Resolution 2018 01 (Loan Offset and Satisfaction)

RESOLUTION 2018-01 To Ratify and Approve the Executive Director’s Action to Enter into the First Amendment to Loan Agreement Between the Franklin County Convention Facilities Authority and the Director of the Ohio Development Services Agency of the State of Ohio to Offset and Satisfy the 2012 Loan Obligation for Nationwide Arena.

WHEREAS, pursuant to Chapter 351 of the Ohio Revised Code (the “Act”) and Resolution No. 818-88 adopted by the Board of County Commissioners of Franklin County, Ohio, on July 12, 1988, the Franklin County Convention Facilities Authority (the “Authority”) was created; and WHEREAS, in accordance with the Act, and pursuant to Authority Resolution 2012-6 (the “Bond Resolution”) and the Loan Agreement dated March 28, 2012 (the “Loan Agreement”) between the Authority and the Director of Development of the State of Ohio (now known as the Director of the Ohio Development Services Agency of the State of Ohio and referred to as the “Director”), the Authority issued and the Director purchased the Authority’s $10,000,000 First Lien Convention Facilities Authority Arena Lease Revenue Bond (the “Bond”) for the purpose of financing a portion of the purchase of certain facilities commonly known as Nationwide Arena; and WHEREAS, the Loan Agreement and the Bond provide that upon an annual certification from the Authority to the Director that COLHOC Limited Partnership (the “Team”) has met the economic development incentives (the “Jobs Commitment and Payroll Requirement”) set forth in the Loan Agreement for the stated prior annual period, the principal amount due upon final maturity of the Bond will be reduced by $500,000 (the “Annual Forgiveness Amount”); and WHEREAS, as the Team has far exceeded the Jobs Commitment and Payroll Requirements each year since 2012; in particular the team has exceeded its 60 full-time jobs commitment by 259 jobs and its $45 million payroll commitment by $34.5 million, resulting in approximately $1.7 million in additional state income tax revenue annually, the Authority seeks to offset and satisfy its 2012 Loan Obligation for Nationwide Arena in recognition of such increased benefits and to encourage further economic investment; and WHEREAS, Resolution 2015-6 authorized the Executive Director to act in the best interests of the Authority by authorizing commitments, contracts or agreements in excess of $50,000 between Board meetings if the resulting expenditure fits within the spending limits approved by the Board in the annual budget and has the approval of at least two Board officers, and provided further that any such commitment, contract or agreement is communicated to each Board member as soon as practical after such approval, and a resolution ratifying the obligation is submitted for Board action at the next following Board meeting; and WHEREAS, Resolution 2017-2 authorized the Executive Director to seek additional loan forgiveness through a supplemental agreement between the Authority and the Director; and

WHEREAS, following extensive negotiations, the Authority and the Director reached agreement and executed the First Amendment to Loan Agreement, providing the Authority with the offset and satisfaction of its Loan Agreement obligation; and WHEREAS, the Authority’s loan obligation presently totals $7,000,000; and WHEREAS under the First Amendment to Loan Agreement, $2,000,000 of the Loan obligation will be met by the Annual Forgiveness Amounts for the years 2018 through 2021, reducing the Authority’s loan obligation to $5,000,000; and WHEREAS under the First Amendment to Loan Agreement, the Authority will contribute to the Director a Naming Rights and Advertising Package, which in the aggregate will equal $5,000,000, and will consist of the following: • •

•

annual cash payments of $200,000 for five years beginning in calendar year 2017; and, naming rights for the Ohio Center Garage, or annual cash payments from monies generated by the sale of these naming rights to a third-party, for up to ten (10) years in order to promote Tourism Ohio programs; and, advertising in the Greater Columbus Convention Center for up to ten (10) years, including State visitor branding merchandise sales and digital display advertising to promote Tourism Ohio programs, and

WHEREAS, the First Amendment to Loan Agreement provides for the complete offset and satisfaction of the Authority’s principal, interest, and loan servicing payment obligations under the Loan Agreement after a period of ten years or when the total aggregate value of the Naming Rights and Advertising Package equals $5,000,000, whichever occurs first; now, therefor, Be it resolved by the Board of Directors of the Franklin County Convention Facilities Authority that: Section 1.

The actions taken by the Executive Director of the Authority to secure and execute the First Amendment to Loan Agreement with the Director of the Ohio Development Services Agency of the State of Ohio, providing for the offset and satisfaction of the 2012 Loan Agreement obligation, are hereby ratified and approved.

Section 2.

Expenditures as necessary for modifying the agreement and satisfying the Authority’s contractual obligations are hereby approved. _________________________________ Sally W. Bloomfield Chairman Submitted for Action: Effective Date:

____________________________________ Barbara R. Nicholson Secretary

January 30, 2018 January 30, 2018