RES 2017-13 Adopted RESOLUTION NO. 2017-13
A RESOLUTION REGARDING ACCEPTABLE DEVELOPER
COMMITMENTS PURSUANT TO SECTION 14.01 OF THE
MASTER DEVELOPMENT AGREEMENT AMONG THE CITY
OF NORTH AUGUSTA, SOUTH CAROLINA,
GREENJACKETS BASEBALL LLC, ACKERMAN
GREENSTONE NORTH AUGUSTA, LLC, AND
GREENSTONE HAMMOND'S FERRY, LLC
WHEREAS, the City, pursuant to a Master Development Agreement
approved by the City by ordinance adopted on January 30, 2017 (the "Master Development
Agreement"), among the City, Greenjackets Baseball LLC and Ackerman Greenstone North
Augusta, LLC (the "Hotel Developer"), and Greenstone Hammond's Ferry, LLC
("Greenstone"), is contemplated to issue or cause the issuance of bonds (the "Bonds")
related to Project Jackson;
WHEREAS, pursuant to the Master Development Agreement, the City has
agreed to provide for certain components of Project Jackson from funds available to the City
including proceeds from the issuance of the Bonds, subject to certain conditions outlined
below;
WHEREAS, the City desires to structure its financin g to cause the
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development of Project Jackson for its citizens in a cost effective manner;
WHEREAS, in order to obtain financing for Project Jackson in the most cost
effective manner, the City has determined to consolidate other City obligations to provide
additional security and collateral for the Bonds, and accordingly the City has elected to
include the refinancing of the Medac Parking Deck and the North Augusta Municipal
Building (the "Refinancings") within the Bond financing, and thereby include the Medac
Parking Deck and North Augusta Municipal Building among the Facilities (as defined in the
documents relating to the Bonds) subject to the Bond financing;
WHEREAS, the City Council has studied the financing of Project Jackson
and the Refinancings over an extended period of time and has determined that it is in the
best interest of the City to move forward with the Bonds expeditiously, subject to Section
14.01 of the Master Development Agreement;
WHEREAS, pursuant to Section 14.01 of the Master Development
Agreement (each capitalized term used herein and not otherwise defined has the meaning
given to such term in the Master Development Agreement), the City is under no obligation
to proceed with causing the issuance of the Bonds unless and until it has received:
1. executed letters of intent (reasonably acceptable to the City) from
Hotel Developer committing to the development and construction of
the Hotel, and (B) an executed letter of intent from Greenstone
indicating Greenstone's commitment to develop the Greenstone
Projects (collectively, the "Project Commitments");
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2. financing commitments providing the debt and/or equity in a
cumulative amount sufficient to finance the Apartments, the Hotel
and Senior Living, such commitments to be in a form acceptable to
the City in its sole discretion, such acceptance to be evidenced by
resolution of City Council (the "Funding Commitments," and
together with the Project Commitments, the "Developer
Commitments").
WHEREAS, the City Council has received and reviewed the Project
Commitments as to each component in form and substance and finds them to be acceptable;
WHEREAS, as to the Apartment component of Project Jackson, the City has
reviewed a final Funding Commitment obtained from Synovus Bank by a Greenstone
assignee under the Master Development Agreement as well as other information relating to
the Apartments and finds such Funding Commitment to be in order and acceptable to the
City;
WHEREAS, as to the Hotel component of Project Jackson, the City has
reviewed the proposed sources of equity and debt financing currently being sought by the
Hotel Developer, including a term sheet dated March 30, 2017, from State Bank & Trust
Company, which financing if completed will provide funding in an amount and on terms
consistent with the Hotel Developer's commitments under the Master Development
Agreement, and finds such Funding Commitment to be acceptable and appropriate given the
stage of development. In lieu of such final Funding Commitment with regard to the Hotel
component, Greenstone and the City have agreed to an arrangement whereby the City will
obtain additional recourse to the Master Developer's parking revenues through contractual
parking arrangements that are anticipated to mitigate the shortfall in anticipated revenues
that would otherwise be expected to be generated by the Hotel;
WHEREAS, as to the Senior Living component of Project Jackson, the City
has not received or reviewed an equity or debt Funding Commitment, though has entered
into discussions with several potential assignees of Greenstone under the Master
Development Agreement and such discussions are continuing. In lieu of such Funding
Commitment with regard to the Senior Living component, Greenstone and the City have
agreed to an arrangement whereby the City will obtain additional recourse to the Master
Developer's parking revenues through contractual parking arrangements that are anticipated
to mitigate the shortfall in anticipated revenues that would otherwise be expected to be
generated by the Senior Living component;
WHEREAS, the City Council has levied special assessments on real property
within the Municipal Improvement District to mitigate property tax shortfalls from less than
expected development of Project Jackson, and contracted for additional sources of revenue
contingent on certain failures to perform by the Developers supplemental to those
contemplated in the Master Development Agreement. Such special assessments and sources
of revenue, while themselves subject to market conditions, shortfalls, limitations, and
realization and enforcement considerations, in the aggregate, and after weighing the totality
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of the present circumstances related to Project Jackson, sufficiently offset the absence of
certain Funding Commitments, in the judgement of City Council;
WHEREAS, notwithstanding the lack of finality with regard to the Hotel
Funding Commitment and the absence of the Senior Living Funding Commitment, the City
has obtained acceptable Project Commitments for each component and believes that in light
of significant pending construction escalation and demobilization costs, widely anticipated
increases in interest rates, and other market conditions generally prevailing as well as
specific to Project Jackson, such conditions warrant proceeding expeditiously, and that the
long term negative impacts of not moving forward at this time outweigh the risks of
proceeding without all Funding Commitments in hand as contemplated by Section 14.01 of
the Master Development Agreement; and
WHEREAS, Project Jackson presents a transfonnative opportunity for the
City of North Augusta and has been extensively negotiated and planned over many years
and the City Council strongly supports such project and, taking into account the challenges
presented by the absence of certain Funding Commitments, resolves to fully support Project
Jackson with sufficient time, money and resources to ensure that Project Jackson realizes its
transformative potential.
NOW, THEREFORE, BE IT RESOLVED by the Mayor and City Council of
the City of North Augusta, in meeting duly assembled and by the authority thereof, that the
City Council finds that the Developer Commitments, as presented, are acceptable in form
and substance to the City Council.
DONE, RATIFIED
AND ADOPTED BY THE MAYOR AND CITY COUNCIL F
OF THE
CITY OF NORTH O H AUGUSTA SOUTH CAROLINA,O , ON THIS THE 24TH DAY OF APRIL,2017.
Lark W. Jones, Mayor
ATTEST:
III
Donna B. Young, Cit Clerk
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