Transcript United States Olympic Committee Project Business Points

USOC/City of Colorado Springs
Proposed Economic Development
Agreement
Summary of Key Elements
July 31, 2009
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Economic Dev Agreement - Key Elements
Project Elements
1. New USOC Headquarters: 5 floor, 80,881 sq. ft.
class “A” office space condominium unit at 27 S.
Tejon St.
2. NGB Building: 40,000 sq. ft. of renovated office
space at 30 Cimino Drive for use by National
Governing Bodies
3. OTC Improvements: 166 units of athlete housing,
expansion and enhancement of Athlete Center
including cafeteria facilities, renovation of Visitor
Center, and infrastructure improvements
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Economic Dev Agreement - Key Elements
USOC Headquarters
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Colorado Springs Public Facilities Authority (PFA) to
purchase core and shell of floors 2-6 of property at
27 S. Tejon
Acquisition cost of $18.8 million to be financed
through sale of COPs and use of City Parking
Enterprise funds previously earmarked for a
pedestrian skybridge
Working with USOC, City to contract and manage
the construction of 1st floor lobby entrance and the
lobbies of floors 2 - 6
Working with USOC, City to contract and manage
the construction of tenant improvements (interior
finishes) of condo unit
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Economic Dev Agreement - Key Elements
USOC Headquarters
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City to contribute $2.7 million towards the cost of
tenant improvements and a total of $249,000
towards the construction of the lobby spaces.
USOC to pay all costs for any additional
improvements and interior finishes in excess of $2.7
million
Tenant improvement/lobby costs of $2.949 million
to be financed through sale of COPs and use of City
Parking Enterprise funds previously earmarked for a
pedestrian skybridge
Construction of condominium unit to be completed
by March 31, 2010. USOC has right to terminate
agreement if condo unit not delivered by that date
City to make 240 parking spaces available for lease
to USOC in the Nevada-Colorado Parking Garage
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Economic Dev Agreement - Key Elements
USOC Headquarters
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PFA to lease USOC HQ condo unit to City of Colorado Springs
and City to sub-lease the unit to USOC for $1.00 per year with
USOC bearing all utilities, insurance and building
operating/maintenance costs associated with the condo unit
(except any property taxes that may be due)
Sub-lease to have a term of 30 years and will remain in effect
so long as the USOC maintains in headquarters in the facility.
At the end of 30 year term, title to the condo unit to be
transferred to the USOC
USOC to enter into sub-lease upon the execution of the EDA
by all parties. The USOC’s obligations under the sub-lease,
however, will be conditioned on the City’s performance
regarding the timely completion of the HQ condo unit, the
NGB Building renovation, and funding for OTC improvements
being raised
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Economic Dev Agreement - Key Elements
USOC Headquarters
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The USOC will pay liquidated damages to the City in the event
it no longer occupies the USOC condominium as its national
headquarters.
The liquidated damages through the first 15 years of the sublease will be all P&I paid by the City on COPs issued for the
HQ and NGB Buildings as well as any cash contributions made
by the City for those purposes.
Liquidated damages during years 16-25 to be paid by USOC
on a sliding scale. During years 26-30, no liquidated
damages, but USOC forfeits rights to ownership.
Beginning in year 15, USOC has rights to accomplish a lease
purchase buyout of the USOC condo and NGB Building at a
price equal to the amount necessary retire any and all COPs
issued for their construction/renovation. Liquidated damages
still applicable if USOC Headquarters is relocated outside
corporate boundaries of the City.
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Economic Dev Agreement - Key Elements
USOC Headquarters
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City has right to sub-sublease the first floor of the USOC
condominium without payment of rent for a period of 10
years, with USOC having right, beginning in year 5, to
terminate the lease with one year’s notice. The City would
then be able to lease that space to qualifying 501 c (3) entities
so long as those entities bear the cost of all utilities and
operating expenses for the space and install tenant
improvements in the unit to USOC specifications.
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Economic Dev Agreement - Key Elements
NGB Building
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City to take over management of contract with Copestone
construction for renovation of property at 30 Cimino Drive
Renovation of property to be completed in accordance with
approved plans and specifications with renovations completed
by December 31, 2009
Upon issuance of COPs, USOC shall enter into a
PFA/City/USOC lease with an annual rental rate of $1.00 with
USOC obligated to pay all utilities, insurance and building
operating/maintenance costs associated with the building
(except any property taxes that may be due)
PFA/City/USOC lease to have a term of 30 years and remain in
effect so long as the USOC maintains in headquarters in the
facility. At the end of 30 year term, title to the property to be
transferred to the USOC
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Economic Dev Agreement - Key Elements
OTC Improvements
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OTC Improvements to have two phases (I & II)
A total of $13 million to be placed in escrow account for Phase
I within 90 days of the execution of the EDA
USOC has right to terminate the EDA if $13 million not
available by December 31, 2009
A total of $3 million to be placed in an escrow account for
Phase II within 25 months of the execution of the EDA. If $3
million not raised and deposited at that time, City to deliver a
quit claim deed to USOC for City’s reversionary rights to land
upon which a portion of the OTC is situated and any liquidated
damages USOC would owe the City if it moved its
headquarters from Colorado Springs would be reduced by any
difference between what had been deposited and $3 million
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Economic Dev Agreement - Key Elements
OTC Improvements
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USOC to manage the construction of the OTC improvements of
both Phases
Preference to be provided to local development management
and general contractor firms
City to install, at its cost, a traffic signal at new OTC entrance
at Union and Willamette. Cost of traffic signal to be applied as
a credit against Phase II obligation
USOC to spend all funds deposited in escrow account for
Phase I improvements within 4 years of date all development
approvals received. A similar provision applies for Phase II
improvements. Any unexpended funds after those dates to be
returned to all contributors of the funds pro-rata
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Economic Dev Agreement - Key Elements
OTC Improvements
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Funding for Phase I
• $9,500,000
• $1,500,000
• $1,500,000
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$500,000
from following sources:
PFA COP proceeds
El Pomar challenge grant
Community fundraising 1/
Colorado Office of Econ Dev grant
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Funding for Phase II from following source:
• $3,000,000
Community fundraising 2/
1/ to be raised within 90 days
2/ to be raised within 25 months
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Economic Dev Agreement - Key Elements
Affiliation and Marketing Relationship
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City will be given use rights to the USA 5-ring logo
Right to use USOC emblem
Publicly use the designation “Official Hometown of
the USOC”
Joint public relations outreach efforts involving
Olympic athlete appearances at City events
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Economic Dev Agreement - Key Elements
Issuance of Certificates of Participation
(COPs)
 COP issuance process to begin immediately after
execution of Settlement Agreement
 COPS to be issued within 45 days
 Given that USOC condo unit, NGB Building, OTC
Improvements lack “essentiality” to City
operations, COP purchasers will require other
City assets to be pledged as collateral
 City real estate associated with public safety
operations typically deemed to be of greatest
“essentiality” as they comprise essential services
 COPs proposed to be issued with a mortgage on
Police Operations Center and possibly one fire
station
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Economic Dev Agreement - Key Elements
Issuance of Certificates of Participation (COPs)
Summary of Uses of COP Proceeds:
USOC HQ Condo Unit
OTC housing visitor center, cafeteria
TOTAL
Estimated 2010 COP Payment 1/
$21,461,000
$9,500,000
$30,961,000
$1,720,000
1/ assumes a 30 year amortization, capitalized interest to the end of
2009, a one notch downgrade in City’s bond rating, bond
insurance, 2% annual increase in payments, and current market
conditions
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Economic Dev Agreement - Key Elements
Key Differences: 4/08 EDA vs. Current Proposed EDA
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City to now acquire only the core and shell of the USOC HQ
condo from LandCo vs. a completed building under 4/08
agreement
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City to contract and manage the construction of the tenant
improvements to USOC HQ condo
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City to assume construction contract and complete the
renovation of the NGB Building
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Total purchase price of the USOC HQ Building under proposed
new EDA: $21,749,000 which is $963,000 higher than original
$20,786,000 price. Difference in price due to additional
construction interest carry costs.
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USOC has increased the term of its commitment to keeping its
HQ in Colorado Springs from 25 years to 30 years. This
represents a stronger commitment from the USOC and allows
a 30 year amortization of PFA COPs.
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Economic Dev Agreement - Key Elements
Key Differences: 4/08 EDA vs. Current Proposed EDA
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USOC has given City the right to sub-sublease the first floor of
the USOC condominium without payment of rent for a period
of 10 years
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Any possibility of an “Olympic Experience” on the ground floor
and basement of the USOC HQ building has been dashed
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All of the necessary funding for the Project is not yet secured,
as it was under the 4/08 EDA, with the deal now contingent
upon $4.5 million of fundraising
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Funding of the pedestrian skybridge between the USOC HQ
and City parking garage has been removed with any future
construction dependent upon additional fundraising
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Economic Dev Agreement - Key Elements
Key Differences: 4/08 EDA vs. Current Proposed EDA
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Total cost of the Project is now $42.3 million vs. $52.9 million
under the original EDA
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The $16 million for OTC improvements is no longer funded by
LandCo but is now a responsibility of the City and community
with up to $9.5 million of COP proceeds now being necessary
for that element of the overall project
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The portion of the project to now be funded through COPs is
increased from $27.2 million to $30.96 million.
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The USOC will manage the construction of the OTC
improvements instead of LandCo
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Municipal bond market conditions now dictate that City real
estate assets be pledged as collateral for the COPs vs. the
pledge of the USOC condo unit and NGB building under the
4/08 EDA
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Economic Dev Agreement - Key Elements
Key Differences: 4/08 EDA vs. Current Proposed EDA
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The estimated first year (2010) annual COP payment to be
made by the City is just over $1.7 million which is identical to
the first year payment estimated under the 4/08 EDA.
However, it should be noted that the original 2009 City Budget
included a total of $2,200,495 (pg. 27-1 of 2009 City Budget)
for the first year payment on COPs and the current 2010
projections assume a similar amount.
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Questions
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