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HomeMy WebLinkAbout49-07 ResolutionRECORD OF RESOLUTIONS Dayton Legal Blank, Inc Form No 30045 Resolution No. 49-07 Passed ao 1 ~, 1 1 A RESOLUTION APPROVING AND AUTHORIZING THE CITY MANAGER AND DIRECTOR OF FINANCE TO EXECUTE AN AGREEMENT OF GROUND LESSOR WITH GENERAL ELECTRIC CAPITAL CORPORATION RELATED TO THE GOLF CLUB OF DUBLIN, EXTENDING THE TERM OF THE LEASE AGREEMENT AND ASSIGNING THE LEASE AGREEMENT. WHEREAS, by Ordinance No. 119-00 passed by this Council on October 16, 2000, the City entered into a certain Ground Lease and Operating Agreement, dated as of December 7, 2000, as amended by the Amendment No. 1 to Ground Lease and Operating Agreement, dated October 22, 2001 (collectively, the "Lease Agreement") with Tartan Golf Company, LLC (the "Lessee") wherein the City leased certain real property (as such real property is described in the Lease Agreement, the "Property") to the Lessee and the Lessee agreed therein to construct and operate upon such Property an eighteen hole golf course and related facilities, now known as the "Golf Club of Dublin"; and WHEREAS, the Lease Agreement provides that the City shall have the right to approve or disapprove any liens which may be placed on Lessee's leasehold interest in connection with any financing by the Lessee; and WHEREAS, in 2001, the Lessee completed an initial financing with The Huntington National Bank (The "Initial Financing") to provide for the construction of the Golf Club of Dublin (the "Project"); and WHEREAS, the Lessee has determined to assign its interests under the Lease Agreement (the "Assignment") to the Golf Club of Dublin, LLC (the "LLC"); and WHEREAS, in connection with the Assignment, (i) the Initial Financing will be paid in full and any related mortgages and security interests discharged, (ii) new financing (the "New Financing") for the Project will be secured by the LLC from General Electric Capital Corporation ("GE Capital"), (iii) an infusion of additional cash by members of the LLC will be made to the Project, and (iv) the initial term of the Lease Agreement will be extended for an additional ten years; and WHEREAS, to complete and secure the New Financing, GE Capital has requested that the City consent to such New Financing and the granting of a security interest in the leasehold interest of the LLC under the Lease Agreement; and WHEREAS, the City has determined that it is in the best interests of the residents of the City to consent to and approve the Assignment, the New Financing and the extension of the term of the Lease Agreement, and to evidence such consent by authorizing the execution of an Agreement of Ground Lessor (the form of which is on file in the office of the Clerk of Council and referred to herein as the "Agreement of Ground Lessor") and any other necessary and related agreements and instruments to effect the purpose of this Resolution; NOW, THEREFORE, BE IT RESOLVED by the City of Dublin, in Franklin, Union and Delaware Counties, Ohio, ~ of the elected members concurring, that: Section 1. This Council on behalf of the City hereby consents to the New Financing as described in the Agreement of Ground Lessor. Section 2. The City Manager and Director of Finance, for and in the name of the City, are hereby authorized to execute the Agreement of Ground Lessor. The form of the Agreement of Ground Lessor is approved with such changes therein that are not RECORD OF RESOLUTIONS 1 1 Dayton Legal Blank, Inc ,Form No 30045 49-07 Page 2 Resolution No Passed , 20 materially inconsistent with this Resolution and not substantially adverse to the City and that are permitted by law and shall be approved by the City Manager and Director of Finance. The approval of such changes, and that such changes are not materially inconsistent with this Resolution and not substantially adverse to the City, shall be conclusively evidenced by the signing of the Agreement of Ground Lessor by those officials. Section 3. This Council consents to (i) an extension of the initial term of the Lease Agreement under Section 2.3(a) therein for an additional ten (10) year period and a revised termination date of December 31, 2052 and (ii) an assignment of the Lease Agreement to the LLC. Section 4. This Council further hereby authorizes each one or more of, as appropriate, the City Manager, the Director of Finance, the Director of Law, the Clerk of Council, or other appropriate officers of the City to prepare and sign all agreements and instruments and to take any other actions as maybe appropriate to implement this Resolution. Section 5. This Council finds and determines that all formal actions of this Council concerning or relating to the passage of this Resolution were taken in an open meeting of this Council and that all deliberations of this Council that resulted in those formal actions were in meetings open to the public in compliance with the law. Section 6. This Resolution shall take effect and be in force in accordance with Section 4.04(a) of the Dublin City Charter. Signed: Presiding Officer Attest: ~-- Clerk of Council Passed: , 2007 Effective: , 2007 1 S(1T T T ~ LEGAL SQUIRE, SANDERS & DEMPSEY L.L.P. SANDERS COUNSEL WORLDWIDE MEMORANDUM To: Dublin City Council From: Christopher J. Franzmann and Matthew L. Sagone, Squire, Sanders R Dempsey Steven J. Smith, Director of Law Date: June 28, 2007 Re: Resolution 49-07 -Golf Course of Dublin -Approving GE Agreement of Ground Lessor and Related Documents ("Resolutio n") In late 2000, the City entered into a Ground Lease and Operating Agreement with Tartan Golf Company, LLC ("Tartan Golf LLC") which provided that the City would lease certain land to Tartan Golf LLC, and Tartan Golf LLC would construct and operate The Golf Club of Dublin on the land. Tartan Golf LLC has since financed and constructed and continues to operate The Golf Club of Dublin. In connection with the construction and operation of The Golf Club of Dublin, Tartan Golf LLC has incurred and has outstanding approximately $8,325,000 of indebtedness. Approximately $7,425,710 of that indebtedness was loaned to Tartan Golf LLC by The Huntington National Bank. The Huntington loan is also secured by a mortgage on the City's land. Tartan Golf LLC has advised the City that it would like to replace Tartan Golf LLC with a new limited liability company that will be known as The Golf Club of Dublin, LLC ("Golf Club LLC"). The City has been advised by Tartan Golf LLC that the membership of the Golf Club LLC will be the same as that of Tartan Golf LLC, except for the addition of JJED LLC as a new member and the withdrawal of two members. Tartan Golf LLC therefore intends to assign its rights and responsibilities under the Ground Lease to Golf Club LLC. The current indebtedness will be refinanced through a combination of an investment of an additional $2 million of equity by the Golf Club LLC into the project and a loan from General Electric Capital Corporation for approximately $6.5 million (thus resulting in a reduction in the net indebtedness for the project of approximately $1.8 million). The current mortgage on the land in favor of The Huntington National Bank will be discharged, and the collateral for the GE loan will be against Golf Club LLC's leasehold interest. The City in turn will agree to extend the initial term of the Ground Lease for an additional ten years (with a new expiration date of December 31, 2052). The City's Bond Counsel, Director of Law and Director of Finance recommend approval of the Resolution.