* WARNING: THIS IS AN UNOFFICIAL, INTRODUCTORY COPY OF THE BILL.
THE OFFICIAL COPY CONSIDERED BY THE CITY COUNCIL IS THE FIRST READER COPY.
INTRODUCTORY*
CITY OF BALTIMORE
COUNCIL BILL
Introduced by: The Council President
At the request of: The Administration (Department of Finance)
A BILL ENTITLED
AN ORDINANCE concerning
Title
Supplementary Convention Center Hotel Loan Fund Capital Appropriation - Department of Finance - $305,000,000
FOR the purpose of providing a Supplementary Convention Center Hotel Loan Fund Capital Appropriation in the amount of $305,000,000 to the Department of Finance (Account #9908-146-031), to provide funds for the acquisition, construction, furnishing, and equipping of a convention center headquarters hotel in the City of Baltimore; and providing for a special effective date.
Body
BY authority of
Article VI - Board of Estimates
Section 8(b)(1) and (c)
Baltimore City Charter
(1996 Edition)
Recitals
Whereas, tourism, conventions, and convention-generated business activity have been cornerstones of the City of Baltimore's economic revitalization over the past 25 years;
Whereas, the acquisition, construction, furnishing, equipping, and operating of a convention center headquarters hotel (the "Hotel") will further improve economic development and increase employment opportunities in the City;
Whereas, construction of the Hotel will create a projected 663 construction-related jobs during development;
Whereas, once completed, the Hotel will support a projected 550 full-time equivalent jobs, with an annual payroll of $19 million;
Whereas, the private-sector operator of the Hotel (Hilton Hotels Corporation) has committed to the hiring of City residents at all job levels;
Whereas, Hilton Hotels Corporation has committed to using the job training and other employment development resources available at the Mayor's Office of Employment Development;
Whereas, the Hotel will meet or exceed minority and women business enterprises (MBE/WBE) participation goals;
Whereas, minority and women businesses are projected to earn at least $40 million as a result of the Hotel;
Whereas, the Hotel will sustain and enhance the City's tourism and hotel industry, as well as benefit many restaurants, retail shops, entertainment venues, and cultural attractions that depend on both visitors and local residents;
Whereas, the Hotel will pay a projected $1.229 million in City taxes during Hotel construction, and a projected $800,000 in other utility, parking, and piggyback City taxes per year;
Whereas, the City will receive all excess revenues or profit from the Hotel, projected at $3.3 million in 2009, and increasing to approximately $7 million beginning in 2013;
Whereas, notwithstanding all these direct benefits from the Hotel financing, the Hotel also has the potential to provide net revenue to the City for City-wide neighborhood projects; and
Whereas, it is appropriate for the City to finance the acquisition, construction, furnishing, and equipping of the Hotel:
This Ordinance provides for the supplementary appropriation of the proceeds (the "Bond Proceeds") of certain revenue bonds (the "Bonds") to be issued for the purpose of financing the acquisition, construction, furnishing, and equipping of a convention center headquarters hotel in the City of Baltimore. The Bonds shall be issued pursuant to a trust agreement (the "Indenture") by and between the City and a trustee for the Bonds (the "Trustee"), or a materially similar document. Pursuant to Article VII, Section 21 of the Baltimore City Charter, the Board of Finance (the "Board") is authorized to "determine all matters pertaining to the issuance and sale of certificates of indebtedness," which includes the Bonds. As approved by the Board, the Bond Indenture shall provide that the Bond Proceeds shall be used only for the purposes of financing the acquisition, construction, furnishing, and equipping of a convention center headquarters hotel.
As further approved by the Board, the Bond Proceeds shall be disbursed pursuant to a loan agreement (the "Loan Agreement") by and between the owner of the hotel and the Mayor and City Council of Baltimore, acting by and through the Department of Finance. The Loan Agreement provides that it shall be approved by the Board of Estimates and shall evidence the agreement of the City to disburse the funds, subject to certain conditions as provided for in the agreement and in the documents relating to the Bonds (the "Bond Documents").
The Bond Proceeds are in excess of those relied upon by the Board of Estimates in determining the tax levy required to balance the budget for Fiscal Year 2006. The Indenture provides that upon the sale of the Bonds, the Bond Proceeds will be held by the Trustee in trust for the holders of the Bonds and subject to the above-referenced limitations of the Indenture and other Bond Documents. Therefore, the Bond Proceeds do not represent revenue that would ever be relied upon by the Board of Estimates to determine the tax levy required to balance the Ordinance of Estimates for Fiscal Year 2006 or for any other year in which the Bond proceeds might be disbursed.
Therefore, to the extent required by law, the Board of Estimates on August 3, 2005, has recommended that the City Council of Baltimore approve this Supplementary Convention Center Hotel Loan Fund Capital Appropriation for the purpose of financing the acquisition, construction, furnishing, and equipping of a convention center headquarters hotel in the City of Baltimore, and has authorized the execution of any documents necessary to effectuate the disbursement of Bond Proceeds to the extent that such documents are not otherwise related to the issuance and sale of the certificates of indebtedness.
SECTION 1. BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF BALTIMORE, That to the extent required by law, an amount not to exceed $305,000,000 shall be made available to the Department of Finance (Account #9908-146-031) as a Supplementary Convention Center Hotel Loan Fund Capital Appropriation for Fiscal Year 2006, to provide for the acquisition, construction, furnishing, and equipping of a convention center headquarters hotel in the City of Baltimore. The source of revenue for this appropriation is the proceeds of the Convention Center Hotel Revenue Bonds (the "Bond Proceeds"), in excess of the amount from this source that was relied on by the Board of Estimates in determining the tax levy required to balance the budget for Fiscal Year 2006. The Bond Proceeds, subject to the Bond Documents as approved by the Board of Finance, are to be made available for disbursement through a loan agreement executed by the Mayor and City Council of Baltimore, acting by and through the Department of Finance and such other parties as may be necessary.
SECTION 2. AND BE IT FURTHER ORDAINED, That this Ordinance takes effect on the date it is enacted.
dlr05-448~intro/10Aug05
suppapp1/HotelBond/aa:me
dlr05-448~intro/10Aug05
- 2 -
suppapp1/HotelBond/aa:me