestment Authority, Colorado (the "Authority "). Name of Issue: Tax Exempt Tax Increment Revenue Bonds, Series 2010A in the aggregate principal amount of $ and Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 2010B, in the aggregate principal amount of $ CUSIP: Date of Issuance: October 28, 2010. NOTICE IS HEREBY GIVEN that the Authority has not provided an Annual Report with respect to the Bonds as required by the Continuing Disclosure Certificate executed on October 28, 2010 by the Authority. The Authority anticipates that the Annual Report will be filed by , 20 Dated: , 20 VAIL REINVESTMENT AUTHORITY, COLORADO, By: Title: 5 10/5/2010 1 -1 -106 EXHIBIT `B" INDEX OF OFFICIAL STATEMENT TABLES TO BE UPDATED See page iv of the Official Statement 6 1210846.1 10/5/2010 1 -1 -107 DRAFT - 9/29/10 PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER [12], 2010 NEW ISSUE RATING: S &P: "Applied For" BOOK -ENTRY ONLY Moody's: "Applied For" BANK QUALIFIED See "RATING" 2010A Bonds In the opinion of Sherman & Howard L.L.C., Bond Counsel, assuming continuous compliance with certain covenants described herein, interest on the 2010A Bonds is excluded from gross income under federal income tax laws pursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the date of delivery of the 2010A Bonds (the "Tax Code'), interest on the 2010A Bonds is excluded from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code and interest on the 2010A Bonds is excluded from Colorado taxable income and Colorado alternative minimum taxable income under Colorado income tax laws in effect on the date of delivery of the 2010A Bonds as described herein. See "TAX HATTERS- -2010A Bonds. " The Authority has designated the 2010A Bonds as "quaked tax - exempt obligations "for purposes of Section 265(b)(3) of the Tax Code. See "FINANCIAL INSTITUTION INTEREST DEDUCTION. " 2010E Bonds In the opinion of Bond Counsel, interest on the 2010E Bonds is included in gross income pursuant to the Tax Code. The owners of the 2010B Bonds will not receive a tax credit as a result of holding the 2010E Bonds. In the opinion of Bond Counsel, assuming continuous compliance with certain covenants described herein, the interest on and income from the 2010E Bonds are exempt from all taxation and assessments in the State of Colorado. See "TAX HATTERS- -2010B Bonds." $4,345,000* VAIL REINVESTMENT AUTHORITY TAX- EXEMPT TAX INCREMENT REVENUE BONDS SERIES 2010A $12,385,000* VAIL REINVESTMENT AUTHORITY TAXABLE TAX INCREMENT REVENUE BONDS (DIRECT PAY BUILD AMERICA BONDS) SERIES 2010B Dated: Date of Delivery Due: June 1, as shown herein The 2010 Bonds (defined herein), will be issued by the Vail Reinvestment Authority (the "Authority "), pursuant to an Indenture of Trust dated as of October 28, 2010, between the Authority and U.S. Bank National Association, Denver, Colorado, as Trustee. The 2010 Bonds are issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof and initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( "DTC "), securities depository for the 2010 Bonds. Purchases of the 2010 Bonds are to be made in book -entry form only. Purchasers will not receive certificates representing their beneficial ownership interest in the 2010 Bonds. See Subject to change. 10/5/2010 1 -1 -108 "THE 2010 BONDS -- Book -Entry Only System." The 2010 Bonds bear interest at the rates set forth herein, payable on June 1 and December 1 of each year, commencing on June 1, 2011, to and including the maturity dates shown herein (unless the 2010 Bonds are redeemed earlier), payable to the registered owner of the 2010 Bonds, initially Cede & Co. The principal of the 2010 Bonds will be payable upon presentation and surrender at the Trustee. See "THE 2010 BONDS." The maturity schedule for each series of the 2010 Bonds appears on the inside cover page of this Official Statement. The 2010A Bonds are not subject to redemption prior to maturity. The 2010B Bonds are subject to redemption prior to maturity at the option of the Authority and also are subject to mandatory sinking fund redemption. See "THE 2010 BONDS -- Redemption Provisions." Proceeds of the 2010 Bonds will be used to: (i) finance the acquisition, construction and installation of an urban renewal project, as more particularly described herein; (ii) fund a reserve fund; and (iii) pay the costs of issuing the 2010 Bonds. See "SOURCES AND USES OF FUNDS." The 2010 Bonds are special, limited obligations of the Authority, equitably and ratably secured by an irrevocable pledge of and lien on, and payable solely from the Pledged Revenues (as defined herein). The Pledged Revenues consist primarily of property tax increment revenues collected within the Plan Area (defined herein), the BAB Credit (defined herein) received by the Authority, moneys on deposit in certain funds as described herein (including a Reserve Fund), and investment income as described herein. The 2010 Bonds do not constitute a general obligation of the Town of Vail, Colorado (the "Town ") or the Authority. Owners of the 2010 Bonds may not look to any other funds or accounts other than those specifically pledged by the Authority to the payment of the 2010 Bonds. The Authority does not have the power to impose property or any other taxes for the payment of debt service on the 2010 Bonds, nor may the Authority compel any other taxing jurisdiction to levy a tax. See "SECURITY FOR THE BONDS." This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision, giving special consideration to the section entitled "CERTAIN RISK FACTORS." The 2010 Bonds are offered when, as, and if issued by the Authority and accepted by the Underwriter, subject to the approval of legality of the 2010 Bonds by Sherman & Howard L.L.C., Denver, Colorado, Bond Counsel, and the satisfaction of certain other conditions. Sherman & Howard L.L.C. also has acted as special counsel to the Authority in connection with this Official Statement. Certain legal matters will be passed upon for the Authority by its General Counsel, Hayes, Phillips, Hoffmann & Carberry, P.C., Denver, Colorado. It is expected that the 2010 Bonds will be available for delivery through the facilities of DTC on or about October 28, 2010.* [Piper Jaffray logo] * Subject to change. 10/5/2010 1 -1 -109 MATURITY SCHEDULES* (CUSIP© 6 -digit issuer number: ) $4,345,000* Vail Reinvestment Authority Tax - Exempt Tax Increment Revenue Bonds Series 2010A Price CUSIP© Maturing Principal Interest or Issue June 1 Amount Rate Yield Number 2011 $ 350,000 2012 615,000 2013 635,000 2014 655,000 2015 675,000 2016 695,000 2017 720,000 $12,385,000* Vail Reinvestment Authority Taxable Tax Increment Revenue Bonds (Direct Pay Build America Bonds) Series 2010B $2,330,000 % Term Bond due June 1, 2020. Price: % ©. CUSIP© Issue No.: $4,525,000 % Term Bond due June 1, 2025. Price: _ % ©. CUSIP© Issue No.: $5,530,000 % Term Bond due June 1, 2030. Price: _ %. CUSIP© Issue No.: * Subject to change. Copyright 2010, American Bankers Association. CUSIP data is provided by Standard & Poor's, CUSIP Service Bureau, a division of The McGraw -Hill Companies, Inc. 10/5/2010 1 -1 -110 USE OF INFORMATION IN THIS OFFICIAL STATEMENT This Official Statement, which includes the cover page and the appendices, does not constitute an offer to sell or the solicitation of an offer to buy any of the 2010 Bonds in any jurisdiction in which it is unlawful to make such offer, solicitation, or sale. No dealer, salesperson, or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement in connection with the offering of the 2010 Bonds, and if given or made, such information or representations must not be relied upon as having been authorized by the Authority. The Town maintains an internet website on behalf of the Authority; however, the information presented there is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the 2010 Bonds. The information set forth in this Official Statement has been obtained from the Authority, the Town and from the other sources referenced throughout this Official Statement which are believed to be reliable. No representation or warranty is made, however, as to the accuracy or completeness of such information received from parties other than the Authority. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact, and no representation or warranty is made as to the correctness of such estimates and opinions, or that they will be realized. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities under the federal securities laws as applied to the facts and circumstances of this transaction but the Underwriter does not guarantee the accuracy or completeness of such information. The information, estimates, and expressions of opinion contained in this Official Statement are subject to change without notice, and neither the delivery of this Official Statement nor any sale of the 2010 Bonds shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority, or in the information, estimates, or opinions set forth herein, since the date of this Official Statement. This Official Statement has been prepared only in connection with the original offering of the 2010 Bonds and may not be reproduced or used in whole or in part for any other purpose. The 2010 Bonds have not been registered with the Securities and Exchange Commission due to certain exemptions contained in the Securities Act of 1933, as amended. The 2010 Bonds have not been recommended by any federal or state securities commission or regulatory agency and the foregoing authorities have neither reviewed nor confirmed the accuracy of this document. THE PRICES AT WHICH THE 2010 BONDS ARE OFFERED TO THE PUBLIC BY THE UNDERWRITER (AND THE YIELDS RESULTING THEREFROM) MAY VARY FROM THE INITIAL PUBLIC OFFERING PRICES OR YIELDS APPEARING ON THE COVER PAGE HEREOF. IN ADDITION, THE UNDERWRITER MAY ALLOW CONCESSIONS OR DISCOUNTS FROM SUCH INITIAL PUBLIC OFFERING PRICES TO DEALERS AND OTHERS. IN ORDER TO FACILITATE DISTRIBUTION OF THE 2010 BONDS, THE UNDERWRITER MAY ENGAGE IN TRANSACTIONS INTENDED TO STABILIZE THE PRICE OF THE 2010 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. 10/5/2010 1 -1 -111 VAIL REINVESTMENT AUTHORITY Authority Board Dick Cleveland, Chairman Kim Newberry, Vice Chairman Andy Daly, Commissioner Kerry Donovan, Commissioner Kevin Foley, Commissioner Margaret Rogers, Commissioner Susie Tjossem, Commissioner Authority Staff Stan Zemler, Secretary/Executive Director Judy Camp, Treasurer Lorelei Donaldson, Clerk George Ruther, Director Hayes, Phillips, Hoffmann & Carberry, P.C., General Counsel TRUSTEE U.S. Bank National Association Denver, Colorado UNDERWRITER Piper Jaffray & Co. Denver, Colorado BOND AND SPECIAL COUNSEL Sherman & Howard L.L.C. Denver, Colorado 10/5/2010 1 -1 -112 TABLE OF CONTENTS Page INTRODUCTION........................................................................................... ............................... 1 General......................................................................................................... ............................... 1 TheTown ..................................................................................................... ............................... 1 The Authority and the Plan Area ................................................................. ............................... 2 The 2010 Bonds; Prior Redemption ............................................................ ............................... 2 Taxable Build America Bonds ..................................................................... ............................... 2 Purpose......................................................................................................... ............................... 3 Security........................................................................................................ ............................... 4 Authorityfor Issuance .................................................................................. ............................... 5 Professionals................................................................................................ ............................... 5 TaxStatus ..................................................................................................... ............................... 6 Continuing Disclosure Undertaking ............................................................ ............................... 6 Forward- Looking Statements ....................................................................... ............................... 7 AdditionalInformation ................................................................................ ............................... 7 CERTAIN RISK FACTORS ........................................................................... ............................... 8 Limited Security for the 2010 Bonds ........................................................... ............................... 8 Limited Duration of Tax Increments ........................................................... ............................... 8 Business and Economic Factors May Affect the Success of the Plan Area and the Ability of the Authority to Pay the 2010 Bonds ............................................... ............................... 8 Risks Related to the Pledged Property Tax Revenues ................................. ............................... 9 No Assurances That the Authority Will Receive BAB Credits ................. ............................... 11 Proposed Fiscal Initiatives ......................................................................... ............................... 12 Legal Constraints on Authority Operations; Changes in Law ................... ............................... 13 Limitations on Remedies Available to Owners of Bonds .......................... ............................... 13 SecondaryMarket ...................................................................................... ............................... 14 SOURCES AND USES OF FUNDS ............................................................. ............................... 15 Sources and Uses of Funds ........................................................................ ............................... 15 TheProject ................................................................................................. ............................... 15 THE2010 BONDS ........................................................................................ ............................... 17 General....................................................................................................... ............................... 17 PaymentProvisions .................................................................................... ............................... 17 PriorRedemption ....................................................................................... ............................... 18 TaxCovenants ........................................................................................... ............................... 21 Defeasance................................................................................................. ............................... 21 Book -Entry Only System ........................................................................... ............................... 22 DEBT SERVICE REQUIREMENTS ............................................................ ............................... 23 SECURITY FOR THE BONDS .................................................................... ............................... 24 Special, Limited Obligations ..................................................................... ............................... 24 PledgedRevenues ...................................................................................... ............................... 24 Pled of Revenues; Priority ..................................................................... ............................... 24 History of Pledged Revenues ..................................................................... ............................... 25 Flow of Funds - The Revenue Fund .......................................................... ............................... 26 ReserveFund ............................................................................................. ............................... 27 10/5/201{1 1 -I -113 Pa -- AdditionalBonds ....................................................................................... ............................... 27 REVENUES AVAILABLE FOR DEBT SERVICE ..................................... ............................... 29 General....................................................................................................... ............................... 29 Pledged Property Tax Revenues ................................................................ ............................... 29 The Village Square Metro Districts Intergovernmental Agreement .......... ............................... 29 Ad Valorem Property Taxes ...................................................................... ............................... 30 Ad Valorem Property Tax Data ................................................................. ............................... 34 Reinvestment Fund - History Revenues, Expenditures and Changes in Fund Balance............ 38 THEAUTHORITY ....................................................................................... ............................... 40 Formation................................................................................................... ............................... 40 AuthorityPowers ....................................................................................... ............................... 40 GoverningBody ......................................................................................... ............................... 40 Administration and Employees .................................................................. ............................... 41 AuthorityOperations ................................................................................. ............................... 43 The Cooperation Agreement ...................................................................... ............................... 43 Budgeting and Financial Reporting ........................................................... ............................... 43 DebtStructure ............................................................................................ ............................... 45 THE PLAN AND THE PLAN AREA ........................................................... ............................... 46 ThePlan ..................................................................................................... ............................... 46 ThePlan Area ............................................................................................ ............................... 47 Redevelopment Activities .......................................................................... ............................... 47 ECONOMIC AND DEMOGRAPHIC INFORMATION ............................. ............................... 48 Population and Age Distribution ............................................................... ............................... 48 Income........................................................................................................ ............................... 49 Employment............................................................................................... ............................... 50 RetailSales ................................................................................................. ............................... 52 Recreation and Tourism ............................................................................. ............................... 53 Ea County Regional Airport ................................................................. ............................... 55 BuildingPermits ........................................................................................ ............................... 55 Foreclosure Activity in Eagle County ........................................................ ............................... 56 TAXMATTERS ............................................................................................ ............................... 57 2010ABonds ............................................................................................. ............................... 57 2010BBonds .............................................................................................. ............................... 58 FINANCIAL INSTITUTION INTEREST DEDUCTION ............................ ............................... 60 LEGALMATTERS ....................................................................................... ............................... 60 Litigation.................................................................................................... ............................... 60 Approval of Certain Legal Proceedings ..................................................... ............................... 61 PolicePower .............................................................................................. ............................... 61 Proposed Fiscal Initiatives ......................................................................... ............................... 62 RATINGS...................................................................................................... ............................... 63 INDEPENDENT AUDITORS ....................................................................... ............................... 63 UNDERWRITING........................................................................................ ............................... 63 OFFICIAL STATEMENT CERTIFICATION .............................................. ............................... 64 1015120 f6i 1 -1 -114 Page APPENDIX A - Audited Basic Financial Statements of the Town for the Fiscal Year Ended December 31, 2009 (including the Vail Reinvestment Authority Special Revenue Fund) .................................. ............................... A -1 APPENDIX B - Summary of Certain Provisions of the Indenture .............. ............................B -1 APPENDIX C - Book -Entry Only System ................................................... ............................0 -1 APPENDIX D - Form of Continuing Disclosure Certificate .................... ............................... D -1 APPENDIX E - Forms of Opinions of Bond Counsel .............................. ............................... E -1 10 /5 /20iiii 1 -1 -115 INDEX OF TABLES NOTE: Tables marked with an ( *) indicate Annual Financial Information to be updated pursuant to SEC Rule 15c2 -12, as amended. See "INTRODUCTION -- Continuing Disclosure Undertaking." Page Sources and Uses of Funds ............................................................................ ............................... 15 Debt Service Requirements ............................................................................ ............................... 23 *History of Pledged Revenues ....................................................................... ............................... 25 *History of Assessed Valuations for the Authority ....................................... ............................... 34 *Mill Levies Affecting Property Owners Within the Plan Area .................... ............................... 35 *Property Tax Collections for the Authority ................................................. ............................... 35 *2010 Preliminary Assessed Valuation of Classes of Property in the Authority ......................... 36 *Largest Taxpayers in the Authority ............................................................. ............................... 36 Estimated Overlapping General Obligation Debt .......................................... ............................... 37 *Budget to Actual Comparison - Vail Reinvestment Authority Fund ........... ............. .................. 38 *Reinvestment Fund - History of Revenues, Expenditures and Changes in Fund Balances........ 39 Land Use within the Plan Area ...................................................................... ............................... 47 Population...................................................................................................... ............................... 48 AgeDistribution ............................................................................................. ............................... 49 Per Capita Personal Income ........................................................................... ............................... 49 Median Household Effective Buying Income ................................................ ............................... 50 Percent of Households by Effective Buying Income Groups - 2010 ............. ............................... 50 Labor Force and Percent Unemployed .......................................................... ............................... 50 Average Number of Employees Within Selected Industries - Eagle County ............................... 51 Selected Major Employers in Eagle County .................................................. ............................... 52 RetailSales ..................................................................................................... ............................... 52 SkierVisits ..................................................................................................... ............................... 53 Annual Golf Rounds Played by Course in Eagle County .............................. ............................... 54 Eagle County Regional Airport Passenger Enplanement History ................. ............................... 55 History of New Structure Building Permits Issued in the Town of Vail ....... ............................... 56 Historyof Foreclosures .................................................................................. ............................... 56 10 /5 /20ij' 1 -1 -116 OFFICIAL STATEMENT $4,345,000* VAIL REINVESTMENT AUTHORITY TAX - EXEMPT TAX INCREMENT REVENUE BONDS SERIES 2010A $12,385,000* VAIL REINVESTMENT AUTHORITY TAXABLE TAX INCREMENT REVENUE BONDS (DIRECT PAY BUILD AMERICA BONDS) SERIES 2010B INTRODUCTION General This Official Statement, including the cover page and appendices, is furnished by the Vail Reinvestment Authority (the "Authority ") to provide information in connection with the issuance of its $4,345,000* Tax - Exempt Tax Increment Revenue Bonds, Series 2010A (the "2010A Bonds ") and its $12,385,000* Taxable Tax Increment Revenue Bonds, Series 2010B (the "2010B Bonds," and together with the 2010A Bonds, the "2010 Bonds "). The 2010 Bonds will be issued pursuant to an Indenture of Trust dated as of October 28, 2010 (the "Indenture ") by and between the Authority and U.S. Bank National Association, Denver, Colorado, as trustee (the "Trustee "). The offering of the 2010 Bonds is made only by way of this Official Statement, which supersedes any other information or materials used in connection with the offer or sale of the 2010 Bonds. The following introductory material is only a brief description of and is qualified by the more complete information contained throughout this Official Statement. A full review should be made of the entire Official Statement and the documents summarized or described herein, particularly the section entitled "CERTAIN RISK FACTORS. " Detachment or other use of this "INTRODUCTION" without the entire Official Statement, including the cover page and appendices, is unauthorized. Capitalized terms used but not defined herein have the meanings assigned to them in the Indenture, which is summarized in Appendix B. The Town The Town of Vail, Colorado (the "Town ") is a municipal corporation which was incorporated in 1966 and operates under a home rule charter approved by the Town's voters in 1972 (the "Charter "). The Town is located approximately 100 miles west of Denver and encompasses approximately five square miles in Eagle County, Colorado (the "County "). Interstate 70, the primary east -west interstate highway in Colorado, runs through the Town and provides direct access from the Town to Denver. According to the State Demography Office, the preliminary permanent population of the Town as of July 1, 2009, was 5,027. According to Town estimates, the Town has a peak winter population of residents and visitors of approximately 32,000. * Subject to change. 10/5/2010 1 -1 -117 The Authority and the Plan Area General The Authority was created by the Town Council of the Town (the "Town Council ") on November 4, 2003, and is a body corporate duly organized and existing as an urban renewal authority pursuant to the Urban Renewal Law of the State of Colorado (Section 31 -25 -101 et seq., Colorado Revised Statutes ( "C.R.S. "), as amended (the "Urban Renewal Law" or the "Act ")), for the purpose of undertaking certain urban renewal activities within the Town. The boundaries of the Authority are coterminous with the boundaries of the Town. The Town Council serves as the Board of Commissioners of the Authority (the "Board "). The Board operates pursuant to by -laws (the "Bylaws ") adopted on December 16, 2003. The Authority currently has one redevelopment area. The LionsHead urban renewal area (the "Plan Area ") encompasses approximately 77 acres (not including rights of way) and serves as the base area for the LionsHead gondola; one of the four base areas for the Vail Mountain Ski Area (the "Ski Area "). The Town Council determined that the area comprising the Plan Area was a blighted area in accordance with statutory criteria. On March 16, 2004, the Town approved the original LionsHead Public Facilities Development Plan and on June 7, 2005, approved the Amended LionsHead Public Facilities Development Plan (as amended, the "Plan ") to provide for tax increment financing (as so amended, the "Plan "). See "THE PLAN AND THE PLAN AREA." The Plan authorizes the use of tax increment financing methods, specifically property tax increment, as defined and more particularly described in "Security" below. The Plan authorizes the use of property tax increment financing for a period of 25 years following adoption of the amended Plan (i.e., through June 2030). The 2010 Bonds; Prior Redemption The 2010 Bonds are issued solely as fully registered certificates in denominations of $5,000, or any integral multiple thereof. See "THE 2010 BONDS -- Book -Entry Only System." The 2010 Bonds initially will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ( "DTC "), the securities depository for the 2010 Bonds. Purchases of the 2010 Bonds are to be made in book -entry form only. Purchasers will not receive certificates representing their beneficial ownership interest in the 2010 Bonds. See "THE 2010 BONDS -- Book -Entry Only System." The 2010 Bonds are dated as of their date of delivery and mature and bear interest (calculated based on a 360 -day year consisting of twelve 30 -day months) as set forth on the inside cover page of this Official Statement. The payment of principal and interest on the 2010 Bonds is described in "THE 2010 BONDS -- Payment of Principal and Interest; Record Date." The 2010A Bonds are not subject to redemption prior to maturity. The 2010B Bonds are subject to redemption prior to maturity at the option of the Authority and also are subject to mandatory sinking fund redemption. See "THE 2010 BONDS -- Redemption Provisions." Taxable Build America Bonds The 2010B Bonds are expected to be issued as taxable direct pay Build America Bonds (`GABS "). See "THE 2010 BONDS - -Tax Covenants." Accordingly, the Authority 10/5/201(2 1 -1 -118 expects to receive revenue from the United States Treasury related to the interest payable on the 2010B Bonds. Build America Bonds Generally In February 2009, as part of the American Recovery and Reinvestment Act of 2009 (the "ARRA "), Congress added Sections 54AA and 6431 to the Tax Code, which permit state or local governments to obtain certain tax advantages when issuing taxable obligations that meet certain requirements of the Tax Code and the related Treasury regulations. Such bonds are referred to as "Build America Bonds" or `GABS." A Build America Bond is a qualified bond under Section 54AA(g) of the Tax Code (a "Qualified Build America Bond ") if it meets certain requirements of the Tax Code and the related Treasury Regulations and the issuer has made an irrevocable election to have the special rule for qualified bonds apply. Interest on Qualified Build America Bonds is included in gross income for federal income tax purposes, and owners of Qualified Build America Bonds will not receive any tax credits as a result of ownership of such Qualified Build America Bonds when an issuer has elected to receive the BAB Credit." Interest Subsidy Pam Under Section 6431 of the Tax Code, an issuer of a Qualified Build America Bond may apply to receive BAB Credit payments (the `GAB Credit ") directly from the Secretary of the U.S. Treasury (the "Secretary "). The amount of the BAB Credit is established in Section 6431 of the Tax Code at 35% of the corresponding interest payable on the related Qualified Build America Bond. To receive a BAB Credit, under currently existing procedures, the issuer must file a Form 8038 -CP between 90 and 45 days prior to the corresponding bond interest payment date. The issuer should expect to receive the BAB Credit contemporaneously with the interest payment date with respect to the Qualified Build America Bond. However, depending on the timing of the filing and other factors, the BAB Credit may be received before or after the corresponding interest payment date. The 2010B Bonds as Qualified Build America Bonds In the Indenture, the Authority has made an irrevocable election to treat the 2010B Bonds as Qualified Build America Bonds. As a result of this election, interest on the 2010B Bonds will be includable in gross income of the holders thereof for federal income tax purposes and the holders of the 2010B Bonds will not be entitled to any tax credits as a result of either ownership of the 2010B Bonds or receipt of any interest payments on the 2010B Bonds. See "CERTAIN RISK FACTORS -- No Assurances That the Authority Will Receive BAB Credits" and "TAX MATTERS - -201013 Bonds." The Authority intends to apply for BAB Credits from the Secretary under the "Build America Program" pursuant to Section 6431 of the Tax Code, and in the Indenture, the Authority covenants to maintain the 2010B Bonds as Qualified Build America Bonds so that the Authority remains entitled to receive the BAB Credit. Such credits, if received by the Authority, are pledged to the payment of debt service on the 2010 Bonds (and any Additional Bonds, as defined herein). The Authority will be required to pay interest on the 2010 Bonds regardless of whether BAB Credit payments are received. Purpose Proceeds of the 2010 Bonds will be used to: (i) finance the acquisition, construction and installation of an urban renewal project, as more particularly described herein; (the "Project "); (ii) fund a reserve fund; and (iii) pay the costs of issuing the 2010 Bonds. See "SOURCES AND USES OF FUNDS." 101512o1a 1 -1 -119 Security Limited Oblijzations The 2010 Bonds do not constitute a general obligation debt or indebtedness of the Authority, or an obligation or indebtedness of the Town, the State, or any political subdivision thereof within the meaning of any constitutional, statutory, or other debt limitation or provision. The Authority has no taxing power, nor may it compel any taxing jurisdiction to levy any property tax or other tax. The Trust Estate and Pledged Revenues The 2010 Bonds are special, limited obligations of the Authority, equitably and ratably secured by an irrevocable pledge of and lien on, and payable solely from the Trust Estate. The Trust Estate generally includes: (a) the Pledged Revenues (defined below); and (b) all of the moneys and securities in the funds established in the Indenture (i.e., the Construction Fund, the Revenue Fund, the Bond Fund and the Reserve Fund (together, the "Trust Funds "), but excluding the Rebate Fund. The Indenture defines "Pledged Revenues" to mean the (a) the Pledged Property Tax Revenues (defined below), (b) the BAB Credit received by the Authority with respect to the 2010B Bonds, and any other BAB Credit received in connection with the issuance of any additional BABs in the future, but only to the extent specifically included in the definition of Pledged Revenues by the ordinance, indenture or other document or instrument authorizing the issuance of any such additional BABs, and (c) all income derived from the investment and reinvestment of the funds established by the Indenture, except the Rebate Fund. The Indenture defines "Pledged Property Tax Revenues" to mean, for each Fiscal Year, that portion of ad valorem property taxes produced by the levy at the rates fixed each year by and for each governing body of the various taxing jurisdictions within or overlapping the Plan Area upon that portion of the valuation for assessment of all taxable property within the Plan Area which is in excess of the Property Tax Base Amount (defined below); provided, however, that such revenues shall be reduced by any lawful collection fee charged by the County; and provided further, however, that in the event of a general reassessment of taxable property in the Plan Area, the valuation for assessment of taxable property within the Plan Area shall be proportionately adjusted in accordance with such general reassessment in the manner provided by the Act; and provided further that Pledged Property Tax Revenues shall not extend to any property taxes that are placed in the Property Tax Reserve Fund (described below) for refunds of overpayments by taxpayers pursuant to Section 31- 25- 107(9)(b) of the Act; and provided further that Pledged Property Tax Revenues shall not include any property taxes that the Authority is required to remit or cause to be remitted to the Districts (defined herein), or to any trustee or escrow agent engaged to administer receipts and payments in connection with the Metro Districts' bonds, in accordance with the terms and provisions of the Intergovernmental Agreement (defined herein; see "REVENUES AVAILABLE FOR DEBT SERVICE - -The Village Square Metro Districts Intergovernmental Agreement "). The Property Tax Base Amount is the amount last certified by the County Assessor as the valuation for assessment of all taxable property within the Plan Area prior to the effective date of the Plan modification; provided, however, that in the event of a general reassessment of taxable property in the Plan Area, the valuation for assessment of taxable property within the Plan Area shall be proportionately adjusted in accordance with such general reassessment in the manner required by the Act. The property tax base amount, as adjusted over time, currently is $104,994,570. See "REVENUES AVAILABLE FOR DEBT SERVICE - -Ad 101512014 1 -1 -120 Valorem Property Tax Data." See "CERTAIN RISK FACTORS - -Risks Related to the Pledged Property Tax Revenues" and "SECURITY FOR THE BONDS -- Pledged Revenues." Pursuant to the Indenture and the Act, Pledged Property Tax Revenues also do not include any taxes that are placed in a reserve fund to be returned to the County for refunds of overpayments by taxpayers. If the County refunds property taxes to any taxpayer, the Authority is required to refund its proportional share of the taxes refunded. As a general rule, the County Treasurer withholds such amounts before transmitting tax increment revenues to the Authority. The Indenture creates the Property Tax Reserve Fund; to the extent there are not sufficient property taxes due to the Authority for the County Treasurer to offset the Authority's pro -rata share of any refunds, the Authority is required to deposit amounts into the Property Tax Reserve Fund to provide for its share of the refund. If large refunds are required in any year, the amount of Pledged Property Tax Revenues may be negatively impacted. The Authority reports that it has never had to repay amounts to the County Treasurer to cover its portion of taxpayer refunds. Lien Priority; Additional Bonds The 2010 Bonds constitute an irrevocable and first lien (but not necessarily an exclusive first lien) upon the Pledged Revenues. See "SECURITY FOR THE BONDS." The Indenture allows the Authority, subject to compliance with certain conditions, to issue one or more series of additional parity bonds and other types of securities and obligations payable from all or a portion of the Pledged Revenues and secured by a lien thereon on a parity with the lien thereon of the 2010 Bonds ( "Additional Bonds "). See "SECURITY FOR THE BONDS -- Additional Bonds" and Appendix B - Summary of Certain Provisions of the Indenture. The Authority has no current plans to issue Additional Bonds, but reserves the right to do so upon the satisfaction of all legal requirements. Reserve Fund Each series of the 2010 Bonds also is secured by a separate account in the Reserve Fund. See "SECURITY FOR THE BONDS -- Reserve Fund." Authority for Issuance The 2010 Bonds are issued in full conformity with the Constitution and laws of the State, particularly the Urban Renewal Law, the Supplemental Public Securities Act (Title 11, Article 57, Part 2, C.R.S.), Title 11, Article 56, C.R.S., and pursuant to the Indenture and a resolution adopted by the Board on October 5, 2010. The 2010B Bonds also are issued pursuant to Title 11, Article 59.7, C.R.S., as amended. Professionals General Sherman & Howard L.L.C., Denver, Colorado, has acted as Bond Counsel and also has acted as special counsel in connection with this Official Statement. The fees to be paid to Sherman & Howard L.L.C. are contingent upon the sale and delivery of the 2010 Bonds. Certain legal matters will be passed on for the Authority by Hayes, Phillips, Hoffmann & Carberry, P.C., Denver, Colorado. The basic financial statements of the Town included in this Official Statement as Appendix A have been audited by McMahan & Associates, LLC, certified public accountants, Avon, Colorado. See "INDEPENDENT AUDITORS." Piper Jaffray & Co., Denver, Colorado, will act as the Underwriter for the 2010 Bonds (the "Underwriter "). See "UNDERWRITING." 10/5/201(5 1 -1 -121 The Trustee The Authority has appointed U.S. Bank National Association, [Sandra, is it U.S. Bank National Association, or U.S. Bank, N.A. ?], a national banking association organized under the laws of the United States, to serve as Trustee. Except for the contents of this section, the Trustee has not reviewed or participated in the preparation of this Official Statement and assumes no responsibility for the nature, contents, accuracy or completeness of the information set forth in this Official Statement or for the recitals contained in the Indenture or the 2010 Bonds (except as they relate to the Trustee), or for the validity, sufficiency, or legal effect of any of such documents. Furthermore, the Trustee has no oversight responsibility, and is not accountable, for the use or application by the Authority of any of the 2010 Bonds authenticated or delivered pursuant to the Indenture or for the use or application of the proceeds of such 2010 Bonds by the Authority. The Trustee has not evaluated the risks, benefits, or propriety of any investment in the 2010 Bonds and makes no representation, and has reached no conclusions, regarding the value or condition of any revenues pledged as security for the 2010 Bonds, the technical or financial feasibility of the Project, or the investment quality of the 2010 Bonds, about all of which the Trustee expresses no opinion and expressly disclaims the expertise to evaluate. Tax Status 2010A Bonds In the opinion of Sherman & Howard L.L.C., Bond Counsel, assuming continuous compliance with certain covenants described herein, interest on the 2010A Bonds is excluded from gross income under federal income tax laws pursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the date of delivery of the 2010A Bonds (the "Tax Code "), interest on the 2010A Bonds is excluded from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code and interest on the 2010A Bonds is excluded from Colorado taxable income and Colorado alternative minimum taxable income under Colorado income tax laws in effect on the date of delivery of the 2010A Bonds as described herein. See "TAX MATTERS- -2010A Bonds." The Authority has designated the 2010A Bonds as "qualified tax - exempt obligations" for purposes of Section 265(b)(3) of the Tax Code. See "FINANCIAL INSTITUTION INTEREST DEDUCTION." 2010B Bonds In the opinion of Bond Counsel, interest on the 2010B Bonds is included in gross income pursuant to the Tax Code. The owners of the 2010B Bonds will not receive a tax credit as a result of holding the 2010B Bonds. In the opinion of Bond Counsel, assuming continuous compliance with certain covenants described herein, the interest on and income from the 2010B Bonds are exempt from all taxation and assessments in the State of Colorado. See "TAX MATTERS- -2010B Bonds." Continuing Disclosure Undertaking The Authority will execute a continuing disclosure certificate (the "Disclosure Certificate ") at the time of the closing for the 2010 Bonds. The Disclosure Certificate will be executed for the benefit of the beneficial owners of the 2010 Bonds and the Authority will covenant in the Indenture to comply with its terms. The Disclosure Certificates will provide that so long as the applicable series of 2010 Bonds remains outstanding, the Authority will annually provide the following information to the Municipal Securities Rulemaking Board, through the Electronic Municipal Market Access system: (i) certain financial information and operating data; and (ii) notice of certain material events, as specified in the Disclosure Certificate. The form of the Disclosure Certificate is attached hereto as Appendix D. The Authority has not 10/5/2010 1 -1 -122 previously entered into a continuing disclosure undertaking pursuant to Securities and Exchange Commission Rule 15c2 -12. Forward - Looking Statements This Official Statement contains statements relating to future results that are "forward- looking statements" as defined in the Private Securities Litigation Reform Act of 1995. When used in this Official Statement, the words "estimate," "forecast," "intend," "expect' and similar expressions identify forward- looking statements. Any forward - looking statement is subject to uncertainty. Accordingly, such statements are subject to risks that could cause actual results to differ, possibly materially, from those contemplated in such forward- looking statements. Inevitably, some assumptions used to develop forward- looking statements will not be realized or unanticipated events and circumstances may occur. Therefore, investors should be aware that there are likely to be differences between forward looking statements and actual results. Those differences could be material and could impact the availability of Pledged Revenues to pay debt service on the 2010 Bonds. Additional Information This introduction is only a brief summary of the provisions of the 2010 Bonds and the Indenture; a full review of the entire Official Statement should be made by potential investors Brief descriptions of the Authority, the Project, the Pledged Revenues, the 2010 Bonds, the Indenture and other documents are included in this Official Statement. All references herein to the 2010 Bonds, the Indenture and other documents are qualified in their entirety by reference to such documents. This Official Statement speaks only as of its date, and the information contained herein is subject to change. Copies of the documents referred to herein are available from the Authority and the Underwriter as provided below: Vail Reinvestment Authority 75 S. Frontage Road Vail, CO 81657 Piper Jaffray & Co. 1200 17th Street, Suite 1250 Denver, CO 80202 Telephone: (303) 820 -5848 Attn: Public Finance. 10/5/201(7 1 -1 -123 CERTAIN RISK FACTORS The purchase of the 2010 Bonds involves special risks and the 2010 Bonds may not be appropriate investments for all types of investors. Each prospective investor is encouraged to read this Official Statement in its entirety and to give particular attention to the factors described below, which, among other factors discussed herein, could affect the payment of debt service on the 2010 Bonds and could affect the market price of the 2010 Bonds to an extent that cannot be determined at this time. The following does not purport to be an exhaustive listing of risks and other considerations that may be relevant to investing in the 2010 Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of such risks. Limited Security for the 2010 Bonds The 2010 Bonds are special, limited obligations of the Authority and are payable solely from the Trust Estate established pursuant to the Indenture. See "SECURITY FOR THE BONDS." The 2010 Bonds are not secured by an encumbrance or mortgage on any property located within the Plan Area. No property owner in the Plan Area is obligated to pay debt service on the 2010 Bonds. Therefore, the security for the punctual payment of the 2010 Bonds is dependent upon the generation of Pledged Revenues (and, if necessary, the use of funds in the Reserve Fund) in an amount sufficient to meet the debt service requirements on the 2010 Bonds. The Authority does not have the power to impose property or any other taxes for the payment of debt service on the 2010 Bonds, nor may the Authority compel any other taxing jurisdiction to levy a tax. Limited Duration of Tax Increments Pursuant to the Act and the Plan, the tax increment is limited in duration to 25 years from the effective date of the Town Council's approval of the amended Plan, which contained the tax increment financing provisions. The Town Council approved the amendment to the Plan on June 7, 2005; accordingly, the Pledged Property Tax Revenues will not be imposed or levied after June 7, 2030. If the Pledged Revenues were to be insufficient to pay debt service on the 2010 Bonds in the future, the limited duration of the tax increment revenues could adversely affect the Authority's ability to restructure or refinance the 2010 Bonds to try to respond to financial difficulties. Business and Economic Factors May Affect the Success of the Plan Area and the Ability of the Authority to Pay the 2010 Bonds General Certain circumstances, most of which will be beyond the control of the Authority, may have an effect on the generation of Pledged Property Tax Revenues in the Plan Area. Such circumstances may include, among others, general and local economic conditions (including cyclical trends in the ski industry and the construction industry, competition from nearby communities and interest rates), a decline in property valuations, the rate of employment or economic growth within the Town, the Plan Area or the region; the ability or inability of property owners to pay property taxes as they become due; and the successful development and operation of businesses and other property within the Plan Area. Further, there can be no assurance that property or businesses within the Plan Area will generate sufficient increases in assessed valuation (and therefore Pledged Property Tax Revenues) to offset possible decreases in the incremental assessed valuation, if any, after a general reassessment. See "REVENUES 10/5/201$ 1 -1 -124 AVAILABLE FOR DEBT SERVICE -- Pledged Property Tax Revenue" and "Ad Valorem Property Taxes." Land Use Policies; Public Ownership of Land Town land use policies, including limits on growth or building permits and/or condemnation of land for public purposes could also affect the generation of Pledged Property Tax Revenues in the future. Future ownership of property within the Plan Area by governmental agencies or non - profit corporations (which would eliminate the assessed valuation attributable to such land and therefore result in reduced Pledged Property Tax Revenues) also would impact generation of Pledged Property Tax Revenues in the future. Currently, the Town owns approximately 34.4 acres in the Plan Area (including the LionsHead parking structure and the adjacent charter bus lot, the Dobson Arena, the Vail Public Library and 12.1 acres of open space land), accounting for approximately 44.7% of the land in the Plan Area. The Eagle River Water and Sanitation District also owns a facility in the Plan Area. The Authority does not expect that those parcels will be transferred to private parties. Success of Redevelopment Not Assured As a result of the Plan Area's location at the base of the Ski Area, property values in the Plan Area are relatively high. The continuation of property tax values at relatively high levels is dependent, in part, on the continued success of the Ski Area. It is not possible to predict how successful the owner of the Ski Area (Vail Resorts Inc.) will be in marketing or operating the Ski Area in the future. In addition, the largest developer of private projects in the Plan Area is Vail Resorts Development Company ( "VRDC "); certain of the private development projects are discussed elsewhere in this Official Statement. Should those projects not succeed or should sales of the residential units within those projects not be successful, the assessed value within the Plan Area may be negatively impacted, resulting in lower Pledged Property Tax Revenues. Large Concentration of Commercial Property The collection of Pledged Property Tax Revenues may be subject to the ability or inability of property owners in the Plan Area to pay property taxes as they become due and the successful completion of buildings and development within the Plan Area as planned. A large percentage of the property in the Plan Area (approximately 28% by assessed value) is commercial property. Businesses in the Plan Area may be particularly susceptible to cyclical factors such as economic conditions and competition. Should such factors cause the businesses within the Plan Area to close, the ability of the property owners to pay their property taxes may be compromised. Risks Related to the Pledged Property Tax Revenues Generally The 2010 Bonds are primarily secured by the Pledged Property Tax Revenues. Accordingly, payment of the principal of and interest on the 2010 Bonds is dependent upon the amount of the Pledged Property Tax Revenues and upon the increases or decreases in the total mill levy imposed by overlapping taxing entities. There is no assurance that the Pledged Property Tax Revenues will remain at a level sufficient to pay debt service on the 2010 Bonds, or that mill levies of overlapping taxing jurisdictions will not materially decrease. See "REVENUES AVAILABLE FOR DEBT SERVICE -- Property Tax Data" and "Estimated Overlapping General Obligation Debt." Valuation and Uses of Property The amount of Pledged Property Tax Revenues available in any given year is subject, in part, to the rate of increase or decrease in the assessed 10/5/2019 1 -1 -125 valuation of property within the Plan Area above or below the Property Tax Base Amount. The assessed value of taxing jurisdictions which are within or overlap the Plan Area could decrease or increase as a result of reassessment or other factors. The assessed value of property in the Authority for ad valorem property tax purposes is determined according to the statutory procedures described under "REVENUES AVAILABLE FOR DEBT SERVICE - -Ad Valorem Property Taxes." Assessed valuations may be affected by a number of factors beyond the control of the Authority. For example, property owners are allowed each year by State law to challenge the valuations of their property. Should the actions of property owners result in lower assessed valuations of property in the Plan Area, the security for the 2010 Bonds would be diminished. Further, property used for tax - exempt purposes is not currently subject to taxation. If any property becomes tax - exempt, the Property Tax Base Amount will be decreased accordingly. Regardless of the level at which property is assessed for tax purposes, the ability of each taxing entity to enforce and collect the property tax is dependent upon the property in the Plan Area having sufficient fair market value to support the taxes which are imposed. No assurance can be given as to the future market values of property in the Plan Area. Finally, as further described in "Proposed Fiscal Initiatives" below, several initiated measures that will appear on the November 2010 ballot could, if passed, have a significant impact on Pledged Revenues, including Pledged Property Tax Revenues. Risk of Reductions in Mill Levies The amount of Pledged Property Tax Revenues generated by the incremental assessed valuation is directly dependent upon the mill levies imposed by taxing jurisdictions which overlap the Plan Area. Information regarding the historic mill levies imposed in the Plan Area is set forth in "REVENUES AVAILABLE FOR DEBT SERVICE - -Ad Valorem Property Tax Data." There is no guarantee that the overlapping entities will continue to maintain their mill levies at the current or higher rates, and such mill levies may decrease. In addition, each of the overlapping taxing jurisdictions is subject, with certain exceptions, to limitations as to the amount of revenues which it may generate from its property tax mill levy. These limitations are both statutory and constitutional. If assessed valuations increase significantly, mill levies may be required to be reduced accordingly in order for the overlapping taxing jurisdictions to stay within their statutory and constitutional revenue raising limits. No assurance can be given that any jurisdiction which overlaps the Plan Area will in fact impose any particular mill levy in any year or that mill levies currently imposed by overlapping taxing entities will not decrease in the future. See "CONSTITUTIONAL LIMITATIONS" and "REVENUES AVAILABLE FOR DEBT SERVICE - -Ad Valorem Property Taxes." Ability or Willingness of Owners to Pay Property Taxes Should a large percentage of the properties in the Plan Area cease operations or otherwise fail to pay their property taxes when due, Pledged Property Tax Revenues eventually may be insufficient to pay debt service on the 2010 Bonds when due. No representation can be made about the financial condition or stability of the owners or tenants of properties in the Plan Area or their ability to pay property taxes levied on their properties. There also can be no assurance that any additional development or redevelopment will take place at a rate or level which would generate sufficient increases in assessed valuation and Pledged Property Tax Revenues to offset decreases in the Pledged Property Tax Revenues, if any, after a general reassessment. "REVENUES AVAILABLE FOR DEBT SERVICE -- Pledged Property Tax Revenues." 10i5i201b0 1 -1 -126 Collection and Enforcement The Pledged Property Tax Revenues are based upon property taxes levied by the taxing entities overlapping the Project Area and are collected at the same time and in the same manner as taxes paid to the other taxing entities. Taxes levied must be paid in full; taxpayers may not choose to pay portions of their tax bills. The collection of Pledged Property Tax Revenues will be subject to the ability or inability of property owners in the Project Area to pay property taxes as they become due. No representation can be made about the financial condition or stability of any of the property owners in the Project Area or their ability to pay property taxes levied on their properties. The payment of property taxes does not constitute a personal obligation of each of the property owners within the Project Area. Instead, the obligation to pay property taxes is tied to the properties taxed, and if timely payment is not made, the obligation constitutes a lien against the specific properties. To the extent payment of property taxes depends upon the financial stability of property owners in the Project Area, no assurance can be given that timely payment will occur. The Authority has not undertaken any independent investigation of the financial condition of any property owners within the Project Area. To enforce the property tax liens, the County Treasurer is obligated to foreclose on and cause the sale of tax liens upon the property that is subject to the delinquent taxes or fees, as provided by law. However, foreclosure is a time - consuming remedy which may extend more than one year. In addition, proceeds realized from a foreclosure sale, if any, may or may not be sufficient to cover the delinquent taxes or fees and there is no assurance that such tax liens will sell at such a sale. Owners of the 2010 Bonds cannot foreclose on property within the Project Area or sell such property in order to pay the principal of or interest on their Bonds. In addition, the sales of tax liens applicable to property in the Project Area to enforce such liens could be delayed by bankruptcy laws and other laws affecting creditor's rights generally. During the pendency of any bankruptcy of any property owner in the Project Area, the parcels in the Project Area owned by such property owner could be sold only if the bankruptcy court approves the sale. There is no assurance that property taxes would be paid during the pendency of any bankruptcy; nor is it possible to predict the timeliness of such payment. If the property taxes are not paid over a period of years, the Authority's ability to pay principal and interest on the 2010 Bonds could be affected. No Assurances That the Authority Will Receive BAB Credits The amount of any BAB Credit is subject to legislative changes by Congress. Further, BAB Credits will only be paid if the 2010B Bonds are Qualified Build America Bonds. For the 2010B Bonds to be and remain Qualified Build America Bonds, the Authority must comply with certain covenants and the Authority must establish certain facts and expectations with respect to the 2010B Bonds, the use and investment of proceeds thereof and the use of property financed thereby. If the Authority fails to file the Form 8038 -CP or other necessary tax return in a timely fashion, it is possible that the Authority will never receive BAB Credits for that payment date. Also, BAB Credits are subject to offset against certain amounts that may, for unrelated reasons, be owed by the Authority to an agency of the United States of America, such as Federal withholding tax owed by the Authority for wages paid to its employees, if any. Also see "TAX MATTERS." loisi201bl 1 -1 -127 Proposed Fiscal Initiatives General The Colorado Secretary of State has certified three citizens' initiatives (the "Initiatives ") to be submitted to Colorado voters in November 2010 that would each have a significant impact on the financial operations of the State and local governments in the State. If any or all of the Initiatives are approved by Colorado voters, most of the provisions of the Initiatives would take effect in January 2011. The Authority has conducted an analysis of the effect of the Initiatives on its finances and currently believes that even if the Initiatives are adopted, sufficient Pledged Property Tax Revenues will be generated to pay debt service on the 2010 Bonds. However, the effects of the Initiatives on the Authority currently cannot be precisely known because several of the provisions of the Initiatives are unclear and any or all of the Initiatives may not be approved at the general election to be held in November 2010. It is possible that one or more of the Initiatives could have a substantial negative impact on the future activities of the Authority, including the ability to generate sufficient revenues for its general operations, undertake additional programs or engage in any subsequent borrowings or other financing activities. The Initiative labeled "Amendment 60" is described below. The general provisions of the other two Initiatives are discussed in "LEGAL MATTERS -- Proposed Fiscal Initiatives." Amendment 60 - Limitations upon Property Taxes The first Initiative, labeled "Amendment 60" by the Colorado Secretary of State, would amend TABOR to establish additional limits on property taxes and change certain procedures for elections relating to property taxes. Under Amendment 60, governmental entities would be required to allow petitions from citizens to propose property tax reductions. Under current law, such initiatives cannot be filed with many governmental entities (such as the School District). In addition, Amendment 60 would: (i) mandate that by 2020, all school districts reduce their 2011 tax rates by one -half (excluding debt service levies) and require the State to replace the lost revenues with State funds; (ii) require additional election notices for the extension of expiring taxes, and terminate taxes previously extended without such notices; (iii) limit future property tax increases to 10 years; (iv) require that government enterprises and authorities pay property taxes and require the associated government to reduce its property tax rates to avoid any additional revenue as a result; (v) require that tax increase election questions provide a specific dollar amount for the increase, and invalidate current taxes that exceed the dollar amount included in the authorizing ballot question; (vi) terminate "taxes exceeding state laws, tax policies, or limits violated, changed, or weakened without state voter approval" and restore those "laws, policies, and limits, including debt limits;" (vii) allow electors to vote on property taxes issues in jurisdictions where they own property; (viii) require all property tax elections be held in November; (ix) require that property tax increases be voted upon separately from related debt questions; and (x) prohibit property tax bills from listing items other than property taxes and late charges. Amendment 60 provides that it will not apply to bonds issued before January 1, 2011. However, urban renewal authorities currently are not subject to TABOR, and as a result, it is not clear under existing law whether that provision would apply to bonds issued by an urban renewal authority, or the revenues securing them. Amendment 60 has the potential to significantly and negatively impact the Pledged Property Tax Revenues. Most importantly, the requirement that the School District reduce its operating mill levy by one -half may permanently reduce the overlapping mill levy to a level that is too low to generate sufficient Pledged Property Tax Revenues to pay debt service on the 2010 Bonds and operate the Authority in the future. loisi20ib2 1 -1 -128 Further, the requirement that governmental entities reduce their mill levies to account for the payment of bonds in the future likely will negatively impact the overlapping mill levy; any successful citizen - initiated reduction in mill levies would have the same effect. Finally, Amendment 60 has the potential to reduce or eliminate property tax revenues derived from election questions that have already been approved by voters; should any of the entities overlapping the Authority be required to reduce their property tax revenues as a result of Amendment 60, the overlapping mill levy will decline and Pledged Property Tax Revenues will be reduced. Legal Constraints on Authority Operations; Changes in Law The Authority is created by statute and exercises only limited powers. In addition, various State laws and constitutional provisions govern the assessment and collection of general ad valorem property taxes, limit revenues and spending of the State and local governments and limit rates, fees and charges imposed by such entities, including the Town, the Eagle County School District and, in some cases, the Authority. There can be no assurance that the application of such provisions, or the adoption of new provisions, will not have a material adverse effect on the affairs of the Authority or the collection of Pledged Revenues. It is possible that legislation could be enacted in the State which would limit the availability of tax increment financing to entities such as the Authority, reduce or eliminate the property tax which taxing jurisdictions are permitted to impose, or limit the rates authorized to be imposed. For example, the State's constitution and statutes limit the ability of local governments to increase their mill levies beyond certain thresholds established by law. Any one or more of such occurrences may have the effect of reducing the amount of Pledged Property Tax Revenues available to pay the principal of and interest on the 2010 Bonds. Limitations on Remedies Available to Owners of Bonds No Acceleration There is no provision for acceleration of maturity of the principal of the 2010 Bonds in the event of a default in the payment of principal of or interest on the 2010 Bonds. Consequently, remedies available to the owners of the 2010 Bonds may have to be enforced from year to year. Bankruptcy and Police Power The enforceability of the rights and remedies of the owners of the 2010 Bonds and the obligations incurred by the Authority in issuing the 2010 Bonds are subject to the federal bankruptcy code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings or the exercise of powers by the federal or State government, if initiated, could subject the owners of the 2010 Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation or modification of their rights. 10 /5 /20ib3 1 -1 -129 Secondary Market There is no guarantee that a secondary market for the 2010 Bonds will be maintained by the Underwriter or others. Owners of Bonds should be prepared to hold their Bonds to maturity. 10i5i201b4 1 -1 -130 SOURCES AND USES OF FUNDS Sources and Uses of Funds The proceeds of each series of the 2010 Bonds are expected to be applied in the following manner: Sources and Uses of Funds Sources 2010A Bonds 2010B Bonds Total Par amount of 2010 Bonds .......... ............................... Plus: reoffering premium ........... ............................... Total Uses TheProject .................................. ............................... Reserve Fund deposit .................. ............................... Costs of issuance (including underwriting discount) . Total....................................... ............................... Source: The Underwriter. The Project The Project includes five components within the Plan Area (sometimes referred to as the "LionsHead TIF district "), including: the LionsHead Transit and Welcome Center; East LionsHead Portal Improvements; West LionsHead Portal Improvements; Vail Public Library Remodel; and surface parking on a site adjacent to the parking garage. The proceeds of the 2010 Bonds are expected to provide $15 million to support these projects. The first component of the Project, the LionsHead Transit and Welcome Center will be completed in two phases and address congestion and transit issues identified in the Plan. The first phase, the Transit Center, includes the construction of four additional bus bays along the South Frontage Road at the LionsHead Parking Structure, a new 1,200 square foot Frontage Road Transit Building, a pedestrian connection to the southwest corner of the LionsHead Parking Structure and the entrance to LionsHead, and a new passenger pick -up /drop -off at the lowest level of the existing LionsHead Parking Structure. The construction of the four additional bus bays will increase transit capacity for Eagle County Transit ( "ECO ") and free up space for the Town of Vail Transit at the West LionsHead Circle bus stop. The new building will provide an enclosed waiting area with restrooms and transit related information. The pedestrian connection will provide a safe connection to LionsHead and the future LionsHead Transit Welcome Center that will be constructed with Phase It Improvements. The passenger drop -off provides a 15- minute loading and unloading area for passengers arriving at LionsHead and the LionsHead Transit Welcome Center. Phase I construction is currently on -going and is scheduled to be completed by December 15th, 2010. Phase II improvements include the construction of a new 9,500 square foot Transit Welcome Center to accommodate arriving guests, provide guest information, lockers, rest rooms on the first floor, accommodate and enhance the existing Vail Recreation District's LionsHead offices and programming on the second floor, and provide a new community room space on the third level. Construction is currently scheduled to be completed April 2011 thru December 2011. 10i5i201b5 1 -1 -131 The total cost of the Transit and Welcome Centers is estimated to be $12.8 million; $5.0 million of that amount is expected to be paid from a Federal Transit Authority grant and the remaining $7.8 million funded with 2010 Bond proceeds. The two portal improvement components of the Project define the entries to the LionsHead area from the east and west. The East LionsHead Portal Improvements are adjacent to the LionsHead parking structure and the new LionsHead Transit Welcome Center. The improvements will provide the opportunity to create a world -class entrance portal to LionsHead, and provide a safer and more inviting environment for guests arriving from the east side. Improvements more specifically include heated paver plaza, bus shelter, landscaping, and potential amenities such as fountains, public art, etc. Construction is anticipated from April 2012 through December 2012 at a cost of approximately $3.6 million. The West LionsHead Portal Improvements define the western entry to the area and are adjacent to West LionsHead Circle bus stop at Concert Hall Plaza. The improvements will provide the opportunity to create a more inviting and safer entrance portal to LionsHead, including heated paver walks. Construction is anticipated from April 2012 through December 2012 at a cost of approximately $750,000. The fourth component of the project is a remodel of the 27 -year old Vail Public Library. The library is an award - winning building with a unique architectural character which provides the Town with a variety of amenities and future opportunities. The original building design has many sustainable design and "green" building features including a sod roof. Heavy usage of the library, in addition to identified needs /deficiencies in the library's existing lighting and mechanical systems, have made this an important project in meeting the objectives of the Plan. This component project will also be completed in two phases. Phase I includes a remodel of the main floor public spaces to include new stacks and shelving; millwork and furnishings; new carpet; and enhanced lighting for a cost of $475,000 with the project to be completed in May of 2011. Phase H, with a cost of $1,475,000, relocates staff offices and technical services operations to the lower level and converts current staff space on the main floor to additional technology and training lab space for the public. Installation of an elevator and upgrades to mechanical systems are included in the cost of this phase. Construction of this phase is projected for 2012 and 2013. The final component of the project is surface parking on a site adjacent to the LionsHead parking structure currently used to park charter buses and other oversized vehicles. Sixty new parking spaces will be added to address congestion and overflow parking issues in the area. Other improvements included in the $900,000 cost are a retaining wall and modifications to the parking entry. This project is also proposed for 2011. 1oi5i200 1 -1 -132 THE 2010 BONDS General The 2010 Bonds will be dated as of their date of delivery and will mature and bear interest as shown on the inside cover page of this Official Statement. The 2010 Bonds will be issued in fully registered form and initially will be registered in the name of "Cede & Co.," as nominee for DTC. Purchases by beneficial owners of the 2010 Bonds ( "Beneficial Owners ") are to be made in book -entry only form in the principal amount of $5,000 or any integral multiple thereof. Payments to Beneficial Owners are to be made as described below in `Book -Entry Only System" and Appendix C hereto. Payment Provisions Interest on the 2010 Bonds (calculated based on a 360 -day year consisting of twelve 30 -day months) is payable semiannually on June 1 and December 1 (each an "Interest Payment Date "), commencing June 1, 2011. Interest shall be paid on each Interest Payment Date by check mailed by the Trustee on that date to the Person in whose name the 2010 Bond is registered at the close of business on the means the 15th day of the calendar month (whether of not a Business Day) immediately preceding the applicable Interest Payment Date (the "Record Date ") on the registration records of the Authority kept by the Trustee (the "Bond Register "). Notwithstanding the foregoing, while the 2010 Bonds are held by a DTC (or any other Depository, as defined in Appendix B), interest on any 2010 Bond shall be paid by wire transfer in immediately available funds to the bank account number and address filed with the Trustee by such Owner or in accordance with the provisions of the Representation Letter (defined in Appendix B). If and to the extent, however, that payment of interest on any 2010 Bond is not made on any Interest Payment Date, interest shall cease to be payable to the Person who was the Owner of that 2010 Bond as of the applicable Record Date. When moneys become available for payment of the interest, the Trustee shall establish a Special Record Date for the payment of that interest which shall be not more than 15 nor fewer than 10 days prior to the date of the proposed payment, and the Trustee shall cause notice of the proposed payment and of the Special Record Date to be mailed by first class mail, postage prepaid, to such Owner at its address as it appears on the 2010 Bond Register no fewer than 10 days prior to the Special Record Date and thereafter the interest shall be payable to the Persons who are the Owners of the 2010 Bonds at the close of business on the Special Record Date. The principal of any 2010 Bond shall be payable when due to an Owner upon presentation and surrender of such Bond at the Principal Corporate Trust Office (defined in Appendix B) of the Trustee. The principal of and interest on the 2010 Bonds shall be payable in lawful money of the United States of America without deduction for the services of the Trustee. Notwithstanding the foregoing, payments of the principal of and interest on the 2010 Bonds will be made directly to DTC or its nominee, Cede & Co., by the Trustee, so long as DTC or Cede & Co. is the registered owner of the 2010 Bonds. Disbursement of such payments to DTC's Participants is the responsibility of DTC, and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's Participants and the Indirect Participants, as more fully described herein. See "Book -Entry Only System" below. 1oi5i20ib7 1 -1 -133 Prior Redemption* 2010A Bonds The 2010A Bonds are not subject to redemption prior to maturity. 2010B Bonds The 2010B Bonds are subject to the following redemption provisions. Optional Redemption.* The 2010B Bonds maturing on or prior to June 1, shall not be subject to optional redemption prior to their respective maturity dates. The 2010B Bonds maturing on and after June 1, shall be subject to redemption prior to their respective maturity dates at the option of the Authority, in whole or in part, in integral multiples of $5,000, and if in part in such order of maturities as the Authority shall determine and by lot within a maturity, on June 1, , and on any date thereafter, at a redemption price equal to the principal amount of the 2010B Bonds so redeemed plus accrued interest to the redemption date without a premium.. Mandatory Sinking Fund Redemption.* The 2010B Bonds maturing on June 1, 2020, June 1, 2025, and June 1, 2030 (each a "Term Bond ") are subject to mandatory sinking fund redemption at a price equal to the principal amount thereof plus accrued interest thereon to the redemption date. Such 2010B Bonds are to be selected by lot in such manner as the Authority shall determine (giving proportionate weight to 2010B Bonds in denominations larger than $5,000). As and for a sinking fund for the redemption of the 2010B Bonds maturing on June 1, 2020, the Town shall deposit in the 2010B Debt Service Account moneys which are sufficient to redeem (after any credit as described below) the following principal amount of the 2010B Bonds maturing on June 1, 2020: Redemption Date June 1 Principal Amount 2018 $ 750,000 2019 775,000 2020 (maturity) 805,000 As and for a sinking fund for the redemption of the 2010B Bonds maturing on June 1, 2025, the Town shall deposit in the 2010B Debt Service Account moneys which are sufficient to redeem (after any credit as described below) the following principal amount of the 2010B Bonds maturing on June 1, 2025: Redemption Date June 1 Principal Amount 2021 $ 835,000 2022 870,000 2023 905,000 2024 940,000 2025 (maturity) 975,000 * Subject to change. 10/5/20118 1 -1 -134 As and for a sinking fund for the redemption of the 2010B Bonds maturing on June 1, 2030, the Town shall deposit in the 2010B Debt Service Account moneys which are sufficient to redeem (after any credit as described below) the following principal amount of the 2010B Bonds maturing on June 1, 2030: Redemption Date June 1 Principal Amount 2026 $ 1,015,000 2027 1,060,000 2028 1,105,000 2029 1,150,000 2030 (maturity) 1,200,000 At its option, to be exercised on or before the forty -fifth day next preceding each sinking fund redemption date, the Authority may (i) purchase and cancel any 2010 Bonds with the same maturity date as the 2010 Bonds subject to such sinking fund redemption and (ii) receive a credit in respect of its sinking fund redemption obligation for any 2010 Bonds of the same series with the same maturity date as the 2010 Bonds subject to such sinking fund redemption which prior to such date have been redeemed (otherwise than through the operation of the sinking fund) and cancelled and not theretofore applied as a credit against any sinking fund redemption obligation. Each 2010 Bond so purchased and cancelled or previously redeemed shall be credited at the principal amount thereof to the obligation of the Authority on such sinking fund redemption date, and the principal amount of 2010 Bonds to be redeemed by operation of such sinking fund on such date shall be accordingly reduced. Extraordinary Optional Redemption.* From the date of issuance of the 2010B Bonds up to, but not including, the first optional redemption date of the 2010B Bonds (i.e., June 1, ), the 2010B Bonds are subject to extraordinary optional redemption prior to their respective maturity dates, on any date at the option of the Authority, upon the occurrence of an Extraordinary Event (defined below) from any source of available funds, in whole or in part, by lot, at the Make -Whole Redemption Price (defined below). "Extraordinary Event" means an event causing the BAB Credit expected to be received with respect to the 2010B Bonds to be eliminated or reduced, as reasonably determined by the Secretary /Executive Director, which determination shall be conclusive, as a result of: (1) a material adverse change to Section 54AA or 6431 of the Tax Code, (2) guidance published by the Internal Revenue Service or the United States Treasury with respect to such sections of the Tax Code, or (3) determination by the Internal Revenue Service or the United States Treasury, which determination is not the result of a failure of the Authority to satisfy the requirements of the Authority's tax covenant with respect to the 2010B Bonds (see "Tax Covenants" below). "Make -Whole Redemption Price" means the amount equal to the greater of the following: (1) the issue price of the 2010B Bonds set forth on the inside cover page of this Official Statement (but not less than 100 %) of the principal amount of the 2010B Bonds to be redeemed; or * Subject to change. 1oi5i20lb9 1 -1 -135 (2) the sum of the present value of the remaining scheduled payments of principal and interest on the 2010B Bonds to be redeemed to the first optional redemption date, not including any portion of those payments of interest accrued and unpaid as of the date on which the 2010B Bonds are to be redeemed, discounted to the date on which the 2010B Bonds are to be redeemed on a semi - annual basis, assuming a 360 -day year containing twelve 30 -day months, at the Treasury Rate, plus basis points; plus, in each case, accrued interest on the 2010B Bonds to be redeemed to the redemption date. For purpose of determining the Make -Whole Redemption Price, "Treasury Rate" means, with respect to any extraordinary redemption date for a particular 2010B Bond, the yield to maturity as of such extraordinary redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the extraordinary redemption date (excluding inflation - indexed securities) (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the extraordinary redemption date to the first optional redemption date of the 2010B Bonds; provided, however that if the period from the extraordinary redemption date to the first optional redemption date of the 2010B Bonds is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. Notice of Redemption Notice of optional or mandatory redemption shall be given by the Trustee in the name of the Authority by sending a copy of such notice by first- class, postage prepaid mail, or in the event that the 2010B Bonds to be redeemed are registered in the name of the Depository, such notice may, in the alternative, be given by electronic means in accordance with the requirements of the Depository, not more than sixty nor less than thirty days prior to the redemption date to each Owner at his or her address as it last appears on the registration books kept by the Trustee, as registrar; but neither failure to give such notice nor any defect therein shall affect the redemption of any other 2010B Bond. Such notice shall identify the 2010B Bonds to be so redeemed (if less than all are to be redeemed) and the redemption date, and shall further state that on such redemption date there will become and be due and payable upon each 2010B Bond so to be redeemed, at the Trustee, the principal amount thereof, accrued interest to the redemption date, and the stipulated premium, if any, and that from and after such date interest will cease to accrue. Notice having been given in the manner hereinabove provided, the 2010B Bond or 2010B Bonds so called for redemption shall become due and payable on the redemption date so designated; and upon presentation thereof at the Trustee, the Trustee will pay the 2010B Bond or 2010B Bonds so called for redemption. Notwithstanding the provisions described above, any notice of redemption may contain a statement that the redemption is conditioned upon the receipt by the Trustee on or before the redemption date of funds sufficient to pay the redemption price of the 2010B Bonds so called for redemption, and that if such funds are not available, such redemption shall be canceled by written notice to the Owners of the 2010B Bonds called for redemption in the same manner as the original redemption notice was delivered. On or prior to the date fixed for redemption, funds shall be deposited with the Trustee to pay, and the Trustee is authorized and directed to apply such funds to the payment of the 2010B Bonds or portions thereof called, together with accrued interest thereon to the redemption date and any required premium. No further interest shall accrue on the principal of 10/5/20120 1 -1 -136 any such 2010B Bond called for redemption from and after the redemption date, provided sufficient funds are deposited with the Trustee and available on the redemption date. Tax Covenants 2010A Bonds In the Indenture, the Authority hereby covenants for the benefit of each Owner of the 2010A Bonds that it will not take any action or omit to take any action with respect to the 2010A Bonds, the proceeds thereof, any other funds of the Authority or the facilities financed by the proceeds of the 2010A Bonds if such action or omission (i) would cause the interest on the 2010A Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Tax Code, (ii) would cause interest on the 2010A Bonds to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code, or (iii) would cause interest on the 2010A Bonds to lose its exclusion from State taxable income under present State law. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the 2010A Bonds until the date on which all obligations of the Authority in fulfilling the above covenant under the Tax Code have been met. 2010B Bonds In the Indenture, the Authority makes an irrevocable election that Section 54AA of the Tax Code shall apply to the 2010B Bonds and that subsection (g) of Section 54AA will also apply to the 2010B Bonds so that the Authority will receive the BAB Credit. None of the Owners of the 2010B Bonds shall be entitled to any credit under Section 54AA of the Tax Code. The Authority covenants that it will not take any action or omit to take any action with respect to the 2010B Bonds, the proceeds thereof, any other funds of the Authority or the 2010 Project if such action or omission would case the Authority to not be entitled to the BAB Credit with respect to the 2010B Bonds. In furtherance of this covenant, the Authority agrees to comply with the procedures set forth in the Tax Compliance Certificate with respect to the 2010B Bonds. The foregoing covenants shall remain in full force and effect notwithstanding the payment in full or defeasance of the 2010B Bonds until the date on which all obligations of the Authority in fulfilling the above covenant have been met. The Authority shall timely file or cause to be filed any document required by the Internal Revenue Service to be filed in order to claim the BAB Credit. Defeasance Any 2010 Bond shall be deemed to be paid within the meaning of the Act and the Indenture when payment of the principal of, premium, if any, and interest due on such 2010 Bond to the due date thereof (whether such due date is by reason of maturity or upon redemption as described in "Prior Redemption" above) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided by irrevocably depositing with the Trustee or any other commercial bank or trust company organized under the laws of the United States of America or any state thereof, in trust and irrevocably set aside exclusively for such payment, (A) moneys sufficient to make such payment, (B) Federal Securities (defined in Appendix B), maturing as to principal and interest in such amount and at such time as will insure the availability of sufficient moneys to make such payment, or (C) a combination of cash and Federal Securities. At such times as a 2010 Bond shall be deemed to be paid under the Indenture as described above, such 2010 Bond shall no longer be secured by or entitled to the benefits of the Indenture, except for the purposes of any such payment from such moneys or Federal Securities. 1oi5i2o1Z1 1 -1 -137 In the case of taxable bonds (such as the 2010B Bonds), the Authority is obligated to contribute additional securities or monies to the escrow or trust if necessary to provide sufficient amounts to satisfy the payment obligations on such taxable bonds. Book -Entry Only System The 2010 Bonds will be available only in book -entry form in the principal amount of $5,000 or any integral multiple thereof. DTC will act as the initial securities depository for the 2010 Bonds. The ownership of one fully registered 2010 Bond for each maturity of each series, as set forth on the inside cover page of this Official Statement, in the aggregate principal amount of such maturity coming due thereon, will be registered in the name of Cede & Co., as nominee for DTC. See Appendix C - Book -Entry Only System. SO LONG AS CEDE & CO, AS NOMINEE OF DTC, IS THE REGISTERED OWNER OF THE 2010 BONDS, REFERENCES IN THIS OFFICIAL STATEMENT TO THE REGISTERED OWNERS WILL MEAN CEDE & CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS. Neither the Authority nor the Trustee will have any responsibility or obligation to DTC's Direct Participants or Indirect Participants (each as defined in Appendix C), or the persons for whom they act as nominees, with respect to the payments to or the providing of notice for the Direct Participants, the Indirect Participants or the beneficial owners of the 2010 Bonds as further described in Appendix C to this Official Statement. 1oi5i2o1Z2 1 -1 -138 DEBT SERVICE REQUIREMENTS The following table sets forth the estimated annual debt service requirements for the 2010 Bonds. Debt Service Requirements The 2010A Bonds* The 2010B Bonds* Total Year Principal Interest Principal Interest 2010 Bonds* 2011 $ 350,000 $ 83,489 -- $ 446,837 $ 880,326 2012 615,000 134,000 -- 773,371 1,522,371 2013 635,000 115,550 -- 773,371 1,523,921 2014 655,000 96,500 -- 773,371 1,524,871 2015 675,000 76,850 -- 773,371 1,525,221 2016 695,000 56,600 -- 773,371 1,524,971 2017 720,000 28,800 -- 773,371 1,522,171 2018 -- -- $ 750,000 773,371 1,523,371 2019 -- -- 775,000 731,086 1,506,086 2020 -- -- 805,000 687,392 1,492,392 2021 -- -- 835,000 642,006 1,477,006 2022 -- -- 870,000 590,753 1,460,753 2023 -- -- 905,000 537,353 1,442,353 2024 -- -- 940,000 481,804 1,421,804 2025 -- -- 975,000 424,107 1,399,107 2026 -- -- 1,015,000 364,261 1,379,261 2027 -- -- 1,060,000 297,406 1,357,406 2028 -- -- 1,105,000 227,581 1,332,581 2029 -- -- 1,150,000 154,795 1,304,795 2030 -- -- 1,200,000 79,044 1,279,044 Total $4,345,000 $591,789 $12,385,000 $11,078,020 $28,399,809 (1) Totals may not add due to rounding. (2) Assumes interest at rates estimated by the Underwriter. With respect to the 2010B Bonds, reflects total interest to be paid on the 2010B Bonds (i.e., the BAB Credit has not been subtracted from the amounts shown). As described in "INTRODUCTION -- Taxable Build America Bonds," the Authority expects to receive a BAB Credit in an amount equal to 35% of the interest payable on the 2010B Bonds. Source: The Financial Advisor. * Subject to change. 10/5/20123 1 -1 -139 SECURITY FOR THE BONDS Special, Limited Obligations The 2010 Bonds (and any Additional Bonds) are special and limited revenue obligations of the Authority, payable solely from the Trust Estate, which is pledged and assigned pursuant to the Indenture for the payment of the principal of, premium, if any, and interest on the 2010 Bonds as and to the extent provided in the Indenture. Neither the 2010 Bonds nor the interest thereon constitute a general obligation debt or indebtedness of the Authority, the Town, the State, or any political subdivision thereof within the meaning of any provision or limitation of the constitution or laws of the State or the Charter. The 2010 Bonds are not general obligations of the Authority, and do not constitute a lien on any real property. The Authority has no taxing power. The owners of the 2010 Bonds do not have the right to require or compel the exercise of the ad valorem property taxing power of the Town or of any other taxing entity for payment of the principal of or interest on the 2010 Bonds. The owners of the 2010 Bonds may not look to any other funds of the Authority other than Pledged Revenues for payment of the 2010 Bonds. Therefore, the punctual payment of the principal of and interest on the 2010 Bonds is dependent on the generation of Pledged Revenues in an amount sufficient to meet debt service requirements on the 2010 Bonds. See "CERTAIN RISK FACTORS" and "REVENUES AVAILABLE FOR DEBT SERVICE." The 2010 Bonds constitute an irrevocable and first lien, but not necessarily an exclusive first lien, upon the Trust Estate. The Authority may issue Additional Bonds on a parity with the lien of the 2010 Bonds on the Pledged Revenues upon satisfaction of certain requirements described in "Additional Bonds" below. Pledged Revenues The 2010 Bonds are special, limited obligations of the Authority, equitably and ratably secured by an irrevocable pledge of and lien on, and payable solely from the Trust Estate. The Trust Estate generally includes: (a) the Pledged Revenues; and (b) the Trust Funds. See "INTRODUCTION -- Security," for a more detailed description of the Pledged Revenues. Also see the section entitled "REVENUES AVAILABLE FOR DEBT SERVICE." See Appendix B - Summary of Certain Provisions of the Indenture - Definitions, for definitions of capitalized terms used and not otherwise defined in this section and elsewhere in this Official Statement. Pledge of Revenues; Priority In the Indenture, the Authority irrevocably pledges, but not necessarily exclusively, the Trust Estate to the payment of the Debt Service Requirements of the 2010B Bonds. This pledge will be valid and binding from and after the date of the delivery of the 2010B Bonds. The revenues pledged for the payment of the 2010B Bonds, as received by or otherwise credited to the Authority, shall immediately be subject to the lien of such pledge without any physical delivery, filing, or further act. The lien of such pledge on the revenues pledged for payment of the 2010B Bonds and the obligation to perform the contractual provisions made in the Indenture shall have priority over any or all other obligations and liabilities of the Authority except any Additional Bonds hereafter authorized and issued in accordance with the provisions of the Indenture. The lien of such pledge shall be valid, binding, and enforceable as against all persons or entities having claims of any kind in tort, contract, or 10isi201Z4 1 -1 -140 otherwise against the Authority (except as herein otherwise provided) irrespective of whether such persons or entities have notice of such liens. History of Pledged Revenues The following table sets forth the Pledged Revenues for calendar years 2007 through 2009 and budgeted Pledged Revenues for 2010. Although the tax increment was authorized in 2005 (for collection in 2006), no Pledged Property Tax Revenues were collected in 2006 due to demolitions within the Plan Area in 2005. Investors should be aware that collections of Pledged Revenues may not continue at the levels stated below, and the coverage factors in future years may not remain at the historical levels indicated. The estimated Maximum Annual Debt Service Requirements for the 2010 Bonds is $1,214,664* in 2012.* See "DEBT SERVICE REQUIREMENTS." After taking the anticipated BAB Credit into account, the maximum annual debt service is expected to be $980,313* in 2012. History of Pledged Revenues 2010 2007 2008 2009 Budget Pledged Property Tax Revenues $337,503 $1,222,064 $1,709,772 $1,994,320 Interest earnings (3) 8,167 15,062 26,705 -- Total Pledged Revenues $347,677 $1,239,134 $1,738,486 $1,994,320 Source: Derived from the Town's audited financial statements for the years ended December 31, 2007 through 2009, the Authority's 2010 Budget and from information provided by the Authority. The Authority is in the process of preparing its budget for fiscal year 2011. Based upon preliminary 2010 assessed valuation information received from the County Assessor's office (which is subject to change until December 2010), the Authority currently anticipates receiving Pledged Property Tax Revenues in the amount of $2,798,450 for fiscal year 2011. That amount remains subject to change based upon numerous factors, including the final certified assessed valuation of the Authority for 2010 and collection of all property taxes levied for 2010. As described in "THE AUTHORITY -- Capital Improvement Program," the Town and the Authority have prepared a capital improvement plan ( "CIP ") for use as a planning and budgeting tool. In conjunction with the preparation of the CIP, the Town has estimated that its Pledged Property Tax Revenues will be approximately $2,942,010 in 2012 and 2013 and $3,089,450 in 2014 and 2015. Those estimates are based on numerous assumptions that may not be realized, including the completion of various private projects in the Plan Area, the future assessed value of property within the Plan Area, the collection of all property taxes levied, and the assumption that the Initiatives will not be approved. See "INTRODUCTION-- Forward- Looking Statements." * Subject to change. 10/5/20125 1 -1 -141 Flow of Funds - The Revenue Fund The Indenture establishes the Vail Reinvestment Authority Revenue Fund (the "Revenue Fund ") to be held by the Trustee. After all payments and deposits that are required to be made to the Property Tax Reserve Fund (see "INTRODUCTION -- Security), if any, have been made or provided for, on or prior to the last day of each month the Authority shall remit to the Trustee for deposit in the Revenue Fund all Pledged Property Tax Revenues received by the Authority, until such time as no further deposits are required as described below. In addition, upon receipt of the BAB Credit relating to the 2010B Bonds, the Authority shall remit such BAB Credit to the Trustee for deposit to the Revenue Fund. The Authority may also direct that the BAB Credit relating to the 2010B Bonds be paid directly to the Trustee. Amounts deposited in the Revenue Fund shall be applied by the Trustee to the following purposes in the following order of priority in each Fiscal Year: (i) All amounts deposited in the Revenue Fund during any Fiscal Year shall be transferred to the Bond Fund until the total of the amounts on deposit in the Bond Fund shall equal the Debt Service Requirements on the Series 2010 Bonds for such Fiscal Year, on a pari passu basis with any transfers required to be made to any separate bond funds created in connection with the issuance of Additional Bonds. See Appendix B - Summary of Certain Provisions of the Indenture - Bond Fund. (ii) All amounts deposited in the Revenue Fund during any Fiscal Year remaining after the transfers described in the previous paragraph have been made or provided for shall be transferred to the Reserve Fund, to the extent that the amount on deposit in the Reserve Fund is less than the then - applicable Reserve Fund Requirement, on a pari passu basis with any transfers required to be made to any separate reserve fund securing Additional Bonds. (iii) All amounts deposited in the Revenue Fund during any Fiscal Year remaining after the transfers described in (i) and (ii) above have been made or provided for shall be transferred to the Rebate Fund to the extent required by the Indenture (see Appendix B - Summary of Certain Provisions of the Indenture -- Rebate Fund) on a pari passu basis with any transfers required to be made to any separate rebate fund created in connection with the issuance of any Additional Bonds. (iv) All amounts deposited in the Revenue Fund during any Fiscal Year remaining after the transfers described in (i) through (iii) above have been made or provided for shall be applied, at the written direction of the Authority, to the payment of any Subordinate Debt. After there is on deposit in the Revenue Fund sufficient money to make all payments and transfers from the Revenue Fund as described in (i) through (iv) above for the remainder of the then - current Fiscal Year, the Authority shall no longer be required to remit Pledged Property Tax Revenues to the Trustee (but shall be required to continue to remit the BAB Credit relating to the 2010B Bonds) and any excess amounts remaining on deposit with the Trustee in the Revenue Fund (other than amounts on deposit attributable to the BAB Credit relating to the 2010B Bonds) after all such required amounts are on deposit in such funds shall be transferred to the Authority for any lawful purpose of the Authority. If during any Fiscal Year the Authority has deposited all required Pledged Property Tax Revenues to the Revenue Fund and is no longer making deposits to the Revenue Fund, and thereafter it is determined by the loisi2o1Z6 1 -1 -142 Trustee that further expenditures are required pursuant to the Indenture, the Trustee shall notify the Authority in writing and the Authority shall resume transferring Pledged Property Tax Revenues for deposit to the Revenue Fund. Reserve Fund The 2010 Bonds also are secured by a Reserve Fund created in the Indenture; the Reserve Fund contains a 2010A Reserve Account and a 2010B Reserve Account. The Reserve Fund is required to be maintained in an amount equal to the "Reserve Fund Requirement," which is an amount equal to the least of: (a) 10% of the stated principal amount of the 2010 Bonds and any Additional Bonds that are secured by the Reserve Fund; (b) the Maximum Annual Debt Service Requirements on the Outstanding 2010 Bonds and any Additional Bonds that are secured by the Reserve Fund; or (c) 125 % of the Average Annual Debt Service Requirements on the Outstanding 2010 Bonds and any Additional Bonds that are secured by the Reserve Fund. The amount required to be deposited into the Reserve Fund are calculated using the total debt service payable on the 2010 Bonds; the amount is not net of the BAB Credit. Upon issuance, the Reserve Fund Requirement for the 2010A Bonds will be $ *; that amount will be funded with proceeds of the 2010A Bonds. Upon issuance, the Reserve Fund Requirement for the 2010B Bonds will be $ *; that amount will be funded with proceeds of the 2010B Bonds. The 2010A Reserve Account shall be maintained as a continuing reserve for the payment of the Debt Service Requirements (defined in Appendix B) of the 2010A Bonds and the 2010B Reserve Account shall be maintained as a continuing reserve for the payment of the Debt Service Requirements of the 2010B Bonds. The Reserve Fund is to be maintained and used as described in the Indenture. For further information with respect to the Reserve Fund, see Appendix B - Summary of Certain Provisions of the Indenture - Reserve Fund. In lieu of cash, the Indenture allows the Authority to substitute a letter of credit, surety bond, insurance policy, agreement guaranteeing payment or other undertaking by a financial institution to ensure that cash in the amount otherwise required to be maintained in the Reserve Fund will be available to the Authority as needed. Additional Bonds Additional Parity Lien Bonds The Indenture authorizes the issuance of Additional Bonds for the purpose of providing the Authority with funds for any lawful purpose of the Authority, so long as the following requirements are met: (i) no Default or Event of Default has occurred and is at the time continuing under the Indenture; (ii) all amounts required to be on deposit in the funds and accounts established under the Indenture are on deposit therein, or will be on deposit therein upon the issuance of such Additional Bonds; and (iii) the requirements described below (among others) have been satisfied. Prior to the issuance of Additional Bonds, the Authority must deliver a certificate of the Authority Representative, addressed to the Trustee, establishing that the Pledged Revenues for any period of 12 consecutive calendar months out of the 18 calendar months next preceding * Subject to change. 10/5/20127 1 -1 -143 the date of the issuance of such Additional Bonds were at least 125% of the combined Average Annual Debt Service Requirements of the 2010 Bonds then Outstanding and the Additional Bonds. Notwithstanding the foregoing, in the case of Additional Bonds issued for the purpose of refunding less than all of the 2010 Bonds then Outstanding, compliance with the coverage test described in the prior paragraph shall not be required so long as the Debt Service Requirements payable on all Bonds Outstanding after the issuance of such Additional Bonds in each Fiscal Year does not exceed the Debt Service Requirements payable on all Bonds outstanding prior to the issuance of such Additional Bonds in each Fiscal Year. For purposes of the coverage test described above, when computing the Average Annual Debt Service Requirements for any issue of securities bearing interest at a variable, adjustable, convertible or other similar rate that is not fixed for the entire term thereof, the rate of interest on such securities shall be assumed to be a rate equal to the average per annum rate of interest on such securities during the preceding twelve month period, plus 100 basis points. If such securities have not been outstanding during the preceding twelve month period, the assumed rate of interest on such securities shall be determined by reference to the preceding 12 month average of an index comparable to that utilized in connection with such securities, plus 100 basis points. It shall further be assumed that any such securities which may be tendered prior to maturity for purchase at the option of the Owner thereof will mature on their stated maturity dates or mandatory redemption dates and not on any tender option date. The Authority shall be permitted to treat any fixed rate payable on an interest rate exchange agreement or "swap" contract as the interest rate on any such issue of securities if the counterparty to such agreement or contract has unconditionally agreed to pay all interest due on such securities. Each series of Additional Bonds issued pursuant to the Indenture shall be equally and ratably secured with the 2010 Bonds and all other series of Additional Bonds, if any, previously issued, without preference, priority or distinction of any such Bonds over any other thereof. Subordinate Debt Notwithstanding anything contained in this Indenture to the contrary, the Authority may, subject to applicable law, issue or incur Subordinate Debt (defined in Appendix B) from time to time as determined by the Authority without the consent of or notice to the Owners of the 2010 Bonds at the time Outstanding or any other Person; provided, however, that no Subordinate Debt may be issued if and for so long as any Event of Default shall have occurred and be continuing under the Indenture. No Superior Debt The Authority shall not issue bonds or other securities payable from the Pledged Revenues that have a lien on all or a portion of the Pledged Revenues that is prior and superior to the lien thereon of the 2010 Bonds without the prior written consent of the owners of 100% of the aggregate principal amount of the Outstanding Bonds. 1oi5i2o1Z8 1 -1 -144 REVENUES AVAILABLE FOR DEBT SERVICE General The 2010 Bonds are special, limited obligations of the Authority payable as to principal and interest solely from the Trust Estate, which is comprised primarily of the Pledged Revenues. The Pledged Revenues are comprised primarily of Pledged Property Tax Revenues, which are described in more detail below. Pledged Property Tax Revenues Pursuant to the Act, the Plan contains a provision that ad valorem property taxes levied upon taxable property within the Plan Area may be divided (for a period not to exceed 25 years from the adoption of the Plan) between the Authority and the taxing jurisdictions within or overlapping the Project Area. The revenues allocated to the Authority consist of that portion of such ad valorem taxes (at the prevailing rate of levy of each taxing jurisdiction) attributable to that portion of the certified assessed valuation of the taxable property in the Project Area which is in excess of the Property Tax Base Amount, subject to periodic adjustment as described below. See "Ad Valorem Property Taxes" below for a description of the statutory provisions applicable to the levy and collection of property taxes. The Authority itself has no power to levy ad valorem property taxes to pay debt service on the 2010 Bonds, nor may the Authority or the Town compel any other taxing jurisdiction to levy any property tax. In years of general reassessment (as described in "Ad Valorem Property Taxes" below), the assessed valuation of property within the Plan Area is required to be proportionately adjusted in accordance with such general reassessment. Any increase or decrease in assessed valuation which may occur as a result of such general reassessment is not attributable entirely to the property tax increment. Rather, such increase or decrease is allocated proportionately between the Property Tax Base Amount and the property tax increment so as to maintain the same ratio between the Property Tax Base Amount and the then existing property tax increment as existed prior to the reassessment. In this way, both the Authority and the overlapping taxing jurisdictions receive their proportionate share of any changes in assessed value resulting from statutorily mandated reassessments. All other changes resulting from new development and revaluations become a part of the property tax increment. The total amount of Pledged Property Tax Revenues in any given year will be subject to increases or decreases in the total mill levy imposed by the overlapping taxing entities. See "CERTAIN RISK FACTORS." The Village Square Metro Districts Intergovernmental Agreement The Authority is a party to an Intergovernmental Agreement dated as of December 8, 2005, by and between the Authority, Vail Square Metropolitan District No. 1, Vail Square Metropolitan District No. 2 and Vail Square Metropolitan District No. 3 (together, the "Districts ") and The Vail Corporation, d /b /a/ Vail Associates ( "Vail "), as it may be amended from time to time (the "Intergovernmental Agreement "). Pursuant to the Intergovernmental Agreement, the Districts agreed to construct certain public improvements (the "District Improvements ") required pursuant to the Core Site Development Agreement dated November 8, 2004, entered into by and among the Town, the Authority and Vail. Two of the Districts impose mill levies upon property within their boundaries in order to fund the performance of their 1oi5i20IZ9 1 -1 -145 governmental functions, including the operation, maintenance and repair of the District Improvements and the payment of debt service on District bonds. The Districts are contained within the boundaries of the Authority. Pursuant to the Intergovernmental Agreement, the Authority agreed to provide the Districts with the portion of the incremental property tax revenues generated from the levies imposed by the Districts (net of the County Treasurer's collection fee). Those revenues are referred to herein as the "District Tax Increment Revenues." Pursuant to the Indenture, the District Tax Increment Revenues do not constitute Pledged Property Tax Revenues. Upon receipt from the County Treasurer, the Authority immediately pays the District Tax Increment Revenues to Vail Square Metropolitan District No. 1. The Intergovernmental Agreement remains in effect until the earlier of (i) the expiration of the Authority's power to utilize property tax increment funds; or (ii) written acknowledgement from the Districts that the Districts have paid all capital costs and satisfied all obligations with respect to the cost of the District Improvements, including the repayment of debt used to finance construction of the District Improvements, together with the execution of a supplemental agreement to address the remaining maintenance functions of the Districts. Ad Valorem Property Taxes Property Subject to Taxation Subject to the limitations imposed by Article X, Section 20 of the State constitution (the Taxpayers Bill of Rights or "TABOR," described in "LEGAL MATTERS -- Certain Constitutional Limitations "), the governing body of each of the entities overlapping the Authority has the power to certify to the Eagle County Commission (the "Commission ") a levy for collection of ad valorem taxes against all taxable property within the Plan Area. Property taxes are uniformly levied against the assessed valuation of all property subject to taxation by the jurisdictions overlapping the Plan Area. Both real and personal property are subject to taxation, but there are certain classes of property which are exempt. Exempt property includes, but is not limited to: property of the United States of America; property of the State and its political subdivisions; public libraries; public school property; property used for charitable or religious purposes; nonprofit cemeteries; irrigation ditches, canals, and flumes used exclusively to irrigate the owner's land; household furnishings and personal effects not used to produce income; intangible personal property; inventories of merchandise and materials and supplies which are held for consumption by a business or are held primarily for sale; livestock; agricultural and livestock products; and works of art, literary materials and artifacts on loan to a political subdivision, gallery or museum operated by a charitable organization. The State Board of Equalization supervises the administration of all laws concerning the valuation and assessment of taxable property and the levying of property taxes. Assessment of Property Taxable property is first appraised by the County Assessor to determine its statutory "actual" value. This amount is then multiplied by the appropriate assessment percentage to determine each property's assessed value. The mill levy of each taxing entity is then multiplied by this assessed value to determine the amount of property tax levied upon such property by such taxing entity. Each of these steps in the taxation process is explained in more detail below. Determination of Statutory Actual Value. The County Assessor annually conducts appraisals in order to determine, on the basis of statutorily specified approaches, the 10i5i2oa0 1 -1 -146 statutory "actual" value of all taxable property within the county as of January 1. Most property is valued using a market approach, a cost approach or an income approach. Residential property is valued using the market approach, and agricultural property, exclusive of building improvements thereon, is valued by considering the earning or productive capacity of such lands during a reasonable period of time, capitalized at a statutory rate. The statutory actual value of a property is not intended to represent its current market value, but, with certain exceptions, is determined by the County Assessor utilizing a "level of value" ascertained for each two -year reassessment cycle from manuals and associated data published by the State Property Tax Administrator for the statutorily- defined period preceding the assessment date. Real property is reappraised by the County Assessor's office every odd numbered year. The statutory actual value is based on the "level of value" for the period one and one -half years immediately prior to the July 1 preceding the beginning of the two -year reassessment cycle (adjusted to the final day of the data - gathering period). For example, values for levy year 2008 (collection year 2009) were based on an analysis of sales and other information for the period January 1, 2005 to June 30, 2006. The following table sets forth the State Property Appraisal System for property tax levy years 2005 through 2010: Collection Levy Value Based on the Year Year Calculated As Of Market Period 2006 2005 July 1, 2004 Jan. 1, 2003 to June 30, 2004 2007 2006 July 1, 2004 Jan. 1, 2003 to June 30, 2004 2008 2007 July 1, 2006 Jan. 1, 2005 to June 30, 2006 2009 2008 July 1, 2006 Jan. 1, 2005 to June 30, 2006 2010 2009 July 1, 2008 Jan. 1, 2007 to June 30, 2008 2011 2010 July 1, 2008 Jan. 1, 2007 to June 30, 2008 The County Assessor may consider market sales from more than one and one -half years immediately prior to July 1 if there were insufficient sales during the stated market period to accurately determine the level of value. Oil and gas leaseholds and lands, producing mines and other lands producing nonmetallic minerals are valued based on production levels rather than by the base year method. Public utilities are valued by the State Property Tax Administrator based upon the value of the utility's tangible property and intangibles (subject to certain statutory adjustments), gross and net operating revenues and the average market value of its outstanding securities during the prior calendar year. Determination of Assessed Value. Assessed valuation, which represents the value upon which ad valorem property taxes are levied, is calculated by the County Assessor as a percentage of statutory actual value. The percentage used to calculate assessed valuation differs depending upon the classification of each property. Residential Property. To avoid extraordinary increases in residential real property taxes when the base year level of value is changed, the State constitution requires the Colorado General Assembly to adjust the assessment rate of residential property for each year in which a change in the base year level of value occurs. This adjustment is constitutionally mandated to maintain the same percentage of the aggregate statewide valuation for assessment attributable to residential property which existed in the previous year (although, 10/5/20111 1 -1 -147 notwithstanding the foregoing, TABOR prohibits any valuation for assessment ratio increase for a property class without prior voter approval). Pursuant to the adjustment process described above, the residential assessment rate is adjusted every two years, resulting in the following history of residential assessment rates since levy year 1989: 15.00% of statutory actual value (levy years 1989 -90); 14.34% of statutory actual value (levy years 1991 -92); 12.86% of statutory actual value (levy years 1993 -94); 10.36% of statutory actual value (levy years 1995 -96); 9.74% of statutory actual value (levy years 1997 -98 and 1999 - 2000); 9.15% of statutory actual value (levy years 2001 -02); and 7.96% of statutory actual value (levy years 2003 -04, 2005 -06, 2007 -08 and 2008 -09). In December 2009, the Colorado Legislative Council (the research division of the Colorado General Assembly) projected that the residential assessment rate will remain at 7.96% through levy year 2012. This projection is only an estimate, however, and is subject to change. Non - residential property. All non - residential taxable property, with certain specified exceptions, is assessed at 29% of its statutory actual value. Producing oil and gas property is generally assessed at 87.5% of the selling price of the oil and gas. Protests, Appeals, Abatements and Refunds. Property owners are notified of the valuation of their land or improvements, or taxable personal property and certain other information related to the amount of property taxes levied, in accordance with statutory deadlines. Property owners are given the opportunity to object to increases in the statutory actual value of such property, and may petition for a hearing thereon before the County's Board of Equalization. Upon the conclusion of such hearings, the County Assessor is required to complete the assessment roll of all taxable property and, no later than August 25th each year, prepare an abstract of assessment therefrom. The abstract of assessment and certain other required information is reviewed by the State Property Tax Administrator prior to October 15th of each year and, if necessary, the State Board of Equalization orders the County Assessor to correct assessments. The valuation of property is subject to further review during various stages of the assessment process at the request of the property owner, by the State Board of Assessment Appeals, the State courts or by arbitrators appointed by the Commissioners. On the report of an erroneous assessment, an abatement or refund must be authorized by the Commissioners; however, in no case will an abatement or refund of taxes be made unless a petition for abatement or refund is filed within two years after January 1 of the year in which the taxes were levied. Refunds or abatements of taxes are prorated among all taxing entities which levied a tax against the property. Statewide Review. The Colorado General Assembly is required to cause a valuation for assessment study to be conducted each year in order to ascertain whether or not county assessors statewide have complied with constitutional and statutory provisions in determining statutory actual values and assessed valuations for that year. The final study, including findings and conclusions, must be submitted to the Colorado General Assembly and the State Board of Equalization by September 15th of the year in which the study is conducted. Subsequently, the Board of Equalization may order a county to conduct reappraisals and revaluations during the following property tax levy year. Accordingly, the District's assessed valuation may be subject to modification following any such annual assessment study. Homestead Property Tax Exemption. The Colorado Constitution provides property tax exemptions for qualifying senior citizens (adopted in 2000) and for disabled 10/5/201 2 1 -1 -148 veterans (adopted in 2006). The senior citizen provision provides that for property tax collection years 2007 and later (except that the exemption was suspended for collection years 2009 and 2010), the exemption is equal to 50% of the first $200,000 of actual value of residential real property that is owner - occupied if the owner or his or her spouse is 65 years of age or older and has occupied such residence for at least 10 years. The disabled veterans provision provides that for property tax collection years 2008 and later, the same exemption is available to homeowners who have served on active duty in the U.S. Armed Forces and who are rated 100% permanently disabled by the federal government due to a service- connected disability. The State is required to reimburse all local governments for the reduction in property tax revenue resulting from these exemptions; therefore, it is not expected that this exemption will result in the loss of any property tax revenue to the District. There is no assurance, however, that the State reimbursement will be received in a time period which is sufficient to replace the reduced property tax revenue. Taxation Procedure The County Assessor is required to certify to the Authority (and each taxing entity overlapping it) the assessed valuation of property within the District no later than August 25th of each year. Subject to the limitations of TABOR, based upon the valuation certified by the County Assessor, the governing body of each overlapping entity computes a rate of levy which, when levied upon every dollar of the valuation for assessment of property subject to the entity's property tax, and together with other legally available District revenues, will raise the amount required by the taxing entity in its upcoming fiscal year. The taxing entity subsequently certifies to the Commissioners the rate of levy sufficient to produce the needed funds. Such certification must be made no later than December 15th of the property tax levy year for collection of taxes in the ensuing year. The property tax rate is expressed as a mill levy, which is the rate equivalent to the amount of tax per one thousand dollars of assessed valuation. For example, a mill levy of 25 mills would impose a $250 tax on a parcel of property with an assessed valuation of $10,000. The Commissioners levy the tax on all property subject to taxation by the various taxing entities in the County. By December 22nd of each year, the Commissioners must certify to the County Assessor the levy for all taxing entities within the County. If the Commissioners fail to so certify, it is the duty of the County Assessor to extend the levies of the previous year. Further revisions to the assessed valuation of property may occur prior to the final step in the taxing procedure, which is the delivery by the County Assessor of the tax list and warrant to the County Treasurer. Property Tax Collections Taxes levied in one year are collected in the succeeding year. Thus, taxes certified in 2009 are being collected in 2010. Taxes are due on January 1st in the year of collection; however, they may be paid in either one installment (not later than the last day of April) or in two equal installments (not later than the last day of February and June 15th) without interest or penalty. Interest accrues on unpaid first installments at the rate of 1% per month from March 1 until the date of payment unless the whole amount is paid by April 30. If the second installment is not paid by June 15, the unpaid installment will bear interest at the rate of 1% per month from June 16 until the date of payment. Notwithstanding the foregoing, if the full amount of taxes is to be paid in a single payment after the last day of April and is not so paid, the unpaid taxes will bear penalty interest at the rate of 1% per month accruing from the first day of May until the date of payment. The County Treasurer collects current and delinquent property taxes, as well as any interest or penalty, and after deducting a statutory fee for such collection, remits the balance to the overlapping entities and to the Authority on a monthly basis. The payments to the Authority must be made by the tenth of each month, and shall include all taxes collected through the end of the preceding month. 10/5/201 3 1 -1 -149 All taxes levied on property, together with interest thereon and penalties for default, as well as all other costs of collection, constitute a perpetual lien on and against the property taxed from January 1st of the property tax levy year until paid. Such lien is on a parity with the tax liens of other general taxes. It is the County Treasurer's duty to enforce the collection of delinquent real property taxes by tax sale of the tax lien on such realty. Delinquent personal property taxes are enforceable by distraint, seizure, and sale of the taxpayer's personal property. Tax sales of tax liens on realty are held on or before the second Monday in December of the collection year, preceded by a notice of delinquency to the taxpayer and a minimum of four weeks of public notice of the impending public sale. Sales of personal property may be held at any time after October 1st of the collection year following notice of delinquency and public notice of sale. There can be no assurance that the proceeds of tax liens sold, in the event of foreclosure and sale by the County Treasurer, would be sufficient to produce the amount required with respect to property taxes levied by the District and property taxes levied by overlapping taxing entities, as well as any interest or costs due thereon. Further, there can be no assurance that the tax liens will be bid on and sold. If the tax liens are not sold, the County Treasurer removes the property from the tax rolls and delinquent taxes are payable when the property is sold or redeemed. When any real property has been stricken off to a county and there has been no subsequent purchase, the taxes on such property may be determined to be uncollectible after a period of six years from the date of becoming delinquent and they may be canceled by the Commissioners after that time. Ad Valorem Property Tax Data History of Assessed Value The following table sets forth a five year history of the total assessed valuation in the Plan Area, the amount of such valuation allocable to the Property Tax Base Amount and the amount allocable to the incremental assessed valuation. History of Assessed Valuations for the Authority Total Assessed Valuation Valuation Levy Collection Valuation in Tax Percent Allocable to Allocable to Year Year Increment Area Change Base Increment 2005 2006 $ 60,259,010 -- -- -- 2006 2007 74,538,370 23.7% $60,259,010 $14,279,360 2007 2008 129,801,250 74.1 100,889,450 28,911,800 2008 2009 130,427,610 0.5 93,472,650 36,954,960 2009 2010 150,346,640 15.3 105,223,320 45,123,320 2010 2011 170,216,530 13.2 104,994,570 65,221,960 (1) These figures represent 2010 preliminary assessed valuation; subject to change on or before December 10, 2010. Sources: Eagle County Assessor's Office. Mill Levies Attributable to Property Owners in the Plan Area Owners of property within the Plan Area boundaries are obligated to pay taxes to various taxing entities in which their property is located. As a result, property owners within the Plan Area's boundaries may be subject to different mill levies depending upon the location of their property. The following sets forth a five year history of mill levies that were imposed on certain properties within the Plan Area. 10/5/20L 1 -1 -150 Mill Levies Affecting Property Owners Within the Plan Area 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 Tax Areas Mill Levy Mill Levy Mill Levy Mill Levy Mill Levy 202 46.341 49.625 45.571 46.124 44.227 203 43.984 47.320 43.997 44.515 42.812 204 58.565 61.849 54.751 55.304 52.707 206 -- 49.625 45.571 46.124 44.227 207 -- 49.625 85.571 86.124 84.227 208 -- 49.625 70.571 71.124 69.227 216 -- -- 70.571 71.124 69.227 225 -- -- -- 111.124 109.227 (1) One mill equals 1 /10 of one percent. Mill levies certified at the end of a levy year result in the collection of property taxes during the following year. (2) Includes Cascade Village Metropolitan District. (3) Includes Vail Square Metropolitan District No. 2. (4) Includes Vail Square Metropolitan District No. 3. (5) Includes Vail Square Metropolitan Districts. Nos. 1 and 3. (6) Includes Vail Square Metropolitan Districts Nos. 1, 2 and 3. Source: Eagle County Assessor's Office. Tax Collections The following table sets forth the history of the Authority's ad valorem property tax collections. Property Tax Collections for the Authority Revenue Levy Collection Attributed to Current Tax Collection Year Year Authority Collections (2) Rate 2005 2006 -0- -0- -- 2006 2007 $ 707,707 $ 337,502 47.69% 2007 2008 1,504,332 1,376,171 91.48 2008 2009 1,912,807 1,983,079 103.67 2009 (4) 2010 2,371,088 2,321,038 97.89 (1) Levied amounts do not reflect abatements and other adjustments. These amounts include property taxes that are passed through to the Vail Square Metropolitan Districts. See "The Vail Square Metro Districts Intergovernmental Agreement" above. As a result, not all of the property tax revenues comprise Pledged Property Tax Revenues. (2) The County Treasurer's collection fee has not been deducted from these amounts. Figures do not include interest, fees and penalties. (3) In levy year 2006, the valuations of certain property under construction in the Authority were protested and a large percentage of the taxes attributable to the Authority were abated. (4) Figure represents collections through August 31, 2010. Sources: State of Colorado, Department of Local Affairs, Division of Property Taxation, Annual Reports 2005 -2009; and the Eagle County Treasurer's Office. Assessed Valuation by Property Class The following table sets forth the assessed valuation of specific classes of real and personal property within the Authority based upon the Authority's 2010 preliminary assessed valuation. As shown below, residential property accounts 1oi5i20LM 1 -1 -151 for the largest percentage of the Authority's assessed valuation, and therefore it is anticipated that owners of residential property will pay the largest percentage of ad valorem property taxes levied by the Authority. 2010 Preliminary Assessed Valuation of Classes of Property in the Authority Percent of Total Total Assessed Class Assessed Valuation Valuation Residential $121,964,600 71.65% Commercial 47,196,480 27.73 Vacant 963,240 0.57 State Assessed 92,210 0.05 TOTAL $ 170,216,530 100.00 (1) All valuations are subject to change on or before December 10, 2010. Source: Eagle County Assessor's Office. Top Taxpayers Based upon the most recent information available from Eagle County, the following table represents the ten largest taxpayers within the Authority. A determination of the largest taxpayers can be made only by manually reviewing individual tax records. Therefore, it is possible that owners of several small parcels may have an aggregate assessed value in excess of those set forth in the following chart. Furthermore, the taxpayers shown in the chart may own additional parcels within the Authority not included herein. No independent investigation has been made of and consequently there can be no representation as to the financial conditions of the taxpayers listed below or that such taxpayers will continue to maintain their status as major taxpayers in the Authority. Several of the entities on the largest taxpayer list are developers that represent legally separate but related entities to Vail Corporation. Largest Taxpayers in the Authority Percentage of 2010 Preliminary Total Assessed Taxpayer Name Assessed Valuation Valuation (2) RCR Vail LLC $16,410,530 9.64% Diamondrock Vail Owner LLC 15,950,000 9.37 Arrabelle at Vail Square LLC 9,285,930 5.46 LionsHead Inn LLC 3,842,550 2.26 A Belle Vail CO LLC 2,824,190 1.66 Lazier LionsHead LLC 2,566,620 1.51 Vail Corp. 2,177,050 1.28 Soho Development LLC 2,118,400 1.24 Alter Vail Ventures LLC 1,862,000 1.09 Viele Development LLC 1,335,270 0.78 TOTAL $ 58,372,540 34.29 (1) All values are subject to change on or before December 10, 2010. (2) Based on 2010 preliminary assessed valuation of $170,216,530. Source: Eagle County Assessor's Office. 10/5/2O a6 1 -1 -152 Estimated Overlapping General Obligation Debt Other taxing entities are authorized to incur general obligation debt within boundaries which overlap or partially overlap the boundaries of the Authority. The following table sets forth the estimated overlapping general obligation debt chargeable to property owners within the Authority as of the date of this Official Statement. Additional taxing entities may overlap with the Authority in the future. Estimated Overlapping General Obligation Debt Outstanding General 2010 Obligation Debt Preliminary Outstanding Attributable to Assessed General the Authority (3) Entity Valuation Obligation Debt Percent Debt Cascade Village Metropolitan District $ 62,056,900 $ 2,625,000 0.06% $ 1,575 Eagle County School District RE50J 3,286,764,597 169,300,000 5.18 8,769,740 Eagle River Water & Sanitation District 2,562,648,670 7,057,998 6.64 468,651 Eagle River Water & Sanitation Water Subdistrict 1,060,606,390 11,352,000 16.08 1,825,402 Vail Square Metropolitan Districts 1 -3 21,709,770 16,000,000 100.00 16,000,000 TOTAL $ 27,065,368 (1) The following entities also overlap the Authority but have no reported general obligation debt outstanding: Colorado Mountain College; Eagle County: Eagle County Health Service District; Minturn Cemetery; Town of Vail; and Vail Park and Recreation District (2) Assessed values certified in 2009 are for collection of ad valorem property taxes in 2010. (3) The percentage of each entity's outstanding debt chargeable to the Authority is calculated by comparing the assessed valuation of the portion overlapping the Authority to the total assessed valuation of the overlapping entity. To the extent the Authority's assessed valuation changes disproportionately with the assessed valuation of overlapping entities, the percentage of debt for which property owners within the Authority are responsible will also change. Sources: Eagle County Assessor's Office; and individual taxing entities. Budget Summary and Comparison Set forth in the following table is a comparison of the 2009 and 2010 budgets for the Vail Reinvestment Authority Special Revenue Fund (the "Reinvestment Fund ") as compared to actual, interim (unaudited) revenues and expenditures for the eight -month periods ended August 31, 2009 and August 31, 2010. The table is presented in budgetary (legal) format and is not intended to conform to GAAP. In addition, this table does not indicate beginning or ending fund balances, a portion of which is available and may be appropriated for expenditure in each year. For a representation of fund balances, see the table in "Reinvestment Fund - History of Revenues, Expenditures and Changes in Fund Balances" below. 10i5i2Oa7 1 -1 -153 Budget to Actual Comparison - Vail Reinvestment Authority Fund 2009 2009 Actual 2010 2010 Actual Final Through Revised Through Budget ( 8/31/09 )(1) Budget ( 8/31/10 )(1) Revenues Property Tax (2) $1,984,000 $1,908,284 $2,432,000 $2,314,464 Earnings on investments 12,500 17,293 -- 6,456 Total 1,996,500 1,925,577 2,432,000 2,320,920 Expenditures Professional fees 25,000 7,486 25,000 -- Management fee 34,180 38,166 41,120 39,061 Treasurer's fees (2) 59,570 57,249 72,960 69,434 Vail Square Metro Districts passthrough 266,750 242,582 364,720 347,694 Capital outlay 425,000 32,924 4,170 1,859 Total 810,450 378,406 507,970 458,048 Revenues Over Expenditures 1,186,050 1,547,171 1,924,030 1,862,872 Other Financing Sources (Uses) Transfer to Town Capital Projects Fund (3) 120,834 -- 1,194,681 307,784 Net Income $ 1.306,884 $ 1.547,171 $ 729,349 $ 1.555,088 (1) Unaudited, interim information only. (2) Includes Pledged Property Tax Revenues (and the associated 3% County Treasurer collection fee) as well as property tax revenues required to be paid to the Districts pursuant to the Intergovernmental Agreement. For a representation of the Pledged Property Tax Revenues, see "SECURITY FOR THE BONDS -- History of Pledged Revenues." (3) The Town and the Authority are jointly constructing certain improvements; the Town acts as the project manager for those projects. These transfers represent the Authority's share of the cost of the projects. Sources: Derived from the Town's 2010 Adopted Budget, the Town's CAFR for fiscal year 2009, and internal Town reports for the interim 2009 and 2010 information. Reinvestment Fund - History Revenues, Expenditures and Changes in Fund Balance General The Authority's revenues are provided primarily from the Pledged Property Tax Revenues. The activities of the Authority are recorded in the Reinvestment Fund, which is included in the Town's audited financial statements. The Town's audited basic financial statements for the year ended December 31, 2009, including the financial statements for the Reinvestment Fund, are attached to this Official Statement as Appendix A. Those financial statements represent the most recent audited financial statements for the Town and for the Authority. The Town's audited financial statements are attached to this Official Statement because the financial activity of the Authority is included in them. The 2010 Bonds are payable only from the Trust Estate. Inclusion of the Town's financial statements does not indicate that the 2010 Bonds are payable from any revenues shown therein, other than the Pledged Revenues. 10/5/20118 1 -1 -154 History of Revenues, Expenditures, and Changes in Fund Balance The following table provides a comparative history of revenues, expenditures and changes in fund balance in the Reinvestment Fund for fiscal years 2005 through 2009. The information in this table has been derived from the audited financial information presented in the Town's Comprehensive Annual Financial Report ( "CAFR ") for each of those years. The information should be read together with the Town's fiscal year 2009 audited basic financial statements (and accompanying notes) appearing in Appendix A. Preceding years' financial statements may be obtained from the sources noted in "INTRODUCTION -- Additional Information." Reinvestment Fund - History of Revenues, Expenditures and Changes in Fund Balances Year Ended December 31, 2005 2006 2007 2008 2009 Revenues Property taxes (1) $ -- $ -- $337,502 $1,376,171 $1,983,159 Interest on investments 206 434 8,157 15,061 26,705 Shared costs /project reimbursements 30,379 4,685 14,567 -- -- Total Revenues 30,585 5,118 360,226 1,391,232 2,009,864 Expenditures Economic Development: Administration 1,447 -- -- 24,441 34,195 Office supplies -- -- -- -- 162 Treasurer's fees (1) -- -- 10,124 41,285 59,495 Professional fees 29,187 4,489 37,829 4,706 9,669 Vail Square Metro (1) -- -- -- 149,482 265,186 Capital outlay -- -- -- 151,873 337,536 Total Expenditures 30,634 4,889 47,953 371,787 706,243 Net change in fund balances (49) 629 312,273 1,019,446 1,303,621 Fund balances- Beginning of year 1,252 1,203 1,832 314,105 1,333,551 Fund balances -End of Year $ 1.203 $ 1.832 $ 314.105 $ 1.333.551 $ 2.637.172 (1) In 2005 and 2006, no Pledged Property Tax Revenues were collected due to demolitions within the Plan Area in 2005. Beginning in 2008, includes property taxes collected for the Districts; those amounts, net of the applicable County treasurer's fees, are passed directly through to the Districts pursuant to the Intergovernmental Agreement. See "The Village Square Metro Districts Intergovernmental Agreement" above. Source: Derived from the Town's CAFRs for the years ended December 31, 2005 through 2009. 10/5/2019 1 -1 -155 THE AUTHORITY Formation The Authority is an independent body corporate and politic created by the Town Council on November 4, 2003, pursuant to the Act for the purpose of undertaking certain urban renewal activities in the Town. The boundaries of the Authority are coterminous with the boundaries of the Town. Authority Powers The Authority has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of the Act, including but not limited to the power to sue and be sued; to undertake urban renewal activities and to make and execute all contracts and other instruments necessary or convenient to its purposes, including contracts for advances, loans, grants, and contributions; to arrange for the furnishing or repair by any person or public body of services, facilities or utilities in connection with an activity of the Authority; to dedicate its property for public works; to arrange with the Town or other public body to plan, replan, zone, or rezone land areas in connection with an activity of the Authority; to acquire any property by purchase, lease, gift, or to otherwise acquire any interest in property by condemnation and to hold, improve, clear, or prepare such property for redevelopment; to mortgage or otherwise encumber or dispose of its property; to provide for insurance of any property or operations of the Authority; to sell, lease, or otherwise transfer real property or any interest therein as part of an urban renewal plan at not less than fair value, as determined by the Authority, or to negotiate for the sale, lease, or other transfer of such property for redevelopment or rehabilitation; to borrow money and to give such security as may be required; to make appropriations and expenditures and to establish such funds and accounts necessary for Authority purposes; to submit proposed plans to the Town Council for appropriate action of the Town Council's necessary to carry out the Authority's purposes; to make reasonable relocation payment to or with respect to individuals, families, and business concerns in an urban renewal area which may be displaced as a result of the Plan; and to issue bonds, notes, or other evidences of indebtedness and to expend the proceeds thereof for lawful purposes. Further, no provision of any other law with respect to the planning or undertaking of projects or the acquisition, clearance, or disposition of property by public bodies shall restrict the Authority with respect to a project of the Authority unless the General Assembly specifically so states. The Authority does not have the power to levy or assess any ad valorem taxes, personal property taxes, sales taxes, or any other forms of taxes, including special assessments, against any property. Notwithstanding the foregoing, the Plan specifically states that the power of eminent domain may be used, with the consultation and concurrence of the owner of the underlying fee interest, to eliminate restrictive covenant provisions and other conditions of title which prevent redevelopment of properties within the Plan Area. Governing Body The Town Council serves as the Board for the Authority. Pursuant to the By- laws, the Mayor of the Town serves as the Chairman of the Board and the Mayor Pro Tern serves as the Vice Chairman. 1 0/5/20 1 -1 -156 Under the provisions of the Town's home rule charter (the "Charter "), the seven members of the Town Council are elected at large, including a Mayor, who is elected by the Town Council from its membership. The current members of the Board (and the Town Council) are as follows: Length of Term Name and Title Principal Occupation Service Expires Dick Cleveland, Chairman Chief Investigator, Fifth Judicial District 7 years 2011 Attorney's Office Kim Newbury, Vice Chairman Assistant General Manager, Tivoli Lodge 7 years 2011 Andy Daly, Commissioner Real estate developer and investor 3 years 2011 Kerry Donovan, Commissioner Director, Minturn Community Fund I year 2013 Kevin Foley, Commissioner Resident Manager, Lifthouse Condominiums 5 years 2013 Margaret Rogers, Commissioner Retired attorney 3 years 2011 Susie Tjossem, Commissioner Director, Colorado Ski Museum I year 2013 Administration and Employees Administration Pursuant to the By -laws, the Town Manager serves as the Secretary /Executive Director of the Authority, the Town's Director of Finance serves as the Authority Treasurer, the Town Clerk serves as the Authority Clerk, and the Town's Director of the Department of Community Development serves as the Authority Director. The Town Manager and the Town Attorney are appointed by the Town Council as prescribed in the Charter; each of those employees has an employment agreement with the Town. All other Town employees are appointed by the Town Manager. Pursuant to the By -laws, the Authority's General Counsel is employed under contract to the Board. Currently, the Town Attorney serves as the Authority's General Counsel. The Board also has employed Hayes, Phillips, Hoffmann & Carberry, P.C., Denver, Colorado, as the Authority's General Counsel. Brief biographies of the Authority's administrative personnel follow. Secretary/Executive Director. The Town Manager is the Secretary/Executive Director of the Authority. The Secretary /Executive Director is the chief executive officer of the Authority and exercises supervision over the business of the Authority and of those members of the Town staff as may be assigned to Authority business. The Secretary /Executive Director performs all duties which may from time to time be assigned to the Secretary/Executive Director by the Board. Stan Zemler was appointed Town Manager in October 2003 and became Secretary/Executive Director of the Authority upon its formation in December of that year. Prior to his employment with the Town, Mr. Zemler served as President and Chief Executive Officer of the Boulder Chamber of Commerce (1997- 2003); Acting City Manager and Deputy City Manager for the City of Boulder (1992- 1997), and Executive Director of the Boulder Urban Renewal Authority (1995- 1997). Mr. Zemler holds a bachelor's degree in geography from the University of Colorado at Boulder and an associate's degree in environmental studies from the College of Marin in Marin, California. 10/5/2041 1 -1 -157 Clerk The Town Clerk serves as the Clerk of the Authority. The Clerk's primary responsibilities include: keeping correct and accurate minutes; giving notice as required by law; and attesting to contracts, deeds, and other documents of the Authority. Lorelei Donaldson was appointed Town Clerk in 1997 following seven years as the Office Manager for the Town's Community Development Department. Upon formation of the Vail Reinvestment Authority, she was appointed Clerk of the Authority as well. Ms. Donaldson is a member of the Colorado Municipal Clerks' Association, where she serves on the education committee, and the International Municipal Clerks' Association. Treasurer The Town Finance Director serves as the Authority's Treasurer. The Treasurer's responsibilities include custody and responsibility for all funds of the authority; correct and complete books, records, and financial statements; execution of contracts; and all duties incident to the office of the Treasurer. Judy Camp, CPA, joined the Town as the Finance Director on July 15, 2002, and was appointed Treasurer of the Authority upon its formation in December 2003. Previously, Ms. Camp spent 20 years in financial management for pharmaceutical, manufacturing and non - profit organizations until 1999 when she began work as an investment representative. She received her B.S. from Rochester Institute of Technology and her MBA from Drexel University. She is a CPA licensed in Colorado and a member of the American Institute of CPA's, the Government Finance Officers' Association, and the Colorado Government Finance Officers' Association. Director The Town's Director of Community Development serves as the Authority's Director. George Ruther was selected Director of Community Development for the Town in February of 2007 and appointed to his position as Director of the Authority at that time. Mr. Ruther has been with the Town since April 1993; prior to becoming the Director of Community Development, he served as the Chief of Planning within the Community Development Department (2000- 2007). He holds a bachelor's degree in Public Administration from the University of Wisconsin and a Master's of Urban and Regional Planning degree from the University of Colorado. Mr. Ruther is certified by the American Institute of Certified Planners. General Counsel In June 2008, the Board hired Hayes, Phillips, Hoffmann & Carberry, P.C., as General Counsel to provide legal services to the Authority, replacing another private law firm that had served as general counsel to the Authority since its formation. Kendra Carberry is a partner with the law firm of Hayes, Phillips, Hoffmann & Carberry, P.C., where her practice is concentrated in municipal and local government law, including election law, public records law, constitutional law, employment law and litigation. Ms. Carberry is the City Attorney for the City of Manitou Springs, and the Town Attorney for the Town of Superior. She serves as General Counsel to the Authority and as special counsel to the Town. She also serves as general counsel for the Superior Urban Renewal Authority, the Superior Metropolitan District #1, the Superior Metropolitan Interchange District, the Butterfly Pavilion, the Table Mountain Animal Center, and the North Front Range Metropolitan Planning Organization. She also acts as the Hearing Officer for the City of Golden Liquor Licensing Authority. She earned her B.A. from the University of Virginia and her J.D. from the University of Colorado. Ms. Carberry has lectured and authored articles on various municipal subjects, including home rule, elections, open meetings and public records. She is a member of the Denver and Colorado bar associations. 10i5i2042 1 -1 -158 Authority Operations The Authority operates pursuant to the Bylaws and the Cooperation Agreement (described below). The Authority has no employees; the Town's officers and employees act as the administration and employees of the Authority. The Town provides necessary supporting services for the Authority, including access to insurance through the Town policies, purchasing of supplies and equipment, the provision of accounting services, planning services, provision of meeting space and the provision of miscellaneous office services. The Cooperation Agreement In December 2003, the Authority and the Town entered into a Cooperation Agreement for Administrative Services (the "Cooperation Agreement "). Pursuant to the Cooperation Agreement, the Authority is authorized to utilize the services of Town employees to assist it in urban renewal activities. The Authority is required to reimburse the Town for the applicable percentage of each employees' salary and benefits. The Authority currently pays the Town an administration fee equal to 2% of the increment property tax revenues attributable to the Authority (i.e., net of the amounts passed through to the Districts). That amount is included in the Authority's financial statements as the "Administration" expenditure. Debt service on the 2010 Bonds is payable prior to the payment of Authority expenses, including the administration fee. In addition, the Cooperation Agreement provided that, through 2009, the Town could advance operating funds in an annual amount not to exceed $25,000, subject to annual appropriation by the Town. Those amounts were required to be repaid (without interest) from Pledged Property Tax Revenues and constitute a priority obligation of the Authority, subordinate only to any developer obligations as may subsequently be agreed upon by the Authority and the Town. No advances currently are outstanding and the Cooperation Agreement does not provide for any further advances that would be required to be repaid on a priority basis. The Cooperation Agreement may be terminated upon 30 days written notice so long as there are no outstanding Authority obligations payable to the Town (or satisfactory arrangements for the payment of such obligations has been made). Budgeting and Financial Reporting Budget Process The Authority's budget is adopted as a part of the Town's budget process. Pursuant to Charter provisions, the Town Manager must prepare and submit a recommended budget to the Town Council, as required by ordinance, for a period including at least the next fiscal year. The fiscal year of the Town begins January 1 and ends December 31 of the same year. The recommended budget must contain a detailing of the anticipated revenues from all sources, including any surplus funds from the preceding year; a statement of the proposed expenditures for each office, agency or department; subsidiary budgets for all Town - owned utilities; an estimate of the amount of surplus funds which exist at the end of the proposed budget year; a detailed comparison with the previous budget year; any other information requested by the Town Council; a statement of all proposed capital construction projects and their costs; and a statement of the bonded indebtedness or other long -term obligations of the Town. The Town Council must adopt the budget for the ensuing fiscal year prior to the end of each fiscal year after a public hearing on the proposed budget. On or before the last day 1oi5i2043 1 -1 -159 of the current fiscal year, the Town Council must appropriate, by ordinance, based upon the budget as adopted, the moneys needed for municipal purposes during the next fiscal year. Except those expenditures to be financed by bonds or special assessment or those not chargeable to the budget for certain other purposes, no money may be drawn from funds of the Town nor any obligation for expenditure be incurred except in accordance with the appropriation thereof. The Town Council by resolution may transfer any unencumbered appropriation balance or portion thereof from one classification or expenditure to another within the same department, office or agency. At the request of the Town Manager, the Town Council may, by resolution, transfer any unencumbered appropriation balance or portion thereof from one department, office, or agency to another. The Town Council may make additional appropriations during the budget year for unanticipated expenditures but such additional appropriations must not exceed the amount by which actual reserves exceed budgeted revenues and unappropriated surplus, except in certain emergency situations. In conjunction with the adoption of the budget, the Town Council must provide for a levy of the amount necessary to be raised by property taxes for municipal purposes during such year. Financial Reporting The Authority's finances are accounted for in the Town's audited financial statements. As a general rule, all Town expenditures (including Authority expenditures) are accounted for by the Town's Finance Department, which prepares monthly financial statements. The Charter and State law require that an independent audit of all Town accounts is made at least annually by certified or registered public accountants. The audited financial statements must be filed with the Town Council by June 30th of each year and with the State auditor 30 days thereafter. Failure to comply with this requirement to file an audit report may result in the withholding of the Town's property tax revenues by the county treasurer pending compliance. Insurance Coverage The Authority is covered by the Town's insurance policies. The Town Council acts to protect the Town against loss and liability by maintaining certain insurance coverages provided by the Colorado Intergovernmental Risk Sharing Agency ( "CIRSA "), a public entity risk pool currently operating as a common risk management and insurance program for members. Those coverages, which have various deductibles and coverage limits, include property (including automobile physical damage); liability (including general liability, automobile liability, law enforcement liability, and public officials errors and omissions liability); crime coverage (including employee dishonestly and money and securities); and workers' compensation (including employer's liability coverage). The Town renews its coverage with CIRSA annually; the current CIRSA coverage expires on January 1, 2011. In the opinion of the Town's Director of Human Resources, Safety and Risk, the Town's insurance coverage is adequate. Capital Improvement Program The Town has developed a capital improvement plan (" CIP ") to be used as a planning and budgeting tool by Town administrators. The CIP includes Authority capital project information. The CIP is approved as part of the Town's budget process. The CIP is a planning document only; the projects listed are subject to change, deletion from the CIP, or re- prioritizing at any time. The Town is in the process of preparing the CIP for 2011 -2015. For 2010, the Authority's capital projects are budgeted to be approximately $1.19 million, including costs associated with the LionsHead Transit Center and Welcome Center, a feasibility study for 10i5i20144 1 -1 -160 expansion of the LionsHead parking structure addition, and parking structure capital maintenance. For 2011 -2015, the Authority's CIP anticipates approximately $15.71 million in capital expenditures. Those expenditures include: approximately $6.83 million for the LionsHead welcome center; approximately $3.60 million for the East LionsHead Portal Improvements; approximately $750,000 for West LionsHead Portal Improvements; approximately $900,000 for charter bus lot surface parking; approximately $1.95 million for library remodeling; and approximately $1.68 million in parking structure capital maintenance expenditures. See "SOURCES AND USES OF FUNDS- -The Project" and "THE PLAN AND THE PLAN AREA -- Redevelopment Activities - Authority Redevelopment Activities." Debt Structure After issuance, the 2010 Bonds will be the only outstanding bonds of the Authority. The Authority currently has no plans to issue Additional Bonds; however, it reserves the right to do so upon the satisfaction of all legal requirements. See "THE PLAN AND THE PLAN AREA -- Redevelopment Activities - Authority Redevelopment Activities" for a discussion of future projects planned for the Plan Area. Upon completion of the Project, the Authority will assess its need and ability to issue Additional Bonds for additional projects. 10/5/2045 1 -1 -161 THE PLAN AND THE PLAN AREA The Plan The Plan was adopted as a tool to address problems in the LionsHead area that were identified in the LionsHead Redevelopment Master Plan adopted in December 1999. The LionsHead area was originally developed in the early seventies. Lodging, condominiums, and retail were constructed over a period of years, often without coordinated planning of circulation and public transportation facilities of the area. As a result of rapid development, the traffic and transportation network for personal vehicles, pedestrians and delivery vehicles did not work well. In addition, public infrastructure in the LionsHead deteriorated as a result of extremes of temperature and topography as well as intense utilization of the area by residents and guests. The LionsHead Redevelopment Master Plan identifies specific public infrastructure improvements that needed to occur. A major implementation action in the Master Plan was redevelopment of the LionsHead gondola and Sun Bird building sites into a high -end hotel (the Arrabelle) and remodeling of the Marriott and Antler properties. These projects, as well as remodels to the LionsHead North and Landmark condominiums, have been completed - increasing vitality of the area. To properly support this major private reinvestment in LionsHead, upgrades to the transportation infrastructure, including a transportation center to accommodate increased usage of the area, were called for. The Plan, adopted in March 2004 and amended in June 2005, provided the financial mechanisms to support the renovation and reconstruction of the public infrastructure in LionsHead. The Plan's objectives include the following: • Creation of a sense of place and an improved aesthetic character for LionsHead for both residents and guests. • Renovate or redevelop the deteriorated and/or outdated residential and commercial buildings and provide enhanced amenities. • Enhance impediments to the redevelopment of key facilities within the Plan Area. • Upgrade and restore public infrastructure including transportation facilities, parking, sidewalks and streetscapes. In order to implement the Plan, the Authority is authorized to undertake the following activities: redevelopment and rehabilitation actions; property acquisition; relocation assistance and payments; public improvements and facilities; redevelopment agreements with private parties (including financial assistance); interagency cooperation; and establishment of an advisory committee (however, no advisory committee has been established). The Plan also authorizes the use of tax increment financing methods, specifically property tax increment, as defined and more particularly described in "Security" below. The Plan authorizes the use of property tax increment financing for a period of 25 years following adoption of the Plan (i.e., through June 2030). 1oi5 /200 1 -1 -162 The Plan Area The Plan Area encompasses approximately 77 acres at the base of the LionsHead Gondola for the Ski Area. The Town owns approximately 34.4 acres (or approximately 44.7%) in the Plan Area. The following chart illustrates the current land uses within the Plan Area. Land Use within the Plan Area Land Use Acres % of Total (1) Commercial 2.22 2.9% Hotel 5.58 7.2 Industrial 5.46 7.1 Mixed use (commercial and residential) 9.23 11.9 Open space (owned by the Town) 12.14 15.7 Parking 7.70 9.9 Pedestrian 1.90 2.5 Recreational 4.71 6.1 Residential 15.45 20.0 Streets and rights -of -way 13.00 16.8 Total 77.39 100.0% Redevelopment Activities Authority Redevelopment Activities No major public improvement projects have been completed by the Town or the Authority to date. A portion of the Authority's planned redevelopment activities for the Plan Area are described in "SOURCES AND USES OF FUNDS - -The Project." The LionsHead Transit Center is underway with funds provided by the Town, the Authority, and Federal Transit Authority. In addition, the LionsHead Welcome Center is in the design phase of development. Other components of the 2010 Project are at various stages of planning and design. They include east and west portal entries to LionsHead; library remodel; and addition of surface parking adjacent to the LionsHead parking structure. Future projects for the Plan Area could include frontage road improvements, parking structure addition and/or improvements, and a remodel of the Dobson ice arena. Other Redevelopment Activities The largest private project completed in the redevelopment area is the Arrabelle at Vail Square, a $150 million project developed and financed by Vail Resorts Development Company ( "VRDC "), containing 36 hotel rooms, 67 condominium units, 43,524 square feet of retail and restaurant space, and a skating rink/public plaza area. In connection with the development, VRDC provided $1 million in public art, public spaces and heated streetscape. The Town pays for the operations of the heated streetscape. Three metropolitan districts levy a total of 65 mills on property owners within their boundaries to pay the other costs of the project. Recent private development also includes the Gore Creek Residences, a 16 -unit townhome development completed by VRDC in 2007 at an estimated valuation of $33.4 million; Lion Square Lodge North, a $17.6 million renovation with addition of 36 units completed in 2009; the Landmark Condominiums, a $33 million renovation and addition and remodel of 76 units completed in 2009; the Landmark Commercial, the addition and renovation of 12,445 square feet of commercial space valued at 1.9 million; and the Ritz - Carlton Residences, a $148 million new development comprised of 116 units completed in 2010. 10/5/2047 1 -1 -163 ECONOMIC AND DEMOGRAPHIC INFORMATION This portion of the Official Statement contains general information concerning historic economic and demographic conditions in and surrounding the Town. It is intended only to provide prospective investors with general information regarding the Authority's community. The information was obtained from the sources indicated and is limited to the time periods indicated. The information is historic in nature; it is not possible to predict whether the trends shown will continue in the future. The Authority makes any no representation as to the accuracy or completeness of data obtained from parties other than the Town or the Authority. Population and Age Distribution Population The following table sets forth a history of the populations of the Town, Eagle County and the State. Between 2000 and 2009, the Town's population increased 10.9 %, the County's population increased 31.4% and the State's population increased approximately 18.0 %. Population Town of Percent Eagle Percent Percent Year Vail Change County Change Colorado Change 1970 484 -- 7,498 -- 2,209,596 -- 1980 2,261 367.1% 13,320 77.7% 2,889,735 30.8% 1990 3,716 64.4 21,928 64.6 3,294,394 14.0 2000 4,531 21.9 41,659 90.0 4,301,261 30.6 2005 4,789 -- 49,421 -- 4,731,799 -- 2006 4,812 0.5 50,926 3.1 4,827,387 2.0 2007 4,871 1.2 52,532 3.2 4,919,884 1.9 2008 4,960 1.8 54,044 2.9 5,011,390 1.9 2009' 5,027 1.4 54,721 1.3 5,073,919 1.2 (1) Preliminary. Sources: Figures for 1970 through 2000 were obtained from the United States Department of Commerce, Bureau of Census; figures for 2005 -2009 are estimates provided by the Colorado State Demography Office, and are subject to periodic revision. Age Distribution The following table sets forth a comparative age distribution profile for the Town, Eagle County, the State and the nation as of January 1, 2010. 10/5/201U 1 -1 -164 Age Distribution Percent of Population Age Town of Vail Eagle County Colorado United States 0 -17 11.1% 24.1% 24.2% 24.3% 18 -24 4.1 7.3 9.2 9.7 25 -34 31.9 19.0 14.9 13.3 35 -44 19.3 18.4 14.3 13.6 45 -54 13.8 15.7 14.9 14.4 55 -64 11.2 10.4 11.6 11.5 65 -74 6.3 3.8 6.1 7.0 75 and Older 2.3 1.3 4.8 6.2 Source: © 2010 The Nielsen Company, SiteReports. Income The following table sets forth annual per capita personal income levels for Eagle County, the State and the United States. Per capita personal income levels in Eagle County have consistently exceeded levels in the State and the United States during the period shown. Per Capita Personal Income Year Eagle County Colorado United States 2004 $43,861 $36,652 $33,881 2005 46,499 38,555 35,424 2006 50,954 40,899 37,698 2007 52,929 42,449 39,392 2008 52,684 43,021 40,166 2009' n/a 41,344 39,138 Source: United States Department of Commerce, Bureau of Economic Analysis. The following two tables reflect Median Household Effective Buying Income ( "EBI") and also the percentage of households by EBI Groups. EBI is defined as "money income" (defined below) less personal tax and nontax payments. "Money income" is defined as the aggregate of wages and salaries, net farm and nonfarm self - employment income, interest, dividends, net rental and royalty income, Social Security and railroad retirement income, other retirement and disability income, public assistance income, unemployment compensation, Veteran Administration payments, alimony and child support, military family allotments, net winnings from gambling, and other periodic income. Deductions are made for personal income taxes (federal, state and local), personal contributions to social insurance (Social Security and federal retirement payroll deductions), and taxes on owner - occupied nonbusiness real estate. The resulting figure is known as "disposable" or "after -tax" income. 10/5/2049 1 -1 -165 Median Household Effective Buying Income Year Town of Vail Eagle County Colorado United States 2006 n/a $58,373 $45,594 $40,529 2007 n/a 58,210 45,477 41,255 2008 n/a 59,648 44,711 41,792 2009 $52,978 63,133 45,490 42,513 2010 49,788 60,960 45,543 43,252 Source: © The Nielsen Company, SiteReports, 2009 -2010. (Prior years provided by Nielsen Claritas- informed publication: Trade Dimensions International Inc. - Demographics USA - County Edition, 2006 - 2008.) Percent of Households by Effective Bugg Income Groups - 2010 Effective Buying Town of Income Group Vail Eagle County Colorado United States Under $24,999 16.1% 10.9% 21.1% 26.2% $25,000 - 49,999 34.1 28.5 34.4 32.1 $50,000 - 74,999 21.7 24.3 20.8 20.1 $75,000 - 99,999 12.0 16.6 12.0 11.1 $100,000 - 149,999 8.8 11.1 7.5 6.5 $150,000 or More 7.3 8.6 4.2 4.0 Source: © 2010 The Nielsen Company, SiteReports. Employment The following table presents information on employment within Eagle County, the State and the United States, for the time period indicated. Labor Force and Percent Unemployed Eagle County Colorado United States Labor Percent Labor Percent Percent Year Force Unemployed Force Unemployed Unemployed 2005 28,670 3.9% 2,588,382 5.1% 5.1% 2006 30,176 3.4 2,653,333 4.4 4.6 2007 31,281 2.9 2,695,834 3.9 4.6 2008 31,794 3.6 2,727,616 4.9 5.8 2009 30,192 7.4 2,701,026 7.7 9.3 Month of July (2) 2009 29,928 7.5% 2,733,143 8.2% 9.4% 20 10(3) 29,845 7.9 2,680,934 8.0 9.5 (1) Figures for the County and the State are not seasonally adjusted. (2) Due to the seasonal nature of much of the employment in the County, the monthly estimates are not necessarily representative of overall employment in the County. (3) Preliminary. Source: State of Colorado, Department of Labor and Employment, Labor Market Information, Colorado Areas Labor Force Data and U.S. Department of Labor, Bureau of Statistics. 10 /5 /20 L%0 1 -I -166 The following table sets forth the number of individuals employed within selected Eagle County industries which are covered by unemployment insurance. In 2009, the largest employment sector in Eagle County was accommodation and food services (comprising approximately 23.4% of the county's work force), followed, in order, by construction; arts, entertainment, and recreation; retail trade; and government. For the twelve -month period ended December 31, 2009, total average employment in Eagle County decreased (10.0)% as compared to the same period ending December 31, 2008, while average weekly wages decreased (3.7)% during the same time period. Average Number of Employees Within Selected Industries - Eagle County Industry 2005 2006 2007 2008 2009 Agriculture, Forestry and Fisheries 56 67 58 61 55 Mining 8 9 14 14 16 Utilities 54 63 64 65 64 Construction 4,209 4,721 5,073 4,910 3,501 Manufacturing 406 387 389 380 284 Wholesale Trade 371 387 399 410 392 Retail Trade 3,054 3,203 3,445 3,466 3,100 Transportation & Warehousing 484 502 509 441 378 Information 380 389 412 396 346 Finance & Insurance 553 578 584 579 572 Real Estate, Rental & Leasing 1,617 1,651 1,681 1,588 1,436 Professional & Technical Services 1,316 1,352 1,428 1,393 1,125 Management of Companies /Enterprises 151 195 150 151 133 Administrative & Waste Services 1,400 1,593 1,739 1,754 1,473 Educational Services 136 143 134 130 128 Health Care & Social Assistance 1,544 1,685 1,735 1,814 1,859 Arts, Entertainment & Recreation 3,191 3,320 3,247 3,266 3,259 Accommodation & Food Services 6,799 6,845 6,942 7,412 6,807 Other Services 901 904 1,131 1,184 1,099 Non - classifiable n /a n/a n/a 3 n/a Government 2,486 2,588 2,709 2,841 3,015 Totals (2) 29,116 30,582 31,843 32,256 29,040 (1) Due to confidentiality, figures were not released. (2) Figures may not equal totals when added, due to the rounding off of averages or the inclusion in the total of employees that were not disclosed in individual classifications. Source: State of Colorado, Department of Labor and Employment, Labor Market Information, Quarterly Census of Employment and Wages (QCEW). A selection of some of the largest employers in Eagle County is set forth below. No independent investigation of the stability or financial condition of the employers listed hereafter has been conducted; therefore, no representation can be made that these employers will continue to maintain their status as major employers in Eagle County. 1oi5i20151 1 -1 -167 Selected Major Employers in Eagle County Estimated Number of Employees Ski Off Season Employer Product or Service Season and Summer Vail Resorts, Inc. (2) Ski resorts 5,280 1,940 Eagle County School District Public education 910 -- Vail Valley Medical Center Q) Health care 655 The Ritz Carlton Hotel, Bachelor Gulch Hotel 550 350 Eagle County (4) Government 500 500 Vail Cascade Resort & Spa Hotel 525 350 Hyatt Regency at Beaver Creek Hotel 400 335 Gallegos Corporation Construction 375 500 Sonnenalp Resort of Vail Hotel and golf course 350 370 Town of Vail (5) Local government 318 282 (1) As of February 2010. Employers in the tourism industry have provided estimated employee figures based on the ski season, which runs from mid- November through mid -April and the off - season/summer season which generally runs from mid -April through mid- November. Unless new functions or facilities are added, estimated numbers remain much the same over several years. (2) Vail Resorts, Inc. ( "Vail Resorts ") owns and operates two ski resorts located in Eagle County: Vail Mountain and Beaver Creek Mountain. Vail Resorts operates several different lines of business within Eagle County in connection to its Mountain operations, such as lift tickets, ski schools, tubing, ice skating, dining, lodging, retail and rentals. Other revenue includes owning and operating three professional golf courses. Vail Resorts also owns /manages a number of luxury and resort hotels in Eagle County including The Lodge at Vail, The Arrabelle at Vail Square, The Vail Marriott Mountain Resort and Spa, The Pines Lodge and the Osprey at Beaver Creek. (3) Includes medical center operations at seven locations spanning a 70 -mile distance across Eagle and Summit Counties. (4) Include full -time, part-time, seasonal, temporary and occasional employees. (5) Represents positions budgeted for 2010. Sources: Vail Valley Chamber of Commerce; and individual employers. Retail Sales The following table sets forth annual retail sales figures for Eagle County and the State. Retail Sales (in thousands) Year Town of Vail Percent Change Eagle County Percent Change Colorado Percent Change 2005 $482,027 -- $1,817,784 -- $122,907,090 -- 2006 543,024 12.7% 2,134,864 17.4% 133,531,307 8.6% 2007 585,798 7.9 2,367,789 10.9 148,673,216 11.3 2008 577,345 (1.4) 2,355,829 (0.5) 152,747,684 2.7 2009 506,920 (12.2) 1,876,486 (20.3) 134,058,593 (12.2) 2010' 229,052 -- 615,157 -- 31,717,505 -- (1) Figures through 1'` quarter 2010. Source: State of Colorado, Department of Revenue, Sales Tax Statistics, 2005 -2010. 10/5/201$2 1 -1 -168 Recreation and Tourism Year -round tourism and skiing - related businesses account for a significant portion of the employment and earned income of area residents. The Ski Industry in the State After several years of gain, the Colorado ski industry dropped approximately 6.1 percent in skier visits during the 2008 -09 season at the state's 26 ski areas and held steady for the 2009 -10 season. According to Colorado Ski Country USA ( "CSCUSA "), a ski industry group, Colorado hosted 11.86 million skier visits during the 2009 -10 season, a slight increase over the 11.77 million visits hosted in the 2008 -09 season. Skier visits represent one person visiting a ski area for all or any part of a day or night for the purpose of skiing or snowboarding. Overall snowfall amounts across the state were down substantially and were a contributing factor to the 2009 -10 season's visitation patterns. Snowfall amounts were down 26 percent compared to the 2008 -09 season, though heavy spring snows rallied visits to a solid finish for the season. One indicator of a significant ski industry is the economic impact. Research commissioned by Colorado Ski Country USA in 2004, stated that skiers spend $2.0 to $2.5 billion annually in Colorado, with up to an estimated two - thirds of those expenditures being captured by local business within the resort communities. In addition, the strong number of skier visits supported Denver International Airport's 2008 first time posting of 50 million plus passengers in a year. The 2009 passenger total reflected a -2.1% decrease from the previous year's total. The Ski Industry in the Vail Valley Skier visits at the two largest ski areas in the vicinity, Beaver Creek and Vail Mountain, accounted for 21.5% (combined) of the total skier visits for the State during the 2008 -09 ski season. Set forth in the following table are the skier visits for the Beaver Creek and Vail Mountain ski areas from the 2004 -05 ski season through the 2008 -09 ski season, as well as skier visit data for the State. Skier Visits (in thousands) Vail Valley Ski Areas 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010 Beaver Creek 875 890 918 931 927 Vail 1,676 1,608 1,570 1,622 1,599 Vail Valley Total 2.551 2.498 2.488 2.553 2.526 Percent Change -- (2.1)% (0.4)% 2.6% (1.1)% Colorado Total 12,533 12,566 12,541 11,775 11,864 Percent Change -- 0.3% (0.2)% (6.1)% 0.8% Vail Valley's Share of the Colorado Market 20.4% 19.9% 19.8% 21.7% 21.3% Sources: Colorado Ski Country USA and Vail Resorts, Inc. Vail Resorts, Inc The Vail Ski Resort ( "Vail Mountain ") is owned and operated by Vail Resorts, Inc. ( "Vail Resorts "). Vail Resorts is a publicly held company (NYSE: MTN) which, in addition to Vail Mountain and Beaver Creek (located in the nearby community Avon, 10i5i200 1 -1 -169 Colorado), owns and operates the Keystone and Breckenridge ski resorts in Colorado, the Heavenly Mountain Resort in California, the Grand Teton Lodge in Wyoming, as well as Vail Resorts Hospitality, the company's lodging division. Vail Resorts also is active in developing real estate (including the Red Sky Ranch luxury golf community near Beaver Creek) and engages in various other business ventures. Vail Ski Resort Vail Mountain lies within the White River National Forest and operates under permits from the U.S. Forest Service. The ski area is directly adjacent to the Town of Vail, and rises approximately 3,450 vertical feet above the Town. Vail Mountain has seven miles of mountain front, seven back bowls, three terrain parks, a 450 foot Superpipe, and 5,289 acres of skiable terrain. The outer -most area of Vail Mountain offers intermediate and expert skiers and riders a variety of moguls, glades, tree skiing, cliffs and ridges. There are 193 trails and 32 lifts, including one 12- passenger gondola, 16 high -speed quadruple chair lifts and a fixed -grip quadruple chair lift. Current Siinificant Development Projects Several large renovations and new projects have occurred within the Town of Vail in recent years, and additional projects are opening in 2010. Guests will find 280 new hotel rooms and 60,000 square feet of new retail and restaurant space. During the summer of 2010, a luxury complex called Solaris opened, featuring 78 residential units, an open air ice skating rink, a 10 -lane bowling alley, a three - screen movie theater, and world -class shopping and dining. The Ritz - Carlton Residences is located on the west end of LionsHead and is modeled after an European castle. It will open its doors in the fall of 2010, featuring approximately 71 luxurious residences with services and amenities, including valet parking, a ski valet, a fitness facility, and an outdoor heated pool. Opening late 2010, the Four Seasons Resort Vail is located at the gateway to Vail Village and is a short stroll to abundant shops, restaurants, and the ski concierge at the Vista Bahn chair lift. The Four Seasons Resort will add 121 rooms as well as limited fractional and private residences. Recent public redevelopment projects include the Vail Village streetscape, which was a $13 million reconstruction of streets in Vail Village including utility upgrades, street resurfacing with heated pavers, landscaping, and art features (completed in 2007) and the new Vail Gymnastics Center (completed in 2005). In 2003, the Town established an urban renewal authority, Vail Reinvestment Authority, to facilitate funding of public improvements through tax increment financing. Summer Activities Year -round visitors are attracted to the area to take advantage of award - winning resort golf courses. Six resort courses in the County are available to the public: Beaver Creek Golf Club, The Club at Cordillera (short course only), the Eagle Vail Golf Club, Red Sky Golf Club (two courses) and Sonnenalp Golf Club. The two public 18 -hole championship golf courses are Vail Golf Club and Eagle Ranch Golf Club. Finally, the exclusive golf clubs include the semi - private Cotton Ranch Club and private clubs at The Club at Cordillera, Country Club of the Rockies at Arrowhead; Eagle Springs Golf Club and Adams Mountain Country Club. Set forth in the following table are approximate numbers of golf rounds played in Eagle County during the past five years. Annual Golf Rounds Played by Course in Eagle County Golf Course 2005 2006 2007 2008 2009 Red Sky Ranch"' 24,000 22,000 23,000 13,600 12,000 Arrowhead 10,000 10,000 10,000 9,800 10,900 10/5/201$4 1 -1 -170 Cordillera (2) 34,360 37,640 32,736 32,000 32,100 Sonnenalp 19,500 20,000 19,000 16,500 16,800 Beaver Creek 15,000 14,025 12,500 14,748 10,200 Eagle- Vail 20,491 19,186 19,000 15,000 25,422 Vail 23,000 22,300 24,600 24,900 23,800 Eagle Springs 8,000 8,204 5,000 6,000 12,000 Cotton Ranch/Gypsum Creek 12,850 13,200 13,000 13,837 14,000 Eagle Ranch 20,760 21,100 22,586 22,000 20,198 TOTAL 187,961 187,655 181,422 168,385 177,420 Percent Change 9.0% (0.2)% (3.3)% (7.2)% 5.4% (1) Includes 2 courses. (2) Includes mountain, valley and short courses. (3) Includes Eagle -Vail Par 18 and Willow Creek Par 3 golf courses. Source: Eagle County Comprehensive Annual Report 2009, including the golf courses cited in the Annual Report upon which the table is based. Horseback riding, mountain biking, fly- fishing, hiking, whitewater rafting and other recreational sports also draw guests to the area, as well as world -class music festivals and art shows. Eagle County Regional Airport The Eagle County Regional Airport located near Eagle, Colorado provides year round service to general aviation and scheduled commercial flights. In the winter, American, Continental, Delta, United and United Express provide non -stop jet service between Eagle County Regional Airport and thirteen major U.S. cities. During the summer, daily non -stop 13- 757 flights are available to Dallas/Ft. Worth on American Airlines and to Denver on United. Set forth below is a history of enplanements for the full years 2005 through 2009. Eagle County Regional Airport Passenger Enplanement History Year Enplanements Percent Change 2005 215,464 -- 2006 218,105 12.2% 2007 232,250 6.5 2008 214,715 (7.6) 2009" 182,673 (14.9) 2010 168,684 -- (1) During the summer of 2009, the airport was closed four months to accommodate runway maintenance. (2) As of August 2010. Source: Eagle County Regional Airport. Building Permits The following table sets forth a history of building permits issued for new structures in the Town of Vail. 10/5/201$5 1 -1 -1n History of New Structure Building Permits Issued in the Town of Vail New Single Family New Multi - Family New Commercial Year Permits Valuation Permits Valuation Permits Valuation 2004 13 $ 9,538,860 0 0 6 $ 29,606,157 2005 30 39,446,852 1 $10,000,000 3 5,256,836 2006 19 29,237,143 0 0 9 14,250,583 2007 27 50,146,147 3 77,605,988 16 468,177,242 2008 16 40,329,937 2 59,890,000 8 355,958,333 2009 9 3,066,286 0 0 15 2,012,120 2010 3 3,630,000 0 0 17 14,592,141 (1) Includes duplexes. (2) As of September 24, 2010. Source: Town of Vail, Community Development Department. Foreclosure Activity in Eagle County The following table sets forth the number of foreclosures filed in Eagle County during the time period indicated. Such figures represent the total number of foreclosures filed and do not take into account foreclosures which were filed and subsequently withdrawn or redeemed. History of Foreclosures Number of Percent Year Foreclosure Filed Change 2005 178 -- 2006 197 10.7% 2007 140 (28.9) 2008 179 27.9 2009 459 156.4 2010 392 -- (1) Filings through August 31, 2010. Source: Eagle County Public Trustee's Office. 10/5/201$6 1 -1 -172 TAX MATTERS 2010A Bonds In the opinion of Bond Counsel, assuming continuous compliance with certain covenants described below, interest on the 2010A Bonds is excluded from gross income under federal income tax laws pursuant to Section 103 of the Tax Code, interest on the 2010A Bonds is excluded from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code, and interest on the 2010A Bonds is excluded from Colorado taxable income and Colorado alternative minimum taxable income under Colorado income tax laws in effect on the date of delivery of the 2010A Bonds. The Tax Code and Colorado law impose several requirements which must be met with respect to the 2010A Bonds in order for the interest thereon to be excluded from gross income, alternative minimum taxable income, Colorado taxable income and Colorado alternative minimum taxable income. Certain of these requirements must be met on a continuous basis throughout the term of the 2010A Bonds. These requirements include: (a) limitations as to the use of proceeds of the 2010A Bonds; (b) limitations on the extent to which proceeds of the 2010A Bonds may be invested in higher yielding investments; and (c) a provision, subject to certain limited exceptions, that requires all investment earnings on the proceeds of the 2010A Bonds above the yield on the 2010A Bonds to be paid to the United States Treasury. The Authority will covenant and represent in the Indenture that it will take all steps to comply with the requirements of the Tax Code and Colorado law (in effect on the date of delivery of the 2010A Bonds) to the extent necessary to maintain the exclusion of interest on the 2010A Bonds from gross income and alternative minimum taxable income under such federal income tax laws and Colorado taxable income and Colorado alternative minimum taxable income under such Colorado income tax laws. Bond Counsel's opinion as to the exclusion of interest on the 2010A Bonds from gross income, alternative minimum taxable income, Colorado taxable income and Colorado alternative minimum taxable income is rendered in reliance on these covenants, and assumes continuous compliance therewith. The failure or inability of the Authority to comply with these requirements could cause the interest on the 2010A Bonds to be included in gross income, alternative minimum taxable income, Colorado taxable income or Colorado alternative minimum taxable income, or a combination thereof, from the date of issuance. Bond Counsel's opinion also is rendered in reliance upon certifications of the Authority and other certifications furnished to Bond Counsel. Bond Counsel has not undertaken to verify such certifications by independent investigation. The Tax Code contains numerous provisions which may affect an investor's decision to purchase the 2010A Bonds. Owners of the 2010A Bonds should be aware that the ownership of tax - exempt obligations by particular persons and entities, including, without limitation, financial institutions, insurance companies, recipients of Social Security or Railroad Retirement benefits, taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax - exempt obligations, foreign corporations doing business in the United States and certain "subchapter S" corporations may result in adverse federal and Colorado tax consequences. Under Section 3406 of the Tax Code, backup withholding may be imposed on payments on the 2010A Bonds made to any owner who fails to provide certain required information, including an accurate taxpayer identification number, to certain persons required to collect such information pursuant to the Tax Code. Backup withholding may also be applied if the owner underreports "reportable payments" (including interest and dividends) as defined in Section 3406, or fails to provide a certificate that the owner is not subject to backup withholding 10/5/201$7 1 -1 -173 in circumstances where such a certificate is required by the Tax Code. Certain of the 2010A Bonds were sold at a premium, representing a difference between the original offering price of those 2010A Bonds and the principal amount thereof payable at maturity. Under certain circumstances, an initial owner of such bonds (if any) may realize a taxable gain upon their disposition, even though such bonds are sold or redeemed for an amount equal to the owner's acquisition cost. Bond Counsel's opinion relates only to the exclusion of interest on the 2010A Bonds from gross income, alternative minimum taxable income, Colorado taxable income and Colorado alternative minimum taxable income as described above and will state that no opinion is expressed regarding other federal or Colorado tax consequences arising from the receipt or accrual of interest on or ownership of the 2010A Bonds. Owners of the 2010A Bonds should consult their own tax advisors as to the applicability of these consequences. The opinions expressed by Bond Counsel are based on existing law as of the delivery date of the 2010A Bonds. No opinion is expressed as of any subsequent date nor is any opinion expressed with respect to pending or proposed legislation. Amendments to the federal or state tax laws may be pending now or could be proposed in the future that, if enacted into law, could adversely affect the value of the 2010A Bonds, the exclusion of interest on the 2010A Bonds from gross income or alternative minimum taxable income or both from the date of issuance of the 2010A Bonds or any other date, or that could result in other adverse tax consequences. In addition, future court actions or regulatory decisions could affect the tax treatment or market value of the 2010A Bonds. Owners of the 2010A Bonds are advised to consult with their own tax advisors with respect to such matters. The Internal Revenue Service (the "Service ") has an ongoing program of auditing tax- exempt obligations to determine whether, in the view of the Service, interest on such tax - exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. No assurances can be given as to whether or not the Service will commence an audit of the 2010A Bonds. If an audit is commenced, the market value of the 2010A Bonds may be adversely affected. Under current audit procedures, the Service will treat the Authority as the taxpayer and the Owners may have no right to participate in such procedures. The Authority has covenanted in the Indenture not to take any action that would cause the interest on the 2010A Bonds to lose its exclusion from gross income for federal income tax purposes or lose its exclusion from alternative minimum taxable income for the owners thereof for federal income tax purposes. None of the Authority, the Financial Advisor, the initial purchaser of the 2010A Bonds or Bond Counsel or Special Counsel is responsible for paying or reimbursing any Registered Owner or Beneficial Owner for any audit or litigation costs relating to the 2010A Bonds. 2010B Bonds In the opinion of Bond Counsel, interest on the 2010B Bonds is included in gross income pursuant to the Tax Code. The Authority has designated the 2010B Bonds as "Build America Bonds" pursuant to Section 54AA(d)(1) of the Tax Code. Pursuant to Section 54AA(g)(2) of the Tax Code, the Authority has elected to receive a credit under Section 6431 of the Tax Code in connection with the 2010B Bonds, in lieu of any credit otherwise available to the Owners under Section 54AA(a) of the Code. The owners of the 2010B Bonds will not receive a tax credit as a result of holding the 2010B Bonds. In the opinion of Bond Counsel, assuming continuous compliance with certain covenants described herein, the interest on and income from the 2010B Bonds is exempt from all taxation and assessments in the State of Colorado. 1015120M I -I -174 The Tax Code imposes several requirements which must be met with respect to the 2010B Bonds in order for such bonds to continue to qualify as "Build America Bonds." Certain of these requirements must be met on a continuous basis throughout the term of the 2010B Bonds. These requirements include: (a) limitations as to the use of proceeds of the 2010B Bonds; (b) limitations on the extent to which proceeds of the 2010B Bonds may be invested in higher yielding investments; and (c) a provision, subject to certain limited exceptions, that requires all investment earnings on the proceeds of the 2010B Bonds above the yield on the 2010B Bonds to be paid to the United States Treasury. Under Colorado law in effect as of the date of issuance of the 2010B Bonds, if the 2010B Bonds cease to qualify as "Build America Bonds," the interest on and income from the 2010B Bonds may become subject to taxation and assessments in the State of Colorado. The Authority will covenant and represent that it will take all steps to maintain the status of the 2010B Bonds as "Build America Bonds" under the Tax Code to the extent necessary to maintain exemption of the interest on and income from 2010B Bonds from all taxation and assessments in the State of Colorado. Bond Counsel's opinion as to the exemption of the interest on and income from 2010B Bonds from all taxation and assessments in the State of Colorado is rendered in reliance on these covenants, and assumes continuous compliance therewith. Bond Counsel's opinion also is rendered in reliance upon certifications of the Authority and other certifications furnished to Bond Counsel. Bond Counsel has not undertaken to verify such certifications by independent investigation. The Tax Code contains numerous provisions which may affect an investor's decision to purchase the 2010B Bonds. Under Section 3406 of the Tax Code, backup withholding may be imposed on payments on the 2010B Bonds made to any owner who fails to provide certain required information, including an accurate taxpayer identification number, to certain persons required to collect such information pursuant to the Tax Code. Backup withholding may also be applied if the owner underreports "reportable payments" (including interest and dividends) as defined in Section 3406, or fails to provide a certificate that the owner is not subject to backup withholding in circumstances where such a certificate is required by the Tax Code. The opinions expressed by Bond Counsel are based on existing law as of the delivery date of the 2010B Bonds. No opinion is expressed as of any subsequent date nor is any opinion expressed with respect to pending or proposed legislation. Amendments to the federal or state tax laws may be pending now or could be proposed in the future that, if enacted into law, could adversely affect the value of the 2010B Bonds. In addition, future court actions or regulatory decisions could affect the market value of the 2010B Bonds. Owners of the 2010B Bonds are advised to consult with their own tax advisors with respect to such matters. The Service routinely examines municipal bond issues for compliance with the applicable tax laws and regulations. Like other municipal bonds, Build America Bonds, such as the 2010B Bonds, and the application of the proceeds thereof to expenditures, are subject to numerous requirements set forth in the Tax Code and regulations promulgated thereunder, and are subject to scrutiny by the Service. The Service's scrutiny of Build America Bonds is likely to include an inquiry into the requirement that proceeds of Build America Bonds, net of any proceeds used for issuance costs and funding of a reserve fund, must be used for "capital expenditures ", as that term is used in Section 54AA of the Tax Code. Further, the Service may determine to examine a greater percentage of Build America Bonds than the percentage of other municipal bonds it examines under its current practices. If, as a result of such an examination of the 2010B Bonds, the Service makes an initial determination that the Authority did not comply with the applicable rules, the Service could suspend paying BAB Credits to the Authority even 10/5/20119 1 -1 -175 before it makes a final determination that the applicable tax rules were violated. In addition, the Service could seek to recover BAB Credits previously paid to the Authority. Any tax advice concerning the 2010E Bonds, interest on the 2010E Bonds or any other federal income tax issues associated with the 2010E Bonds, express or implicit in the provisions of this Official Statement, is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on any taxpayer by the Internal Revenue Service. This document supports the promotion or marketing of the transactions or matters addressed herein. Each taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor. FINANCIAL INSTITUTION INTEREST DEDUCTION The Tax Code generally provides that a financial institution may not deduct that portion of its interest expense which is allocable to tax - exempt interest. The interest expense which is allocable to tax - exempt interest is an amount which bears the same ratio to the institution's interest expense as the institution's average adjusted basis of tax - exempt obligations acquired after August 7, 1986, bears to the average adjusted basis of all assets of the institution. Tax - exempt obligations may be treated as if issued prior to August 7, 1986 (and therefore are not subject to this rule), if they are "qualified tax - exempt obligations" as defined in the Tax Code and are designated for this purpose by the Authority. The Authority has designated the 2010A Bonds for this purpose; however, under provisions of the Tax Code dealing with financial institution preference items, certain financial institutions, including banks, are denied 20% of their otherwise allowable deduction for interest expense with respect to obligations incurred or continued to purchase or carry the 2010A Bonds. In general, interest expense with respect to obligations incurred or continued to purchase or carry the 2010A Bonds will be in an amount which bears the same ratio as the institution's average adjusted basis in the 2010A Bonds bears to the average adjusted basis of all assets of the institution. Amendments to the Tax Code could be enacted in the future and there is no assurance that any such future amendments which may be made to the Tax Code will not adversely affect the ability of banks or other financial institutions to deduct any portion of its interest expense allocable to tax - exempt interest. LEGAL MATTERS Liti Counsel to the Authority states that, as of the date hereof, to the best of her knowledge, there is no pending or threatened litigation which would restrain or enjoin the issuance of the 2010 Bonds, the Improvement Project, the Refunding Project, or the collection of Pledged Revenues; or in any way contesting or affecting the validity of the 2010 Bonds or any proceedings of the Authority taken with respect to the issuance or sale thereof, the pledge or application of any moneys or securities provided for the payment of the 2010 Bonds, or the corporate existence or the powers of the Authority. It is the opinion of counsel to the Authority that any pending litigation will not result in final judgments against the Authority which would, individually or in the aggregate, materially adversely affect its respective financial positions or their its respective abilities to perform its obligations to the owners of the 2010 Bonds. 10/5/20 W 1 -1 -176 Approval of Certain Legal Proceedings The approving opinion of Sherman & Howard L.L.C., as Bond Counsel, will be delivered with each series of the 2010 Bonds. A form of each Bond Counsel opinion is attached to this Official Statement as Appendix E. The opinions will include a statement that the obligations of the Authority are subject to the reasonable exercise in the future by the State and its governmental bodies of the police power inherent in the sovereignty of the State and to the exercise by the United States of the powers delegated to it by the federal constitution, including bankruptcy. Sherman & Howard L.L.C., Denver, Colorado, has also acted as special counsel to the Authority in connection with this Official Statement. Certain legal matters pertaining to the Authority will be passed upon for the Authority by its General Counsel, Hayes, Phillips, Hoffmann & Carberry, P.C., Denver, Colorado. Police Power The obligations of the Authority are subject to the reasonable exercise in the future by the State and its governmental bodies of the police power inherent in the sovereignty of the State and to the exercise by the United States of America of the powers delegated to it by the Federal Constitution, including bankruptcy. Certain Constitutional Limitations General In 1992, the voters of Colorado approved a constitutional amendment which is codified as Article X, Section 20, of the Colorado Constitution (the Taxpayers Bill of Rights or "TABOR "). Pursuant to existing case law, TABOR does not apply to urban renewal authorities, including the Authority. However, a general discussion of TABOR is provided because if the Initiatives pass, certain provisions of TABOR may apply to the Authority in the future. In general, TABOR restricts the ability of the State and local governments to increase revenues and spending, to impose taxes, and to issue debt and certain other types of obligations without voter approval. TABOR generally applies to the State and all local governments, including the Town ( "local governments "), but does not apply to "enterprises," defined as government -owned businesses authorized to issue revenue bonds and receiving under 10% of annual revenue in grants from all state and local governments combined. Because some provisions of TABOR are unclear, litigation seeking judicial interpretation of its provisions has been commenced on numerous occasions since its adoption. Additional litigation may be commenced in the future seeking further interpretation of TABOR. Voter Approval Requirements and Limitations on Taxes, Spending, Revenues, and Borrowin4 TABOR requires voter approval in advance for: (a) any new tax, tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase, extension of an expiring tax, or a tax policy change causing a net tax revenue gain; (b) any increase in a local government's spending from one year to the next in excess of the limitations described below; (c) any increase in the real property tax revenues of a local government from one year to the next in excess of the limitations described below; or (d) creation of any multiple - fiscal year direct or indirect debt or other financial obligation whatsoever, subject to certain exceptions such as the refinancing of obligations at a lower interest rate. 10/5/2061 1 -I -177 TABOR limits increases in government spending and property tax revenues to, generally, the rate of inflation and a local growth factor which is based upon, for school districts, the percentage change in enrollment from year to year, and for non - school districts, the actual value of new construction in the local government. Unless voter approval is received as described above, revenues collected in excess of these permitted spending limitations must be rebated. Debt service can be paid without regard to any spending limits, assuming revenues are available to do so. Emergency Reserve Funds TABOR also requires local governments to establish emergency reserve funds. The reserve fund must consist of at least 3% of fiscal year spending. TABOR allows local governments to impose emergency taxes (other than property taxes) if certain conditions are met. Local governments are not allowed to use emergency reserves or taxes to compensate for economic conditions, revenue shortfalls, or local government salary or benefit increases. Other Limitations TABOR also prohibits new or increased real property transfer tax rates and local government income taxes. TABOR allows local governments to enact exemptions and credits to reduce or end business personal property taxes; provided, however, the local governments' spending is reduced by the amount saved by such action. With the exception of K -12 public education and federal programs, TABOR also allows local governments (subject to certain notice and phase -out requirements) to reduce or end subsidies to any program delegated for administration by the general assembly; provided, however, the local governments' spending is reduced by the amount saved by such action. Proposed Fiscal Initiatives General The Colorado Secretary of State has certified three citizens' initiatives (the "Initiatives ") to be submitted to Colorado voters in November 2010 that would each have a significant impact on the financial operations of the State and local governments in the State. If any or all of the Initiatives are approved by Colorado voters, most of the provisions of the Initiatives would take effect in January 2011. The potential impact of Amendment 60 on the Authority is described in more detail in "CERTAIN RISK FACTORS -- Proposed Fiscal Initiatives." Amendment 61 - Borrowings Another Initiative, Amendment 61, relates to state and local borrowing. Among other things, Amendment 61 would limit local governments' ability to enter into future bond transactions, require voter approval for certain transactions that currently are exempt, such as refinancings at a lower interest rate, and classify new instruments as "debt," including certificates of participation and lease - purchase transactions. Proposition 101 - Reduction in Fees and Income Taxes Proposition 101 would effect a statutory change to reduce a range of sales taxes and vehicle fees and revenues from telecommunications charges and fees. These reductions would include nearly eliminating specific ownership taxes (which are property taxes on vehicle ownership) and reducing sales taxes on vehicle sales and vehicle rentals. If Proposition 101 is adopted, future statewide voter approval would be required to reverse it and reinstate the reduced fees or impose additional fees similar to those reduced by Proposition 101. 10/5/2012 1 -1 -178 RATINGS Moody's Investors Service ( "Moody's ") and Standard & Poor's Rating Group, a Division of the McGraw -Hill Companies, Inc. ( "S &P ") have assigned the 2010 Bonds the Ratings shown on the cover page of this Official Statement. An explanation of the significance of the ratings given by Moody's may be obtained from Moody's at 7 World Trade Center at 250 Greenwich Street, New York, New York 10007. An explanation of the significance of the ratings given by S &P may be obtained from S &P at 55 Water Street, New York, New York 10041. Such ratings reflect only the views of such rating agencies, and there is no assurance that any rating will continue for any given period of time or that either rating will not be revised downward or withdrawn entirely by the applicable rating agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the 2010 Bonds. Except for its responsibilities under the Disclosure Certificate, the Authority has not undertaken any responsibility to bring to the attention of the owners of the 2010 Bonds any proposed change in or withdrawal of such ratings once received or to oppose any such proposed revision. INDEPENDENT AUDITORS The financial statements of the City as of December 31, 2009, and for the year then ended, included herein as Appendix A, have been audited by McMahan & Associates, LLC, certified public accountants, Avon, Colorado, as stated in their report appearing herein. UNDERWRITING Piper Jaffray & Co., Denver, Colorado (the "Underwriter ") has agreed to purchase the 2010 Bonds from the Authority pursuant to a Bond Purchase Agreement at a purchase price equal to $ (which is equal to the par amount of the 2010 Bonds, less Underwriter's discount of $ ). The Underwriter is committed to take and pay for all of the 2010 Bonds if any are taken. The Underwriter intends to offer the 2010 Bonds to the public at the offering prices set forth on the cover page of this Official Statement. The Underwriter may allow concessions from the public offering price to certain dealers who may reallow concessions to other dealers. After the initial public offering price, prices may be varied from time to time by the Underwriter, and the 2010 Bonds may be offered and sold at prices other than the initial offering prices, including sales to dealers who may sell such 2010 Bonds into investment accounts. 10/5/203 1 -1 -179 OFFICIAL STATEMENT CERTIFICATION The undersigned official of the Authority hereby confirms and certifies that the execution and delivery of this Official Statement and its use in connection with the offering and sale of the 2010 Bonds have been duly authorized by the Board. VAIL REINVESTMENT AUTHORITY By [Executive Director /Secretary] or [Chairman] 10/5/201 1 -1 -180 APPENDIX A AUDITED BASIC FINANCIAL STATEMENTS OF THE TOWN FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 (INCLUDING THE VAIL REINVESTMENT AUTHORITY SPECIAL REVENUE FUND) NOTE: The 2010 Bonds are payable only from the Trust Estate. Inclusion of the Town's audited financial statements does not indicate that the 2010 Bonds are payable from any revenues shown therein, other than the Pledged Revenues. 10isi20k 1 1 -1 -181 APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE Set forth in this Appendix B are certain definitions used in the Indenture and summaries of certain provisions of the Indenture. These summaries do not purport to be definitive summaries of all of the provisions of the Indenture; these summaries are qualified in their entirety by the provisions of the Indenture. Reference must be made to the actual, complete provisions of the Indenture for a complete recital of its terms. Copies of the Indenture may be obtained from the sources listed in "INTRODUCTION -- Additional Information." [TO COME] 10i5i201?0- 1 I -1 -182 APPENDIX C BOOK -ENTRY ONLY SYSTEM [TO COME] 10 /5 /2014- I 1 -1 -183 APPENDIX D FORM OF CONTINUING DISCLOSURE CERTIFICATE [TO COME] 10/5/20t))- I 1 -1 -184 APPENDIX E FORMS OF OPINIONS OF BOND COUNSEL [TO COME] \1231362.3 10/5/20 1 1 -I -185 To: Vail Reinvestment Authority From: Sherman & Howard Date: August 4, 2010 Re: Proposed Tax Increment Revenue Bonds (Direct Pay Build America Bonds), Series 2010B We understand that the Vail Reinvestment Authority (the "Issuer ") is considering the issuance of tax increment revenue bonds that will be issued as Build America Bonds ( "BABs" or the "Bonds ") rather than traditional tax - exempt bonds (or possibly simultaneously with the issuance of traditional tax - exempt bonds). BABs bear interest at a taxable interest rate, but the issuer receives a subsidy payment from the federal government (a "BAB credit ") equal to 35% of the interest paid, on or about the time of each interest payment date. The federal tax rules applicable to BABs are similar to tax - exempt bonds; however, there are certain rules in addition to the tax - exempt bond rules which apply to Build America Bonds. This memo is designed to provide a list of these rules for your consideration when determining whether to issue Build America Bonds. With respect to the financial advantages or disadvantages of issuing Build America Bonds, we will defer to your underwriter for this analysis. 1. Tax - Exempt Bond Rules All of the rules typically applicable to tax - exempt governmental bonds apply to the proceeds of BABs, including, without limitation, the rules related to arbitrage, arbitrage rebate and private use. A federal tax certificate related to the BABs which outlines these rules will be prepared by us and we will review these rules and provisions with the Issuer prior to the issuance of the Bonds. This tax certificate will then be executed by an official of the Issuer at the closing. 2. Cost of Issuance Limitation The amount of proceeds of the BABs that can be used to pay the cost of issuance of the BABs is limited to two percent (2 %) of the proceeds of the BABs. Underwriter's discount is included as a cost of issuance. 3. Premium Limitation Premiums (i.e., the amount above the par amount of a bond at which the bond is sold to the public) are prohibited or substantially restricted for BABs. This limitation applies to premiums even if the premium is retained by the underwriter and never paid to the Issuer. A violation of this rule by the Issuer or the underwriter (as well as a violation of the other BAB and tax- exempt bond rules) can lead to denial of the BAB credit. 4. Capital Expenditures All of the proceeds of BABs must be used to finance capital expenditures, as defined in Treas. Reg. 1.150 -1(b). None of the proceeds of the BABs can be used for working capital expenditures. (The de minimis working capital exceptions generally applicable to governmental tax- exempt bonds are not available for BABs.) To verify compliance with this requirement, the Issuer may need to have an accountant that is familiar with federal tax rules on the capitalization of costs review the expenses made with BAB proceeds. BAB proceeds may not be used for refunding projects. 1221460.1 10/5/2010 1 -1 -186 5. Form to Obtain BAB Credit In order to obtain the BAB credit, currently promulgated IRS guidance provides that the Issuer must file a Form 8038 -CP for each BAB payment requested. Current guidance provides that for fixed rate BABs this form must be filed between 90 and 45 days prior to each applicable interest payment date with respect to the BABs. The Issuer will need to establish a procedure or reminder system so the form is timely filed before each interest payment date. It is also possible to enter into an agreement with the paying agent of the BABs and have the paying agent prepare the required form and submit it to the Issuer for execution at the required times. We can prepare this agreement for the Issuer and have this executed at the time the BABs are issued. 6. Set -Off The IRS is allowed to set off amounts which the federal government or an agency thereof determines are owed to it by the Issuer against the BAB credit payments. Authority for this set -off is in Sections 6401 & 6402 of the Internal Revenue Code of 1986, as amended, which are applicable to the BAB credit under Section 3.3 of IRS Notice 2009- 26. 7. Increased IRS audits /compliance checks The IRS has indicated that it likely will be more thorough and comprehensive in examining BABs than typical tax- exempt bonds. Representatives of the IRS have publically stated that each 8038 -CP will be reviewed by an agent, and that a "Compliance Check" questionnaire will be sent to each issuer of BABs sometime after the BABs are issued. We recommend that you establish certain policies that are described in the questionnaire before the BABs are issued. We would be happy to assist the Issuer in developing these policies. These policies may require a level of monitoring of activities related to the BABs (e.g., expenditures, change of use, etc) that may be somewhat higher than what the Issuer's practice has been for the tax exempt bonds that have been issued by the Issuer. 8. Redemptions of BABs Often the underwriters or financial advisors will recommend that the BABs not have a traditional 10 year call feature, exercisable at par or at par plus a small premium. Instead, an optional "Mark -to- market" or "make- whole" call feature may be recommended, either as a purely optional call, as an "extraordinary" call in the event that the BAB Credit is reduced or eliminated as a result of a change to the tax code, guidance by the IRS or certain determinations made by the IRS, or both as a purely optional call and as an "extraordinary" call. The price of calling bonds in these "mark -to- market" or "make- whole" calls is based on the bond market at the time the bonds are called, to make up for loses the bondholder may experience as a result of having its bond (which may be worth much more than par because interest rates have gone down) called. Sometimes the price for the extraordinary "mark -to- market" or "make- whole" call is slightly less than the purely optional "mark -to- market" or "make- whole" call. The Issuer should be aware that if the standard 10 year par call feature is eliminated, the Issuer will not be able to refund the Bonds at a later time to achieve an interest savings, even if interest rates have declined considerably since the Bonds were issued. 9. Risk of Loss of BAB Credits Since Build America Bonds bear interest at a taxable interest rate, the interest rate paid by the Issuer on BABs will be higher than interest paid on traditional tax - exempt bonds. This higher interest cost is offset by the direct subsidy payment that the Issuer will receive from the federal government. However, there is a possibility that the BAB credit could be lost under certain circumstances. There is a small risk that the BAB 2 1221460.1 10/5/2010 1 -1 -187 credits could be eliminated by Congress during the term of the Bonds. There is also a risk of loss of BAB credits as a result of non - compliance with the BAB rules or the general rules applicable to tax exempt bonds (which all apply as mentioned above). This could mean that the IRS would stop paying the BAB credit while there is a dispute over compliance, and the Issuer would then have to make up for this lost source of revenue. With traditional tax - exempt bonds, an issuer generally does not face a risk of a loss of a revenue source as a result of disputing a compliance issue with the IRS. As mentioned above, there is also a risk of a set -off of any amount the federal government or an agency thereof says the Issuer owes to it against the BAB credit, which could reduce or eliminate the BAB credit received by the Issuer. 10. State Tax Exemption. The interest paid to the owners of the BABs is taxable for federal tax purposes, but is exempt from all taxation and assessments in the State of Colorado pursuant to the Colorado Recovery and Reinvestment Act. We would be happy to discuss these issues with you at your convenience. 3 1221460.1 10/5/2010 1 -1 -188 Sep 30, 2010 11:02 am Prepared by Piper Jaffray & Co. Page 1 VAIL REINVESTMENT AUTHORITY SERIES 2010 - NET DEBT SERVICE COMP Combination Present Value All Tax- Exempt & to 11/03/2010 Date Tax - Exempt BAB Savings @ 4.5905389% 11/03/2011 738,215.29 706,307.89 31,907.40 31,089.16 11/03/2012 1,277,822.64 1,221,186.72 56,635.92 53,594.18 11/03/2013 1,280,122.64 1,222,736.72 57,385.92 51,890.95 11/03/2014 1,276,822.64 1,223,686.72 53,135.92 45,982.77 11/03/2015 1,278,072.64 1,224,036.72 54,035.92 44,681.98 11/03/2016 1,278,722.64 1,223,786.72 54,935.92 43,406.08 11/03/2017 1,277,122.64 1,220,986.72 56,135.92 42,380.57 11/03/2018 1,279,522.64 1,222,186.72 57,335.92 41,360.60 11/03/2019 1,275,722.64 1,219,701.48 56,021.16 38,624.35 11/03/2020 1,275,922.64 1,221,300.06 54,622.58 35,994.60 11/03/2021 1,277,985.14 1,221,799.22 56,185.92 35,340.33 11/03/2022 1,280,522.64 1,223,485.22 57,037.42 34,247.53 11/03/2023 1,276,210.14 1,223,774.84 52,435.30 30,097.68 11/03/2024 1,280,278.88 1,222,668.04 57,610.84 31,526.91 11/03/2025 1,277,266.38 1,220,164.86 57,101.52 29,832.57 11/03/2026 1,277,403.88 1,221,265.30 56,138.58 28,000.26 11/03/2027 1,280,385.14 1,222,807.58 57,577.56 27,389.62 11/03/2028 1,280,547.64 1,222,423.14 58,124.50 26,371.74 11/03/2029 1,277,891.38 1,220,112.00 57,779.38 25,001.96 11/03/2030 (29,264.88) (304,346.82) 275,081.94 113,204.09 23,717,295.39 22,400,069.85 1,317,225.54 810,017.93 Savings Summary PV of savings from cash flow 810,017.93 Net PV Savings 810,017.93 Piperj ffray 10/5/2010 1 -1 -189 Sep 22, 2010 11:35 am Prepared by Piper Jaffray & Co. TABLE OF CONTENTS VAIL REINVESTMENT AUTHORITY IN THE TOWN OF VAIL, COLORADO TAX INCREMENT REVENUE BONDS SERIES 2010 (Tax- Exempt & Build America Bonds) Report Page Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Net Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Bond Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Bond Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Piperj ffray 10 /5 /2010 1 -1 -190 Sep 22, 2010 11:35 am Prepared by Piper Jaffray & Co. Page 1 SOURCES AND USES OF FUNDS VAIL REINVESTMENT AUTHORITY IN THE TOWN OF VAIL, COLORADO TAX INCREMENT REVENUE BONDS SERIES 2010 (Tax- Exempt & Build America Bonds) Dated Date 11/03/2010 Delivery Date 11/03/2010 Sources: Bond Proceeds: Par Amount 16,730,000.00 Premium 105,250.75 16,835,250.75 Uses: Project Fund Deposits: Project Fund 15,000,000.00 Other Fund Deposits: Debt Service Reserve Fund 1,525,221.00 Delivery Date Expenses: Cost of Issuance 100,000.00 Underwriter's Discount 209,125.00 309,125.00 Other Uses of Funds: Additional Proceeds 904.75 16,835,250.75 Piperj ffray 10/5/2010 1 -1 -191 Sep 22, 2010 11:35 am Prepared by Piper Jaffray & Co. Page 2 BOND DEBT SERVICE VAIL REINVESTMENT AUTHORITY IN THE TOWN OF VAIL, COLORADO TAX INCREMENT REVENUE BONDS SERIES 2010 (Tax- Exempt & Build America Bonds) Dated Date 11/03/2010 Delivery Date 11/03/2010 Period Ending Principal Coupon Interest Debt Service 06/01/2011 350,000 3.000% 530,325.47 880,325.47 06/01/2012 615,000 3.000% 907,371.00 1,522,371.00 06/01/2013 635,000 3.000% 888,921.00 1,523,921.00 06/01/2014 655,000 3.000% 869,871.00 1,524,871.00 06/01/2015 675,000 3.000% 850,221.00 1,525,221.00 06/01/2016 695,000 4.000% 829,971.00 1,524,971.00 06/01/2017 720,000 4.000% 802,171.00 1,522,171.00 06/01/2018 750,000 5.638% 773,371.00 1,523,371.00 06/01/2019 775,000 5.638% 731,086.00 1,506,086.00 06/01/2020 805,000 5.638% 687,391.50 1,492,391.50 06/01/2021 835,000 6.138% 642,005.60 1,477,005.60 06/01/2022 870,000 6.138% 590,753.30 1,460,753.30 06/01/2023 905,000 6.138% 537,352.70 1,442,352.70 06/01/2024 940,000 6.138% 481,803.80 1,421,803.80 06/01/2025 975,000 6.138% 424,106.60 1,399,106.60 06/01/2026 1,015,000 6.587% 364,261.10 1,379,261.10 06/01/2027 1,060,000 6.587% 297,403.06 1,357,403.06 06/01/2028 1,105,000 6.587% 227,580.86 1,332,580.86 06/01/2029 1,150,000 6.587% 154,794.50 1,304,794.50 06/01/2030 1,200,000 6.587% 79,044.00 1,279,044.00 16,730,000 11,669,805.49 28,399,805.49 Piperj ffray 10/5/2010 1 -1 -192 Sep 22, 2010 11:35 am Prepared by Piper Jaffray & Co. Page 3 NET DEBT SERVICE VAIL REINVESTMENT AUTHORITY IN THE TOWN OF VAIL, COLORADO TAX INCREMENT REVENUE BONDS SERIES 2010 (Tax- Exempt & Build America Bonds) Period Total Debt Service Net Ending Debt Service BAB Credit Reserve Fund Debt Service 06/01/2011 880,325.47 (156,392.80) (17,624.78) 706,307.89 06/01/2012 1,522,371.00 (270,679.86) (30,504.42) 1,221,186.72 06/01/2013 1,523,921.00 (270,679.86) (30,504.42) 1,222,736.72 06/01/2014 1,524,871.00 (270,679.86) (30,504.42) 1,223,686.72 06/01/2015 1,525,221.00 (270,679.86) (30,504.42) 1,224,036.72 06/01/2016 1,524,971.00 (270,679.86) (30,504.42) 1,223,786.72 06/01/2017 1,522,171.00 (270,679.86) (30,504.42) 1,220,986.72 06/01/2018 1,523,371.00 (270,679.86) (30,504.42) 1,222,186.72 06/01/2019 1,506,086.00 (255,880.10) (30,504.42) 1,219,701.48 06/01/2020 1,492,391.50 (240,587.02) (30,504.42) 1,221,300.06 06/01/2021 1,477,005.60 (224,701.96) (30,504.42) 1,221,799.22 06/01/2022 1,460,753.30 (206,763.66) (30,504.42) 1,223,485.22 06/01/2023 1,442,352.70 (188,073.44) (30,504.42) 1,223,774.84 06/01/2024 1,421,803.80 (168,631.34) (30,504.42) 1,222,668.04 06/01/2025 1,399,106.60 (148,437.32) (30,504.42) 1,220,164.86 06/01/2026 1,379,261.10 (127,491.38) (30,504.42) 1,221,265.30 06/01/2027 1,357,403.06 (104,091.06) (30,504.42) 1,222,807.58 06/01/2028 1,332,580.86 (79,653.30) (30,504.42) 1,222,423.14 06/01/2029 1,304,794.50 (54,178.08) (30,504.42) 1,220,112.00 06/01/2030 1,279,044.00 (27,665.40) (1,555,725.42) (304,346.82) 28,399,805.49 (3,877,305.88) (2,122,429.76) 22,400,069.85 Piperj ffray 10/5/2010 1 -1 -193 Sep 22, 2010 11:35 am Prepared by Piper Jaffray & Co. Page 4 BOND SUMMARY STATISTICS VAIL REINVESTMENT AUTHORITY IN THE TOWN OF VAIL, COLORADO TAX INCREMENT REVENUE BONDS SERIES 2010 (Tax- Exempt & Build America Bonds) Dated Date 11/03/2010 Delivery Date 11/03/2010 First Coupon 06/01/2011 Last Maturity 06/01/2030 Arbitrage Yield 3.967784% True Interest Cost (TIC) 4.110664% Net Interest Cost (NIC) 6.189811% All -In TIC 4.179912% Average Coupon 6.083530% Average Life (years) 11.466 Duration of Issue (years) 10.106 Par Amount 16,730,000.00 Bond Proceeds 16,835,250.75 Total Interest 11,669,805.49 Net Interest 11,773,679.74 Bond Years from Dated Date 191,826,222.22 Bond Years from Delivery Date 191,826,222.22 Total Debt Service 28,399,805.49 Maximum Annual Debt Service 1,525,221.00 Average Annual Debt Service 1,450,614.36 Underwriter's Fees (per $1000) Average Takedown Other Fee 12.500000 Total Underwriter's Discount 12.500000 Bid Price 99.379114 Par Average Average Bond Component Value Price Coupon Life Tax - Exempt Serial Bond 4,345,000.00 102.422 3.511% 3.879 Taxable Term Bond - 2020 2,330,000.00 100.000 5.638% 8.601 Taxable Term Bond - 2025 4,525,000.00 100.000 6.138% 12.655 Taxable Term Bond - 2030 5,530,000.00 100.000 6.587% 17.661 16,730,000.00 11.466 Piperj ffray 10/5/2010 1 -1 -194 Sep 22, 2010 11:35 am Prepared by Piper Jaffray & Co. Page 5 BOND SUMMARY STATISTICS VAIL REINVESTMENT AUTHORITY IN THE TOWN OF VAIL, COLORADO TAX INCREMENT REVENUE BONDS SERIES 2010 (Tax- Exempt & Build America Bonds) All -In Arbitrage TIC TIC Yield Par Value 16,730,000.00 16,730,000.00 16,730,000.00 • Accrued Interest • Premium (Discount) 105,250.75 105,250.75 105,250.75 - Underwriter's Discount (209,125.00) (209,125.00) - Cost of Issuance Expense (100,000.00) - Other Amounts Target Value 16,626,125.75 16,526,125.75 16,835,250.75 Target Date 11/03/2010 11/03/2010 11/03/2010 Yield 4.110664 % 4.179912% 3.967784% Piperj ffray 10/5/2010 1 -1 -195 Sep 22, 2010 11:35 am Prepared by Piper Jaffray & Co. Page 6 BOND PRICING VAIL REINVESTMENT AUTHORITY IN THE TOWN OF VAIL, COLORADO TAX INCREMENT REVENUE BONDS SERIES 2010 (Tax- Exempt & Build America Bonds) Maturity Bond Component Date Amount Rate Yield Price Tax - Exempt Serial Bond: 06/01/2011 350,000 3.000% 1.550% 100.830 06/01/2012 615,000 3.000 % 1.800% 101.857 06/01/2013 635,000 3.000% 1.900% 102.753 06/01/2014 655,000 3.000 % 2.350% 102.216 06/01/2015 675,000 3.000% 2.730% 101.153 06/01/2016 695,000 4.000 % 3.180% 104.158 06/01/2017 720,000 4.000% 3.470% 103.090 4,345,000 Taxable Term Bond - 2020: 06/01/2020 2,330,000 5.638% 5.638% 100.000 Taxable Term Bond - 2025: 06/01/2025 4,525,000 6.138% 6.138 % 100.000 Taxable Term Bond - 2030: 06/01/2030 5,530,000 6.587% 6.587% 100.000 16,730,000 Dated Date 11/03/2010 Delivery Date 11/03/2010 First Coupon 06/01/2011 Par Amount 16,730,000.00 Premium 105,250.75 Production 16,835,250.75 100.629114% Underwriter's Discount (209,125.00) (1.250000) Purchase Price 16,626,125.75 99.379114% Accrued Interest Net Proceeds 16,626,125.75 Piperj ffray 10/5/2010 1 -1 -196 Sep 22, 2010 11:35 am Prepared by Piper Jaffray & Co. Page 7 BOND SOLUTION VAIL REINVESTMENT AUTHORITY IN THE TOWN OF VAIL, COLORADO TAX INCREMENT REVENUE BONDS SERIES 2010 (Tax- Exempt & Build America Bonds) Period Proposed Proposed Debt Service Total Adj Revenue Unused Debt Sery Ending Principal Debt Service Adjustments Debt Service Constraints Revenues Coverage 06/01/2011 350,000 880,325 (156,393) 723,933 1,493,000 769,067 206.23465% 06/01/2012 615,000 1,522,371 (270,680) 1,251,691 1,713,420 461,729 136.88840% 06/01/2013 635,000 1,523,921 (270,680) 1,253,241 1,713,420 460,179 136.71910% 06/01/2014 655,000 1,524,871 (270,680) 1,254,191 1,799,490 545,299 143.47813% 06/01/2015 675,000 1,525,221 (270,680) 1,254,541 1,799,490 544,949 143.43810% 06/01/2016 695,000 1,524,971 (270,680) 1,254,291 1,899,550 645,259 151.44411% 06/01/2017 720,000 1,522,171 (270,680) 1,251,491 1,899,550 648,059 151.78294% 06/01/2018 750,000 1,523,371 (270,680) 1,252,691 1,984,170 731,479 158.39259% 06/01/2019 775,000 1,506,086 (255,880) 1,250,206 1,984,170 733,964 158.70746% 06/01/2020 805,000 1,492,392 (240,587) 1,251,804 2,083,350 831,546 166.42775% 06/01/2021 835,000 1,477,006 (224,702) 1,252,304 2,083,350 831,046 166.36141% 06/01/2022 870,000 1,460,753 (206,764) 1,253,990 2,187,518 933,528 174.44462% 06/01/2023 905,000 1,442,353 (188,073) 1,254,279 2,187,518 933,238 174.40434% 06/01/2024 940,000 1,421,804 (168,631) 1,253,172 2,296,893 1,043,721 183.28630% 06/01/2025 975,000 1,399,107 (148,437) 1,250,669 2,296,893 1,046,224 183.65314% 06/01/2026 1,015,000 1,379,261 (127,491) 1,251,770 2,411,738 1,159,968 192.66627% 06/01/2027 1,060,000 1,357,403 (104,091) 1,253,312 2,411,738 1,158,426 192.42918% 06/01/2028 1,105,000 1,332,581 (79,653) 1,252,928 2,532,325 1,279,397 202.11264% 06/01/2029 1,150,000 1,304,795 (54,178) 1,250,616 2,532,325 1,281,709 202.48614% 06/01/2030 1,200,000 1,279,044 (27,665) 1,251,379 2,658,941 1,407,563 212.48095% 16,730,000 28,399,805 (3,877,306) 24,522,500 41,968,849 17,446,349 Piperj ffray 10/5/2010 1 -1 -197 VAIL REINVENSTMENTAUTHORITY VAIL TOWN COUNCIL CHAMBERS 75 S. Frontage Road W. Vail, CO 81657 6:00 P.M., TUESDAY, OCTOBER 5, 2010 NOTE: Times of items are approximate, subject to change and cannot be relied upon to determine at what time Commissioners will consider an item. 1. Judy Camp ITEM /TOPIC: Resolution No. 3, Series 2010, a resolution authorizing, approving, and directing the issuance, sale and delivery By the Authority of tax - exempt tax increment revenue bonds, Series 2010A and taxable tax increment revenue bonds (direct pay Build America Bonds), series 20108, in the combined maximum aggregate principal amount of $17,200,000; approving documents in connection therewith; and ratifying prior actions. (60 minutes) ACTION REQUESTED OF COMMISSIONERS: Consider Resolution No. 3, series of 2010, authorizing the issuance of tax increment financing (TIF) bonds to fund $15 million of project costs in LionsHead. BACKGROUND RATIONALE: On August 17, the Commissioners directed staff to begin the process to issue bonds in support of public improvements in the LionsHead area consistent with the LionsHead Public Facilities Improvement Plan. On September 21, direction was given to include the following projects for a total project cost of $15 million: LionsHead Transit and Welcome Centers; East LionsHead Portal Improvements; West LionsHead Portal Improvements; Vail Public Library remodel; and surface parking on the charter bus lot. See attached staff memo for more detail. Jonathan Heroux of Piper Jaffray and Dee Wisor of Sherman and Howard will also be available to answer questions. Resolution No. 3 authorizes issuance of bonds to net $15 million in project funds and within parameters outlines in the resolution. Authority is delegated for certain responsibilities associated with the bond issue to the Chairman of the Board of the Authority (Dick Cleveland), the Secretary /Executive Director (Stan Zemler), and the Treasurer (Judy Camp). STAFF RECOMMENDATION: Approve, approve with amendments, or deny Resolution No. 3. 1 -2 -1 IL 'OWN ff VA, . VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: October 5, 2010 ITEM /TOPIC: Citizen Participation 10/5/2010 IL 'OWN ff VA, . VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: October 5, 2010 ITEM /TOPIC: Town Manager's Report: (15 min.) Revenue Highlights Update PRESENTER(S): Stan Zemler ATTACHMENTS: Revenue Highlights 10/5/2010 TOWN OF VAIL REVENUE HIGHLIGHTS September 30, 2010 Sales Tax Upon receipt of all sales tax returns for the month of August, collections for the month are expected to be $1,135,166 up 7.9% from budget and 6.3% from last year. Year -to -date sales tax collections are expected to be up 3.7% from budget and up 2.1 % from last year. Inflation as measured by the consumer price index was up 1.1 % in August compared with August 2009. Construction Permit Fee Revenue Construction permit revenue through September 30 totals $516,180, down 26% from last year. The 2010 budget for construction permit fees assumed a decrease of 21%, with annual revenues at $625,000. Major redevelopment projects account for $191,915 compared with $363,561 in 2009. Revenue from non -major projects is down 5% from 2009. Use Tax Use tax collections as of September 30, 2010 total $870,692 compared with $642,274 at this time last year and $497,000 budgeted. Major redevelopment projects including First Chair, Lodge Tower, and Ramshorn contributed $323,044 or 37% of the total. Several remodel projects including additions to units at Vail Village Inn and Vail Mountain Lodge and remodels at Millrace Condos, the Antlers, and Vail Point also paid use tax in 2010. Year -to -date use tax collections have already exceeded the full -year budget of $600,000. Real Estate Transfer Tax (RETT) RETT collections through September 28, 2010 total $5,258,386, compared with $2,894,000 budgeted and $1,775,000 at this time last year. Approximately $3,293,056 of the 2010 RETT collected is from major redevelopment projects including Arrabelle, Chalets at the Lodge at Vail, Founders' Park Garage, Landmark, Lions Square Lodge North, Manor Vail, Mountain View, Ritz Carlton Residences, Solaris, and Vail Plaza Hotel. Collections not related to major redevelopment projects total $1,965,330 compared with $1,164,715 through September of 2009. The full -year budget for RETT is $4,283,000 and we have surpassed that by nearly $1 million. Summary Across all funds and revenue accounts through August 31, 2010, total revenue of $37.1 million is up 14.3% year -to -date from this time last year and up 10.4% from the budget. -1- 10/5/2010 3 -1 -1 IL 'OWN ff VA, . VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: October 5, 2010 ITEM /TOPIC: Commission on Special Events board appointment. PRESENTER(S): Pam Brandmeyer ACTION REQUESTED OF COUNCIL: The staff requests the Town Council appointment one new member to the Commission on Special Events (CSE). STAFF RECOMMENDATION: The staff requests the Town Council appoint one new member to the Commission on Special Events (CSE). 10/5/2010 TOWN (ffr VA M VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: October 5, 2010 ITEM /TOPIC: An appeal, pursuant to Section 12 -3 -3, Appeals, Vail Town code, of the Town of Vail Design Review Boards's approval of a deisgn review application, pursuant to Section 12 -11, Design Review, Vail Town Code, to allow for a change to the approved sidewalk paver blend, located at 141 East Meadow Drive. PRESENTER(S): Warren Campbell, Michael Suman, Peter Knobel ACTION REQUESTED OF COUNCIL: The Vail Town Council shall uphold, modify, or overturn the Design Review Board's approval. BACKGROUND: On September 7, 2010, the Vail Town Council voted to call -up the Design Review Board's August, 18, 2010, approval of a change to the paver colors on the north side of the Solaris development. On November 20, 1991, the Town of Vail adopted the Streetscape Master Plan which established the paver design and color blend for pedestrian areas. The paver pattern for pedestrian areas was established to be herringbone and the paver color was a unique "Vail Blend" which was a "charcoal grey with reddish /black accent ". These patterns and color blends were reaffirmed in the adoption of the 2003 Streetscape Master Plan Addendum. STAFF RECOMMENDATION: The Community Development Department recommends that the "Vail Blend" be utilized for the pedestrain sidewalk on the north side of the Solaris development pursuant to the adopted Town of Vail Streetscape Master Plan and the Streetscape Master Plan Addendum.. ATTACHMENTS: Memorandum to Town Council DRB Approved Paver Blend Change 081810 Solaris Paver Blend Initial Approval 2007 Town of Vail Streetscape Master Plan 1991 Town of Vail Streetscape Master Plan Addendum 2003 10/5/2010 MEMORANDUM TO: Vail Town Council FROM: Community Development Department DATE: October 5, 2010 SUBJECT: An appeal, pursuant to Section 12 -3 -3, Appeals, Vail Town Code, of the Town of Vail Design Review Board's approval of a design review application, pursuant to Chapter 12 -11, Design Review, Vail Town Code, to allow for a change to the approved sidewalk paver color blend, located at 141 East Meadow Drive /Lot P, Block 5D, Vail Village Filing 1, and setting forth details in regard thereto. (D RB 100342) Appellant: Vail Town Council Planner: Warren Campbell I. SUMMARY The appellant, Vail Town Council, has appealed, pursuant to Section 12 -3 -3, Appeals, Vail Town Code, the Town of Vail Design Review Board's approval of a design review application, pursuant to Chapter 12 -11, Design Review, Vail Town Code, to allow for a change to the approved sidewalk paver color blend, located at 141 East Meadow Drive. Staff has attached a site plan depicting the extent by which the solid charcoal pavers would replace the "Vail Blend" (Attachment A), portion of the Town of Vail Streetscape Master Plan (Attachment B), and portions of the Town of Vail Streetscape Master Plan Addendum (Attachment C). II. SUBJECT PROPERTY The subject property, Solaris, is located at 141 Eat Meadow Drive/ Lot P, Block 5D, Vail Village Filing 1. III. BACKGROUND On November 20, 1991, the Town of Vail adopted the Streetscape Master Plan which established the paver design and color blend for pedestrian areas. The paver pattern for pedestrian areas was established to be herringbone and the paver color was a unique "Vail Blend" which was a "charcoal grey with reddish /black accent ". These patterns and color blends were reaffirmed in the adoption of the 2003 Streetscape Master Plan Addendum. On February 21, 2007, the Design Review Board by a vote of 4 -1 -0 (Dorward opposed) approved the site plan for Solaris which included the plaza design, landscaping, and pavers for the project. In July 2010, Staff identified that the pavers installed along the north side of the Solaris project within the Colorado Department of Transportation (CDOT) were solid charcoal and not eh approved "Vail Blend ". The applicant was notified of this inconsistency with the approved plan. 1 10/5/2010 5 -1 -I On August 18, 2010, the DRB unanimously approved a request by Solaris to change the paver color blend along the north side of the project from "Vail Blend" to a solid charcoal color within the Colorado Department of Transportation right -of -way. During this hearing Staff informed the Design Review Board of the fact that the approved "Vail Blend" was the adopted paver color for the pedestrian walkways along the South Frontage Road in Town, with the overall purpose of providing a visual cue to pedestrians of were public paths were located. Furthermore, that this paver color blend was installed along the north sides of the Vail Plaza Hotel, Gateway, Vail Village Inn Phase III, and at the west side of the Vail Village Parking structure. The Board after review felt that the solid charcoal color was acceptable as it worked in concert with the solid charcoal color of the Solaris port cochere. On September 7, 2010, the Vail Town Council voted to call -up the Design Review Board's approval of a change to the paver color blend on the north side of the Solaris development within the CDOT right -of -way. IV. STANDING OF APPELLANT Pursuant to Section 12- 3 -3C -2, Initiation, Vail Town Code, "The town council may also call up a decision of the planning and environmental commission or the design review board or the art in public places board by a majority vote of the town council members present." V. APPLICABLE DOCUMENTS Chapter 12 -11, Design Review (in part) 12 -11 -1: Purpose: A. Attractive Attributes Recognized: Vail is a town with a unique natural setting, internationally known for its natural beauty, alpine environment, and the compatibility of manmade structures with the environment. These characteristics have caused a significant number of visitors to come to Vail with many visitors eventually becoming permanent residents participating in community life. B. Area Character Protection: These factors constitute an important economic base for the town, both for those who earn their living here and for those who view the town as a precious physical possession. The town council finds that new development and redevelopment can have a substantial impact on the character of an area in which it is located. Some harmful effects of one land use upon another can be prevented through zoning, subdivision controls, and building codes. Other aspects of development are more subtle and less amenable to exact rules put into operation without regard to specific development proposals. Among these are the general form of the land before and after development, the spatial relationships of structures and open spaces to land uses within the vicinity and the town, and the appearance of buildings and open spaces as they contribute to the area as it is being developed and redeveloped. In order to provide for the timely exercise of judgment in the public interest in the evaluation of the design of new development and redevelopment, the town council has created a design review board (DRB) and design criteria. 2 10/5/2010 5 -1 -2 C. Design Review: Therefore, in order to preserve the natural beauty of the town and its setting, to protect the welfare of the community, to maintain the values created in the community, to protect and enhance land and property, for the promotion of health, safety, and general welfare in the community, and to attain the objectives set out in this section; the improvement or alteration of open space, exterior design of all new development, and all modifications to existing development shall be subject to design review as specified in this chapter. D. Guidelines: It is the intent of these guidelines to leave as much design freedom as possible to the individual designer while at the same time maintaining the remarkable natural beauty of the area by creating structures which are designed to complement both their individual sites and surroundings. The objectives of design review shall be as follows: 1. Recognize the interdependence of the public welfare and aesthetics, and to provide a method by which this interdependence may continue to benefit its citizens and visitors. 2. Allow for the development of public and private property which is in harmony with the desired character of the town as defined by the guidelines herein provided. 3. Prevent the unnecessary destruction or blighting of the natural landscape. 4. Ensure that the architectural design, location, configuration materials, colors, and overall treatment of built up and open spaces have been designed so that they relate harmoniously to the natural landforms and native vegetation, the town's overall appearance, with surrounding development and with officially approved plans or guidelines, if any, for the areas in which the structures are proposed to be located. 5. Protect neighboring property owners and users by making sure that reasonable provision has been made for such matters as pedestrian and vehicular traffic, surface water drainage, sound and sight buffers, the preservation of light and air, and those aspects of design not adequately covered by other regulations which may have substantial effects on neighboring land uses. VI. REQUIRED ACTION The Vail Town Council shall uphold, overturn, or modify the Town of Vail Design Review Board's approval of the Solaris sidewalk paver color change design review application (DRB100342). Pursuant to Sub - section 12- 3 -3C -5, Findings, Vail Town Code, the Town Council is required to make findings of fact in accordance with the Vail Town Code: "The Town Council shall on all appeals make specific findings of fact based directly on the particular evidence presented to it. These findings of fact must support conclusions that the standards and conditions imposed by the requirements of this title (i.e. Title 12, Zoning Regulations, Vail Town Code) have or have not been met." 3 10/5/2010 5 -1 -3 Should the Vail Town Council choose to uphold the Town of Vail Design Review Board's approval of the Solaris design review application, the Community Development Department recommends the following motion: "The Town Council upholds the Town of Vail Design Review Board's approval of a design review application, pursuant to Chapter 12 -11, Design Review, Vail Town Code, to allow for change to the sidewalk paver color blend, located at 141 East Meadow Drive/ Lot P, Block 5D, Vail Village Filing 1, and setting forth details in regard thereto." Should the Vail Town Council choose to uphold the Town of Vail Design Review Board's approval of the Solaris design review application, the Community Development Department recommends the following finding: "Pursuant to Section 12- 3 -3 -05, the Vail Town Council finds, in accordance with the Vail Town Code, that the subject application for a change to the sidewalk paver color blend meets the requirements of the Vail Town Code, the Town of Vail Streetscape Master Plan and the Town of Vail Streetscape Master Plan Addendum. " Should the Vail Town Council choose to overturn the Town of Vail Design Review Board's approval of the Solaris design review application, the Community Development Department recommends the following motion: "The Town Council overturns the Town of Vail Design Review Board's approval of a design review application, pursuant to Chapter 12 -11, Design Review, Vail Town Code, to allow for a change to the sidewalk paver color blend, located at 141 East Meadow Drive/ Lot P, Block 5D, Vail Village Filing 1, and setting forth details in regard thereto." Should the Vail Town Council choose to overturn the Town of Vail Design Review Board's approval of the Solaris design review application, the Community Development Department recommends the following finding: "Pursuant to Section 12- 3 -3 -05, the Vail Town Council finds, in accordance with the Vail Town Code, that the subject application for a change to the sidewalk paver color blend does not meet the requirements of the Vail Town Code, the Town of Vail Streetscape Master Plan and the Town of Vail Streetscape Master Plan Addendum." VII. STAFF RECOMMENDATION The Community Development Department recommends that the "Vail Blend" be utilized for the pedestrian sidewalk on the north side of the Solaris development pursuant to the adopted Town of Vail Streetscape Master Plan and the Streetscape Master Plan Addendum and as initially approved for construction. VIII. ATTACHMENTS 4 10/5/2010 5 -1 -4 A. DRB August 18, 2010, approved revised site plan Sheet 1-1.01a B. DRB February 21, 2007, approved site plan Sheet 1-1.01 C. Town of Vail Streetscape Master Plan (in part) D. Town of Vail Streetscape Master Plan Addendum (in part) 5 10/5/2010 5 -1 -5 z O r 1 0. ^ ; /,. J 1 li � - -------- - - - - -- - - - - -- - - - -� n I II I e cJ 1 - - --------------- --------- - - - -- - -- 1 A - - -- -- 1 A --- - - - - -- lJ = 6 3_ < \ 1 n ? \ }pry O 1 �> U _ 1 � 1 r � m ms - - - -- p SOLARIS D � m m < 0 2211 NORTH FRONTAGE RD. SUITE A $ o A m c VAIL, COLORADO 81657 y cn Z m W cl) L z Q SOLARIS PROPERTY OWNER, LLC ,I I 1 v 0 0 Ij ------------------------- — 1 e _ III CAA �,s ----------- - - - - -- ------ -- - -- m 0 1 { 1 Z m � m Ne O l i t I 1 \\ a ❑ g - -- -------------------- I o m ° J 0 --------------------- - - x m P z SOLARIS m D x r o A< 0 2211 NORTH FRONTAGE RD. 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PRESENTER(S): Ethan Moore, Nina Timm ACTION REQUESTED OF COUNCIL: Provide Staff direction on how to amend the Capital Projects Fund to reflect any changes Town Council would like made to the Vail Commons Residential Homeowner's Association land lease payment. BACKGROUND: Pursuant to the request from the Vail Commons Residential Homeowners Association "to defer the land lease fee for the maintanance on capital projects" Staff has prepared a memorandum outlining the terms of the Vail Commons Residential Land Lease as well as the terms for other employee housing developments on Town land. STAFF RECOMMENDATION: Staff does not recommend providing lease payment dispensation for the Vail Commons Residential Land Lease. ATTACHMENTS: Town Council Memorandum ioi; �oio MEMORANDUM TO: Vail Town Council FROM: Community Development Department DATE: October 5, 2010 SUBJECT: Vail Commons Land Lease Policy I. PURPOSE A written request has been received from the Vail Commons Residential Homeowners Association "to defer the land lease fee for the maintenance on capital projects we (Vail Commons HOA) are considering now and in the future." The purpose of this memorandum is to provide Town Council with background information regarding Vail Commons and other residential land leases the Town has entered into. II. TOWN OF VAIL RESIDENTIAL LAND LEASE DEVELOPMENTS • Vail Commons (53 units) — 1996 • HOA has a 99 -year land lease • Annual land lease payment of $38,160 • Town purchased the land for $3,125,818 in 1995 from the Capital Projects Fund • City Market has a 49 -year land lease with annual land lease payments starting at $100,000 increasing to $190,016 • Today's Average Price Per Square Foot $159 • Red Sandstone Creek (18 units) - 1999 • HOA given fee title to land at no cost • Eagle River Water & Sanitation District owned 2/3 of the land and the Town obtained 1/3 of the land in 1997 as part of the Land Ownership Adjustment Agreement with the US Forest Service — no cash was exchanged, only land • Recently requested a long -term loan from the Town of Vail for insulation improvements and roof replacement • Today's Average Price Per Square Foot $168 • North Trail Townhomes (6 units) - 2001 • HOA has a 99 -year land lease • Annual land lease payment of $10 1 10/5/2010 6 -1 -I • Town purchased the land for $218,000 in 1990 from the Capital Projects Fund • A portion of the land is also used for Ellefson Park • Today's Average Price Per Square Foot $198 • Middle Creek Village (142 units plus a child care center) - 2001 • Middle Creek has a 53 -year land lease • Required to construct a 4,500 square foot child care center (given to the Town of Vail upon completion) and make annual land lease payment of $1 • At the end of the lease term the land and the improvements revert to the Town free and clear • Via Resolution No. 7, Series of 1976, the Town was given the land (along with other parcels) from Vail Associates, Inc. • Arosa Drive Duplex (2 units) -2010 • Duplex owners have a 99 -year land lease • Annual land lease payment of $25 per unit • Town purchased the land in 1995 for $150,000 as part of the Land Ownership Adjustment Agreement with the US Forest Service • Today's Average Price Per Square Foot $250 • Chamonix Neighborhood (up to 58 units) — 2011 Start o Land lease terms: • Length of term — need to be 99 -years for conventional mortgage approval • Lease payment per unit per month to be determined o Town purchased the land in 2002 for $2,598,000 from the Capital Projects Fund III. POLICY QUESTIONS • How does this proposed change, if implemented, impact the Capital Projects Fund now and in the future? • Will impact decision on land lease payments for the Chamonix Neighborhood Project • Impacts the already strapped Capital Projects Fund • Is this a one -year dispensation or a multi -year dispensation? • Would it be more appropriate for the dispensation to be granted in the year(s) the proposed work is completed in? o Guarantees the work that was intended to be done with the additional dollars is completed with those dollars rather than for other purposes 2 10/5/2010 6 -1 -2 • Should the work covered by the dispensation be allowed to increase the Maximum Sales Price under the deed restriction? o To allow the improvements to also be recoupable would be double reward for current owners only • The deed restriction calls out repair and maintenance as a cost of homeownership and is designed to allow only capital improvements outside of repair and replacement as recoupable IV. STAFF RECOMMENDATION Staff does not recommend providing lease payment dispensation for the Vail Commons Residential Land Lease. Based upon the language contained in the Land Lease, the land lease payment was established so the Town could recoup its investment in the land over a period of time, "accomplishing its objective of affordable housing and other public initiatives with minimal cost to Vail ". Looking forward, Town Council has expressed an intention to also recoup the Town's land investment in the future Chamonix Commons employee housing. 3 10/5/2010 6 -1 -3 'OWN ffVAM . VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: October 5, 2010 ITEM /TOPIC: First reading of Ordinance No. 15, Series of 2010, an ordinance amending Chapter 12 -6, Residential Districts, Vail Town Code, to establish the Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. PRESENTER(S): Rachel Friede Dimond, Planner and Dominic Mauriello, Mauriello Planning Group ACTION REQUESTED OF COUNCIL: The Vail Town Council shall approve, approve with modifications, or deny the first reading of Ordinance No. 15, Series of 2010. BACKGROUND: On August 23, 2010 the Planning and Environmental Commission forwarded a recommendation of approval, with modifications, by a vote of 5 -0 -0, to the Vail Town Council for prescribed regulation amendments to Chapter 12 -6, Residential District, Vail Town Code, pursuant to Section 12 -3 -7, Amendment, Vail Town Code, to establish a new zone district, Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. STAFF RECOMMENDATION: The Planning and Enviromental Commission recommends the Vail Town Council approves the first reading of Ordinance No. 15, Series of 2010, with the following modifications: - The gross residential floor area standards should allow a 1.35 GRFA ratio. - The parking standards should include the applicant's proposed language allowing parking in the front setback and street right -of -way. - The setback standards should be 20 feet as recommended in the Staff memorandum. ATTACHMENTS: Town Council memo Attachment A vicinity map Ordinance No. 15, Series of 2010 Attachment C Resolution No. 23, Series of 2010 Attachment D 8/23/10 PEC results Attachment E 8/23/10 PEC memo Attachment E 8/23/10 applicant's request Attachment F applicant's GRFA analysis 10/5/2010 MEMORANDUM TO: Vail Town Council FROM: Community Development Department DATE: October 5, 2010 SUBJECT: Ordinance No. 15, Series of 2010, an ordinance amending Chapter 12 -6, Residential Districts, Vail Town Code, pursuant to Section 12 -3 -7, Amendment, Vail Town Code, to establish a new zone district, Vail Village Townhouse (VVT) District, and setting forth details in regard thereto; and Resolution No. 23, Series of 2010, a resolution amending Chapter VII, Vail Village Sub - Areas, East Gore Creek Sub -Area ( #6), Vail Village Master Plan, pursuant to Chapter VIII, Implementation and Amendment, Vail Village Master Plan, to include recommendations related to a new Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. (PEC100011 /PEC100035) Applicant: Chris Galvin, represented by K.H. Webb Architects /Mauriello Planning Group Planner: Bill Gibson I. DESCRIPTION OF THE REQUEST The applicant, Chris Galvin, represented by K.H. Webb Architects and Mauriello Planning Group, is proposing to establish a new residential zone district, the Vail Village Townhouse (VVT) District. The applicant is proposing to establish a new zone district to simplify the development review process and to create economic incentives for the redevelopment of existing townhouse properties in Vail Village. This proposed new zone district involves amendments to the Town's Zoning Regulations (Ordinance No. 15, Series of 2010) and associated amendments to the Vail Village Master Plan (Resolution No. 23, Series of 2010). While there is currently no application to apply this proposed new zone district to any specific properties, the applicant believes that in the future, this new zone district could be applied to the existing Vail Row Houses, Texas Townhomes, Vail Trails East, and the Vail Trails Chalets townhouse developments. A vicinity map of the Vail Row Houses, Texas Townhomes, Vail Trails East, and Vail Trails Chalets (Attachment A) has been attached for reference. These existing townhouse style properties are currently zoned High Density Multiple - Family (HDMF) District and share similar existing legally non - conforming zoning issues. Since zoning these existing properties HDMF District, the Town of Vail has granted multiple variances to facilitate the remodeling of individual townhouse units which has resulted in the inconsistent application of zoning standards. Rather than perpetuate the current system of requiring variances for most townhouse unit remodels, the applicant is proposing to establish a new zone district specifically designed to regulate these existing townhouse properties in Vail Village. The proposed new zone district is intended to differentiate between existing townhouses that were subdivided as part of a comprehensive development site (similar to a multiple - family condominium building) and those townhouses subdivided as individual lots 1 10/5/2010 7 -1 -I (similar to a single - family house). For example, the applicant is proposing a zero foot side setback requirement between existing attached townhouse units that were originally subdivided as individual development sites. The applicant intends the proposed new zone district to better reflect the current built conditions at the existing Vail Village townhouse properties than the HDMF District. For example, the applicant is proposing to reduce the required landscape area for these properties from 30% to 20 %. The proposed new district is also intended to simplify the allowable floor area calculations for these properties by eliminating the existing "Interior Conversion" and "250 Ordinance" GRFA bonuses. To preserve the development rights associated with the bonus, the applicant is proposing an increase in the allowable GRFA ratio from 0.60 to 1.5. The applicant contends that a GRFA ratio of 1.5 will also increase development rights enough to provide an economic incentive for the redevelopment of existing townhouse properties in Vail Village. The Planning and Environmental Commission recommends the Vail Town Council adopt a 1.35 GRFA ratio to maintain the current development rights for the majority of the existing townhouse properties. Both "Interior Conversion" and "250 Ordinance" GRFA development rights are lost if an existing dwelling unit is demolished. The elimination of these bonuses with an associated increase in the allowable GRFA ratio formula is intended to facilitate the "demo /rebuild" redevelopment of existing townhouse properties. The applicant is proposing to maintain some parameters of the HDMF District in the proposed new zone district such as the current 45748' foot building height limit and a 55% site coverage limit. The proposed Ordinance No. 15, Series of 2010 (Attachment B), proposed Resolution No. 23, Series of 2010 (Attachment C), the August 23, 2010 Planning and Environmental Commission hearing results (Attachment D), the August 23, 2010 Staff memorandum to the Planning and Environmental Commission (Attachment E), and the applicant's GRFA analysis from their August 23, 2010 presentation to the Planning and Environmental Commission have been attached for review. II. BACKGROUND The existing townhouse developments in Vail Village such as the Vail Row Houses, Texas Townhomes, Vail Trails East, and Vail Trails Chalets are zoned High Density Multiple Family (HDMF) District. These existing townhouse developments are legally non - conforming in regard to several development standards of the HDMF District including setbacks, density, landscape area, parking, etc. Some of the individual units in these townhouse developments, including units 7 -13 Vail Row Houses and the Texas Townhomes, were subdivided into individual townhouse lots years ago under Eagle County jurisdiction. The Town of Vail has treated these individually platted units as independent development sites, rather than as one unit in a larger comprehensive townhouse project. The standards of the Town's HDMF District were intended to be applied to comprehensive multiple - family development sites (such as multiple - family condominium buildings), and were not designed to be applied to the individual units of a multiple - family building. For example, the HDMF District requires 20 foot side setbacks (i.e. a total of 40 linear feet of lot width) for individually platted townhouse lots that are a total of 20 feet wide. In this scenario, the side setbacks overlap and apply to the entire development site thus rendering the property unbuildable without variances. 2 10/5/2010 7 -1 -2 The Planning and Environmental Commission reviewed the applicant's proposed text amendments to the Town's Zoning Regulations and the Vail Village Master Plan at its April 26, May 10, June 14, July 12, and August 23, 2010 public hearings. On August 23, 2010 the Planning and Environmental Commission forwarded a recommendation of approval to the Vail Town Council for the proposed amendments by a vote of 5 -0 -1 (Pratt recused) with the following modifications: • The gross residential floor area standards should allow a 1.35 GRFA ratio. • The parking standards should include the applicant's proposed language allowing parking in the front setback and street right -of -way. • The setback standards should be 20 feet as recommended in the Staff memorandum. • The applicant's proposed language about the Town vacating the Gore Creek Drive street right -of -way should be removed from the Vail Village Master Plan amendment. Staff has incorporated the Planning and Environmental Commission's recommended modifications into the attached Ordinance No. 15, Series of 2010, and associated Resolution No. 23, Series of 2010. III. TOWN COUNCIL ACTION In reviewing the applicant's proposal, the Vail Town Council must address the following policy questions: • Should the Town of Vail adopt a new zoning district specifically designed to regulate existing townhouse properties in Vail Village or should these properties continue to be zoned High Density Multiple Family District? • If the Town of Vail were to adopt a new zone district, should this district economically incentivise the redevelopment of the existing townhouse properties in Vail Village? • If the Town of Vail were to adopt a new zone district, should this district maintain the existing character of the townhouse properties in Vail Village? • If the Town of Vail were to adopt a new zone district to incentivise redevelopment and maintain the existing character of townhouse properties in Vail Village, do the proposed amendments achieve that policy? The Town Council must approve, approve with modifications, deny or table the first reading of Ordinance No. 15, Series of 2010. The Town Council must also approve, approve with modifications, deny or table Resolution No. 23, Series of 2010. 3 10/5/2010 7 -1 -3 IV. RECOMMENDATION Ordinance No. 15, Series of 2010 The Planning and Environmental Commission forwarded a recommendation of approval to the Town Council for the first reading of Ordinance No. 15, Series of 2010, ordinance amending Chapter 12 -6, Residential Districts, Vail Town Code, pursuant to Section 12 -3 -7, Amendment, Vail Town Code, to establish a new zone district, Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. Should the Vail Town Council choose to approve these amendments, the Community Development Department recommends the Vail Town Council pass the following motion: "The Town Council approves, on first reading, Ordinance No. 15, Series of 2010, an ordinance amending Chapter 12 -6, Residential Districts, Vail Town Code, pursuant to Section 12 -3 -7, Amendment, Vail Town Code, to establish a new zone district, Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. " Should the Vail Town Council choose to approve Ordinance No. 15, Series of 2010, on first reading, the Community Development Department recommends the Vail Town Council makes the following findings: "Based upon the review of the criteria outlined in Section V of Staffs August 23, 2010 memorandum to the Planning and Environmental Commission and the evidence and testimony presented, the Vail Town Council finds: 1. That the amendments are consistent with the applicable elements of the adopted goals, objectives and policies outlined in the Vail comprehensive plan and is compatible with the development objectives of the town; and 2. That the amendments further the general and specific purposes of the sign regulations; and 3. That the amendments promote the health, safety, morals, and general welfare of the town and promote the coordinated and harmonious development of the town in a manner that conserves and enhances its natural environment and its established character as a resort and residential community of the highest quality. " Resolution No. 23, Series of 2010 Should the Vail Town Council choose to approve the first reading of Ordinance No. 15, Series of 2010; the Community Development Department recommends the Council tables the final vote on Resolution No. 23, Series of 2010, to correspond with the second reading of Ordinance No. 15, Series of 2010. Should the Vail Town Council choose to deny the first reading of Ordinance No. 15, Series of 2010; the Community Development Department recommends the Council also denies the associated Resolution No. 23, Series of 2010. 4 10/5/2010 7 -1 -4 IV. ATTACHMENTS Attachment A: Vicinity Map Attachment B: Ordinance No. 10, Series of 2010 Attachment C: Resolution No. 23, Series of 2010 Attachment D: August 23, 2010 PEC hearing results Attachment E: August 23, 2010 Staff memorandum to the PEC Attachment F: Applicant's GRFA Analysis from August 23, 2010 PEC Hearing 5 10ij ?010 7 -I -5 w `- y 7 > :7 4 — i sue# � f ti* r _ A I i AN M l o , 1 1 1 ORDINANCE NO. 15 Series of 2010 AN ORDINANCE AMENDING CHAPTER 12 -6, RESIDENTIAL DISTRICTS, VAIL TOWN CODE, TO ESTABLISH THE VAIL VILLAGE TOWNHOUSE (WT) DISTRICT, AND SETTING FORTH DETAILS IN REGARD THERETO. WHEREAS, Section 12 -3 -7, Amendment, Vail Town Code, sets forth the procedures for amending the Town's Zoning Regulations; and, WHEREAS, on August 23, 2010 the Town of Vail Planning and Environmental Commission held a public hearing on the application to amend the Town's Zoning Regulations and establish the Vail Village Townhouse District, in accordance with the provisions of the Vail Town Code; and, WHEREAS, the Town of Vail Planning and Environmental Commission forwarded a recommendation of approval, with modifications, of the proposed Zoning Regulation amendments to the Vail Town Council by a vote of 5 -0 -1; and, WHEREAS, the Vail Town Council finds and determines that the amendment is consistent with the applicable elements of the adopted goals, objectives and policies outlined in the Vail Comprehensive Plan and is compatible with the development objectives of the town; and, WHEREAS, the Vail Town Council finds and determines that the amendment to the Town Code furthers the general and specific purposes of the Zoning Regulations; and, WHEREAS, the Vail Town Council finds and determines that the amendment promotes the health, safety, morals, and general welfare of the town and promotes the coordinated and harmonious development of the town in a manner that conserves and enhances its natural environment and its established character as a resort and residential community of the highest quality. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO, THAT: SECTION 1 . Table of Contents, Title 12, Zoning Regulations, Vail Town Code, is hereby amended in part as follows (text to be deleted is in stFikethFeug4, text that is to be added is bold, and sections of text that are not amended have been omitted): Vail Village Townhouse (WT) District ... 6J SECTION 2 . Section 12 -2 -2, Definitions, Vail Town Code, is hereby amended in part as follows (text to be deleted is in stF +h F9 g I , text that is to be added is bold, and sections of text that are not amended have been omitted): TOWNHOUSE: A building that has one - family dwelling units erected in a row, each being separated from the adjoining unit or units by a party wall or walls extending from the basement floor to the roof along the dividing lot line. INDIVIDUALLY PLATTED TOWNHOUSE UNIT: A dwelling unit within a townhouse subdivided under Eagle County jurisdiction as an individual development site. SECTION 3 . Section 12 -4 -1, Designated, Vail Town Code, is hereby amended in part as Ordinance No. 15, Series of 2010, first reading Ios,z0Ia 7 -i -I follows (text to be deleted is in stpike +hpe g l , text that is to be added is bold, and sections of text that are not amended have been omitted): The following zone districts are established: Hillside residential (HR) district Single- family residential (SFR) district Two - family residential (R) district Two - family primary/secondary residential (PS) district Residential cluster (RC) district Low density multiple - family (LDMF) district Medium density multiple - family (MDMF) district High density multiple - family (HDMF) district Housing (H) district Vail Village Townhouse (WT) District Public accommodation (PA) district Commercial core 1 (CC1) district Commercial core 2 (CC2) district Commercial core 3 (CC3) district Commercial service center (CSC) district Arterial business (ABD) district Heavy service (HS) district Lionshead mixed use 1 (LMU -1) district Lionshead mixed use 2 (LMU -2) district Public accommodation -2 (PA -2) district Agricultural and open space (A) district Outdoor recreation (OR) district Natural area preservation (NAP) district Ski base /recreation (SBR) district Ski base /recreation 2 (SBR2) district Special development (SDD) district Parking (P) district General use (GU) district SECTION 4 . Chapter 12 -6, Residential Districts, Vail Town Code, is hereby established as follows (text that is to be added is bold): ARTICLE J. VAIL VILLAGE TOWNHOUSE (WT) DISTRICT 12 -6J -1: PURPOSE: Vail Village Townhouse District is intended to provide sites and maintain the unique character of existing townhouse and row house development in the Vail Village Master Plan area of the Town of Vail. The Vail Village Townhouse district is intended to ensure adequate light, air, open space, and other amenities commensurate with attached or row dwellings, and to maintain the desirable residential and resort qualities of the zone district by establishing appropriate site development standards. Certain nonresidential uses are permitted as conditional uses, which relate to the nature of Vail as a winter and summer recreation and vacation community and, where permitted, are intended to blend harmoniously with the residential character of the zone district. This zone district was specifically developed to regulate existing townhouse and row house properties that were legally nonconforming in the High Density Ordinance No. 15, Series of 2010, first reading 10/5/201 7-3 -2 Multiple Family District. The Vail Village Townhouse District is meant to encourage and provide incentives for redevelopment of existing townhouse and row house properties in accordance with the Vail Village Master Plan. The incentives in this zone district include differentiating between properties subdivided and regulated as a comprehensive townhouse building from those properties subdivided and regulated as individual townhouse lots within a building, reductions in lot area standards, reductions in setbacks, increases in density, increases in gross residential floor area (GRFA), reductions in landscaping area, and reductions in parking design requirements. More restrictive building height requirements have been applied to these properties in accordance with the Vail Village Master Plan to maintain the existing character of townhouse and rowhouse development in Vail Village. 12 -6J -2: PERMITTED USES: The following uses shall be permitted in the VVT district: Employee housing units, as further regulated by chapter 13 of this title. Multiple - family residential dwellings, including townhouses or attached row dwellings. 12 -6J -3: CONDITIONAL USES: The following conditional uses shall be permitted in the VVT district, subject to issuance of a conditional use permit in accordance with the provisions of chapter 16 of this title: Bed and breakfasts, as further regulated by section 12 -14 -18 of this title. Communications antennas and appurtenant equipment. Home child daycare facilities, as further regulated by section 12 -14 -12 of this title. Private unstructured parking. Public buildings, grounds and facilities. Public park and recreation facilities. Public utility and public service uses. Timeshare units. 12 -6J -4: ACCESSORY USES: The following accessory uses shall be permitted in the VVT district: Home occupations, subject to issuance of a home occupation permit in accordance with the provisions of section 12 -14 -12 of this title. Private greenhouses, tool sheds, playhouses, attached garages or carports, swimming pools, or recreation facilities customarily incidental to permitted residential and lodge uses. Other uses customarily incidental and accessory to permitted or conditional uses, and necessary for the operation thereof. 12 -6J -5: LOT AREA AND SITE DIMENSIONS: The minimum lot orsite area shall be ten thousand (10,000) square feet of total site area for a comprehensive townhouse development site. For individually platted townhouse lots within a townhouse development site, the minimum lot or site area shall be two thousand (2,000) square feet of total site area. Each site shall have a minimum frontage of twenty feet (20'). 12 -6J -6: SETBACKS: The minimum setback shall be twenty feet (20') from the front, side, and rear Ordinance No. 15, Series of 2010, first reading 10/5/201 7 -3 -3 property lines. There shall be no setback from property lines which exist between attached dwelling units. 12 -6J -7: HEIGHT: For a flat roof or mansard roof, the height of buildings shall not exceed forty five feet (45'). For a sloping roof, the height of buildings shall not exceed forty eight feet (48'). The initial eave height along a public street shall be as regulated by the Vail Village Master Plan. 12 -6J -8: DENSITY CONTROL: The existing number of legally established units on a property or twenty -five dwelling units peracre of total site area, whichever is greater, shall be allowed. A dwelling unit in a multiple - family or townhouse building may include one attached accommodation unit no larger than one -third (1/3) of the total floor area of the dwelling. 12 -6J -9: GROSS RESIDENTIAL FLOOR AREA: Not more than one hundred thirty five (135) square feet of gross residential floorarea (GRFA) shall be permitted foreach one hundred (100) square feet of total site area. Attached or row dwellings in this zone district shall not be entitled to additional gross residential floor area under section 12 -15 -5: Additional Gross Residential Floor Area (250 Ordinance), or section 12 -15 -4: Interior Conversions of this title. There shall be no exclusion to gross residential floor area granted for enclosed garage space within individual dwelling units as referenced in Chapter 15 Gross Residential Floor Area. 12- 6J -10: SITE COVERAGE: Site coverage shall not exceed fifty five (55 %) of the total site area. 12- 6J -11: LANDSCAPING AND SITE DEVELOPMENT: At least twenty percent (20 %) of the total site area shall be landscaped. 12- 6J -12: PARKING AND LOADING: Off street parking and loading shall be provided in accordance with chapter 10 of this title. Required parking legally established within the street right -of -way may be continued subject to a revocable right -of -way permit issued by the Town of Vail. SECTION 5 . Section 12- 10 -17 -B, Lease Qualifications, Vail Town Code, is hereby amended in part as follows (text to be deleted is in stp text that is to be added is bold, and sections of text that are not amended have been omitted): 1. Any owner, occupant or building manager who owns, occupies or manages ten (10) or more private parking spaces located in commercial core 1, commercial core 2, commercial core 3, high density multiple - family, Vail Village Townhouse, public accommodations, Lionshead mixed use 1, Lionshead mixed use 2, or special development zone districts and provides sufficient parking for use by employees may apply to the administrator of the town for a permit to lease parking spaces. SECTION 6 . Section 12 -13 -4, Requirements by Employee Housing Unit (EHU) Type, Vail Town Code, is hereby amended in part as follows (text to be deleted is in s t p ik e th pe g , text that is to be added is bold, and sections of text that are not amended have been omitted): Ordinance No. 15, Series of 2010, first reading 4 10/5/2010 7-3-4 Type Residential cluster The EHU The EHU n/a n/a Per A. Dwelling The EHU is III Low density multiple - family may be is chapter unit: 300 sq. excluded Medium density multiple- sold or excluded 10 of ft. minimum from the family transferred from the this title and 1,200 calculation High density multiple - family separately. calculatio as a sq. ft. of density. Vail Village townhouse n of dwelling maximum. Public accommodation GRFA. unit. Commercial core 1 Commercial core 2 B. Dormitory Commercial core 3 unit: Commercial service center 200 sq. Arterial business ft. Heavy service mi m for for Lionshead mixed use 1 Lionshead mixed use 2 each Public accommodation 2 person Ski base /recreation occupyi Ski base /recreation 2 ng the Special development district EHU. Parking district General use SECTION 7 . Section 12 -15 -2, GRFA Requirements By Zone District, Vail Town Code, is hereby amended in part as follows (text to be deleted is in stpikethpe g1 text that is to be added is bold, and sections of text that are not amended have been omitted): Zone Districts + GRFA Credits (Added To Results Of GRFA Ratio Application Of Percentage) HR r0,25 of site <_ 10,000 sq. ft., plus I None Hillside residential of site area > 10,000 and <_ 22,000 sq. ft., plus of site area > 22,000 sq. ft. SFR ' 0.40 of site area :5 10,000 sq. ft., plus None Single- family residential 10.13 of site area > 10,000 sq. ft. R 0.46 of site area <_ 10,000 sq. ft., plus None Two - family residential 0.38 of site area > 10,000 and <_ 15,000 sq. ft., plus 0.13 of site area > 15,000 and <_ 30,000 sq. ft., plus 0.06 of site area > 30,000 sq. ft. PS 0.46 of site area <_ 10,000 sq. ft., plus None Two - family primary/ 0.38 of site area > 10,000 and <_ 15,000 sq. ft., plus secondary residential 0.13 of site area > 15,000 and <_ 30,000 sq. ft., plus 0.06 of site area > 30,000 sq. ft. (the secondary unit shall not exceed 40% of the allowable GRFA) RC 0.36 of buildable area None Residential cluster LDMF 0.44 of buildable area None Low density multiple - family MDMF 0.56 of buildable area None Medium density multiple - family HDMF 0.76 of buildable area None High density multiple - family H Per planning and environmental commission None Housing approval VVT 1.35 of site area None (Vail Village townhouse 5 Ordinance No. 15, Series of 2010, first reading 10/5/2016 7 -3 -5 AN PA 0.80 of buildable area None Public accommodation CC1 r.80 of buildable area one Commercial core 1 rCC2 F 80 of buildable area None (Commercial core 2 CC3 0.30 of buildable area None Commercial core 3 CSC 0.40 of buildable area None Commercial service (GRFA shall not exceed 50% of the center total building floor area on any site) IABD 0.60 of buildable area None Arterial business HS None permitted None Heavy service LMU -1 2le a rea None Lionshead mixed use 1 LMU -2 2.5 of buildable area None Lionshead mixed use 2 A 2,000 sq. ft. None Agricultural and open (space OR None permitted None Outdoor recreation — 1 F None permitted None Parking GU Per planning and environmental commission None General use approval NAP None permitted None Natural area preservation SBR Per town council approval None Ski base /recreation SDD , Per underlying zoning or per None Special development development plan approval by town council districts SBR2 Per planning and environmental commission None Ski base /recreation 2 approval SECTION 8 . Section 12 -15 -3, Definition, Calculation, and Exclusions, Vail Town Code, is hereby amended in part as follows (text to be deleted is in stFikethF9UgI4, text that is to be added is bold, and sections of text that are not amended have been omitted): B. Within The Residential Cluster (RC), Low Density Multiple - Family (LDMF), Medium Density Multiple - Family (MDMF), High Density Multiple - Family (HDMF), A444 Housing (H), and Vail Village Townhouse (WT) Districts: SECTION 9 . Section 12 -15 -3, Definition, Calculation, and Exclusions, Vail Town Code, is hereby amended in part as follows (text to be deleted is in stFikethF9UgI4, text that is to be added is bold, and sections of text that are not amended have been omitted): C. Within All Districts Except The Hillside Residential (HR), Single - Family Residential (SFR), Two - Family Residential (R), Two - Family Primary/Secondary (PS), Residential Cluster (RC), Low Density Multiple - Family (LDMF), Medium Density Multiple - Family (MDMF), High Density Multiple - Family (HDMF), A-R4 Housing (H), and Vail Village Townhouse (WT) Districts: Ordinance No. 15, Series of 2010, first reading 10/5/201 7 -3 -6 SECTION 10 . Section 12 -15 -4, Interior Conversions, Vail Town Code, is hereby amended in part as follows (text to be deleted is in stp text that is to be added is bold, and sections of text that are not amended have been omitted): B. Applicability: Within all zone districts except the single - family residential (SFR), two - family residential (R), a+4 two - family primary/secondary residential (PS), and Vail Village Townhouse (WT) districts, dwelling units that meet or exceed allowable GRFA will be eligible to make interior conversions provided the following criteria are satisfied: 1. Any existing dwelling unit shall be eligible to add GRFA, via the "interior space conversion" provision in excess of existing or allowable GRFA including such units located in a special development district; provided, that such GRFA complies with the standards outlined herein. 2. For the purpose of this section, "existing unit" shall mean any dwelling unit that has been constructed prior to August 5, 1997, and has received a certificate of occupancy, or has been issued a building permit prior to August 5, 1997, or has received final design review board approval prior to August 5, 1997. SECTION 11 . Section 12 -15 -5, Additional Gross Residential Floor Area (250 Ordinance), Vail Town Code, is hereby amended in part as follows (text to be deleted is in s t p ik e th pe g I text that is to be added is bold, and sections of text that are not amended have been omitted): B. Applicability: The provisions of this section shall apply to dwelling units in all zone districts except the single - family residential (SFR), two - family residential (R), a+4 two - family primary/secondary residential (PS), and Vail Village Townhouse (WT) districts. SECTION 12 . Section 12 -24 -1, Inclusionary Zoning, Vail Town Code, is hereby amended in part as follows (text to be deleted is in stp text that is to be added is bold, and sections of text that are not amended have been omitted): B. This chapter shall apply to all new residential development and redevelopment located within the following zone districts, except as provided in section 12 -24 -5 of this chapter: 1. High density multiple - family (HDMF); 2. Vail Village Townhouse (WT) 3. Public accommodation (PA); 3- 4. Public accommodation 2 (PA -2); 4 5. Commercial core 1 (CC1); & 6. Commercial core 2 (CC2); 7. Commercial core 3 (CC3); 8. Commercial service center (CSC); 3- 9. Arterial business (ABD); 9- 10. General use (GU); 44 11. Heavy service (HS); 44- 12. Lionshead mixed use 1 (LMU -1); 4-2-. 13. Lionshead mixed use 2 (LMU -2); 4.3 14. Ski base /recreation (SBR); 44. 15. Ski base /recreation 2 (SBR2); 45- 16. Parking district (P); and Ordinance No. 15, Series of 2010, first reading 7 10/5/2010 7 -i -7 4-6-. 17. Special development (SDD). SECTION 13 . 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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 Vail 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. SECTION 15. The Vail Town Council hereby finds, determines and declares that this ordinance is necessary and proper for the health, safety and welfare of the Town of Vail and the inhabitants thereof. The Council's finding, determination and declaration is based upon the review of the criteria prescribed by the Town Code of Vail and the evidence and testimony presented in consideration of this ordinance. SECTION 16. The amendment of any provision of the Town Code of Vail as provided in this ordinance shall not affect any right which has accrued, any duty imposed, any violation that occurred prior to the effective date hereof, any prosecution commenced, nor any other action or proceeding as commenced under or by virtue of the provision amended. The amendment of any provision hereby shall not revive any provision or any ordinance previously repealed or superseded unless expressly stated herein. SECTION 17. 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. INTRODUCED, READ ON FIRST READING, APPROVED, AND ORDERED PUBLISHED ONCE IN FULL ON FIRST READING this 5 th day of October, 2010 and a public hearing for second reading of this Ordinance set for the 19 day of October, 2010, at 6:00 p.m. in the Council Chambers of the Vail Municipal Building, Vail, Colorado. Richard D. Cleveland, Mayor ATTEST: Lorelei Donaldson, Town Clerk Ordinance No. 15, Series of 2010, first reading 6 to/s/zotb 7 -3 -16 RESOLUTION NO. 23 Series of 2010 A RESOLUTION AMENDING CHAPTER VII, VAIL VILLAGE SUB - AREAS, EAST GORE CREEK SUB -AREA ( #6), VAIL VILLAGE MASTER PLAN TO INCLUDE RECOMMENDATIONS RELATED TO A NEW VAIL VILLAGE TOWNHOUSE (WT) DISTRICT, AND SETTING FORTH DETAILS IN REGARD THERETO. WHEREAS, Chapter VIII, Implementation and Amendment, Vail Village Master Plan, sets forth the procedures for amending the Town's Zoning Regulations; and, WHEREAS, on August 23, 2010 the Town of Vail Planning and Environmental Commission held a public hearing on the application to amend the Town's Zoning Regulations and establish the Vail Village Townhouse District and associated amendments to the Vail Village Master Plan; and, WHEREAS, the Town of Vail Planning and Environmental Commission forwarded a recommendation of approval, with modifications, of the proposed Vail Village Master Plan amendments to the Vail Town Council by a vote of 5 -0 -1; and, WHEREAS, the Vail Town Council finds and determines that the amendment is consistent with the applicable elements of the adopted goals, objectives and policies outlined in the Vail Comprehensive Plan and is compatible with the development objectives of the town; and, WHEREAS, the Vail Town Council finds and determines that the amendment to the Vail Village Master Plan furthers the general and specific purposes of the plan; and, WHEREAS, the Vail Town Council finds and determines that the amendment promotes the health, safety, morals, and general welfare of the town and promotes the coordinated and harmonious development of the town in a manner that conserves and enhances its natural environment and its established character as a resort and residential community of the highest quality. NOW THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO THAT: SECTION 1. Chapter VII, Vail Village Sub - Areas, East Gore Creek Sub -Area ( #6), Vail Village Master Plan, is hereby amended in part as follows (text to be deleted is in str text that is to be added is bold, and sections of text that are not amended have been omitted): EAST GORE CREEK SUB AREA ( #6) A number of the earliest projects developed in Vail are located in the East Gore Creek Sub -Area. Development in this area is exclusively multi - family condominium and townhouse projects with a very limited amount of support commercial. Surface parking is found at each site, which creates a very dominant visual impression of the sub -area. While the level of development in East Gore Creek is generally greater than that allowed under existing zoning, this area has the potential to absorb density without compromising the character of the Village. This development could be accommodated by partial infills of existing parking areas balanced by greenspace additions or through increasing the height of existing buildings (generally one story Resolution No. 23, Series of 2010 10/5/2010 7 -4 -1 over existing heights). In order to maintain the architectural continuity of projects, additional density should be considered only in conjunction with the comprehensive redevelopment of condominium projects or redevelopment of individual townhouse units. There are several townhouse projects within this subarea which were platted and /or constructed under Eagle County jurisdiction. These townhouse projects are nonconforming with the many of development standards (including, but not limited to density, GRFA, setbacks, site coverage, landscape area) of the Town Zoning Regulations. It is recommended that greater flexibility with the standards may be necessary to allow these townhouse projects to redevelop. This flexibility may be achieved through the approval of variances or the establishment of a townhouse zone district. However, the granting of variances or the establishment of a townhouse zone district should consider potential impacts to the character of the neighborhood. Clearly, one of the main objectives to consider in the redevelopment of any property should be to improve existing parking facilities. This includes satisfying parking demands for existing and additional development °. �v°" as d e6 i g R GORSi` era+ionc pelt tO Fedev°'�Tea+ FOPS) � . The opportunity to introduce below grade structured parking will greatly improve pedestrianization and landscape features in this area. This should be considered a goal of any redevelopment proposal in this sub -area. Development or redevelopment of this sub -area may w4 attract additional traffic and population into this area and may have significant impacts upon portions of Sub -Areas 7 and 10. #6 -1 °° °i,_or+i ° Ir,Fi" Texas Townhomes/Vail Trails Additional floor or residential development over what is existing. d it +r\ ho GGRG GRIP OR nr\N lRGtir\ri Ynii +h -A G9Rq ProheRGiVe Fede ieIGPmori+ of eanh PFe}eet To encourage redevelopment, the Vail Village Townhouse (VVT) District was established to grant additional floor area over what was existing. A key factor in the redevelopment of these properties will be to relocate required parking in underground structures or a single unified structure serving all adjacent properties. This will allow for increased landscaping and overall improvements to pedestrian ways to create a park -like setting on the surface in this area. In order to implement increased floor area, either the initial eave height along the south elevation of buildings should be at 35' in height or less or there shall be a horizontal stepback in building facades of 2' to 3' in the first 35' of building height. The intent of this is to maintain the existing character of the neighborhood, with the appearance of 2 -3 story buildings along the front elevation. In all cases, the mature pines along Gore Creek shall be maintained. Stream impact must be considered. Special emphasis on 1.2, 2.3, 2.6, 3.1, 5.1, 6.2. #6 -2 Manor Vail Possible residential infill on portions of existing surface parking area and additional floor to the two northern most buildings adjacent to Gore Creek. Infill project must include addition of greenspace adjacent to East Mill Creek and other adjoining pedestrian areas. Height of structure shall be limited to prevent impacts on view to the Gore Range from Village core and Vail Valley Drive. Present and future parking demand to be met on site. Traffic considerations must be addressed. Special emphasis on 1.2, 2.3, 2.6, 3.1, 4.1, 5.1, 6.1 Resolution No. 23, Series of 2010 10/5/2010 7 -4 -2 #6 -3 Vail Row Houses To encourage redevelopment, the Vail Village Townhouse (WT) District was established to grant additional floor area over what was existing. It is recognized as not being practical to require subsurface parking in this area due to the limited site area, and the impact of individual units constructing garages could have on the appearance and character of the area. As a result, it is recommended that enclosed parking be considered on a case -by -case basis, and may be limited to single -car garages (with the depth to allow for tandem parking when possible). When possible, driveway widths shall be minimized and increased areas for landscaping should be considered. Surface parking should be improved when redevelopment occurs using high quality landscape paver treatments and the current "post and chain" parking delineation should be replaced with other methods to identify private parking. In order to implement increased floor area, either the initial eave height along the south elevation of buildings should be at 35' in height or less or there shall be a horizontal step -back in the building facade of 2' to 3' in the first 35' of building height. The intent of this is to maintain the existing character of the neighborhood, with the appearance of 2 -3 story buildings along the front elevation. Improvement of the stream corridor consistent with Town policies should be considered with redevelopment applications. Special emphasis on 1.2, 2.3, 2.6, 3.1, 5.1, 6.2. EA 5 i t EAST �. rjL- }' 1 719EEK INTRODUCED, PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Vail held this 19th day of October, 2010. Richard D. Cleveland, Mayor of the Town of Vail, Colorado ATTEST: Lorelei Donaldson, Town Clerk Resolution No. 23, Series of 2010 10/5/2010 7 -4 -3 PLANNING AND ENVIRONMENTAL COMMISSION August 23, 2010 r: 1:OOpm �1'1WNQF�'t�'' TOWN COUNCIL CHAMBERS / PUBLIC WELCOME 75 S. Frontage Road - Vail, Colorado, 81657 MEMBERS PRESENT MEMBERS ABSENT Luke Cartin Michael Kurz Bill Pierce Henry Pratt Tyler Schneidman David Viele arrived at 1:10 Site Visits: None Water Quality Presentation — Kirby Wynn, ERWC Water Program Director 60 minutes Mr. Wynn gave a presentation highlighting changes in the Gore Creek watershed. Gore Creek was recently put on the impaired list of waterways in Colorado. He talked about how stream health is measured and quantified. He spoke to the efforts to increase the capture of sand used for traction on 1 -70 prior to it reaching Black Gore and Gore Creeks. Commissioner Pratt inquired as to the impacts of the beetle killed trees loss of needles and the impact to run -off needle accumulation, etc. Mr. Wynn described a concern that when a fire comes through the fire will burn very hot and result in a burn that denudes the topography greater than a typical forest fire thus likely resulting in increased run -off of water. Commissioner Cartin inquired as to the Town's possession of a complete inventory of point source discharges and who and what is being discharged. Bill Carlson, Environmental Officer, described what the Town had and still needed to complete. Commissioner Kurz suggested that Mr. Wynn remain in contact with Town staff, so that communication is open and involved. Commissioner Pierce inquired into the Town's requirements for parking areas and filtering of run- off and the ability to retro - actively apply current standards to older parking lots. 60 minutes 1. A request for a recommendation to the Vail Town Council on prescribed regulation amendments to Chapter 12 -6, Residential Districts, Vail Town Code, pursuant to Section 12 -3 -7, Amendment, Vail Town Code, to establish a new zone district, Vail Village Townhouse (VVT) District, and setting forth details in regard thereto; and a request for a recommendation to the Vail Town Council on proposed amendments to Chapter VII, Vail Village Sub - Areas, East Gore Creek Sub - Area ( #6), Vail Village Master Plan, pursuant to Chapter VIII, Implementation and Amendment, Vail Village Master Plan, to include recommendations related to a new Vail Village Townhouse (WT) District, and setting forth details in regard thereto. (PEC100011, PEC100035) Applicant: Chris Galvin, represented by K.H. Webb Arch itects /Mauriello Planning Group Planner: Bill Gibson Pa 1 10/5/2010 7 -5 -I ACTION: Recommendation of approval MOTION: Viele SECOND: Kurz VOTE: 5 -0 -1 (Pratt Recused) CONDITION(S): 1. The Planning and Environmental Commission forwards a recommendation of approval to the Vail Town Council based upon the modifications identified in the Staff memorandum and the following: • The gross residential floor area standards should allow a 1.35 GRFA ratio. • The parking standards should include the applicant's proposed language allowing parking in the front setback and street right -of -way. • The applicant's proposed language about the Town vacating the Meadow Drive street right -of -way should be removed from the Vail Village Master Plan amendment. • The setback standards should be 20 feet as recommended in the Staff memorandum. Commissioner Pratt recused and departed due to his firms involvement with an owner in the Vail Row Houses. Bill Gibson gave a presentation per the staff memorandum. Dominic Mauriello, Mauriello Planning Group, representing the applicant, gave a presentation highlighting the support of various associations that could be affected by the adoption of a new zone district. He covered three topics with which he differed from the Town staff's recommendation for amended text. Those topics included setbacks, GRFA, and parking. Dolph Bridgewater, owner of a Unit 11 in the Vail Row Houses, stated that he sees value in some of what the applicant is proposing; however, he is concerned about the new potential size of his adjacent neighbors' units at the Vail Row Houses. He then read a prepared written statement highlighting the history of the application and his concerns. He is concerned that the applicant's proposal will "Solarisize" the Vail Row Houses, and he supports limiting the allowable GRFA to a ratio or 1.00 or 1.15. Scott Lindall, GPSL Architects, representing Unit 13 of the Vail Row Houses, wanted to go on the record with his support of the 1.5 GRFA ratio, the continuance of parking in the right -of -way and the ability to have a three foot side setback in order to have a greater number of existing units comply. Jim Lamont, Vail Homeowners Association, inquired into staff's recommendation and a potential change in process. Warren Campbell, Chief of Planning, responded that Staff has not changed the process, but simply suggested that if the existing bulk and mass is desired to be maintained a ratio of 1.25 is appropriate based on our research. If the Commission desired to provide further incentives for redevelopment, GRFA ratios above 1.25 could accomplish that policy. Dolph Bridgewater stated that GRFA is the key factor in limiting the size of the units, not building height. He believes the change in Staff's recommendation from a ratio of 1.00 to 1.25 in the past two weeks will have impacts. Dominic Mauriello stated for the record that this application has been vetted very extensively as exhibited in Mr. Bridgewater's testimony. He restated the goal of not reducing the development potential for any of the potentially effected units. He again stated that another goal was to create Page 2 10/5/2010 7 -5 -2 equity in GRFA, for example today Mr. Bridgewater's unit is allowed a 1.33 GRFA limit but another unit at the Vail Row Houses is only allowed 0.88 GRFA. Commissioner Pierce stated that the creation of a unique zone district is appropriate. He has concerns with the setbacks regulations as proposed by the applicant in the new zone district. He stated his belief that there should be language in the district allowing the existing parking to continue, but not pass regulations that extend rights to parking off the various properties. He felt any conversation regarding the Town vacating street right -of -way should occur in another venue. He supports a GRFA limit of 1.25 in the new zone district. Commissioner Kurz agreed with Commissioner Pierce, with the exception that he believes a 1.35 GRFA ratio is appropriate to reduce the number of nonconformities and create equity. He stated that the properties being discussed are in an older part of Vail that needs upgrading. Commissioner Schneidman agreed with the comments of Commissioner Kurz and the GRFA limit in the new zone district should be a 1.35 ratio. Commissioner Cartin agreed with the other Commissioners that a new zone district is needed, but there still may be a need for some future variances. He agreed with Commissioner Pierce that discussion of about vacating street right -of -ways should not be part of this application. He believes the applicant's proposed 1.5 GRFA ratio is too high. Commissioner Viele noted that fundamentally this application will solve problems of the past and will streamline the review process. He identified creating equity as a goal of the new zone district. He agreed with Commissioner Kurz that a 1.35 GRFA ratio is appropriate for the new zone district. He is not in favor of discussing the Town vacating street right -of -ways in this forum. He believes there should be acknowledgement that the existing parking in the right -of -way should be allowed to continue. Commissioner Viele noted that Staff's change in memo format was more appropriate for this type of legislative application than past memos. Commissioner Kurz agreed with Commissioner Viele. 5 minutes 2. A request for an amendment to an Approved Development Plan, pursuant to Section 12- 61 -11, Development Plan Required, Housing Zone District, Vail Town Code, to allow for revisions to the required landscape plan and geologic hazard mitigation plan for the redevelopment of the easternmost 5.24 acres of the Timber Ridge Village Apartments; and a request for the review of a variance, from Section 14 -5 -1, Minimum Standards, Parking Lot and Parking Structure Design Standards for All Uses, Vail Town Code, pursuant to Chapter 12 -17, Variances, Vail Town Code, to allow for a crossover drive aisle width of less than thirty -feet (30') within the required parking structure, located at 1280 North Frontage Road /Lots 1 -5, Block C, Lions Ridge Subdivision Filing 1,and setting forth details in regard thereto. (PEC1 0001 8/PEC1 00019) Applicant: Vail Timber Ridge L.L.C. Planner: George Ruther ACTION: Table to September 13, 2010 MOTION: Viele SECOND: Kurz VOTE: 6 -0 -0 5 minutes 3. A request for a final recommendation to the Vail Town Council for prescribed regulations amendments to Title 12, Zoning Regulations and Title 14, Development Standards, Vail Town Code, pursuant to Section 12 -3 -7, Amendment, Vail Town Code, to provide regulations that will Page 3 10/5/2010 7 -5 -3 implement sustainable building and planning standards, and setting forth details in regard thereto. (PEC090028) Applicant: Town of Vail Planner: Rachel Friede ACTION: Table to September 13, 2010 MOTION: Viele SECOND: Kurz VOTE: 6 -0 -0 4. Approval of August 9, 2010 minutes MOTION: Viele SECOND: Pratt VOTE: 6 -0 -0 5. Information Update 6. Adjournment MOTION: Viele SECOND: Kurz VOTE: 5 -0 -0 The applications and information about the proposals are available for public inspection during regular office hours at the Town of Vail Community Development Department, 75 South Frontage Road. The public is invited to attend the project orientation and the site visits that precede the public hearing in the Town of Vail Community Development Department. Please call (970) 479 -2138 for additional information. Sign language interpretation is available upon request with 24 -hour notification. Please call (970) 479 -2356, Telephone for the Hearing Impaired, for information. Community Development Department Published August 20, 2010, in the Vail Daily. Page 4 10/5/2010 7 -5 -4 MEMORANDUM TO: Planning and Environmental Commission FROM: Community Development Department DATE: August 23, 2010 SUBJECT: A request for a recommendation to the Vail Town Council on prescribed regulation amendments to Chapter 12 -6, Residential Districts, Vail Town Code, pursuant to Section 12 -3 -7, Amendment, Vail Town Code, to establish a new zone district, Vail Village Townhouse (VVT) District, and setting forth details in regard thereto; and a request for a recommendation to the Vail Town Council on proposed amendments to Chapter VII, Vail Village Sub - Areas, East Gore Creek Sub -Area ( #6), Vail Village Master Plan, pursuant to Chapter VIII, Implementation and Amendment, Vail Village Master Plan, to include recommendations related to a new Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. (PEC100011, PEC100035) Applicant: Chris Galvin, represented by K.H. Webb Arch itects /Mauriello Planning Group Planner: Bill Gibson I. SUMMARY The applicant, Chris Galvin, represented by K.H. Webb Architects and Mauriello Planning Group, is proposing to establish a new residential zone district, the Vail Village Townhouse (VVT) District. While there is currently no application to apply this proposed zone district to any specific property, the applicant believes that in the future, this new zone district could be applied to the existing Vail Row Houses, Texas Townhomes, Vail Trails East, and the Vail Trails Chalets townhouse developments. Each of these existing townhouse style properties are currently zoned High Density Multiple - Family (HDMF) District and share similar existing legally non - conforming zoning issues. As discussed at the Planning and Environmental Commission's previous public hearings on this application and a previous special development application, the existing townhouse developments in Vail Village such as the Vail Row Houses, Texas Townhomes, Vail Trails East, and Vail Trails Chalets are zoned High Density Multiple Family (HDMF) District. These existing townhouse developments are legally non- conforming in regard to several development standards of the HDMF District including setbacks, density, landscape area, parking, etc. Some of the individual units in these townhouse developments, including units 7 -13 Vail Row Houses and the Texas Townhomes, were subdivided into individual townhouse lots years ago under Eagle County jurisdiction. The standards of the HDMF District were intended to be applied to comprehensive development sites and were not designed to be applied to the individual units of a townhouse building. 1 10/5/2010 7-6 -1 The Town of Vail has granted multiple variances to facilitate the remodeling of individual townhouse units which has resulted in the inconsistent application of zoning standards to the various existing townhouse properties. Rather than perpetuate the current system of requiring variances for most townhouse unit remodels, the applicant is proposing to establish a new zone district specifically designed to regulate the existing townhouse properties in Vail Village. The applicant is proposing to establish a new zone district to simplify the development review process and to create incentives for redevelopment. In conjunction with the proposed new zone district, the applicant is also proposing to incorporate recommendations related to a new Vail Village Townhouse (VVT) District in the Vail Village Master Plan. In reviewing the applicant's request, the Planning and Environmental Commission must answer the following questions: • Should the Town of V it dopt new zonin district specific Ily desi ned to re ul to existin townhouse properties in V it Vill a or should these properties continue to be zoned Hi h Density Multiple F mily District? • If the Town of V it were to dopt new zone district, should this district incentivise redevelopment of the existin townhouse properties in V it Vill e? • If the Town of V it were to dopt new zone district, should this district m int in the existin ch r cter of the townhouse properties in V it Vill e? • If the Town of V it were to dopt new zone district to incentivise redevelopment nd m int in the existin ch r cter of townhouse properties in V it Vill e, do the followin proposed items chieve th t policy? ■ Incre sin development ri hts to reduce nonconformities nd the need for future v ri nces. • Incre sin development ri hts to reduce inequities cre ted by previous v ri nces nd previous 250 Ordin nce /Interior Conversion dditions. • Est blishin zonin st nd rds th t differenti to between townhouse buildin s nd individu Ily pi tted townhouse lots within buildin . • sin lot re c Icul tions on "site re " r ther th n the more restrictive "build ble re ". • Reducin the minimum lot re st nd rds for individu Ily pi tted townhouse lots within buildin . 2 10/5/2010 7 -6 -2 • Elimin tin side setb ck requirements between djoinin individu Ily pl tted townhouse lots within buildin . • Reducin setb ck requirements to m tch the existin built conditions. • sin density c Icul tions on "site re " r ther th n the more restrictive "build ble re ". • Incre sin the How ble density st nd rds to m tch existin built conditions. • sin GRFA c Icul tions on "site re " r ther th n the more restrictive "build ble re ". • F cilit tin "demo /rebuild" redevelopment without the loss of existin development potenti I by elimin tin "250 Ordin nce" nd "Interior Conversion" dditions nd djustin the GRFA formul to include n equiv lent floor re potenti I. • Incre sin the How ble GRFA bove current levels. • Reducin the minimum I ndsc pe re st nd rds. • Modifyin the p rkin st nd rds to How existin surf ce p rkin conditions to continue. Based upon Staff's review of the criteria outlined in Section V of this memorandum and the evidence and testimony presented, should the Planning and Environmental Commission choose to forward a recommendation of approval for this request subject to the findings noted in Section VI of this memorandum, Staff recommends the Commission consider adopting the modifications identified in Section III of this memorandum. The applicant's request has been attached for review (Attachment A). II. ACKGROUND The Planning and Environmental Commission held public hearing work sessions on this application on April 26, May 10, June 14, and July 12, 2010. The applicant has revised their proposal based upon the public comment and Commissioner input from these hearings. III. DESCRIPTION OF REQUEST PROPOSED NEW ZONE DISTRICT The following is a summary of the applicant's proposed regulation amendments to establish the new Vail Village Townhouse (VVT) District. As discussed at the Planning and Environmental Commission's last hearing, the applicant has included "Vail Village" in the name of the proposed district to further clarify the intent of this new zone district and to help limit the scope of its future application to properties within the Vail Village 3 10/5/2010 7 -6 -3 area such as the discussed Vail Row Houses, Texas Townhomes, Vail Trails East, and the Vail Trails Chalets properties. By its name, this district is not intended to be applied to townhouse developments in other Vail neighborhoods. The applicant's proposed text is in italic font, followed by a Staff analysis. Any Staff recommended modifications to the applicant's proposed text are in bold font and text recommended to be deleted is in 4"&ethF9t4g4 font. • 12 -6J -1: PURPOSE: Vail Village Townhouse District is intended to provide sites and maintain the unique character of existing townhouse and row house development in the Vail Village Master Plan area of the Town of Vail. The Vail Village Townhouse district is intended to ensure adequate light, air, open space, and other amenities commensurate with attached or row dwellings, and to maintain the desirable residential and resort qualities of the zone district by establishing appropriate site development standards. Certain nonresidential uses are permitted as conditional uses, which relate to the nature of Vail as a winter and summer recreation and vacation community and, where permitted, are intended to blend harmoniously with the residential character of the zone district. This zone district was specifically developed to regulate existing townhouse and row house properties that were legally nonconforming in the High Density Multiple Family District. The Vail Village Townhouse District is meant to encourage and provide incentives for redevelopment of existing townhouse and row house properties in accordance with the Vail Village Master Plan. The incentives in this zone district include differentiating between properties subdivided and regulated as a comprehensive townhouse building from those properties subdivided and regulated as individual townhouse lots within a building, reductions in lot area standards, reductions in setbacks, increases in density, increases in gross residential floor area (GRFA), reductions in landscaping area, and reductions in parking design requirements. More restrictive building height requirements have been applied to these properties in accordance with the Vail Village Master Plan to maintain the existing character of townhouse and rowhouse development in Vail Village. Staff Analysis: Staff believes the proposed purpose statement is consistent with the format of the Town's zoning regulations and communicates the intent of the new district. • 12 -6J -2: PERMITTED USES: The following uses shall be permitted in the VVT district: Employee housing units, as further regulated by chapter 13 of this title. Multiple- family residential dwellings, including to townhouses or attached row dwellings. 12 -6J -3: CONDITIONAL USES: The following conditional uses shall be permitted in the VVT district, subject to issuance of a conditional use permit in accordance with the provisions of chapter 16 of this title: Bed and breakfasts, as further regulated by section 12 -14 -18 of this title. Communications antennas and appurtenant equipment. Home child daycare facilities, as further regulated by section 12 -14 -12 of this title. 4 10/5/2010 7 -6 -4 Private unstructured parking. Public and private schools. Public buildings, grounds and facilities. Public park and recreation facilities. Public utility and public service uses. Timeshare units. 12 -6J -4: ACCESSORY USES: The following accessory uses shall be permitted in the VVT district: Home occupations, subject to issuance of a home occupation permit in accordance with the provisions of section 12 -14 -12 of this title. Private greenhouses, tool sheds, playhouses, attached garages or carports, swimming pools, or recreation facilities customarily incidental to permitted residential and lodge uses. Other uses customarily incidental and accessory to permitted or conditional uses, and necessary for the operation thereof. Staff Analysis: The applicant is proposing that many of the land uses allowed in the High Density Multiple Family (HDMF) District also be allowed in the new townhouse district. The applicant is not proposing to allow lodges, dog kennels, funiculars, private clubs, public parking, religious institutions, or ski lifts in this new townhouse district. Staff generally supports the applicant's approach of allowing similar uses in the new townhouse district as are allowed in the HDMF District. At its July 12, 2010, the Planning and Environmental Commission determined that the applicant's proposed permitted, conditional, and accessory uses are appropriate in the new townhouse zone district. • 12 -6J -5: LOT AREA AND SITE DIMENSIONS: The minimum lot or site area shall be ten thousand (10,000) square feet of site area for a comprehensive development site. For individually platted townhouse lots within a development site, the minimum lot or site area shall be two thousand (2,000) square feet of site area. Each site shall have a minimum frontage of twenty feet (20). Staff Analysis: The proposed minimum lot size requirements of the new townhouse district distinguish between those townhouse units considered to be part of a larger, comprehensive development site and those townhouse units considered individual lots /development sites. This concept was supported by the Planning and Environmental Commission at its July 12, 2010 public hearing. Staff recommends the proposed text be modified to better distinguish these two scenarios. At its July 12, 2010 public hearing, the Planning and Environmental Commission determined that to simplify the development review process by eliminating the need for two different lot area calculations, the minimum lot size standards in the new townhouse district should be based upon total site area rather than "buildable area" as in the High Density Multiple Family District. "Buildable area" is that portion of a lot not located in a floodplain, red avalanche hazard, or on slopes greater than 40 . Since only minor differences exist between site area and buildable area for the Vail Row Houses, Texas Townhomes, Vail Trails East, and the Vail Trails Chalets due to the presence of the Gore Creek floodplain in limited areas of those properties, Staff also supports this proposed methodology. 5 10/5/2010 7 -6 -5 As directed by the Planning and Environmental Commission at it July 12, 2010 public hearing, the applicant has revised the proposed text amendment to include a minimum street frontage standard similar to other residential zone districts. Staff recommends the proposed district include a minimum lot dimension standard similar to the Town's other residential zone districts. The Town's other residential zone districts require lots to be of a size and shape capable of enclosing an eighty foot (80') by eighty foot (80') square within its boundaries. Given the size and dimensions of the existing townhouse lots in Vail Village, Staff recommends each site be capable of enclosing a twenty foot (20') by forty foot (40') rectangle. Staff recommends the following modifications to the proposed lot area and site dimension standards: fer o nepgpFehonsive deval t s ite. CPr inr414P - h4a#y plotted t P I ninhP_iic+a (-2 &qHaFe feet A-f 8.4e -air E-aG.4 Site 4-awe a RW . R! I R314R3 Wage ef twee i foot (209 Each site shall have a minimum frontage of twenty feet (20'). Each development site shall be of a size capable of enclosing a rectangle area of twenty feet (20) by forty feet (40') within its boundaries. The minimum lot or site area for those properties subdivided and regulated as a comprehensive townhouse building shall be ten thousand (10,000) square feet. The minimum lot or site area for those properties subdivided and regulated as individual townhouse lots within a building shall be two thousand (2,000) square feet of site area. • 12 -6J -6: SETBACKS: The minimum setback shall be twenty feet (20) from the front, side, and rear property lines. There shall be no setback from property lines which exist between attached dwelling units. It is recognized that many existing townhouse properties have setbacks of less than 20'. In these cases, structures that are demolished may be rebuilt to the prior existing setback dimension. Staff Analysis: The applicant is proposing to maintain the existing 20 foot setback requirements of the High Density Multiple Family District around the perimeter of townhouse developments. The applicant is proposing to eliminate the setback requirements between individual townhouse units. Staff believes a zero setback policy between units is necessary for the successful implementation of a townhouse zone district. At its July 12, 2010 public hearing the Planning and Environmental Commission recommended that encroachments into the required setbacks should be addressed through the variance review process. The Commission did not 6 10/5/2010 7 -6 -6 support creating setback standards in this new zone district based solely upon the existing built conditions at the existing Vail Row Houses, Texas Townhomes, Vail Trails East, and the Vail Trails Chalets townhouse developments. Staff believes the applicant's proposed text should be modified to remove the statement about non - conforming structures as follows: The minimum setback shall be twenty feet (20) from the front, side, and rear property lines. There shall be no required side setback for properties subdivided and regulated as individual townhouse lots within a building from nrene ly linos whinh exist between attanheel e1weging units It is renervni�ei^l Gases st- UGtures that are demelisheel may he rehiiilt to the Wrier existing sethaGk . I'm ter. • 12 -6J -7: HEIGHT. For a flat roof or mansard roof, the height of buildings shall not exceed forty five feet (45'). For a sloping roof, the height of buildings shall not exceed forty eight feet (48). The initial eave height along a public street shall be as regulated by the Vail Village Master Plan. Staff Analysis: The applicant is proposing to continue the 45 foot flat roof and 48 foot sloping roof building height limits of the High Density Multiple Family District in the new townhouse district. Staff supports the applicant's proposal to maintain these allowable building height standards. The applicant is proposing that an initial roof eave height limit be regulated by the Vail Village Master Plan. Staff agrees with the applicant's intent of minimizing the perceived bulk and mass of townhouse structures from the street. Staff believes the Vail Village Master Plan should quantify the appropriate eave heights for those specific properties being discussed during the review of this text amendment application. • 12 -6J -8: DENSITY CONTROL: The existing number of legally established units on a property or twenty -five dwelling units per acre of total site area, whichever is greater, shall be allowed. A dwelling unit in a multiple - family or townhouse building may include one attached accommodation unit no larger than one -third (113) of the total floor area of the dwelling. Staff Analysis: Similar to the HDMF District, the applicant is proposing that the density in the new townhouse zone district to be 25 dwelling units per acre. However, in the HDMF District, the allowable density is based upon acres of "buildable area" rather than total lot area. As discussed above, minor differences exist between the site area and buildable area of the Vail Row Houses, Texas Townhomes, Vail Trails East, and the Vail Trails Chalets due to the presence of 100 -year floodplain on portions of those properties. At its July 12, 2010 public hearing the Planning and Environmental Commission supported this proposal to utilize total site area, rather than buildable area, to simplify the development review process. The applicant is proposing that the allowable density be the greater of 25 units per acre and "the existing number of legally established units on a property ". The 7 10/5/2010 7 -6 -7 Town Vail currently quantifies allowable density based upon existing built conditions, rather than solely upon a number of units per acre, in Lionshead through the density control standards of the Lionshead Mixed Use 1 and Lionshead Mixed Use 2 Districts. While this methodology is currently used in another zone district, Staff acknowledges that establishing an existing built condition as the allowable density standard in the Vail Village Townhouse District will complicate the development review process and create inequities between similarly zoned properties. • 12 -6J -9: GROSS RESIDENTIAL FLOOR AREA: Not more than one hundred fifty (150) square feet of gross residential floor area (GRFA) shall be permitted for each one hundred (100) square feet of total site area. Attached or row dwellings in this zone district shall not be entitled to additional gross residential floor area under section 12 -15 -5: Additional Gross Residential Floor Area (250 Ordinance), or section 12 -15 -4: Interior Conversions of this title. There shall be no exclusion to gross residential floor area granted for enclosed garage space within individual dwelling units as referenced in Chapter 15 Gross Residential Floor Area. Staff Analysis: The Planning and Environmental Commission held a work session at its June 14, 2010 public hearing to discuss gross residential floor area (GRFA) in the proposed townhouse zone district. The subject of GRFA was again discussed at the Commission's July 12, 2010 public hearing. Based upon comments from the Commission from those hearings, the applicant is proceeding with their request to allow 150 square feet of GRFA for each 100 square feet of total site area (1.5 GRFA ratio). In the High Density Multiple Family District, the allowable GRFA is based upon the "buildable area" rather than total lot area. As discussed above, minor differences exist between the site area and buildable area of the Vail Row Houses, Texas Townhomes, Vail Trails East, and the Vail Trails Chalets due to the presence of the 100 -year floodplain on limited portions of those properties. At its July 12, 2010 public hearing the Planning and Environmental Commission recommended using total site area for the GRFA calculations to simplify the development review process. As discussed in the upcoming parking and loading standards analysis, the Planning and Environmental Commission does not support the construction of first floor garages at the existing townhouse developments, and at its July 12, 2010 recommended that the applicant eliminate the current GRFA deductions for garages. The applicant is proposing to exclude units in the townhouse zone district from utilizing the "250 Ordinance" or the "Interior Conversion" additional GRFA provisions of the Vail Town Code. Staff believes this policy will simplify the development review process and eliminate the potential loss of development rights associated with a demo /rebuild of an existing townhouse unit that has previously constructed 250 Ordinance or Interior Conversion additions. Staff believes this policy of excluding townhouse units from utilizing the 250 Ordinance and the Interior Conversion provision, and instead adjusting the allowable GRFA formulas to prevent a loss of development rights, creates equity among property owners in the same zone district. 8 10/5/2010 7-6 -a The applicant's proposed 1.5 GRFA ratio is not a doubling of the current 0.76 High Density Multiple Family District GRFA ratio due to the current 250 Ordinance and Interior Conversion provisions of the Vail Town Code. The 250 Ordinance and Interior Conversion provision allow property owners to add floor area to existing dwelling units beyond the allowable 0.76 ratio. Staff believes the applicant's proposed 1.5 GRFA ratio more than compensates the majority of the existing Vail Village townhouse properties for the proposed loss of 250 Ordinance and Interior Conversion additional floor area opportunities. The applicant intends the proposed 1.5 GRFA ratio to also be a floor area incentive for the redevelopment of existing townhouse properties. In 2004, the Town of Vail amended the GRFA standards in the residential zone districts and eliminated eligibility to utilize the 250 Ordinance and Interior Conversion in the Hillside, Single Family, Two - Family, and Two - Family Primary /Secondary Residential Districts. The allowable GRFA formulas in these districts were adjusted to compensate for these exclusions. In 2004, the newly adopted "basement deduction" compensated for the loss of crawlspace Interior Conversion opportunities and the GRFA formulas were increase by 15 to compensate for the loss of attic Interior Conversion opportunities. The GRFA formulas were also adjusted for the loss of 250 Ordinance opportunities based upon conforming density. The first reading ordinance amending GRFA in 2004 eliminated eligibility to utilize the 250 Ordinance and Interior Conversion provisions in the multiple family districts. The High Density Multiple Family District was proposed to be modified to a GRFA ratio of 1.0 to compensate for these exclusions. The second, and final, reading ordinance preserved the 250 Ordinance and Interior Conversion opportunities, the Town Council adopted the existing 0.76 GRFA ratio in the High Density Multiple Family District. An unintended consequence of the 2004 GRFA amendments was the reset of eligibility for utilizing the 250 Ordinance in multiple family zone districts. 250 Ordinance additions constructed prior to 2004 were considered part of the new allowable GRFA, and if properties did not have enough new allowable GRFA to absorb a previous 250 Ordinance addition, that addition was "grandfathered" as a legal non - conformity. The effect of the 2004 GRFA amendments is that some properties may be allowed to construct two 250 Ordinance additions (one before and one after 2004). While the applicant is proposing to establish a new townhouse zone district to simplify the development review process, the applicant also intends the proposed new zone district to create incentives for redevelopment of existing townhouse properties in the Vail Village. Staff supports modifying the existing High Density Multiple Family District 0.76 GRFA ratio to compensate for the elimination of the current 250 Ordinance and Interior Conversion additions in the proposed townhouse district. Staff believes this policy can be achieved with a 1.25 GRFA ratio. Should the Planning and Environmental Commission choose to recommend adoption of the proposed new zone district, Staff recommends the Commission consider the modifying the proposed GRFA standards as follows: 9 10/5/2010 7 -6 -9 Not more than era° hiinrlreel fifty (450) one hundred and twenty five (125) square feet of gross residential floor area (GRFA) shall be permitted for each one hundred (100) square feet of total site area. Attached or row dwellings in this zone district shall not be entitled to additional gross residential floor area under section 12 -15 -5: Additional Gross Residential Floor Area (250 Ordinance), or section 12 -15 -4: Interior Conversions of this title. There shall be no exclusion to gross residential floor area granted for enclosed garage space within individual dwelling units as referenced in Chapter 15 Gross Residential Floor Area. • 12- 6J -10: SITE COVERAGE: Site coverage shall not exceed fifty five (55 ) of the total site area. Staff Analysis: The applicant is proposing to maintain the existing High Density Multiple Family District site coverage limit of 55 of the total site area. Staff supports the applicant's continuation of the existing site coverage standards. • 12- 6J -11: LANDSCAPING AND SITE DEVELOPMENT. At least twenty percent (20 ) of the total site area shall be landscaped. Staff Analysis: The applicant is proposing that a minimum of 20 of the total site area be landscaped in the new townhouse district. This proposal is less restrictive than the 30 landscaping standard of the High Density Multiple Family District. The applicant is proposing 20 landscaping based upon the existing conditions at the Vail Row Houses, Texas Townhomes, Vail Trails East, and the Vail Trails Chalets townhouse developments. Staff believes the proposed 20 landscaping standard maintains the existing character of the townhouse developments in Vail Village. • 12- 6J -12: PARKING AND LOADING: Off street parking and loading shall be provided in accordance with chapter 10 of this title. Required parking currently located within the street right -of -way may continue subject to a revocable right -of -way permit issued by the Town of Vail. Staff Analysis: Similar to the other residential zone districts in the Town of Vail, the proposed parking requirements for the townhouse district are in accordance with Chapter 12 -10, Off Street Parking and Loading, Vail Town Code. Staff supports this approach in regulating parking in the new zone district. The applicant's proposed parking and loading standards deviate from the High Density Multiple Family District by not including a requirement prohibiting parking in the front setback and not requiring that at least 75 of the parking be located within a building. Contrary to the current recommendations of the Vail Village Master Plan, the proposed townhouse district also does not require parking to be enclosed as part of a redevelopment project. Instead, the proposed townhouse district allows existing surface parking located within the front setback and the street right -of- way to continue. At its July 12, 2010 public hearing, the Planning and Environmental Commission recognized that individual unit remodels are more likely to occur in the future than 10 10/5/2010 7 -6- 10 the comprehensive demolition and re -build of an entire townhouse development. The Commission determined that continuing the existing surface parking scenarios at the Vail Row Houses, Texas Townhomes, Vail Trails East, and the Vail Trails Chalets townhouse developments, while not ideal, are preferred to the construction of individual first floor garages. The Commission recognized that individual below grade garages may not be feasible due to site constraints such as lot width, grade, the distance between building and the street, etc. The Commission recognized that the construction of individual garages would like occur on the first floor. The Commission expressed concerns that first floor garages would eliminate any existing landscaping between the townhouse buildings and the street, would create an urban building character inconsistent with the desired pedestrian character of Vail Village, and would displace existing first floor gross residential floor area (GRFA) to upper stories thus increasing building height, bulk, and mass. Based upon the Planning and Environmental Commission's recommendation to allow parking in the front setback within the new townhouse district, Staff supports the proposed text eliminating the High Density Multiple Family District language prohibiting parking in the front setback. Staff recommends the Vail Village Master Plan be amended to address parking for the existing townhouse properties, and therefore recommends the proposed text be amended as follows: Off street parking and loading shall be provided in accordance with chapter 10 of I�egt4 r d norl�i g GUFF i leGa i-I inn n Me righaro , qay this titl ,T en tee ,- r�,-,� s treet t e �, -,�,� and the Vail Village Master Plan. • Related "House Keeping" Town Code Amendments: The applicant's proposal does not include the related text amendments necessary to establish a new zone district in the Vail Town Zoning Regulations. Staff will incorporate these "house keeping" amendments in the proposed ordinance presented to the Town Council for review. These amendments include the addition of the "Vail Village Townhouse (VVT) District" in the same manner as the High Density Multiple Family District to Title 12, Zoning Regulations, table of contents; Chapter 12 -2, Definitions (add initial eave height, townhouse, townhouse building); Chapter 12 -4, Districts Established; Chapter 12 -13, Employee Housing; Chapter 15, Gross Residential Floor Area; Chapter 21, Hazard Regulations; Chapter 24, Inclusionary Zoning; etc. PROPOSED VAIL VILLAGE MASTER PLAN AMENDMENTS The following is a summary of the applicant's proposed Vail Village Master Plan amendments to address the proposed new Vail Village Townhouse (VVT) District. The applicant's proposed master plan additions are in underlined font and deletions are in c+4*@t4 -gi4g4 font, followed by a Staff analysis. Any Staff recommended modifications to the applicant's proposed text are in bold font and text recommended to be deleted is in -trol4 lob font. 11 10/5/2010 7-6-11 • EAST GORE CREEK SUB AREA ( #6) A number of the earliest projects developed in Vail are located in the East Gore Creek Sub -Area. Development in this area is exclusively multi - family condominium and townhouse projects with a very limited amount of support commercial. Surface parking is found at each site, which creates a very dominant visual impression of the sub -area. While the level of development in East Gore Creek is generally greater than that allowed under existing zoning, this area has the potential to absorb density without compromising the character of the Village. This development could be accommodated by partial infills of existing parking areas balanced by greenspace additions or through increasing the height of existing buildings (generally one story over existing heights). In order to maintain the architectural continuity of projects, additional density should be considered only in conjunction with the comprehensive redevelopment of condominium projects or redevelopment of individual townhouse units. There are several townhouse projects within this subarea which were platted and /or constructed under Eagle County jurisdiction. These townhouse projects are nonconforming with the many of development standards (including, but not limited to density, GRFA, setbacks, site coverage, landscape area) of the Town Zoning Regulations. It is recommended that greater flexibility with the standards may be necessary to allow these townhouse projects to redevelop. This flexibility may be achieved through the approval of variances. However, the granting of variances should consider potential impacts to the character of the neighborhood. Clearly, one of the main objectives to consider in the redevelopment of any property should be to improve existing parking facilities. This includes satisfying parking demands for existing and additional development as well as design �n oir/o ro +i�no +P ro rloiohnmon+ nr9pgga o The opportunity to introduce below grade structured parking in front of Vail Trail Chalets, Vail Trails East, and Texas Townhomes will greatly improve pedestrianization and landscape features in this area. This should be considered a goal of any redevelopment proposal in this sub- area. In furtherance of this goal the Town should encourage these property owners to work together to develop a comprehensive redevelopment of the parking to a below grade structure with a landscaped park -like treatment on the surface. This redevelopment may involve the need to vacate or otherwise modify the right -of -way that exists within the current parking areas. Development or redevelopment of this sub -area may will attract additional traffic and population into this area and may have significant impacts upon portions of Sub -Areas 7 and 10. Staff Analysis: Neither the Planning and Environmental Commission nor the Vail Town Council have recently discussed vacating the street right -of -way in front of the Vail Trails complex. Staff is not opposed to this concept, but believes this concept should be addressed as a separate policy discussion and not included in this proposed master plan amendment without additional analysis and public input. Staff recommends the following text be deleted until such time as a separate sub -area master planning process has been completed: A number of the earliest projects developed in Vail are located in the East Gore Creek Sub -Area. Development in this area is exclusively multi - family 12 10/5/2010 7 -6- 12 condominium and townhouse projects with a very limited amount of support commercial. Surface parking is found at each site, which creates a very dominant visual impression of the sub -area. While the level of development in East Gore Creek is generally greater than that allowed under existing zoning, this area has the potential to absorb density without compromising the character of the Village. This development could be accommodated by partial infills of existing parking areas balanced by greenspace additions or through increasing the height of existing buildings (generally one story over existing heights). In order to maintain the architectural continuity of projects, additional density should be considered only in conjunction with the comprehensive redevelopment of condominium projects or redevelopment of individual townhouse units. There are several townhouse proiects within this subarea which were platted and /or constructed under Eagle County jurisdiction. These townhouse Projects are nonconforming with the many of development standards (including, but not limited to density, GRFA, setbacks, site coverage, landscape area) of the Town Zoning Regulations. It is recommended that greater flexibility with the standards may be necessary to allow these townhouse projects to redevelop. This flexibility may be achieved through the approval of variances or the establishment of a townhouse zone district However, the granting of variances or the establishment of a townhouse zone district should consider potential impacts to the character of the neighborhood. Clearly, one of the main objectives to consider in the redevelopment of any property should be to improve existing parking facilities. This includes satisfying parking demands for existing and additional development as well as desigp ,+nn oirlo +i�no rolo +i,a to ro, mon+ nr9pesalo The opportunity to introduce below grade structured parking, with a landscaped park -like treatment on the surface, in front of Vail Trail Chalets, Vail Trails East, and Texas Townhomes will greatly improve pedestrianization and landscape features in this area. This should be considered a goal of any redevelopment proposal in this sub -area. wav +h Development or redevelopment of this sub -area may will attract additional traffic and population into this area and may have significant impacts upon portions of Sub -Areas 7 and 10. • #64 R I Texas Townhomes/Vail Trails Additional floor or residential development over what is existing. Additional density and floor area to be considered only in conjunction with a ^^mnrohon';i„o redevelopment of each condominium project or redevelopment of individual properties in the case of a townhouse property A key factor in the redevelopment of these properties will be to relocate required parking in underground structures or a single unified structure serving all adjacent properties under what is today a surface parking lot This will allow for increased landscaping and overall improvements to pedestrian ways to create a park -like setting on the surface in this area. The existing parking areas serving the Vail Trails East and Vail Trails Chalets are currentlV encumbered with a street right -of -way as they have since the 1960`s. In order to 13 10/5/2010 7-6 13 encourage the development of a subsurface parking facility in this area serving these residential properties, the Town may need to consider vacating this right -of -way. In order to implement increased floor area, either the initial eave height along the south elevation of buildings should be at 35' in height or less or there shall be a horizontal stepback in building facades of 2' to Yin the first 35' of building height. The intent of this is to maintain the existing character of the neighborhood, with the appearance of 2 -3 story buildings along the front elevation. In all cases, the mature pines along Gore Creek shall be maintained. Stream impact must be considered. Special emphasis on 1. 2, 2.3, 2.6, 3.1, 5.1, 6.2. Staff Analysis: Neither the Planning and Environmental Commission nor the Vail Town Council have recently discussed vacating the street right - of -way in front of the Vail Trails complex. Staff is not opposed to this concept; but believes this concept should be addressed as a separate policy discussion and not included in this proposed master plan amendment without additional analysis and public input. Staff recommends the following text be deleted until such time as a separate sub -area master planning process has been completed. Staff recommends this proposed text be modified as follows: Additional floor or residential development over what is existing. Additional density and floor area to may be considered in conjunction with a Gem r_eheps io redevelopment of each townhouse building or individual townhouse lot within a building A key factor in the redevelopment of these properties will be to relocate required parking in underground structures or a single unified structure serving all adjacent properties „4_ @r A..0406- This will allow for increased landscaping and overall improvements to pedestrian ways to create a park -like setting on the surface in this area. Th ti n.,, 6 g +H. - ai. TFah ,- gl Q! frglq@ a In order to implement increased floor area, either the initial eave height along the south elevation of buildings should be at 35' in height or less or there shall be a horizontal stepback in building facades of 2' to 3' in the first 35' of building height. The intent of this is to maintain the existing character of the neighborhood, with the appearance of 2 -3 story buildings along the front elevation. In all cases, the mature pines along Gore Creek shall be maintained. Stream impact must be considered. Special emphasis on 1. 2, 2.3, 2.6, 3.1, 5.1, 6.2. #6 -3 Vail Row Houses Additional density and floor area to be considered only in conjunction with individual redevelopment applications. It is recognized as not being practical to require subsurface parking in this area due to the limited site area, and the impact of individual units constructing garages could have on the appearance and character of the area. As a result, it is recommended that enclosed parking be considered on a case -by -case basis, and may be limited to single -car garages 14 10/5/2010 7 -6- 14 (with the depth to allow for tandem parking when possible). When possible, driveway widths shall be minimized and increased areas for landscaping should be considered. Surface parking should be improved when redevelopment occurs using high quality landscape paver treatments and the current `post and chain" parking delineation should be upgraded to other methods to identify private parking. In order to implement increased floor area, either the initial eave height along the south elevation of buildings should be at 35' in height or less or there shall be a horizontal step -back in the building facade of 2' to 3' in the first 35' of building height. The intent of this is to maintain the existing character of the neighborhood, with the appearance of 2 -3 story buildings along the front elevation. Improvement of the stream corridor consistent with Town policies should be considered with redevelopment applications. Special emphasis on 1.2, 2.3, 2.6, 3.1, 5.1, 6.2. Staff Analysis: Staff recommends this proposed text be modified as follows: Additional density and floor area may be considered oWy in coniunction with individual redevelopment applications. It is recognized as not being practical to require subsurface parking in this area due to the limited site area, and the impact of individual units constructing garages could have on the appearance and character of the area. As a result, it is recommended that enclosed parking be considered on a case -bV -case basis, and may be limited to single -car garages (with the depth to allow for tandem parking when possible). When possible, driveway widths shall be minimized and increased areas for landscaping should be considered. Surface parking should be improved when redevelopment occurs using high quality landscape paver treatments and the current "post and chain" parking delineation should be replaced with other methods to identify private parking. In order to implement increased floor area, either the initial eave height along the south elevation of buildings should be at 35' in height or less or there shall be a horizontal step -back in the building facade of 2' to Yin the first 35' of building height. The intent of this is to maintain the existing character of the neighborhood, with the appearance of 2 -3 story buildings along the front elevation. Improvement of the stream corridor consistent with Town policies should be considered with redevelopment applications. Special emphasis on 1.2, 2.3, 2.6, 3. 1, 5.1, 6.2. IV. APPLICA LE DOCUMENTS ZONING REGULATIONS 12 -1 -2: PURPOSE: A. General: These regulations are enacted for the purpose of promoting the health, safety, morals, and general welfare of the town, and to promote the coordinated and harmonious development of the town in a manner that will conserve and enhance its natural environment and its established character as a resort and residential community of high quality. 15 10/5/2010 7 -6- 15 B. Specific: These regulations are intended to achieve the following more specific purposes: 1. To provide for adequate light, air, sanitation, drainage, and public facilities. 2. To secure safety from fire, panic, flood, avalanche, accumulation of snow, and other dangerous conditions. 3. To promote safe and efficient pedestrian and vehicular traffic circulation and to lessen congestion in the streets. 4. To promote adequate and appropriately located off street parking and loading facilities. 5. To conserve and maintain established community qualities and economic values. 6. To encourage a harmonious, convenient, workable relationship among land uses, consistent with municipal development objectives. 7. To prevent excessive population densities and overcrowding of the land with structures. 8. To safeguard and enhance the appearance of the town. 9. To conserve and protect wildlife, streams, woods, hillsides, and other desirable natural features. 10. To assure adequate open space, recreation opportunities, and other amenities and facilities conducive to desired living quarters. 11. To otherwise provide for the growth of an orderly and viable community. VAIL LAND USE PLAN Goal 1. General Growth /Development 1.1 Vail should continue to grow in a controlled environment, maintaining a balance between residential, commercial and recreational uses to serve both the visitor and the permanent resident. 1.3 The quality of development should be maintained and upgraded whenever possible. 1.12 Vail should accommodate most of the additional growth in existing developed areas (infill areas). Goal 4. Village Core /Lionshead 4.2 Increased density in the Core areas is acceptable so long as the existing character of each area is preserved through implementation of the Urban Design Guide Plan and the Vail Village Master Plan. 4.3 The ambiance of the Village is important to the identity of Vail and should be preserved. (Scale, alpine character, small town feeling, mountains, natural settings, intimate size, cosmopolitan feeling, environmental quality.) Goal 5. Residential 5.1 Additional residential growth should continue to occur primarily in existing, platted areas and as appropriate in new areas where high hazards do not exist. 16 10/5/2010 7 -6- 16 5.4 Residential growth should keep pace with the market place demands for a full range of housing types. VAIL VILLAGE MASTER PLAN CHAPTER V. GOALS, OBJECTIVES, AND ACTION STEPS GOAL #1: Encourage high quality, redevelopment while preserving unique architectural scale of the village in order to sustain its sense of community and identity. Objective 1.1 Implement a consistent development review process to reinforce the character of the Village. Objective 1.2: Encourage the upgrading and redevelopment of residential and commercial facilities. Policy 1.2.1: Additional development may be allowed as identified by the Action Plan and as is consistent with the Vail Village Master Plan and Urban Design Guide Plan. Objective 1.4: Recognize the `historic" importance of the architecture, structures, landmarks, plazas and features in preserving the character of Vail Village. Policy 1.4.2 The Town may grant flexibility in the interpretation and implementation of its regulations and design guidelines to help protect and maintain the existing character of Vail Village. GOAL #2: To foster a strong tourist industry and promote year- around economic health and viability for the village and for the community as a whole. Objective 2.1: Recognize the variety of land uses found in the 11 sub -areas throughout the Village and allow for development that is compatible with these established land use patterns. Policy 2.1.1: The zoning code and development review criteria shall be consistent with the overall goals and objectives" of the Vail Village Master Plan. GOAL #3: To recognize as a top priority the enhancement of the walking experience throughout the village. Policy 3.1.1: Private development projects shall incorporate streetscape improvements (such as paver treatments, landscaping, lighting and seating areas), along adjacent pedestrian ways. Objective 3.2: Minimize the amount of vehicular traffic in the Village to the greatest extent possible. GOAL #5: Increase and improve the capacity, efficiency, and aesthetics of the transportation and circulation systems throughout the village. 17 10/5/2010 7 -6- 17 Policy 5.1.5: Redevelopment projects shall be strongly encouraged to provide underground or visually concealed parking. CHAPTER VII: Vail Village Sub -Areas East Gore Creek Sub -Area ( #6) . i `!- �,� Tai - - - x �. •� r ..E EASE ' a \ VILLAGE �7 s s EAST GOPE — o —r GREEK A number of the earliest projects developed in Vail are located in the East Gore Creek Sub -Area. Development in this area is exclusively multi - family condominium projects with a very limited amount of support commercial. Surface parking is found at each site, which creates a very dominant visual impression of the sub -area. While the level of development in East Gore Creek is generally greater than that allowed under existing zoning, this area has the potential to absorb density without compromising the character of the Village. This development could be accommodated by partial infill of existing parking areas balanced by green space additions or through increasing the height of existing buildings (generally one story over existing heights). In order to maintain the architectural continuity of projects, additional density should be considered only in conjunction with the comprehensive redevelopment of projects. Clearly, one of the main objectives to consider in the redevelopment of any property should be to improve existing parking facilities. This includes satisfying parking demands for existing and additional development, as well as design considerations relative to redevelopment proposals. The opportunity to introduce below grade structured parking will greatly improve pedestrianization and landscape features in this area. This should be considered a goal of any redevelopment proposal in this sub -area. Development or redevelopment of this sub -area will attract additional traffic and population into this area and may have significant impacts upon portions of Sub -Areas 7 and 10. V. PRESCRI ED REGULATION AMENDMENT AND MASTER PLAN AMENDMENT REVIEW CRITERIA Before acting on an application for an amendment to the Zoning Regulations or the Vail Village Master Plan, the Planning and Environmental Commission shall consider the following factors with respect to the requested text amendment: 18 10/5/2010 7-6- IS 1. The extent to which the text mendment furthers the ener I nd specific purposes of the zonin re ul tions; nd Staff believes the proposed Zoning Regulations amendments and Vail Village Master Plan amendments, with Staff's proposed modifications, further the goals general and specific purposes of the zoning regulations by establishing zoning standards and development recommendations specifically designed to address the redevelopment of the existing townhouse properties in Vail Village. Based upon Staff's analysis and recommended modifications outlined in Section III of this memorandum, Staff believes the proposed amendments further the purposes of the zoning regulations. 2. The extent to which the text mendment would better implement nd better chieve the pplic ble elements of the dopted o Is, objectives, nd policies outlined in the V it comprehensive pi n nd is comp tible with the development objectives of the town; nd The Town of Vail has granted multiple variances to facilitate the remodeling of several individual townhouse units in Vail Village which has resulted in the inconsistent application of zoning standards to existing townhouse properties. Rather than perpetuate the current system of requiring variances for most townhouse unit remodels, the proposed new zone district, and associated master plan amendments, are designed to regulate the existing townhouse developments in Vail Village. The proposed amendments will minimize the need for future variances and will simplify the development review process. 3. The extent to which the text mendment demonstr tes how conditions h ve subst nti Ily ch n ed since the doption of the subject re ul tion nd how the existin re ul tion is no Ion er ppropri to or is in pplic ble; nd The existing townhouse developments in Vail Village such as the Vail Row Houses, Texas Townhomes, Vail Trails East, and Vail Trails Chalets are zoned High Density Multiple Family (HDMF) District. These existing townhouse developments are legally non - conforming in regard to several development standards of the HDMF District including setbacks, parking, density, etc. The standards of the HDMF District were intended to be applied to condominium developments and were not designed to be applied to townhouse developments consisting of individually platted lots. The Town of Vail has granted multiple variances to facilitate the remodeling of several non- conforming townhouse properties which has resulted in the inconsistent application of zoning standards to existing townhouse properties. 4. The extent to which the text mendment provides h rmonious, convenient, work ble rel tionship mon I nd use re ul tions consistent with municip I development objectives; nd Based upon Staff's analysis and recommended modifications outlined in Section III of this memorandum, Staff believes the propose zoning regulation and master plan amendments are consistent with the Zoning Regulations purposes, Land Use Plan goals, and Vail Village Master Plan goals, objectives, and policies outlined in Section IV of this memorandum. 19 10/5/2010 7 -6- 19 5. Such other f ctors nd criteri the pl nnin nd environment I commission nd /or council deem pplic ble to the proposed text mendment. VI. STAFF RECOMMENDATION Should the Planning and Environmental Commission choose to forward a recommendation of approval for this request to the Vail Town Council; the Community Development Department recommends the Commission modifies the proposed text as outlined in Section III of this memorandum. Should the Planning and Environmental Commission choose to forward a recommendation of approval with modifications of this request to the Vail Town Council; Community Development Department recommends the Commission pass the following motion: " "Based upon a review of Section V of the Staff's August 23, 2010, memorandum to the Planning and Environmental Commission and the evidence and testimony presented, the Planning and Environmental Commission forwards a recommendation of approval with modifications to the Vail Town Council on prescribed regulation amendments to Chapter 12 -6, Residential Districts, Vail Town Code, pursuant to Section 12 -3 -7, Amendment, Vail Town Code, to establish a new zone district, Vail Village Townhouse (VVT) District, and setting forth details in regard thereto; and a request for a recommendation to the Vail Town Council on proposed amendments to Chapter VII, Vail Village Sub - Areas, East Gore Creek Sub -Area ( #6), Vail Village Master Plan, pursuant to Chapter VIII, Implementation and Amendment, Vail Village Master Plan, to include recommendations related to a new Vail Village Townhouse (VVT) District, and setting forth details in regard thereto." Should the Planning and Environmental Commission choose to forward a recommendation of approval to the Vail Town Council for the proposed text amendment, the Community Development Department recommends the Commission makes the following findin s: "Based upon the review of the criteria outlined in Section V of Staff's August 23, 2010, memorandum and the evidence and testimony presented, the Planning and Environmental Commission finds: 1. That the amendment is consistent with the applicable elements of the adopted goals, objectives and policies outlined in the Vail Comprehensive Plan and is compatible with the development objectives of the Town; and 2. That the amendment furthers the general and specific purposes of the Zoning Regulations; and 3. That the amendment promotes the health, safety, morals, and general welfare of the town and promotes the coordinated and harmonious development of the town in a manner that conserves and enhances its natural environment and its established character as a resort and residential community of the highest quality. „ 20 10/5/2010 7 -6 -20 VI. ATTACHMENTS A. Applicant's Request 21 10/5/2010 7 -6 -21 Text Amendment to the Town of Vail Zoning Regulations, Creating a New "Vail Village "Townhouse" District & An Amendment to the Vail Village Master Plan Planning and Environmental Commission Submitted March 15, 2010 P evised April 15, 2010 R evased July G, 2010 Revised July 30, 2010 Revised August 17, 2010 Maurlello Planning Group VAIL 10/5/2010 7 -7 -1 I. Introduction to the Zoning Code Amendment The intent of this text amendment to the 'linen of Vail . Zoning Regulations is to correct a long standing problematic ala )hcation of High Density Multiple Family Zoning to townhouse projects within the Vail Village and correct an equity issue created by the "250 Ordinance." The proposal will create a new townhouse zoning; that can be applied to townhouse properties in the Vail Village area, proposed as the "Vail Village "Townhouse" District (VVT) and outlined in Section III of this submittal. There are several townhouse projects within the Vail ;a) Lloor Brew No minimum; Village area which were originally platted as townhouse (b) Lot Area: No minimum; parcels under Eagle County jurisdiction before there was (c) Setback; Front - 15 feet. zoning In Eagle County and before the Town was (a) Finor Area Ratio: The floor area ratio small not incorporated in 1466. Zoning was not adopted in the exeeed 1_50!1. Town of Vail until 1964 (Ordinance No. 7, Series of (3) Off-street Parking C]ff- stree! parking shall be 1469). These properties were then zoned High Density Multiple Family (HDMF). Under the 1469 zoning code, provided in accordance with requirements set forth in the Supplementary there was only a front setback requirement and no side regulations. setback requirements, there was no building height ( Off-street Loading- Off- street loading shall be limitation and the GRFA limitation (then termed Floor provided in accordance with the requirements set forth in the Supplementary Area Ratio — FAR) was 1.5 to 1, meaning that 150 sq. ft. re of GRFA was allowed for each 100 sq. ft. of total land 1969 FIDMF Zoning R gu6itions area instead of the 0.76 to 1 ratio that exists today. Nov, 46 years later, the zoning on these properties is more restrictive and does not appropriately recognize traditional townhouse development, which is described as a series of attached homes with zero lot lines between the units. Unlike a condominium development, town houses traditionally sit on fee simple parcels of land. Linder current HDMF zoning, these types of lots are not in compliance with many of the HDMF zoning provisions. In order to address both the fee - simple lot format and the condominium format of town houses found in Vail Village, the proposed district will accommodate both ownership formats. As a result, the applicant is proposing a new zone district, referred to as `Vail Village Townhouse" District (VV`l). The VVT zone district will allow for redevelopment of individual units within a townhouse or row house configuration, without the need for numerous variances but with review by the 'Town of Vail to ensure compliance with the regulations. Along with the new zone district, an amendment to the Vail Village Master flan is proposed to implement the ideas contained within the new zone district. Examples of townhouse and row house development in Vail Village: v Texas Townhomss 1 : "FraiIs `snail Rowhouses Neva Znrre ichicl. Vail 11illa& - I'ouw house District 2 10/5/2010 7 -7 -2 II. Proposed Text Amendment The purpose behind this proposal is to streamline the redevelopment process and avoid the need for multiple variances for even the smallest of development projects. In addition, it is intended to recognize and restore the historical development rights of townhouse projects while recognizing the importance of maintaining their existing character. Under the new district, "250s" would be eliminated by allowing the GRFA at a lev -el that creates equal treatment of similar properties and allows individual town house units to demolished without the penalties inherent with the application of the 250 Ordinance. HDMF was used as the basis for the new zone district, with changes to allow for townhouse development. The following is the proposed new zone district, along with a description of why the modifications are necessary to facilitate townhouse redevelopment: ARTICLE J. VAIL VILLAGE TOWNHOUSE (VVT) DISTRICT 12 -6J -1: PURPOSE: Vail Village Townhouse District is intended to provide sites and maintain the unique character of existing townhouse and row house development in the Vail Village Master Plan area of the Town of Vail. The Vail Village Townhouse district is intended to ensure adequate light, air, open space, and other amenities commensurate with attached or row dwellings, and to maintain the desirable residential and resort qualities of the zone district by establishing appropriate site development standards. Certain nonresidential uses are permitted as conditional uses, which relate to the nature of Vail as a winter and summer recreation and vacation community and, where permitted, are intended to blend harmoniously with the residential character of the zone district. This zone district was specifically developed to regulate existing townhouse and row house properties that were legally nonconforming in the High Density Multiple Family District. The Vail Village Townhouse District is meant to encourage and provide incentives for redevelopment of existing townhouse and row house properties in accordance with the Vail Village Master Plan. The incentives in this zone district include differentiating between properties subdivided and regulated as a comprehensive townhouse building from those properties subdivided and regulated as individual townhouse lots within a building, reductions in lot area standards, reductions in setbacks, increases in density, increases in gross residential floor area (GRFA), reductions in landscaping area, and reductions in parking design requirements. More restrictive building height requirements have been applied to these properties in accordance with the Vail Village Master Plan to maintain the existing character of townhouse and rowhouse development in Vail Village. 12 -6J -2: PERMITTED USES: The following uses shall be permitted in the VVT district: Employee housing units, as further regulated by chapter 13 of this title. Multiple - family residential dwellings, including to townhouses or attached row dwellings. 12 -6J -3: CONDITIONAL USES: The following conditional uses shall be permitted in the VVT district, subject to issuance of a conditional use permit in accordance with the provisions of chapter 16 of this title: Bed and breakfasts, as further regulated by section 12 -14 -18 of this title. Communications antennas and appurtenant equipment. Home child daycare facilities, as further regulated by section 12 -14 -12 of this title. Private unstructured parking. Public and private schools. Public buildings, grounds and facilities. Public park and recreation facilities. Public utility and public service uses. Timeshare units. 12 -6J -4: ACCESSORY USES: New Zone District: hail llillczlre "1'ownbouse District 3 10/5/2010 7 -7 -3 The following accessory uses shall be permitted in the WT district: Home occupations, subject to issuance of a home occupation permit in accordance with the provisions of section 12 -14 -12 of this title. Private greenhouses, tool sheds, playhouses, attached garages or carports, swimming pools, or recreation facilities customarily incidental to permitted residential and lodge uses. Other uses customarily incidental and accessory to permitted or conditional uses, and necessary for the operation thereof. 12 -6J -5: LOT AREA AND SITE DIMENSIONS: The minimum lot or site area shall be ten thousand (10,000) square feet of site area for a comprehensive development site. For individually platted townhouse lots within a development site, the minimum lot or site area shall be two thousand (2,000) square feet of site area. Each site shall have a minimum frontage of twenty feet (20'). 12 -6J -6: SETBACKS: The minimum setback shall be twenty feet (20') from the front, side, and rear property lines. There shall be no setback from property lines which exist between attached dwelling units. It is recognized that many existing townhouse properties have setbacks of less than 20'. In these cases, structures that are demolished may be rebuilt to the prior existing setback dimension. 12 -6J -7: HEIGHT: For a flat roof or mansard roof, the height of buildings shall not exceed forty five feet (45'). For a sloping roof, the height of buildings shall not exceed forty eight feet (48 The initial eave height along a public street shall be as regulated by the Vail Village Master Plan. 12 -6J -8: DENSITY CONTROL: The existing number of legally established units on a property or twenty -five dwelling units per acre of total site area, whichever is greater, shall be allowed. A dwelling unit in a multiple- family or townhouse building may include one attached accommodation unit no larger than one -third (1/3) of the total floor area of the dwelling. 12 -6J -9: GROSS RESIDENTIAL FLOOR AREA: Not more than one hundred fifty (150) square feet of gross residential floor area (GRFA) shall be permitted for each one hundred (100) square feet of total site area. Attached or row dwellings in this zone district shall not be entitled to additional gross residential floor area under section 12 -15 -5: Additional Gross Residential Floor Area (250 Ordinance), or section 12 -15 -4: Interior Conversions of this title. There shall be no exclusion to gross residential floor area granted for enclosed garage space within individual dwelling units as referenced in Chapter 15 Gross Residential Floor Area. 12- 6J -10: SITE COVERAGE: Site coverage shall not exceed fifty five (55 %) of the total site area. 12- 6J -11: LANDSCAPING AND SITE DEVELOPMENT: At least twenty percent (20 %) of the total site area shall be landscaped. 12- 6J -12: PARKING AND LOADING: Off street parking and loading shall be provided in accordance with chapter 10 of this title. Required parking currently located within the street right -of -way may continue subject to a revocable right -of -way permit issued by the Town of Vail. New Zone District: Vail Village 7ownhouse District 4 10/5/2010 7 -7 -4 III. Proposed Vail Village Master Plan Text Amendment (Text to be stricken is indicated with s�filie t l i fe.tg text to be added is underlined and bold). O - f EAST GORE CREEK SUB AREA ( #6) aji� ry0 r — "'2 ±_ 6-2 r r3"L ' a MM EAS7 00 Jf 1 • V1LLAGrE r EAST GORE CREEK A number of the earliest projects developed in Vail are located in the East Gore Creek Sub -Area. Development in this area is exclusively multi- family condominium and townhouse projects with a very limited amount of support commercial. Surface parking is found at each site, which creates a very dominant visual impression of the sub -area. While the level of development in East Gore Creek is generally greater than that allowed under existing zoning, this area has the potential to absorb density without compromising the character of the Village. This development could be accommodated by partial infills of existing parking areas balanced by greenspace additions or through increasing the height of existing buildings (generally one story over existing heights). In order to maintain the architectural continuity of projects, additional density should be considered only in conjunction with the comprehensive redevelopment of condominium projects or redevelopment of individual townhouse units There are several townhouse projects within this subarea which were platted and /or constructed under Eagle County jurisdiction. These townhouse projects are nonconforming with the many of development standards (including, but not limited to density, GRFA, setbacks, site coverage, landscape area) of the Town Zoning Regulations. It is recommended that greater flexibility with the standards may be necessary to allow these townhouse projects to redevelop. This flexibility may be achieved through the approval of variances. However, the granting of variances should consider potential impacts to the character of the neighborhood. Clearly, one of the main objectives to consider in the redevelopment of any property should be to improve existing parking facilities. This includes satisfying parking demands for existing and additional development , - . The opportunity to introduce below grade structured parking in front of Vail Trail Chalets, Vail Trails East, and Texas Townhomes will greatly improve pedestrianization and landscape features in this area. This should be considered a goal of any redevelopment proposal in this sub -area. In New Zone District: Vail Village "Townhouse District 5 10/5/2010 7 -7 -5 furtherance of this goal the Town should encourage these property owners to work together to develop a comprehensive redevelopment of the parking to a below grade structure with a landscaped park -like treatment on the surface. This redevelopment may involve the need to vacate or otherwise modify the right -of -way that exists within the current parking areas. Development or redevelopment of this sub -area ma ;;444 attract additional traffic and population into this area and may have s'n�� impacts upon portions of Sub -Areas 7 and 10. ' #6 -1 Texas Townhomes / Vail Trails R _ Additional floor or residential development over what is p ., ?l.- existing. Additional density and floor area to be ;- - - considered only in conjunction with - _2 redevelopment of each condominium project or redevelopment of individual properties in the case of _ a townhouse property A key factor in the redevelopment s of these properties will be to relocate required parking in underground structures or a single unified structure - serving all adjacent properties under what is today surface parking lot This will allow for increased .e..:,.�, landscaping and overall improvements to pedestrian ways .AGE 7 - 7-5 to create a park -like setting on the surface in this area. �• - �' �r The existing parking areas serving the Vail Trails East and Vail Trails Chalets are currently encumbered with a street right -of -way as they have since the 1960`s. In order to encourage the development of a subsurface parking facility in this area serving these residential properties, the Town may need to consider vacating this right -of -way. In order to implement increased floor area, either the initial eave height along the south elevation of buildings should be at 35' in height or less or there shall be a horizontal step - back in building facades of 2' to 3' in the first 35' of building height. The intent of this is to maintain the existing character of the neighborhood, with the appearance of 2 -3 story buildings along the front elevation. In all cases, the mature pines along Gore Creek shall be maintained. Stream impact must be considered. Special emphasis on 1.2, 2.3, 2.6, 3.1, 5.1, 6.2. #6 -3 Vail Row Houses �r�n+�r4a r ••••••• ` "''^"�' 7 _ Additional density and floor area to be considered only in conjunction with individual redevelopment a It is recognized as not being practical to ' require subsurface parking in this area .. 6 -3 due to the limited site area, and the impact of individual units constructing garages could have on the appearance 1:.. EAST f and character of the area. As a result, it is """ recommended that enclosed parking be f �`x, • • ■ s • VILLA { considered on a case -by -case basis, and 3 _ may be limited to single -car garages (with ! y" the depth to allow for tandem parking when possible). When possible, driveway widths shall be minimized and increased New Zone District: Vail Village 7ownhouse District 6 10/5/2010 7 -7 -6 areas for landscaping should be considered. Surface parking should be improved when redevelopment occurs using high duality landscape paver treatments and the current "post and chain" parking delineation should be upgraded to other methods to identify private parking. In order to implement increased floor area, either the initial eave height along the south elevation of buildings should be at 35' in height or less or there shall be a horizontal step -back in the building facade of 2' to 3' in the first 35' of building height. The intent of this is to maintain the existing character of the neighborhood, with the appearance of 2 -3 story buildings along the front elevation. Improvement of the stream corridor consistent with Town policies should be considered with redevelopment applications. Special emphasis on 1.2, 2.3, 2.6, 3.1, 5.1, 6.2. New Zone District.- Vail Village 7ownhouse District 7 10/5/2010 7 -7 -7 IV. Review Criteria for a Text Amendment The Town of Vail Zoning Regulations provide the criteria for review of a text amendment. For the purposes of this application, each criterion will be addressed below: 1. The extent to which the text amendment furthers the general and specific purposes of the zoning regulations; and Our Anal The Town of Vail Zoning Regulations, in Section 12 -1 -2: Purpose, describes the general purpose of the regulations as follows: 12 -1 -2: PURPOSE: A. General. These regulations are enacted for the purpose of promoting the health, safety, morals, and general welfare of the town, and to promote the coordinated and harmonious development of the town in a manner that will conserve and enhance its natural environment and its established character as a resort and residential community of high quality. Section 12 -1 -2 also provides the specific purposes of the regulations as follows: 1. To provide for adequate light, air, sanitation, drainage, and public facilities. 2. To secure safety from fire, panic, floor, avalanche, accumulation of snow, and other dangerous conditions. 3. To promote safe and efficientpedestiian and vehicular traffic circulation and to lessen congestion in the streets. 4. To promote adequate and appropriately located off street parking and loading facilities. 3. To conserve and maintain established community qualities and economic values. 6. To encourage a harmonious, convenient, workable relationship among land uses, consistent with municipal development oljectives. 7. To prevent excessive population densities and overcrowding of the land with structures. 8. To safeguard and enhance the appearance of the town. 9. To conserve and protect wildlife, streams, woods, hillsides, and other desirable natural features. 10. To assure adequate open space, recreation opportunities, and other amenities and facilities conducive to desired living quarters. 11. To otherwise provide for the growth of an orderj and viable community. The proposed text amendment also furthers the purpose statements of the Vail Zoning Regulations. Each of the purpose statements is clearly enhanced by the proposed amendment. 2. The extent to which the text amendment would better implement and better achieve the applicable elements of the adopted goals, objectives, and policies outlined in the Vail comprehensive plan and is compatible with the development objectives of the town; and Our Anal The goals contained in several of the Town's comprehensive, guiding documents are applicable during the review process for the text amendment. The applicable plan sections below are identified as relevant to the review of this proposal. Vail Land Use Plan (in part) 1.0 General Growth /Development 1.1 Vail should continue to grow in a controlled environment, maintaining a balance between residential, commercial and recreational uses to serve both the visitor and thepermanent resident. New Zone District.- Vail Village Townhouse District 8 10/5/2010 7 -7 -8 1.3 The quality of development should lie zvaintained and upgraded rr h enever possible. 1.12 [fail should accarrrrrtadate most of the additionalgrorrth in existing developed areas (irafill areas). 4.0 T illage Core { Lionshead 4.2 Increased density in the Care areas is acceptable so long as the existing character of each area is preserved tharotrgb irirplementation af' the Urban Design Guide Plan. 4.3 The ambiance of Vaal Village is impor-tant to the idenMot of Vail and should be preserved. (scale, a46ine character sacral[ town feelirxg, rraorrrrtrlitrs, natural setting, intimate side, casrraopolitarx feelirxg„ environmental qualit)' -) 5.0 Revidential 5.1 ,Additional residentialgrow1h should continue to orcurprimariy in existing, platted areas and as appropriate in lieu areas wbere high hazards do not exist. 5.3 lfforclable earrplgee hoaesisxg should be made available through private e foils, assisted 1 v [incited incentives, provided Icy the Town of Vail avith appropriate restrirtions 5.4 Resideratialgrowlb should keep pare n4lh the marketplace demands far a full ravage of housing types. 5.5 The existing etaplyee housing base should be preserved and upgraded, -Additional errrplyee houshrr needs should he acc©nrrnodated at varied sites throughout the eotrlartzmo Vail Village Master flan (in parr) The Vail Row I-Iouses is located wilhin the "Nail Village [blaster Plan" land use category. The following statedgoals of the Mail Village Ala seer Plan are applicable to this application.- Goal ## 1: Encourage high quality redevelopmew while preserving the rnaique architertural scale of the Village in order - to sustain its sense of rommunitj+ and identity: 01yeetdve 1.2. Encourage the upgrading and redevelopmeaxt of residential and cammerrial frarilities Objective 1.3: Enhance new development and redevelopment through public improvements done fni private developers worming in cooperation witb the Town. Polio 1.3.1: Public rrrpror ellaents shall be developed n ith the working participation r f the private sector rr ork:ing with the Town. Coral #3: To recognise as a top prrott the enharacerrrerat af' the raalkirrg expenence throughout the Village E:A CT GO E CREEK SUB -4 RE-- 4 ( #G) ROAD fAV EAST �+ + = CREEK Neva Zone District. Vail llillage - Ibawbouse District 9 10/5/2010 7 -7 -9 "4 number of the earliest projects developed irr Mail are located in the East Gore Creek Sub -24 rea. Development in tbir area is exelrerively rrrulti fividly coadominiurrr projerts it a eery limited amount of .support commercial. Sur/irre par king is found at each ,rite, it hirh creates a rer yr dominaril visual impression of the .rule - area. IFIbile the level of development in 1 ''asi Gore Creek is generally greater than t1 ?al allon under eNisting Zarzirzg, this area hers the palerztial to rrin arla derzsitj nr ill) orrt compromising the clscaracter of tlhe Vzllage. This development roald be acrommodated by partial irfll a/' existing parking areas balanced by greenspace additions or through increasing the height of existing frrrildings (generally one stns aver xisti)rg hei ght_~). fn order' to waintain the architerlitral corrfirruit oj' projects, additional dwso should be considered only irr m7lunction with the conrprel]etrrive redeveloprzrerat of pr ject_s.. Clear }; one of the znaitr objectives to consider in the redevelrepmerrt of any propert} should be to improve e isfirrg parking firilities T'ljis includes satisfying parking devzaidr for e- sfing acrd additional developmeal, as rr•ell as design corasiderzations relative to redevelopmenl proposals. The opportunit} to inlrodure below grade structured parking will greatly improve pedesitiarri!Zglion and landscape fiatrrres in this area. '1 his .should be considered a goal of ° alp rederelopmenl proposal in this sub -area Developrrrent or redevelopment of this iul, -area rvill attract additional tart" and population into this area and may have significant impacts rrpon portions of Sub - Areas 7 and 10. " 3. The extent to which the text amendment demonstrates how conditions have substantially changed since the adoption of the subject regulation and how the existing regulation is no longer appropriate or is inapplicable, and Our Anal In 1969, when the Town of Vail zoned many of these townhouse and row house projects HDMF, they generally complied with zoning. 'There was no) minimum left size, there was only a front setback of 15 ft. and the floor area ratio was 1.5:1. (see below) (a) Floor Area No minimum: (b) Lot Area: No minimum; (c) Setback: Front - 15 feet. (2) Floor Area Ratio: The floor area ratio shalt not exceed 1. 50:1• (3) Off- street Parking Off- street parking shall be provided in accordance with requirements set forth in the Supplementary regulations. (4) Off- street Loading;. Off- street loading shall be provided in accordance with the requirements set forth in the Supplementary regulations. Hmxrever, since that time, amendment to the HDlI!IF zone district have rendered these properties nonconforming with regards to almost every development standard of the district, including but not limited to: • Density • Lot Size Nena- 'Lorne Di. +trice. mail if"illr�ge T'onnlwrrre District 10 10/5/2010 7 -7 -10 • Street Frontage • Setbacks • Landscape Area • Parking • Parking Location (front setback and right -of -way) These amendments have made redevelopment of individual units reliant on the variance process, rather than providing a clear road map for redevelopment. As a result, HDMF is no longer appropriate for these properties. 4. The extent to which the text amendment provides a harmonious, convenient, workable relationship among land use regulations consistent with municipal development objectives; and Our Analysis: The new VVT zone district maintains the uses that are permitted, conditional, and accessory uses within the HDMF zone district. Many uses have been eliminated from this zone district that are not applicable, but none have been added, ensuring that this text amendment is a harmonious, convenient, and workable relationship among land use regulations. The new zone district will eliminate the inequities created by the the HDMF district as applicable to townhouse development and the inequities created by the 250 Ordinance. 5. Such other factors and criteria the planning and environmental commission and /or council deem applicable to the proposed text amendment. Our Analysis: Not applicable. New Zone District: hail Village 7ownhouse District 11 10/5/2010 7 -7 -11 i 0 o . Co C'0 O r C'0 LO LO LO t Q T N w C'0 C'0 O w O Q T T T Q T T V (3) �U Cf) ( 1) 0 (3) i N CD T 00 00 r--_ ® U Co O O O r 09 O 09 Q T T T O O O C.- U N W O LL J 0 O �-- co � Cti C� T- T T 0 > F- i N O .O C'0 O I` CD T O O 00 N a� O O 00 T N O O 00 O N i �U 0 C) �Q LL i LO O 00 00 N N �0 0 0 0 0 0 0 0 0 0 U :5 cd . W 0 F 0 cz x O C� U Co I` od }' I O F- 00 I L I I O cz }, Q � � L O (� U cz co N cz ^1 T T rr W cz 4-1 ^ O n U) _ c OC 1 cz LL � J) N co CTJO Ir } ' O OD or U) C: T O WO' ° U) U) z W cz cz U U) ^ cz cz W 0 v . cn TOWN (ffr VA M VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: October 5, 2010 ITEM /TOPIC: Resolution 23, Series of 2010, a resolution amending Chapter VII, Vail Village Sub - Areas, East Gore Creek Sub -Area ( #6) to include recommendations related to a new Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. PRESENTER(S): Rachel Friede Dimond, Planner and Dominic Mauriello, Mauriello Planning Group ACTION REQUESTED OF COUNCIL: The Vail Town Council shall discuss the proposed resolution and table the final decision on Resolution 23, Series of 2010 to coincide with the second reading of the related Ordinance No. 15, Series of 2010. BACKGROUND: Resolution 23, Series of 2010, is associated with the Town Council's review of Ordinance No. 15, Series of 2010, an ordinance to establish the Vail Village Townhouse (VVT) District.On August 23, 2010 the Planning and Environmental Commission forwarded a recommendation of approval, with modifications, by a vote of 5 -0 -0, to the Vail Town Council for amendments to Chapter VII, Vail Village Sub - Areas, East Gore Creek Sub -Area ( #6), Vail Village Master Plan, pursuant to Chapter VIII, Implementation and Amendment, Vail Village Master Plan, to include recommendations related to a new Vail Village Townhouse (VVT) District, and setting forth details in regard thereto. The Planning and Environmental Commission forwarded a recommendation with the following modification to the applicant's proposal: the applicant's proposed language about the Town vacating the Meadow Drive street right -of -way should be removed from the Vail Village Master Plan amendment. STAFF RECOMMENDATION: Staff recommends the Vail Town Council discuss the proposed resolution and table the final decision on Resolution 23, Series of 2010 to coincide with the second reading of the related Ordinance No. 15, Series of 2010. ATTACHMENTS: Resolution No. 23, Series of 2010 10/5/2010 RESOLUTION NO. 23 Series of 2010 A RESOLUTION AMENDING CHAPTER VII, VAIL VILLAGE SUB - AREAS, EAST GORE CREEK SUB -AREA ( #6), VAIL VILLAGE MASTER PLAN TO INCLUDE RECOMMENDATIONS RELATED TO A NEW VAIL VILLAGE TOWNHOUSE (WT) DISTRICT, AND SETTING FORTH DETAILS IN REGARD THERETO. WHEREAS, Chapter VIII, Implementation and Amendment, Vail Village Master Plan, sets forth the procedures for amending the Town's Zoning Regulations; and, WHEREAS, on August 23, 2010 the Town of Vail Planning and Environmental Commission held a public hearing on the application to amend the Town's Zoning Regulations and establish the Vail Village Townhouse District and associated amendments to the Vail Village Master Plan; and, WHEREAS, the Town of Vail Planning and Environmental Commission forwarded a recommendation of approval, with modifications, of the proposed Vail Village Master Plan amendments to the Vail Town Council by a vote of 5 -0 -1; and, WHEREAS, the Vail Town Council finds and determines that the amendment is consistent with the applicable elements of the adopted goals, objectives and policies outlined in the Vail Comprehensive Plan and is compatible with the development objectives of the town; and, WHEREAS, the Vail Town Council finds and determines that the amendment to the Vail Village Master Plan furthers the general and specific purposes of the plan; and, WHEREAS, the Vail Town Council finds and determines that the amendment promotes the health, safety, morals, and general welfare of the town and promotes the coordinated and harmonious development of the town in a manner that conserves and enhances its natural environment and its established character as a resort and residential community of the highest quality. NOW THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO THAT: SECTION 1. Chapter VII, Vail Village Sub - Areas, East Gore Creek Sub -Area ( #6), Vail Village Master Plan, is hereby amended in part as follows (text to be deleted is in str text that is to be added is bold, and sections of text that are not amended have been omitted): EAST GORE CREEK SUB AREA ( #6) A number of the earliest projects developed in Vail are located in the East Gore Creek Sub -Area. Development in this area is exclusively multi - family condominium and townhouse projects with a very limited amount of support commercial. Surface parking is found at each site, which creates a very dominant visual impression of the sub -area. While the level of development in East Gore Creek is generally greater than that allowed under existing zoning, this area has the potential to absorb density without compromising the character of the Village. This development could be accommodated by partial infills of existing parking areas balanced by greenspace additions or through increasing the height of existing buildings (generally one story Resolution No. 23, Series of 2010 10/5/2010 8 -1 -I over existing heights). In order to maintain the architectural continuity of projects, additional density should be considered only in conjunction with the comprehensive redevelopment of condominium projects or redevelopment of individual townhouse units. There are several townhouse projects within this subarea which were platted and /or constructed under Eagle County jurisdiction. These townhouse projects are nonconforming with the many of development standards (including, but not limited to density, GRFA, setbacks, site coverage, landscape area) of the Town Zoning Regulations. It is recommended that greater flexibility with the standards may be necessary to allow these townhouse projects to redevelop. This flexibility may be achieved through the approval of variances or the establishment of a townhouse zone district. However, the granting of variances or the establishment of a townhouse zone district should consider potential impacts to the character of the neighborhood. Clearly, one of the main objectives to consider in the redevelopment of any property should be to improve existing parking facilities. This includes satisfying parking demands for existing and additional development °. �v°" as d e6 i g R GORSi` era+ionc pelt tO Fedev°'�Tea+ FOPS) � . The opportunity to introduce below grade structured parking will greatly improve pedestrianization and landscape features in this area. This should be considered a goal of any redevelopment proposal in this sub -area. Development or redevelopment of this sub -area may w4 attract additional traffic and population into this area and may have significant impacts upon portions of Sub -Areas 7 and 10. #6 -1 °° °i,_or+i ° Ir,Fi" Texas Townhomes/Vail Trails Additional floor or residential development over what is existing. d it +r\ ho GGRG GRIP OR nr\N lRGtir\ri Ynii +h -A G9Rq ProheRGiVe Fede ieIGPmori+ of eanh PFe}eet To encourage redevelopment, the Vail Village Townhouse (VVT) District was established to grant additional floor area over what was existing. A key factor in the redevelopment of these properties will be to relocate required parking in underground structures or a single unified structure serving all adjacent properties. This will allow for increased landscaping and overall improvements to pedestrian ways to create a park -like setting on the surface in this area. In order to implement increased floor area, either the initial eave height along the south elevation of buildings should be at 35' in height or less or there shall be a horizontal stepback in building facades of 2' to 3' in the first 35' of building height. The intent of this is to maintain the existing character of the neighborhood, with the appearance of 2 -3 story buildings along the front elevation. In all cases, the mature pines along Gore Creek shall be maintained. Stream impact must be considered. Special emphasis on 1.2, 2.3, 2.6, 3.1, 5.1, 6.2. #6 -2 Manor Vail Possible residential infill on portions of existing surface parking area and additional floor to the two northern most buildings adjacent to Gore Creek. Infill project must include addition of greenspace adjacent to East Mill Creek and other adjoining pedestrian areas. Height of structure shall be limited to prevent impacts on view to the Gore Range from Village core and Vail Valley Drive. Present and future parking demand to be met on site. Traffic considerations must be addressed. Special emphasis on 1.2, 2.3, 2.6, 3.1, 4.1, 5.1, 6.1 Resolution No. 23, Series of 2010 10/5/2010 8 -1 -2 #6 -3 Vail Row Houses To encourage redevelopment, the Vail Village Townhouse (WT) District was established to grant additional floor area over what was existing. It is recognized as not being practical to require subsurface parking in this area due to the limited site area, and the impact of individual units constructing garages could have on the appearance and character of the area. As a result, it is recommended that enclosed parking be considered on a case -by -case basis, and may be limited to single -car garages (with the depth to allow for tandem parking when possible). When possible, driveway widths shall be minimized and increased areas for landscaping should be considered. Surface parking should be improved when redevelopment occurs using high quality landscape paver treatments and the current "post and chain" parking delineation should be replaced with other methods to identify private parking. In order to implement increased floor area, either the initial eave height along the south elevation of buildings should be at 35' in height or less or there shall be a horizontal step -back in the building facade of 2' to 3' in the first 35' of building height. The intent of this is to maintain the existing character of the neighborhood, with the appearance of 2 -3 story buildings along the front elevation. Improvement of the stream corridor consistent with Town policies should be considered with redevelopment applications. Special emphasis on 1.2, 2.3, 2.6, 3.1, 5.1, 6.2. EA 5 i t EAST �. rjL- }' 1 719EEK INTRODUCED, PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Vail held this 19th day of October, 2010. Richard D. Cleveland, Mayor of the Town of Vail, Colorado ATTEST: Lorelei Donaldson, Town Clerk Resolution No. 23, Series of 2010 10/5/2010 8 -1 -3 VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: October 5, 2010 ITEM /TOPIC: Resolution No. 24, Series of 2010, a Resolution Approving an Intergovernmental Agreement Between the Town of Vail and the Colorado Department of Transportation Regarding Highway Maintenance; and Setting Forth Details in Regard Thereto. PRESENTER(S): Greg Hall ACTION REQUESTED OF COUNCIL: Approve the IGA, and authorize the Town Manager to sign and enter into the IGA with CDOT. BACKGROUND: The Colorado Department of Transportation ( "CDOT ") is required to maintain State highways including highways extending through a city or an incorporated town. The Town of Vail and CDOT wish to enter into an Intergovernmental Agreement authorizing the Town to maintain the highways within town limits, and for the State of Colorado to pay a fee of $120,998.00 for such services. STAFF RECOMMENDATION: Approve the IGA, and authorize the Town Manager to sign and enter into the IGA with the CDOT in a form approved by the Town Attorney. ATTACHMENTS: Resolution No. 24, Series of 2010 Exhibit A CDOT IGA IOij 2010 RESOLUTION NO. 24 Series of 2010 A RESOLUTION APPROVING AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE TOWN OF VAIL AND THE COLORADO DEPARTMENT OF TRANSPORTATION REGARDING HIGHWAY MAINTENANCE; AND SETTING FORTH DETAILS IN REGARD THERETO. WHEREAS, the Town of Vail (the "Town "), in the County of Eagle and State of Colorado is a home rule municipal corporation duly organized and existing under the laws of the State of Colorado and the Town Charter; and WHEREAS, the members of the Town Council of the Town (the "Council ") have been duly elected and qualified; and WHEREAS, Colorado Revised Statute § §43 -2 -102 and 103 requires the Colorado Department of Transportation ( "CDOT ") to maintain State highways, including highways extending through a city or an incorporated town; and WHEREAS, the Town and CDOT wish to enter into the Intergovernmental Agreement (the "IGA ") authorizing the Town to provide some or all maintenance services on state highways within the Town, and for State of Colorado to pay the Town a negotiated rate for such services; and WHEREAS, the Town has adequate facilities to perform the desired maintenance services on State highways within the town limits; and WHEREAS, the Council finds and determines that IGA is necessary and will promote the health, safety, morals, and general welfare of the Town; and WHEREAS, the Council's approval of Resolution No. 24, Series 2010, is required to enter into an IGA. NOW THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO THAT: Section 1. The Council hereby approves the IGA and authorizes the Town Manager to enter into the IGA with CDOT, in substantially the same form as attached hereto as Exhibit A and in a form approved by the Town Attorney. Section 2. This Resolution shall take effect immediately upon its passage. INTRODUCED, PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Vail held this 5 th day of October, 2010. Richard Cleveland, Town Mayor ATTEST: Lorelei Donaldson, Town Clerk Resolution No. 24, Series 2010 10/5/2010 9 -1 -I (State $ LA Work Highway Maintenance Agreement) Town of Vail (Local Agency) COI TRACT # 11 HA3 23321 REGIOI 3 (DAW) ID # 331000361 II TERGOVERI MEI TAL HIGHWAY MAII TEI Al CE AGREEMEI T THIS COI TRACT made this day of 2010, by and between the State of Colorado for the use and benefit of the Colorado Department of Transportation hereinafter referred to as the "State" and the Town of Vail 1309 Elkhorn Drive Vail, COI 81657 CDOT Vendor #: 2000003, hereinafter referred to as the "Contractor" or the "Local Agency." RECITALS 1. Authority exists in the law and funds have been budgeted, appropriated and otherwise made available and a sufficient uncommitted balance thereof remains available for payment of project and Local Agency costs in Fund Number 400, Function 9999, GL Acct. 4541000020, WBS Element or Cost Center R3200 -010, Contract Encumbrance Amount: $0.00 2. Required approval, clearance and coordination have been accomplished from and with appropriate agencies. 3. Section 43 -2 -102 and 103, C.R.S require the State to maintain state highways (including where such highways extend through a city or an incorporated town), and 43 -2 -135 C.R.S. describes certain specific responsibilities of the State and affected local entities (respectively) with respect to state highways that are also part of a local street system; 4. The parties desire to enter this Contract for the Local Agency to provide some or all of the certain maintenance services on state highways that are the responsibility of the State under applicable law, and for the State to pay the Local Agency a reasonable negotiated fixed rate for such services; 5. The parties also intend that the Local Agency shall remain responsible to perform any services and duties on state highways that are the responsibility of the Local Agency under applicable law, at its own cost; 6. The State and the Local Agency have the authority, as provided in Sections 29 -1 -203, 43 -1 -106, 43 -2 -103, 43 -2 -104, and 43 -2 -144 C.R.S., as amended, and in applicable ordinance or resolution duly passed and adopted by the Local Agency, to enter into contract with the Local Agency for the purpose of maintenance on the state highway system as hereinafter set forth; and 7. The Local Agency has adequate facilities to perform the desired maintenance services on State highways within its jurisdiction. THE PARTIES I OW AGREE THAT: Page 1 of 12 10/5/2010 9 -2 -1 Section 1. Scope of Work The Local Agency shall perform all Highway Maintenance Services for the I -70 Frontage Road, MP 172.2 to 180.3 for a total of 8.1 miles, and actual "Lane Miles" total of 11.24 miles on the Interstate or State Highway System segments, which are located within the Local Agency's jurisdiction, for a total length of 11.24 miles ( "the Highways ") as detailed in Exhibit A, attached hereto and incorporated herein by this reference. 11.24 miles on I -70 Frontage Road Such services and highways are further detailed in Section 5. Section 2. Order of Precedence In the event of conflicts or inconsistencies between this contract and its exhibits, such conflicts or inconsistencies shall be resolved by reference to the documents in the following order of priority: 1. Special Provisions contained in section 23 of this contract 2. This contract 3. Exhibit A (Scope of Work) 4. Exhibit C (Option Letter) 5. Other Exhibits in descending order of their attachment. Section 3. Term This contract shall be effective upon approval of the State Controller or designee, or on the date made, whichever is later. The term of this contract shall be for a term of FIVE (5) years. Provided, however, that the State's financial obligation for each subsequent, consecutive fiscal year of that term after the first fiscal year shall be subject to and contingent upon funds for each subsequent year being appropriated, budgeted, and otherwise made available therefore. Section 4. Project Funding and Payment Provisions A. The Local Agency has estimated the total cost of the work and is prepared to accept the state funding for the work, and to complete the work under the project as evidenced by its execution of this contract. B. Subject to the terms of this Contract, for the satisfactory performance of the maintenance services on the Highways, as described in Section 5, the State shall pay the Local Agency on a lump sum basis, payable in monthly installments, upon receipt of the Local Agency's statements, as provided herein. 1. The lump sum payments shall be based solely on the rate negotiated by the parties per mile of the Highways, times the number of miles of the Highways - figured to the hundredth of a mile, per fiscal year of the Contract term. Provided, however, that the total of such payments during the term of the Contract shall not exceed the particular maximum amount determined by that formula of "rate X miles ", unless the Contract is amended or extended accordingly. Page 2 of 12 10/5/2010 9 -2 -2 The rate negotiated by the parties per mile for this Contract is $ 10,764.00 per mile, and the number of miles of the Highways for which the Local Agency will provide maintenance services 8.1 Miles, with actual "Lane Miles" total of 11.24 miles, for a total maximum amount of $120,988.00 per fiscal year, for five (5) years. The negotiated rate per mile shall remain fixed for the full term of the Contract, unless this rate per mile is renegotiated in accordance with the procedure set forth herein in Sections 17 & 18. The total payments to the Local Agency during the term of this Contract shall not exceed the maximum amount of $604,940.00 ( "Rate X miles" X 5 Years), unless this Contract is amended or extended accordingly. ( "Rate times miles per applicable fiscal year ", or $10,764.00 per mile X.11.24 miles), • $120,998.00 in ST Fiscal Year 2011; • $120,998.00 in ST Fiscal Year 2012; • $120,998.00 in ST Fiscal Year 2013; • $120,998.00 in ST Fiscal Year 2014; and • $120,998.00 in ST Fiscal Year 2015. The total payments to the Local Agency during the term of this Contract shall not exceed the annual maximum amount of $120,998.00, and the maximum contract Not to Exceed Value of $604,940.00, unless this Contract is amended or extended accordingly. 2. The statements submitted by the Local Agency for which payment is requested shall contain an adequate description of the type(s) and the quantities of the maintenance services performed, the date(s) of that performance, and on which specific sections of the Highways such services were performed, in accord with standard Local Agency billing standards. 3. If the Local Agency fails to satisfactorily perform the maintenance for a segment of the Highways (or portion thereof), or if the statement submitted by the Local Agency does not adequately document the payment requested, after notice thereof from the State, the State may deduct and retain a proportionate amount from the monthly payment, based on the above rate, for that segment or portion. Section 5. State and Local Agency Commitments A. The Local Agency shall perform the "highway maintenance services" for the certain State Highway System segments described herein. Such services and highways are detailed in Section 1, and /or Exhibit A. B. As used herein the term "maintenance services" shall mean only those maintenance services normally performed by the State to comply with its responsibility under § 43 -2 -102 and 43 -2- 135, C.R.S., as described in the State's then current "Maintenance Management Information Manual ", as amended, which is incorporated herein by this reference. The Local Agency shall obtain a copy of that Manual from the State before it performs any maintenance services under this Contract. ( "Maintenance services" do not include reconstruction of portions of the highways destroyed by Page 3 of 12 10/5/2010 9 -2 -3 major disasters, fires, floods, or Acts of God. Provided, however, that the Local Agency shall give the State immediate notice of the existence of any such conditions on the Highways.) 1. Maintenance services to be performed by the Local Agency, at State expense, for the Highways under this Contract shall include (without limitation) the following services: a. Removal of snow, and application of anti -icing and de -icing materials. b. Warning the State's representative of any "dangerous condition" (as that term is defined in 324 -10- 103(1) C.R.S., as amended), and /or repairing that condition. 2. Local Agency shall also continue to perform, at its own expense, all activities /duties on the Highways that Local Agency is required to perform by 343 -2 -135 (1) (a) and (e), C.R.S., as amended, including, but not limited to: cutting weeds and grasses within the State's right of way; fence maintenance; cleaning of roadways, including storm sewer inlets and catch basins; cleaning of ditches; and repairing of drainage structures, excluding storm sewers. C. The Local Agency shall perform all maintenance services on an annual basis. The Local Agency's performance of such services shall comply with the same standards that are currently used by the State for the State's performance of such services, for similar type highways with similar use, in that year, as determined by the State. The State's Regional Transportation Director, or his representative, shall determine the then current applicable maintenance standards for the maintenance services. Any standards /directions provided by the State's representative to the Local Agency concerning the maintenance services shall be in writing. The Local Agency shall contact the State Region office and obtain those standards before the Local Agency performs such services. D. The Local Agency shall perform the maintenance services in a satisfactory manner and in accordance with the terms of this Contract. The State reserves the right to determine the proper quantity and quality of the maintenance services performed by the Local Agency, as well as the adequacy of such services, under this Contract. The State may withhold payment, if necessary, until Local Agency performs the maintenance services to the State's satisfaction. The State will notify the Local Agency in writing of any deficiency in the maintenance services. The Local Agency shall commence corrective action within 24 hours of receiving actual or constructive notice of such deficiency: a) from the State; b) from its own observation; or c) by any other means. In the event the Local Agency, for any reason, does not or cannot correct the deficiency within 24 hours, the State reserves the right to correct the deficiency and to deduct the actual cost of such work from the subsequent payments to the Local Agency, or to bill the Local Agency for such work. Section 6. Record Keeping Page 4 of 12 10/5/2010 9 -2 -4 The Local Agency shall maintain a complete file of all records, documents, communications, and other written materials, which pertain to the costs incurred under this contract. The Local Agency shall maintain such records for a period of three (3) years after the date of termination of this contract or final payment hereunder, whichever is later, or for such further period as may be necessary to resolve any matters which may be pending. The Local Agency shall make such materials available for inspection at all reasonable times and shall permit duly authorized agents and employees of the State and FHWA to inspect the project and to inspect, review and audit the project records. Section 7. Termination Provisions This contract may be terminated as follows: A. This Contract may be terminated by either party, but only at the end of the State fiscal year (June 30), and only upon written notice thereof sent by registered, prepaid mail and received by the non - terminating party not later than 30 calendar days before the end of that fiscal year. In that event, the State shall be responsible to pay the Local Agency only for that portion of the highway maintenance services actually and satisfactorily performed up to the effective date of that termination, and the Local Agency shall be responsible to provide such services up to that date, and the parties shall have no other obligations or liabilities resulting from that termination. Notwithstanding subparagraph A above, this contract may also be terminated as follows: B. Termination for Convenience. The State may terminate this contract at any time the State determines that the purposes of the distribution of moneys under the contract would no longer be served by completion of the project. The State shall effect such termination by giving written notice of termination to the Local Agency and specifying the effective date thereof, at least twenty (20) days before the effective date of such termination. C. Termination for Cause. If, through any cause, the Local Agency shall fail to fulfill, in a timely and proper manner, its obligations under this contract, or if the Local Agency shall violate any of the covenants, agreements, or stipulations of this contract, the State shall thereupon have the right to terminate this contract for cause by giving written notice to the Local Agency of its intent to terminate and at least ten (10) days opportunity to cure the default or show cause why termination is otherwise not appropriate. In the event of termination, all finished or unfinished documents, data, studies, surveys, drawings, maps, models, photographs and reports or other material prepared by the Local Agency under this contract shall, at the option of the State, become its property, and the Local Agency shall be entitled to receive just and equitable compensation for any services and supplies delivered and accepted. The Local Agency shall be obligated to return any payments advanced under the provisions of this contract. Notwithstanding the above, the Local Agency shall not be relieved of liability to the State for any damages sustained by the State by virtue of any breach of the contract by the Local Agency, and the State may withhold payment to the Local Agency for the purposes of mitigating its damages until Page 5 of 12 10/5/2010 9 -2 -5 such time as the exact amount of damages due to the State from the Local Agency is determined. If after such termination it is determined, for any reason, that the Local Agency was not in default or that the Local Agency's action/inaction was excusable, such termination shall be treated as a termination for convenience, and the rights and obligations of the parties shall be the same as if the contract had been terminated for convenience, as described herein. D. Termination Due to Loss of Funding. The parties hereto expressly recognize that the Local Agency is to be paid, reimbursed, or otherwise compensated with federal and /or State funds which are available to the State for the purposes of contracting for the Project provided for herein, and therefore, the Local Agency expressly understands and agrees that all its rights, demands and claims to compensation arising under this contract are contingent upon availability of such funds to the State. In the event that such funds or any part thereof are not available to the State, the State may immediately terminate or amend this contract. Section 8. Legal Authority The Local Agency warrants that it possesses the legal authority to enter into this contract and that it has taken all actions required by its procedures, by -laws, and /or applicable law to exercise that authority, and to lawfully authorize its undersigned signatory to execute this contract and to bind the Local Agency to its terms. The person(s) executing this contract on behalf of the Local Agency warrants that such person(s) has full authorization to execute this contract. Section 9. Representatives and I otice The State will provide liaison with the Local Agency through the State's Region Director Region3, 222 S. 6 th Street Grand Junction, CO 81501. Said Region Director will delegate responsibilities for coordinating the State's activities under this contract to the R3 Maintenance Superintendent who will also issue a "Notice to Proceed" to the Local Agency for commencement of the Work. All communications relating to the day -to -day activities for the work shall be exchanged between representatives of the State's Transportation Region 3 and the Local Agency. All communication, notices, and correspondence shall be addressed to the individuals identified below. Either party may from time to time designate in writing new or substitute representatives. If to State: If to the Local Agency: Toby Brown Greg Hall CDOT Region 3 Town of Vail Maintenance Superintendent Public Works Director 606S. 9 1h Street 1309 Elkhorn Drive Grand Junction, Colorado 81501 Vail, Colorado 81657 (970) 683 -6305 (970) 479 -2100 Section 10. Successors Except as herein otherwise provided this contract shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assignees. Page 6 of 12 10/5/2010 9 -2 -6 Section 11. Third Party Beneficiaries It is expressly understood and agreed that the enforcement of the terms and conditions of this contract and all rights of action relating to such enforcement, shall be strictly reserved to the State and the Local Agency. Nothing contained in this contract shall give or allow any claim or right of action whatsoever by any other third person. It is the express intention of the State and the Local Agency that any such person or entity, other than the State or the Local Agency receiving services or benefits under this contract shall be deemed an incidental beneficiary only. Section 12. Governmental Immunity Notwithstanding any other provision of this contract to the contrary, no term or condition of this contract shall be construed or interpreted as a waiver, express or implied, of any of the immunities, rights, benefits, protection, or other provisions of the Colorado Governmental Immunity Act, § 24 -10 -101, et seq., C.R.S., as now or hereafter amended. The parties understand and agree that liability for claims for injuries to persons or property arising out of negligence of the State of Colorado, its departments, institutions, agencies, boards, officials and employees is controlled and limited by the provisions of § 24 -10 -101, et seq., C.R.S., as now or hereafter amended and the risk management statutes, §§ 24 -30 -1501, et seq., C.R.S., as now or hereafter amended. Section 13. Severability To the extent that this contract may be executed and performance of the obligations of the parties may be accomplished within the intent of the contract, the terms of this contract are severable, and should any term or provision hereof be declared invalid or become inoperative for any reason, such invalidity or failure shall not affect the validity of any other term or provision hereof. Section 14. Waiver The waiver of any breach of a term, provision, or requirement of this contract shall not be construed or deemed as a waiver of any subsequent breach of such term, provision, or requirement, or of any other term, provision or requirement. Section 15. Entire Understanding This contract is intended as the complete integration of all understandings between the parties. No prior or contemporaneous addition, deletion, or other amendment hereto shall have any force or effect whatsoever, unless embodied herein by writing. No subsequent novation, renewal, addition, deletion, or other amendment hereto shall have any force or effect unless embodied in a writing executed and approved pursuant to the State Fiscal Rules. Section 16. Survival of Contract Terms Notwithstanding anything herein to the contrary, the parties understand and agree that all terms and conditions of this contract and the exhibits and attachments hereto which may require continued performance, Page 7 of 12 10/5/2010 9 -2 -7 compliance or effect beyond the termination date of the contract shall survive such termination date and shall be enforceable by the State as provided herein in the event of such failure to perform or comply by the Local Agency. Section 17. Modification and Amendment A. This contract is subject to such modifications as may be required by changes in federal or State law, or their implementing regulations. Any such required modification shall automatically be incorporated into and be part of this contract on the effective date of such change as if fully set forth herein. Except as provided above, no modification of this contract shall be effective unless agreed to in writing by both parties in an amendment to this contract that is properly executed and approved in accordance with applicable law. B. Either party may suggest renegotiation of the terms of this Contract, provided that the Contract shall not be subject to renegotiation more often than annually, and that neither party shall be required to renegotiate. If the parties agree to change the provisions of this Contract, the renegotiated terms shall not be effective until this Contract is amended / modified accordingly in writing. Provided, however, that the rates will be modified only if the party requesting the rate change documents, in accord with then applicable cost accounting principles and standards (including sections 24- 107 -101, et seq. C.R.S. and implementing regulations), that the requested increase /decrease is based on and results from (and is proportionate to) an increase /decrease in the "allowable costs" of performing the Work. Any such proposed renegotiation shall not be effective unless agreed to in writing by both parties in an amendment to this contract that is properly executed and approved by the State Controller or his delegates. Section 18. Option Letters Option Letters may be used to extend Agreement term, change the level of service within the current term due to unexpected overmatch, add a phase without increasing contract dollars, or increase or decrease the amount of funding. These options are limited to the specific scenarios listed below. The Option Letter shall not be deemed valid until signed by the State Controller or an authorized delegate. Following are the applications for the individual options under the Option Letter form: Option I - Option to extend or renew (this option applies to Highway and Signal maintenance contracts only). In the event the State desires to continue the Services and a replacement contract has not been fully approved by the termination date of this contract, the State, upon written notice to Contractor, may unilaterally extend this contract for a period of up to one (1) year. The contract shall be extended under the same terms and conditions as the original contract, including, but not limited to prices, rates and service delivery requirements. This extension shall terminate at the end of the one (1) year period or when the replacement contract is signed by the Colorado State Controller or an authorized delegate. The State may exercise this option by providing a fully executed option to the contractor, within thirty (30) days prior to the end of the current contract term, revising the Section 4. Project Funding Provisions. If the State exercises this option, the extended contract will be considered to include this option provision. The total duration of this contract, including the exercise of any options under this clause, shall not exceed five (5) years. Option 2 — Level of service change within current term due to unexpected overmatch in an overbid situation only In the event the State has contracted all project funding and the Local Agency's construction bid is higher than expected, this option allows for additional Local Overmatch dollars to be provided by the Local Agency to be added to the contract. This option is only applicable for Local Overmatch on an overbid situation and shall not be intended for any other Local Overmatch funding. The State may unilaterally increase the total dollars of this contract as stipulated by the executed Option Letter (Exhibit C), which will bring the maximum amount payable under this contract to the amount indicated in Section 4. Project Funding Provisions attached to the executed Option Letter (future Page 8of12 10/5/2010 9 -2 -8 changes to Exhibit C shall reference additional changes to Section 4). Performance of the services shall continue under the same terms as established in the contract. The State will use the Financial Statement submitted by the Local Agency for "Concurrence to Advertise" as evidence of the Local Agency's intent to award and it will also provide the additional amount required to exercise this option. If the State exercises this option, the contract will be considered to include this option provision. Option 3 — Option to add overlapping phase without increasing contract dollars The State may require the contractor to begin a phase that may include Design, Construction, Environmental, Utilities, ROW Incidentals or Miscellaneous (this does not apply to Acquisition/Relocation or Railroads) as detailed in Exhibit A and at the same terms and conditions stated in the original contract with the contract dollars remaining the same. The State may exercise this option by providing a fully executed option to the contractor within thirty (30) days before the initial targeted start date of the phase, in the Option Letter, Exhibit C. If the State exercises this option, the contract will be considered to include this option provision. Option 4 - To update funding (increases and /or decreases) with a new Section 4 Project Funding Provision This option can be used to increase and /or decrease the overall contract dollars (state, federal, local match, local agency overmatch) to date, by replacing the original funding provisions. The State may have a need to update changes to state, federal, local match and local agency overmatch funds, which will be attached to the option form. The State may exercise this option by providing a fully executed option to the contractor within thirty (3 0) days after the State has received notice of funding changes, in the of Option Letter Exhibit C. If the State exercises this option, the contract will be considered to include this option provision. Section 19. Disputes Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed of by agreement, will be decided by the Chief Engineer of the Department of Transportation. The decision of the Chief Engineer will be final and conclusive unless, within 30 calendar days after the date of receipt of a copy of such written decision, the Local Agency snails or otherwise furnishes to the State a written appeal addressed to the Executive Director of the Department of Transportation. In connection with any appeal proceeding under this clause, the Local Agency shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the Local Agency shall proceed diligently with the performance of the contract in accordance with the Chief Engineer's decision. The decision of the Executive Director or his duly authorized representative for the determination of such appeals will be final and conclusive and serve as final agency action. This dispute clause does not preclude consideration of questions of law in connection with decisions provided for herein. Nothing in this contract, however, shall be construed as making final the decision of any administrative official, representative, or board on a question of law. Section 20. Does not supercede other agreements This Contract is not intended to supercede or affect in any way any other agreement (if any) that is currently in effect between the State and the Local Agency for other "maintenance services" on State Highway rights -of -way within the jurisdiction of the Local Agency. Also, the Local Agency shall also continue to perform, at its own expense, all such activities /duties (if any) on such State Highway rights -of- ways that the Local Agency is required by applicable law to perform. Section 21. Sub Local Agencies The Local Agency may subcontract for any part of the performance required under this Contract, Page 9 of 12 10/5/2010 9 -2 -9 subject to the Local Agency first obtaining approval from the State for any particular Sub -Local Agency. The State understands that the Local Agency may intend to perform some or all of the services required under this Contract through a Sub -Local Agency. The Local Agency agrees not to assign rights or delegate duties under this contract [or subcontract any part of the performance required under the contract] without the express, written consent of the State [which shall not be unreasonably withheld]. Except as herein otherwise provided, this agreement shall inure to the benefit of and be binding only upon the parties hereto and their respective successors and assigns. Section 22. Statewide Contract Management System If the maximum amount payable to Contractor under this Contract is $100,000 or greater, either on the Effective Date or at anytime thereafter, this §Statewide Contract Management System applies. Contractor agrees to be governed, and to abide, by the provisions of CRS §24- 102 -205, §24 -102 -206, §24 -103 -601, §24- 103.5 -101 and §24- 105 -102 concerning the monitoring of vendor performance on state contracts and inclusion of contract performance information in a statewide contract management system. Contractor's performance shall be subject to Evaluation and Review in accordance with the terms and conditions of this Contract, State law, including CRS §24- 103.5 -101, and State Fiscal Rules, Policies and Guidance. Evaluation and Review of Contractor's performance shall be part of the normal contract administration process and Contractor's performance will be systematically recorded in the statewide Contract Management System. Areas of Evaluation and Review shall include, but shall not be limited to quality, cost and timeliness. Collection of information relevant to the performance of Contractor's obligations under this Contract shall be determined by the specific requirements of such obligations and shall include factors tailored to match the requirements of Contractor's obligations. Such performance information shall be entered into the statewide Contract Management System at intervals established herein and a final Evaluation, Review and Rating shall be rendered within 30 days of the end of the Contract term. Contractor shall be notified following each performance Evaluation and Review, and shall address or correct any identified problem in a timely manner and maintain work progress. Should the final performance Evaluation and Review determine that Contractor demonstrated a gross failure to meet the performance measures established hereunder, the Executive Director of the Colorado Department of Personnel and Administration (Executive Director), upon request by the Department of Transportaion , and showing of good cause, may debar Contractor and prohibit Contractor from bidding on future contracts. Contractor may contest the final Evaluation, Review and Rating by: (a) filing rebuttal statements, which may result in either removal or correction of the evaluation (CRS §24 -105- 102(6)), or (b) under CRS §24- 105 - 102(6), exercising the debarment protest and appeal rights provided in CRS § §24- 109 -106, 107, 201 or 202, which may result in the reversal of the debarment and reinstatement of Contractor, by the Executive Director, upon showing of good cause. SPECIAL PROVISIOI S Section 23. The Special Provisions apply to all contracts except where noted in italics. 1. COI TROLLER'S APPROVAL. CRS §24 -30- 202(1). This contract shall not be valid until it has been approved by the Colorado State Controller or designee. Page 10 of 12 10/5/2010 9 -2 -10 2. FUI D AVAILABILITY. CRS §24 -30- 202(5.5). Financial obligations of the State payable after the current fiscal year are contingent upon funds for that purpose being appropriated, budgeted, and otherwise made available. 3. GOVERI MEI TAL 1MMU1 ITY. No term or condition of this contract shall be construed or interpreted as a waiver, express or implied, of any of the immunities, rights, benefits, protections, or other provisions, of the Colorado Governmental Immunity Act, CRS §24 -10 -101 et seq., or the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b) and 2671 et seq., as applicable now or hereafter amended. 4. II DEPEI DE1 T LOCAL AGEI CY. Local Agency shall perform its duties hereunder as an independent Local Agency and not as an employee. Neither Local Agency nor any agent or employee of Local Agency shall be deemed to be an agent or employee of the State. Local Agency and its employees and agents are not entitled to unemployment insurance or workers compensation benefits through the State and the State shall not pay for or otherwise provide such coverage for Local Agency or any of its agents or employees. Unemployment insurance benefits will be available to Local Agency and its employees and agents only if such coverage is made available by Local Agency or a third party. Local Agency shall pay when due all applicable employment taxes and income taxes and local head taxes incurred pursuant to this contract. Local Agency shall not have authorization, express or implied, to bind the State to any agreement, liability or understanding, except as expressly set forth herein. Local Agency shall (a) provide and keep in force workers' compensation and unemployment compensation insurance in the amounts required by law, (b) provide proof thereof when requested by the State, and (c) be solely responsible for its acts and those of its employees and agents. 5. COMPLIAI CE WITH LAW. Local Agency shall strictly comply with all applicable federal and State laws, rules, and regulations in effect or hereafter established, including, without limitation, laws applicable to discrimination and unfair employment practices. 6. CHOICE OF LAW. Colorado law, and rules and regulations issued pursuant thereto, shall be applied in the interpretation, execution, and enforcement of this contract. Any provision included or incorporated herein by reference which conflicts with said laws, rules, and regulations shall be null and void. Any provision incorporated herein by reference which purports to negate this or any other Special Provision in whole or in part shall not be valid or enforceable or available in any action at law, whether by way of complaint, defense, or otherwise. Any provision rendered null and void by the operation of this provision shall not invalidate the remainder of this contract, to the extent capable of execution. 7. B11 DIl G ARBITRATIO1 PROHIBITED. The State of Colorado does not agree to binding arbitration by any extra- judicial body or person. Any provision to the contrary in this contact or incorporated herein by reference shall be null and void. 8. SOFTWARE PIRACY PROHIBITIOI . Governor's Executive Order D 002 00. State or other public funds payable under this contract shall not be used for the acquisition, operation, or maintenance of computer software in violation of federal copyright laws or applicable licensing restrictions. Local Agency hereby certifies and warrants that, during the term of this contract and any extensions, Local Agency has and shall maintain in place appropriate systems and controls to prevent such improper use of public funds. If the State determines that Local Agency is in violation of this provision, the State may exercise any remedy available at law or in equity or under this contract, including, without limitation, immediate termination of this contract and any remedy consistent with federal copyright laws or applicable licensing restrictions. 9. EMPLOYEE F11 Al CIAL 11 TEREST /COI FLICT OF 11 TEREST. CRS § §24 -18 -201 and 24 -50 -507. The signatories aver that to their knowledge, no employee of the State has any personal or beneficial interest whatsoever in the service or property described in this contract. Local Agency has no interest and shall not acquire any interest, direct or indirect, that would conflict in any manner or degree with the performance of Local Agency's services and Local Agency shall not employ any person having such known interests. 10. VEI DOR OFFSET. CRS § §24 -30 -202 (I) and 24- 30- 202.4. [I of Applicable to intergovernmental agreements] Subject to CRS §24 -30 -202.4 (3.5), the State Controller mar withhold pen inenr under the State's vendor offset intercept system for debts owed to State agencies for: (a) unpaid child support debts or child support an earages; (b) impaid balances of tax, accrued interest, or other charges specified in CRS $39 -21 -101, et seq.; (e) unpaid loans due to the Student Loan Division ojYhe Deparment of'Higher Education; (d) amounts required to be paid to the Unemployment Compensation Fund; and (e) other unpaid debts owing to the Slate as a result offinal agency determination orjudicial action. 11. PU LIC CONTRACTS FOR SERVICES. CRS -17.5 -101. [Not Applicable to agreements relating to the offer, issuance, or sale of securities, investment advisory services or fund management services, sponsored projects, intergovernmental agreements, or information technology services or products and services] Local Agency certifies, warrants, and agrees that it does not knowingly employ or contract with an illegal alien who will perform work under this contract and will confirm the employment eligibility of all employees who are newly hired for employment in the United States to perform work under this contract, through participation in the E- Verify Program or the Department program established pursuant to CRS 8- 17.5- 102(5)(c), Local Agency shall not knowingly employ or contract with an illegal alien to perform work under this contract enter into a contract with a sub -Local Agency that fails to certify to Local Agency that the sub -Local Agency shall not knowingly employ or contract with an illegal alien to perform work under this contract Local Agency (a) shall not use E- Verify Program or Department program procedures to undertake pre- employment screening of job applicants while this contract is being performed, (b) shall notify the sub -Local Agency and the contracting State agency within three days if Local Agency has actual knowledge that a sub -Local Agency is employing or contracting with an illegal alien for work under this contract, (c) shall terminate the subcontract if a sub- LocalAgency does not stop employing or contracting with the illegal alien within three days of receiving the notice, and (d) shall comply with reasonable requests made in the course of an investigation, undertaken pursuant to CRS 8- 17.5- 102(5), by the Colorado Department of Labor and Employment. If Local Agency participates in the Department program, Local Agency shall deliver to the contracting State agency, Institution of Higher Education or political subdivision a written, notarized affirmation, affirming that Local Agency has examined the legal work status of such employee, and shall comply with all of the other requirements of the Department program. If Local Agency fails to comply with any requirement of this provision or CRS 8- 17.5 -101 et seq., the contracting State agency, institution ofhigher education or political subdivision may terminate this contract for breach and, ifso terminated, Local Agency shall be liable for damages. 12. PUBLIC COI TRACTS WITH I ATURAL PERSOI S. CRS §24- 76.5 -101. Local Agency, if a natural person eighteen (18) years of age or older, hereby swears and SIGNATURE Pil affirms under penalty of perjury that he or she (a) is a citizen or otherwise lawfully present in the United States pursuant to federal law, (b) shall comply with the provisions of CRS §24- 76.5 -101 et seq., and (e) has produced one form of identification required by CRS §24- 76.5 -103 prior to the effective date of this contract. Revised 1 -1 -09 THE PARTIES HERETO HAVE EXECUTED THIS COI TRACT LOCAL AGEI CY: STATE OF COLORADO: Page 11 of 12 10/5/2010 9 -2 -11 BILL RITTER, JR. GOVERI OR Town of Vail By Legal I ame of Contracting Entity Executive Director Department of Transportation 2000003 CDOT Vendor I umber LEGAL REVIEW: Signature of Authorized Officer JOHI W. SUTHERS ATTORI EY GEI ERAL By Print I ame & Title of Authorized Officer LOCAL AGEI CIES: (A Local Agency attestation is required.) Attest (Seal) By (Town /City /County Clerk) (Place Local Agency seal here, if available) ALL COI TRACTS MUST BE APPROVED BY THE STATE COI TROLLER CRS 24 -30 -202 requires that the State Controller approve all state contracts. This contract is not valid until the State Controller, or such assistant as he may delegate, has signed it. The Local Agency is not authorized to begin performance until the contract is signed and dated below. If performance begins prior to the date below, the State of Colorado may not be obligated to pay for the goods and /or services provided. STATE COI TROLLER: DAVID J. MCDERMOTT, CPA By Date Page 12 of 12 10/5/2010 9 -2 -12 Exhibit A SCOPE OF WORK TOWN OF VAIL DEPARTMENT OF PUBLIC WORKS LIST OF INTERSTATE AND STATE HIGHWAYS UNDER THE MAINTENANCE AGREEMENT CONTRACT 1. Maintenance services to be performed by the Local Agency, at State expense, for the Highways under this Contract shall include (without limitation) the following services: a. Removal of snow, and application of anti -icing and de -icing materials. b. Warning the State's representative of any "dangerous condition" (as that term is defined in 324- 10- 103(l) C.R.S., as amended), and /or repairing that condition. 2. Local Agency shall also continue to perform, at its own expense, all activities /duties on the Highways that Local Agency is required to perform by 343 -2 -135 (1) (a) and (e), C.R.S., as amended, including, but not limited to: cutting weeds and grasses within the State's right of way; fence maintenance; cleaning of roadways, including storm sewer inlets and catch basins; cleaning of ditches; and repairing of drainage structures, excluding storm sewers. II TERSTATE 70 ( #STATE HIGHWAY #) MILES LAI E MILES I -70 170 Frontage Road MP 172.2 TO MP 180.3 8.1 11.24 TOTAL MILEAGE FOR MAII TEI Al CE 11.24 RATE $10,764.00 PER MILE X 11.24 MILES = $120,993.00 Per Fiscal Year $120,993.00 Per Year X 5 Years = $604.965.00 Total Contract Value Exhibit A - Page 1 of 1 10/5/2010 9 -2 -13 Exhibit B LOCAL AGENCY ORDINANCE or RESOLUTION (NOT APPLICABLE TO THIS AGREEMENT) 10/5/2010 9 -2- 14 Exhibit C SAMPLE IGA OPTION LETTER This option is limited to the specific contract scenarios listed below AND cannot be used in place of exercising a formal amendment. D te: St to Fisc I Ye r: Option Letter No. CLIN Routin # Loc IA ency : A. SU JECT: (Choose applicable options listed below AND in section 8 and delete the rest) 1. Option to renew (for an additional term) applies to Highway and Signal maintenance contracts ONLY; this renewal cannot be used to make any change to the original scope of work; 2. Level of service change within current term due to an unexpected Local overmatch on an overbid situation ONLY; 3. Option to add phasing to include Design, Construction, Environmental, Utilities, ROW incidentals or Miscellaneous ONLY (does not apply to Acquisition /Relocation or Railroads); 4. Option to update funding (a new Section 4. Project Funding Provisions must be referenced with the option letter and shall be labeled Revision 1 to Section 4. Project Funding Provisions (future changes for this option shall be labeled as follows: Revision 2, etc.) REQUIRED PROVISIONS. All Option Letters shall contain the appropriate provisions set forth below: (Insert the following language for use with Options #1): In accordance with Paragraph(s) of contract routing number ( insert FY, Agency code, CLIN routin #), between the State of Colorado, Department of Transportation, and ( insert contractor's name) the state hereby exercises the option for an additional term of ( insert performance period here) at a cost/price specified in Paragraph /Section /Provision of the original contract, AND /OR an increase in the amount of goods /services at the same rate(s) as specified in Paragraph of the original contract. (Insert the following language for use with Option #2): In accordance with the terms of the original contract ( insert FY, Agency code CLIN routing #) between the State of Colorado, Department of Transportation and (insert contractor's name here) the State hereby exercises the option to record a level of service change due to unexpected overmatch dollars due to an overbid situation. The contract is now increased by ( indicate additional dollars here specified in Paragraph /Section /Provision of the original contract. (Insert the following language for use with Option #3): In accordance with the terms of the original contract ( insert FY, Agency code CLIN routing #) between the State of Colorado, Department of Transportation and (insert contractor's name here) the State hereby exercises the option to add an overlapping phase in (indicate Fiscal Year here that will include ( describe which phase will be added and include all that apply— Design, Construction, Environmental, Utilities, ROW incidentals or Miscellaneous Total funds for this contract remain the same (indicate total dollars here as referenced in Paragraph /Section /Provision /Exhibit of the original contract. (Insert the following language for use with Option #4): In accordance with the terms of the original contract ( insert FY, Agency code CLIN routing #) between the State of Colorado, Department of Transportation and (insert contractor's name here) the State hereby exercises the option to update funding based on changes from state, federal, local match and /or local agency overmatch funds. Exhibit26(Page 1 of 2 9 -2- 15 Exhibit C The contract is now ( select one: increased and /or decreased) by ( insert dollars here specified in Paragraph /- Section /- Provision /Exhibit of the original contract. A new Section 4. Project Funding Provisions is made part of the original contract and replaces the original Section 4. Project Funding Provisions. (The following language must be included on all options): The amount of the current Fiscal Year contract value is ( increased /decreased by ( amount of change) to a new contract value of ( ) to satisfy services /goods ordered under the contract for the current fiscal year ( indicate Fiscal Year) The first sentence in Paragraph /Section /Provision is hereby modified accordingly. The total contract value to include all previous amendments, option letters, etc. is ( ). The effective date of this Option Letter is upon approval of the State Controller or delegate, whichever is later. APPROVALS: For the Contractor / Local Agency Legal Name of Contractor / L:ocal Agency By: Print Name of Authorized Individual Signature: Date: Title: Official Title of Authorized Individual State of Colorado: Bill Ritter, Jr., Governor By. Executive Director, Colorado Department of Transportation ALL CONTRACTS MUST BE APPROVED BY THE STATE CONTROLLER CRS §24 -30 -202 requires the State Controller to approve all State Contracts. This Contract is not valid until signed and dated below by the State Controller or delegate. Contractor is not authorized to begin performance until such time. If Contractor begins performing prior thereto, the State of Colorado is not obligated to pay Contractor for such performance or for any goods and /or services provided hereunder. State Controller David J. McDermott, CPA By: Date: Issuance Date: Controller Signature Exhibit26(Page 2 of 2 9 -2- 16