F24-12-107-1 - Capital Financing Conduit Borrower

The City anticipates utilizing a financing structure that includes the use of tax-exempt conduit bond financing in an estimated amount of $700 million dollars to complete the arena, ice center and waterpark hotel (collectively the “Assets”). The City would be the beneficiary of the financing, and all Assets would revert to City ownership upon the repayment of the debt. It is intended that a “Conduit Issuer” will issue debt to a ”Conduit Borrower” to enable the financing of the West Side Project. It is anticipated that the Conduit Issuer in a conduit bond financing will issue the bonds and loan the bond proceeds to the Conduit Borrower. The Conduit Borrower will generally be responsible for the payment of debt service on the Conduit Bond issue and would be contractually obligated to maintain the tax-exempt status of the bonds issued by the Conduit Issuer and would be generally responsible for maintaining the tax exemption on the bonds. The bond documents would also provide for delegation of certain responsibilities to the Conduit Borrower. Prior to debt repayment, the “Conduit Borrower” would be the owner of the developed assets and responsible for management and operation of the developed assets. This may include contracting 1) with the fee developer for construction of the assets and 2) for the operations of the arena/ice rink, hotel, and waterpark with the City as an interested party to the agreements.