ORDINANCE NO. 260940
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Sponsor: City Manager’s Office
Approving an Amended and Restated Industrial Development Plan (the “Amended Plan”) for the purpose of facilitating the implementation of a previously approved project for the acquisition and construction of a commercial multifamily apartment complex and a related parking garage, located at 1923 Broadway Boulevard, Kansas City, Missouri, by revising the Payment in Lieu of Tax (“PILOT”) Schedule; authorizing and approving various agreements for the purpose of setting forth covenants, agreements and obligations of the City and Denali III, LLC (the “Company”); authorizing and approving certain other documents; and authorizing certain other actions in connection therewith.
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WHEREAS, the City of Kansas City, Missouri, a constitutional charter city and municipal corporation of the State of Missouri (the “City”), is authorized pursuant to the provisions of Article VI, Section 27(b) of the Missouri Constitution, as amended, and the City of Kansas City Charter to issue its revenue bonds for the purpose of paying all or a part of the cost of purchasing, constructing, extending or improving any facility to be leased or otherwise disposed of pursuant to law to private persons or corporations for manufacturing, commercial, warehousing and industrial development purposes, including the real estate, buildings, fixtures and machinery, such revenue bonds to be paid solely from revenue received from such project; and
WHEREAS, pursuant to Committee Substitute for Ordinance No. 170192 passed by the City Council on March 30, 2017 (the “Ordinance”), the City previously authorized and approved, among other things, an Industrial Development Plan (the “Original Plan”) and the issuance of the City’s Taxable Industrial Development Revenue Bonds in a maximum aggregate principal amount not to exceed $40,000,000.00, to implement a development project for the purpose of acquiring and constructing a 226-unit commercial multifamily apartment complex (plus 2 additional guest suites) and constructing a 209-stall underground parking garage, including real property acquisition and improvements, which, according to current plans, consistent with the intent of the Ordinance, will consist of 218 units (the “Project”), which is located at 1923 Broadway in the City, to be used by Opus Development Company, LLC or an affiliate or other designee thereof, and Opus Development Company, LLC has assigned the Project to its designee, the Company; and
WHEREAS, as authorized by the Ordinance, the City executed and delivered a Trust Indenture dated as of July 1, 2021 (the “Indenture”) pursuant to which the City issued its Taxable Industrial Development Revenue Bonds (Lux Living Crossroads Apartments Project) Series 2021 (the “Bonds”) in the maximum principal amount not to exceed $40,000,000.00, and the City entered into the Lease Agreement dated as of July 1, 2021 (the “Original Lease”) with the Company, pursuant to which the City, as lessor, acquired title to the Project in consideration of rentals sufficient to pay the principal of and interest on the Bonds; and
WHEREAS, consistent with the intent of the Ordinance, the Project is currently under construction by the Company; and
WHEREAS, the Company has requested, as lessee under the Original Lease and as owner of 100% of the outstanding Bonds, that the City authorize and approve, among other things, the Amended Plan, a First Supplemental Lease Agreement, and a First Amendment to Incentives Compliance Agreement, all to facilitate implementing the Project by revising the PILOT Schedule; and
WHEREAS, the Original Plan contemplated total PILOTs in the amount of $6,805,250.00, based on an anticipated schedule commencing in 2020 and terminating in 2039. Based on the timing of the issuance, the PILOT Schedule was not activated until 2022 (still terminating in 2039), resulting in total PILOT payments of $5,380,446.00. The Amended Plan modifies the schedule of payments to decrease the amounts due for 2024 and 2025, while increasing the amounts due for all subsequent years, resulting in an equal total amount of PILOT payments of $5,380,446.00 (still terminating in 2039); and
WHEREAS, pursuant to the City’s direction to utilize Chapter 100 procedures for the Bonds and the Project, notice of the Project was given to the taxing jurisdictions in accordance with the procedures set forth in Section 100.059.1 of the Revised Statutes of Missouri; and
WHEREAS, the Council has heretofore and does hereby find and determine that it is desirable for the economic development of the City and within the public purposes of the Act (as defined in the Indenture) that the Council approve an Amended and Restated Industrial Development Plan as proposed by the Company; and
WHEREAS, the City further finds and determines that it is necessary and desirable in connection with the Project and the issuance of the Bonds that the City enter into certain agreements, and that the City take certain other actions and approve the execution of certain other documents as herein provided; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:
Section 1. The City Council hereby finds and determines that the Project continues to promote the economic well-being and industrial development of the City and the Project will be in furtherance of the public purposes set forth in the Act. The City Council hereby approves the Amended Plan for the Project, which modifies the PILOT Schedule to read as follows:
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Year 1 |
2022 |
$23,066.00 |
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Year 2 |
2023 |
$23,066.00 |
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Year 3 |
2024 |
$48,706.93 |
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Year 4 |
2025 |
$14,157.69 |
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Year 5 |
2026 |
$354,536.58 |
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Year 6 |
2027 |
$354,536.58 |
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Year 7 |
2028 |
$361,626.98 |
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Year 8 |
2029 |
$361,626.98 |
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Year 9 |
2030 |
$368,859.43 |
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Year 10 |
2031 |
$368,859.43 |
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Year 11 |
2032 |
$376,237.28 |
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Year 12 |
2033 |
$376,237.28 |
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Year 13 |
2034 |
$383,761.67 |
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Year 14 |
2035 |
$383,761.67 |
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Year 15 |
2036 |
$391,437.06 |
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Year 16 |
2037 |
$391,437.06 |
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Year 17 |
2038 |
$399,265.69 |
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Year 18 |
2039 |
$399,265.69 $5,380,446.00 |
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Section 2. The City is hereby authorized to enter into the following documents (the "City Documents"), in such form as shall be approved by the officials of the City executing such documents, such officials’ signatures thereon being conclusive evidence of their approval thereof:
(a) The First Supplemental Lease Agreement; and
(b) The Memorandum of First Supplemental Lease Agreement; and
(c) The First Amendment to Incentives Compliance Agreement.
Section 3. Except as modified pursuant to this Ordinance, Committee Substitute for Ordinance No. 170192 and all the terms and provisions thereof remain in full force and effect.
Section 4. The Director of Finance is hereby authorized and directed to execute the City Documents and such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance, for and on behalf of and as the act and deed of the City. The City Clerk or a deputy City Clerk of the City is hereby authorized and directed to attest to and affix the seal of the City to the Bonds and the City Documents and such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance.
Section 5. The Mayor, Director of Finance and other officials, agents and employees of the City as required, are hereby authorized and directed to take such further action, and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance and to carry out, comply with and perform the duties of the City with respect to the Bonds, the City Documents, and tax redirection.
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Approved as to form:
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Samuel Miller
Associate City Attorney