HomeMy WebLinkAboutResolutions - 2010.02.02 - 10086MISCEL7,ANEOUS RESOLUTION 110024 February 2, 2010
BY: PLANNING AND BUILDING COMMITTEE, JOHN SCOTT, CHAIRPERSON
IN RE: PLANNING AND ECONOMIC DEVELOPMENT SERVICES DIVISION RESOLUTION
APPROVING PROJECT PLAN (MICHIGAN MOTION PICTURE STUDIOS, LLC PROJECT) - CITY
OF PONTIAC
To Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS The Economic Development Corporation of the County of Oakland
(the "EDC") has recommended that the Board of Commissioners approve the
Project Plan required by the Economic Development Corporations Act the "Act")
for the captioned Project, a copy of which has been presented to this meeting
(the "Project Plan"); ana
WHEREAS the EDC's recommendations to the Board of Commissioners were
based upon its determinations that the Project is reasonable and necessary to
effectuate the purposes of the Act, that the Project Plan satisfies all of the
requirements of the Act regarding project plans and that a letter of credit
issued by a financial inctitution acceptable to the EDC will be available to
pay debt service; and
WHEREAS the governing body of the City of Pontiac, Oakland County,
Michigan, has also approved the Project Plan and given its consent to the
exercise of jurisdiction over the Project by the EDC; and
WHEREAS the Board of Commissioners has held a public hearing to consider
whether the Project Plan constitutes a public purpose as contemplated by the
Act; and
WHEREAS the Board of Commissioners, following such public hearing and
its review of the Project Plan, hereby certifies, approves and concurs in the
determinations of the EDC with respect thereto.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of
Commissioners hereby determines that the Project Plan constitutes a public
purpose as contemplated by the Act.
BE IT FURTHER RESOLVED that the Oakland County Board of Commissioners
hereby certifies and approves the Project Plan.
BE :T FURTHER RESOLVED that the EDC is hereby authorized to take such
steps as are necessary to implement the Project and the financing thereof by
the issuance of its limited obligation revenue bonds as contemplated by the
Project Plan.
BE IT FURTHER RESOLVED that the County Clerk is hereby directed to
provide four certified copies of this resolution to the Assistant Secretary of
the Board of the EDC.
Chairperson, on behalf of the Planning and Building Committee, I move
the adoption of the foregoing resolution.
PLANNING AND ,BUILING COMMITTEE
PLANNING & BUILDING COMMITTEE VOTE:
Motion carried unanimously on a roll call vote.
THE ECONOMIC DEVELOPMENT CORPORATION
OF THE COUNTY OF OAKLAND
Oakland County, Michigan
Michigan Motion Picture Studios, LLC Project
PROJECT PLAN
CONTENTS
1. Summary Description of Project (Page 1)
2. Project Plan Certification by Company (Page 3)
3. Statutorily Required Information (Page 4)
4. Exhibits
• - Project Area Legal Description
• — Credit Enhancement Documents
• State of Michigan Retirement System Commitment Letter
• - Company Certificate Regarding Transfer of Employment
• - Company Certificate Regarding Payment of Prevailing Wages
• - City of Pontiac Infrastructure Recovery
• — Project Site Plan
Other
PROJECT PLAN
SUMMARY DESCRIPTION OF
MICHIGAN MOTION PICTURE STUDIOS, LLC PROJECT
OWNER OF PROJECT: The five project partners are entities controlled by A, Alfred
Taubman and the Taubman Family, Rakolta Film Partners, LLC, Linden Nelson Trust, Raleigh
Studios and William Morris Endeavor Entertainment.
CONTACT PERSON: Steven Lemberg, Chief Financial Officer, c/o Nelson Ventures, 2100
East Maple Road, Suite 200, Birmingham, MI 48009, (248) 822-0200
LOCATION OF PROJECT: (Local municipality) City of Pontiac
PROJECT AREA/DISTRICT AREA: See Exhibit A
NATURE OF PROJECT: This project renovates an empty 368,400 SF building that we
acquired from General Motors and expands this facility with new construction of seven sound
stages of roughly 185,000 SF located on site. The project will serve the growing needs of the
Michigan film industry by becoming Michigan's only full-service film business facility. In
addition o pre-production, post-production and full-production capabilities, this project will
feature education and training facilities serving the State's unemployed workers and students
who desire to enter into the film and television business.
EMPLOYMENT CREATED OR RETAINED; The subject development will immediately
create 500 construction jobs. Once completed, it will create more than 3,000 new direct jobs in
the first year of operation and serve to anchor and support existing service businesses throughout
the project area. We have estimated an additional 10,000 indirect jobs will be added as a result
of this project.
TOTAL PROJECT COST: 560,000.000
BONDS TO BE ISSUED: Up to 530,000,000 of Recovery Zone Facility Bonds
LETTER OF CREDIT ISSUER OR BOND PURCHASER: The Series A Bonds will be
credit enhanced under the terms of the Guaranty Agreement with the State of Michigan
Retirement System. See attached Commitment letter. The Series B Bonds will be purchased on
a private placement basis by parties designated by the constituent members of Michigan Motion
Picture Studios, LLC, and the Series B Bonds will not be supported by a credit enhancement
facility or a guaranty. The project is working with Bank of America to market the Series A
Bonds, and in this process Bank of America has indicated that the Bank will most likely
purchase the Series A Bonds for its own account on a private placement basis.
DATE AND EXPIRATION DATE OF LETTER OF CREDIT OR BOND PURCHASE
COMMITMENT: The guaranty supporting the Series A Bonds will be coterminous with the
term of the Series A Bonds,
2
PROJECT PLAN CERTIFICATION
THIS PROJECT PLAN WAS PREPARED FOR THE
ECONOMIC DEVELOPMENT CORPORATION OF THE
COUNTY OF OAKLAND IN ACCORDANCE WITH THE
REQUIREMENTS OF THE ECONOMIC DEVELOPMENT
CORPORATIONS ACT, ACT NO. 338 OF THE MICHIGAN
PUBLIC ACTS OF 1974, AS AMENDED,
THE UNDERSIGNED HAS PROVIDED ALL OF THE
INFORMATION CONTAINED HEREIN AND HEREBY
CERTIFIES AS TO THE ACCURACY AND VALIDITY OF
SUCH INFORMATION AS OF THIS DATE.
THE UNDERSIGNED UNDERSTANDS THAT THIS PROJECT
PLAN IS STATUTORILY REQUIRED AND, IF IT CONTAINS
ANY MATERIAL MISREPRESENTATION OR
INACCURACY, COULD RESULT IN THE INVALIDATION
OF THE ECONOMIC DEVELOPMENT CORPORATION
PROCEEDINGS REGARDING THE PROJECT TO WHICH
THE PROJECT PLAN PERTAINS.
MICHIGAN MOTION PICTURE STUDIOS, LLC
By:
Its: Chief Financial Officer
Dated: January 18, 2010
3
PROJECT PLAN
STATUTORILY REQUIRED INFORMATION REGARDING
MICHIGAN MOTION PICTURE STUDIOS, LLC PROJECT
I. THE LOCATION AND EXTENT OF EXISTING STREETS AND OTHER
PUBLIC FACILITIES WITHIN THE PROJECT DISTRICT AREA; THE LOCATION,
CHARACTER, AND EXTENT OF THE CATEGORIES OF PUBLIC AND PRIVATE
LAND USES NOW EXISTING AND PROPOSED FOR THE PROJECT AREA,
INCLUDING RESIDENTIAL, RECREATIONAL, COMMERCIAL, INDUSTRIAL,
EDUCATIONAL, AND OTHER USES; AND A LEGAL DESCRIPTION OF THE
PROJECT AREA:
The legal description of Project Area attached as Exhibit A.
There are no streets or public facilities within the project area. The uses in the project area will
be commercial use as a film and television studio production campus, including a significant
component of education and training.
II. A DESCRIPTION OF EXISTING IMPROVEMENTS IN THE PROJECT
AREA TO BE DEMOLISHED, REPAIRED, OR ALTERED; A DESCRIPTION OF
REPAIRS AND ALTERATIONS; AND AN ESTIMATE OF THE TIME REQUIRED
FOR COMPLETION:
Phase One of the project will be the renovation of the existing 368,400 SF building from a
single-tenant occupied building into a multiple-tenant building. The three month phase-in for
Phase One will begin with the alteration of the "shell and core" of the building which includes
updating the building's life and safety components. The building will then be available for
occupancy by multiple tenants, and we have conservatively projected that full lease-up of Phase
One will be completed over a five-year period. We have entered into negotiation with
educational and film business tenants which we will finalize shortly after official ground
breaking. We are confident that actual lease up of Phase One will exceed projections. In total
we have budgeted 54.300,000 for construction in this Phase One, excluding tenant-financed
improvements. This figure also includes recaulking the exterior, upgrading the kitchen,
upgrading the elevators and other common areas, and mechanical and electrical improvements.
4
HI. THE LOCATION, EXTENT, CHARACTER, AND ESTIMATED COST OF
THE IMPROVEMENTS, INCLUDING REHABILITATION CONTEMPLATED FOR
THE PROJECT AREA, AND AN ESTIMATE OF THE TIME REQUIRED FOR
COMPLETION;
Phase Two of the project will include the construction of the seven sound stages to be
constructed out of precast tilt up concrete panels roughly 55' high with an interior clearance of
45'. The sound stages will range in size from 12,000 SF up to 30,000 SF. Three 30,000 SF
sound stages are separated by knock down panels creating an opportunity for one 90,000 SF
sound stage.
The two new buildings containing the seven sound stages will be constructed on a portion of the
existing parking lot. See Site Plan attached as Exhibit F. The character of this new construction
will be harmonious with the existing building. The exterior of the existing building will remain
unchanged.
The site requires correction of faulty fill that occurred during the original construction. The
project schedule for Phase Two reflects a 12-month construction time frame from project ground
breaking. including the time to correct the faulty fill.
TV. A DESCRIPTION OF THE CONSTRUCTION OR STAGES OF
CONSTRUCTION PLANNED, AND THE ESTIMATED TIME OF COMPLETION OF
EACH STAGE:
As indicated, the construction will occur in two primary phases. Phase One is for the shell and
core work and renovation of the existing building. This Phase One work will require three
months to complete, with tenant-financed improvements to follow.
Phase Two is the new construction of the seven sound stages. We have negotiated a design build
contract with a guaranteed maximum price with Walbridge which will include a commitment to
complete construction within one year of the ground breaking for the project.
5
V A DESCRIPTION OF THE PARTS OF THE PROJECT AREA TO BE
LEFT AS OPEN SPACE AND THE USE CONTEMPLATED FOR THE SPACE:
Roughly 68% of the project area will be preserved as open space to be used for parking,
landscaping, outdoor dining; and an exterior exhibition space at the grand entrance. The outdoor
dining and exhib:tion spaces exist today and are to remain.
VI. A DESCRIPTION OF PORTIONS OF THE PROJECT AREA WHICH
THE ECONOMIC DEVELOPMENT CORPORATION OR THE COMPANY DESIRES
TO SELL, DONATE, EXCHANGE OR LEASE TO OR FROM THE MUNICIPALITY
AND THE PROPOSED TERMS:
Not Applicable
VII. A DESCRIPTION OF DESIRED ZONING CHANGES AND CHANGES IN
STREET, STREET LEVELS, INTERSECTIONS AND UTILITIES:
No zoning changes are needed, and site plan approval and a parking variance have been
achieved. Storm sewer must be extended to the site from the east. The required easement from
General Motors has been obtained for the extension. Gas service will be extended to the building
from the north. We have been in contact with all utilities companies serving the site. We will be
eliminating one curb cut out to Enterprise Drive. No other street work is required.
The Development Agreement with the City of Pontiac provides that the City will reimburse the
project. using federal stimulus funds (i.e., there is no requirement for Pontiac to use its funds),
for electrical, storm and sanitary sewer work and other site infrastructure work required for the
project. Such reimbursement is to the extent of the federal funds received and is included in the
Total Project Cost indicated. The relevant section of the Development Agreement is included as
Exhibit E.
VIII. A DESCRIPTION OF THE PROPOSED METHOD OF FINANCING THE
PROJECT, INCLUDING ATTACHMENT OF A COPY OF THE LETTER OF CREDIT
OR BOND PURCHASER'S COMMITMENT LETTER:
6
The project will be financed as follows:
Recover), Zone Facility Bonds S 23,000,000
Partner Equity or Additional Bond Purchase 5,000,000
City of Pontiac Infrastructure Recovery 3,800,000
Federal New Markets Tax Credits 15,100,000
Michigan Film Infrastructure Tax Credits 11 *100,000
Total $60,000,001
A Copy of the Proposed Credit Enhancement Term Sheet from Bank of America (Confidential)
is attached as Exhibit B. We have been requested to maintain the confidentiality of this
document.
IX. A STATEMENT REGARDING THE PAYMENT OF PREVAILING
WAGE AND FRINGE BENEFIT RATES AS DETERMINED PURSUANT TO ACT NO.
166 OF THE MICHIGAN PUBLIC ACTS OF 1965, AS AMENDED (REGARDING
WAGES ON STATE CONTRACTS):
See Exhibit D
X. A LIST OF PERSONS WHO WILL MANAGE OR BE ASSOCIATED
WITH THE MANAGEMENT OF THE PROJECT FOR .4 PERIOD OF NOT LESS
THAN 1 (ONE) YEAR FROM THE DATE OF APPROVAL OF THE PROJECT PLAN:
Raleigh Studios' Management Team
XI. DESIGNATION OF THE PERSON OR PERSONS, NATURAL OR
CORPORATE, TO WHOM THE PROJECT IS TO BE LEASED, SOLD OR
CONVEYED AND FOR WHOSE BENEFIT THE PROJECT IS BEING UNDERTAKEN,
TO THE EXTENT THAT INFORMATION IS PRESENTLY AVAILABLE:
7
Office space and sound stages will be leased to a combination of education and training
providers; pre. post and on-stage independent film production companies, facility management,
equipment leasing companies, and supporting film industry service providers.
XII. IF THERE IS NOT AN EXPRESS OR IMPLIED AGREEMENT WITH A
PERSON OR PERSONS, NATURAL OR CORPORATE, THAT THE PROJECT WILL
BE LEASED. SOLD, OR CONVEYED TO THOSE PERSONS, THE PROCEDURES
FOR BIDDING FOR THE LEASING, PURCHASING OR CONVEYING OF THE
PROJECT UPON ITS COMPLETION:
The management team of the facility, Raleigh Michigan Studios, will be responsible for
marketing and completing lease agreements for the fall campus facility.
XIII. ESTIMATES OF THE NUMBER OF PERSONS RESIDING IN THE
PROJECT AREA AND THE NUMBER OF FAMILIES AND INDIVIDUALS TO BE
DISPLACED. IF OCCUPIED RESIDENCES ARE DESIGNATED FOR ACQUISITION
AND CLEARANCE, INCLUDE A SURVEY OF THE FAMILIES AND INDIVIDUALS
TO BE DISPLACED, INCLUDLNG THEIR INCOME AND RACIAL COMPOSITION. A
STATISTICAL DESCRIPTION OF THE HOUSING SUPPLY IN THE COMMUNITY,
INCLUDING THE NUMBER OF PRIVATE AND PUBLIC UNITS IN EXISTENCE OR
UNDER CONSTRUCTION, THE CONDITION OF THOSE IN EXISTENCE, THE
NUMBER OF OWNER-OCCUPIED AND RENTER-OCCUPIED UNITS, THE ANNUAL
RATE OF TURNOVER OF THE VARIOUS TYPES OF HOUSING AND THE RANGE
OF RENTS AND SALE PRICES, AN ESTIMATE OF THE TOTAL DEMAND FOR
HOUSING IN THE COMMUNITY, AND THE ESTIMATED CAPACITY OF PRIVATE
AND PUBLIC HOUSING AVAILABLE TO DISPLACED FAMILIES AND
INDIVIDUALS:
There are currently no persons residing in the project area and therefore no one will be displaced.
XW. A PLAN FOR ESTABLISHING PRIORITY FOR THE RELOCATION OF
PERSONS DISPLACED BY THE PROJECT IN NEW HOUSING IN THE PROJECT
AREA:
Not Applicable
8
XV. PROVISION FOR THE COSTS OF RELOCATING PERSONS
DISPLACED BY THE PROJECT AND FINANCIAL ASSISTANCE AND
REIMBURSEMENT OF EXPENSES, INCLUDING LITIGATION EXPENSES AND
EXPENSES INCIDENT TO THE TRANSFER OF TITLE, IN ACCORDANCE WITH
THE STANDARDS AND PROVISIONS OF THE FEDERAL UNIFORM RELOCATION
ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970, 42
U.S.C. 4601 TO 4655:
Not Applicable
XVI. A PLAN FOR COMPLIANCE WITH ACT NO. 227 OF THE MICHIGAN
PUBLIC ACTS OF 1972, WHICH PERTALNS TO PROVIDING FINANCIAL
ASSISTANCE, ADVISORY SERVICES AND REIMBURSEMENT OF CERTAIN
EXPENSES TO DISPLACED PERSONS:
Not Applicable
XVII. OTHER MATERIAL AS THE ECONOMIC DEVELOPMENT
CORPORATION, LOCAL PUBLIC AGENCY, OR GOVERNING BODY CONSIDERS
PERTINENT:
Not Applicable
9
Exhibit A
PROJECT AREA LEGAL DESCRIPTION
LEGAL DESCRIPTION OF CENTERPOINT PARKWAY EAST
Land situated in the City of Pontiac, County of Oakland, State of Michigan, described as:
Part of Section 3. Town 2 North, Range 1(1 East, City of Pontiac, Oakland County, Michigan,
also being part of Lots 5, 6 and 7 and part of Beltline Railroad excepted, as platted, a part of
ASSESSOR'S PLAT NO. 110, as recorded in Liber 52, Page 26 of Plats, Oakland County
Records, being more particularly described as follows: Beginning at a point distant South 89
degrees 46 minutes 13 seconds East along the North line of Section 3, 71,08 feet and South 02
degrees 36 minutes 47 seconds West along the extension of the Easterly line of Centerpoint
Parkway 1:120 feet wide), 67,78 feet from the North IA corner of said Section 3, Township 2
North, Range 10 East, said Point of Beginning being on the South line of South Boulevard (120
feet wide) and Easterly line of said Centerpoint Parkway; thence due East along Southerly line of
said South Boulevard, 1227.63 feet; thence Due South, 185.48 feet; thence South 44 degrees 50
minutes 04 seconds East, 20.48 feet; thence Due East, 453.06 feet; thence North 74 degrees 26
minutes 44 seconds East, 16,09 feet to a point on the West line of North Connector Road (66 feet
wide); thence due South along the West line of said North Connector Road, 336.65 feet to a
point on the North line of Campus Drive (width varies); thence the following five (5) courses
along the Northerly line of said Campus Drive: (1) North 89 degrees 22 minutes 30 seconds
West, 856.31 feet; and (2) 356.03 feet along a curve to the left (radius 443,00 feet, central angle
46 degrees 02 minutes 49 seconds, chord bearing and distance South 67 degrees 36 minutes 06
seconds West, 346.52 feet); and (3) South 44 degrees 34 minutes 41 seconds West, 56.60 feet;
and (4) 296.63 feet along a curve to the right (radius 350.00 feet, central angle 48 degrees 33
minutes 32 seconds, chord bearing and distance South 69 degrees 52 minutes 06 seconds West,
287.83 feet): and (5) North 87 degrees 23 minutes 13 seconds West, 260.00 feet to a point on the
Easterly line of Centerpoint Parkway (120 feet wide); thence Northerly along Easterly line of
said Centerpoint Parkway North 02 degrees 36 minutes 47 seconds East, 783.39 feet to the Point
of Beginning.
Exhibit B
CREDIT ENHANCEMENT DOCUMENTS
The following documents are being provided on a confidential basis:
STATE OF MICHIGAN RETIREMENT SYSTEM COMMITMENT LETTER
72 (Rev_ 4.00
JENNFER M GRAM IOLM
GOVERNOR
STATE Or M.ICHICiAN
:DEPARTMENT OF TREASURY
LANMC;
January 5,2(110
ROBERT IKLCINE
3TATC TREASOREP
Mr. Steven Lemberg
Chief Milani al Officer
Michigan Motion Pictures Studios, LLC
2100 E. Maple Road, Suite 200
Birmingham, Michigan 48009
RE: State of Michigan Retirement Systems Commitment Letter: Credit Enhancement
Recovery Zone Facility Bonds
Dear Mr. Lemberg:
Michigan Motion Pictures Studios, LLC ("MMPS") has requested that the State
Treasurer of the State of Michigan, Custodian of the Michigan Public School Employees'
Retirement System, State Empiores' Retirement System, Michigan State Police Retirement
System, and Nettchigan Judges' Retirement System (State (If Michigan Retirement Systems
("SMRS") ) consider providing credit enhancement for the Recovery Zone Facility Bonds
("Bonds") proposed to be issued by the Oakland County Economic Development Corporation
('EDCB) in support of the project. The project consists of the development of a three-building
movie studio and training complex in Pontiac, Michigan to include production studios, sounds
stages, office space, and educational facilities for use by tenants involved in the motion picture
and television production industries ("Project").
SMRS is providing this letter setting fOrth the business terms pursuant to which it
commits 10 provide the credit enhancement for the Series A Bonds in connection with financing
the Project.
It ts Slv1RS's understanding of the Bond issue as hereinafter deseribed, that SMRS
commits to providing credit enhancement in the amount of Eighteen Million and 00/100
(S18,000,000) Dollars in connection with the proposed issuance of "twenty Three Million and
00/100 ($23,000,000) Dollars of Bonds.
SMRS is adv.:sed that the Bonds will be issued by the EDC in two series. It is expected
that the Series A Bonds will be in the par amount of $18,000,000 and will be supported by the
credit enhancement, of principal and interest, provided by WM. Further, it is anticipated that
ihe Series B Bonds will he in the amount of $5,000,000 and will not he supported )-iy credit
enhancement. It is expected that the Series B Bonds will be purchased on a private placement
basis by the constituent members of the Borrower. The purchase of the Series B bonds is a pre-
condition of SMR.S providing the credit enhancement for the Series A Bonds, It is anticipated
433 WEST ALLA GAN STREET • LANSING, MICHIGAN 422
monk, tr, ichtgan.goviireasury - V) 7 373-3200
Mr. Stever, Lemberg
Page 2
.;anuary 5. 2010
that then will be a schedule for redempton of the Bonds, and deposits will he made into a
sinking fund to pay down Bond principal.
SivIRS will be paid at annual fec in the amount o12.5% of the then-outstanding principal
amount of Bonds it is providing credit enhancement for, aad that ruinuai fee will be paid for the
tim.c period the S'IvIRS credit enhancement is outstanding. SMRS shell be paid quarterly.
StvIRS will provide the credit enhancement for the Series A Bonds by means of an
acceptable Master Credit and Guaranty Agreement in favor of the Trustee for the benefit of tne
bondholders. StviRS will pledge to repay the bondholders the amount, if Any, or. which the
Botrower defaults and fails to pay the bondholders, and if it is required to make sueh payments.
it will have a right of subrogation which will entitle SMRS to exercise the bondholders' rights to
pursue repayMent from thc. Borrower and the Project,
i3 expected that the Bond issue will he structured in conjunction with a New Markets
Tax Credit equity investment. SMRS will require that the closing of the credit enhancement
transactions occur simultaneously with the closing of the issuance of the Bonds and the New
Markets ax Credit investment.
SMRS' commitment to provide credit enhanctanoni is based on the draft Summary of
Terms for the Bond issuance dated January 4, 2010, (attached hereto and made part hereof).
SMRS is aware that certain business terms may be modified and its commitment to N,IMPS as
stated herein ii subject to the condition of execution end delivery of final definitive written
documentation satisfactory to its legal counsel, the Attorney General of the state of Michigan.
STATE TREASURER OF THE STATE OF MICHIGAN, CUSTODIAN OF THE
PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM, STATE
EMPLOYEES' RETIREMENT SYSTEM, MICHIGAN STATE POLICE Ri=-:TIREMEN'l
SYSTEM AND MICHIGAN JUDGES' RETIREMENT SYSTEM
Ro 14.7C
Robert Kleine
State Treasurer
State of Michigan
li .1: , r
Mr. FAr.vcrs L,criihcrg
Page 3
January ,5. 2010
ACKNOWLEDGED AND ACCEPTED:
On this ,-47111. day of January, 2010
MICHICAN MOTION PICTURES STUDIOS, LLC
yi:fari 1)1. -7"
MICHIGAN MOTION PICTURE STUDIOS, LLC
SENIOR BONDS
UP TO $28 MILLION
PRELIMINARY SUMMARY OF TERMS
"apt PI a/m inor:I. Sionntoo- of Term:, contemplates a single-asset mein. financing. le; .$-irch a strwrowe, sco+17(1,
fro bonfilidriev.v -tall he semoP oblipationc Miclngem Moffat] Plentrc 5I:01os, LLC dcWhi Raiefgh Alichigan
Studios (tin 'Smile or "NAV") saltontred throirg4 conduit entities: The Swim wia P'uni (1.17r11 Plurfgage oil
hold had nnpruverneins mid a .7ucai'lly interact In al! thu Slucier ,:s gross rempts.
1. Project. A'...'53.759 square font state-of-the-art motion picture
studio and training complex on 22 acres located inside a
designated Renaissance Zone in Oakland County within
the limits of the City of Pontiac Michigan. The Project is
being undertaken to create a first-rate facility to assist
eligible production companies in maximizing 'Michigan's
generous refundable and assignable film production tax
credits of up to 42% of production .eosts.
2. Issuer: Oakland County Economic Development Corporation
3, Borrower: Michigan Motion Picture Studios, 1,1,C, a limited liability
company organized under the 1W8 Di the State Of
Michigan formed to develop the Project.
4. Closing Date: TBD
5. Principal Amount: -Jp to $28 million
6. Structure: Fixed Rate Obligations
7. 'FitN-Status;
g, tse of Proceeds:
The Bonds will be issued as tax-exempt private activity
bonds known as Recovery Zone Fnility Bonds as
defined in the American Recovery and Reinvestment Act,
enacted in February 2009. The Project has already
received an allocation of up to $30 million from Oakland
County, Michigan. The bonds will not be subject to the
federal Alternative Minimum TaI and carry a State of
Michigan tax-exemption as well.
Net proceeds of the Bonds (net of und,Twrites fees and
other costs of issuance) will he used to pay the costs of
the Project.
9. Maturity Date: Up to 30 years from issuance.
['nu 1
, f
1(. Optional Redemption:
11. Principal Repayment:
(•.?
2. Capitalized Interest:
The Bonds are subject to redemption prior to maturity on
or after 10 ycars from the date of issuance at a
retemp..ion price equal to 1004i, in whole at any time or
in part from dine to time on any interest payment date.
Band amortization will commence not curlier than seven
years from the delivery date of the bonds.
A portior, of bond proceeds shall be deposited into a
capitalized interest account in the amount sufficient to
pay for semi-annual interest payments from the date of
issuance until six months after initial Studio occupancy.
13. Credit Enhancement: Unconditional principal mid interest guarantee of the
bonds,
14. Credit Enhancers: State Treasurer of the State of Michigan, ftNtudian of thc
Michigan Public School Employees Retirement System,
State Employees Retirement System, Michigan State
Police Retirement System, and Michigan Judges
Retirement System (SMRS)). C.:radii enhancement will
be provided by SMR.S for $18 million of the Bonds.
Credit Enhancement Structure; The Bonds will be issued in two series. Series A will be
in the par amount of $18 million and will he credit
enhanced by the guarantee provided by SM RS. The
balance of the Bonds will be issued as Series B and will
be purchased on a private placement basis, without credit
entancement, by the constituent members of Borrower.
The purchase of the Series B Bonds will loa a pre-
condition of SMRS providing credit enhancemmt for the
Series A Bonds,.
16. Credit Enhancement Fees: 2.50% per annum paid no less frequently than quaneriy.
17, Credit Enhancement 'Verm: Thefull termk)f the bonds, reduced as bonds are paid off.
Should the bonds be optionally refinanced for debt
service savings prior to the Maturity Date, at the option of
the Borrower the Credit Enhancement amount then
outstanding shall transfer to the refundintl bond issue.
18. Bond Ratirws: bond ratings, tinny are sought, shall be determined based
on market conditions and bond offering requirements.
Pau 2
COA'1i1)EA .7.-- -IL oj America Lyneh ni ir7 Arle ilarT
22. No Bond Guaranty;
23. Construction Period:
19. Bond Fees:
20. Bond Trustee;
21. Security:
24. Construction Contract:
25. Construction Bonds:
26, Completion Guarantee:
27. Developer Fees:
28. O&M Comma:
TBD
The Bonds will be senior obligations of the Studio. The
Studio shall pledge the gross receipts of the Studio and
shall grant a first mortgage on the land and improvements
and appropriate pledges of equity in the Studio.
These Bonds will be non-recourse obligations of the
Studio.
It is expected that the full Construction Period including
the retrofit of the existing office space and construction of
the suitlios will last no longer than 12 months.
The Burrower intends to enter into a Construction
Contract with Walbridge Aldinger Company, A Michigan
Corporation ("General Contractor") under a guaranteed
maximum price contract to construct the Project. The
.performance by any subsidiary of or sub-contractor to the
General Contractor under the Construction Contract will
be guaranteed by the General Contractor.
Appropriate guarantees and sureties including but not
limited to a payment and performance bond covering sub-
contractors, delay damages, liquidated damages and
minimum performance criteria., if required by the Credit
Enhancers.
As a condition of the Credit Enhancement. the Borrower
shall be required to provide a limited construction
completion guarantee.
Developer fees will he disbursed at Or around the Closing
Date for the reimbursement of pre-development costs and
during the Construction Period for general operating
expenses only, with the remaining balance paid upon
delivery of the completed facility.
The Borrower has entered into an O&M contract with
Raleigh Studios to operaw the Projeet fill an nitia1 :0
year tank. Raleigh Studios is an equity partner in the
Borrower.
Page 3
.1 :r inter ill
29. Flov,a of l'unc.s:
30. Debt Service Reserve Fund:
All pledged revenues of the Borrower wilt be deposited
with the Bond Trustee and held in trust itq applied by the
Bond Trustee in accordance with the -terms and
provisions of the mist i:Klenture in th(. order of priority
st at ed.
A Cebt scrviec reserve fund will be established equal to
Eipproximuttly one year of principai and interest
payments to be funded with deposits no less frequently
than annually commencing in the first year of the Studio's
operation with full funding not later than seven years
after the Closing Date.
31. Debt Service Coverage Ratio: The Borrower's projected Debt Service Coverage Ratio
(HDSCR") for any period shall be a good faith and
reasonable estimate by the Borrower of (a) the
Borrower's projected gross pledged revenues, including
projected interest earnings, divided by (b) scheduled
principal und interest on the Bonds, projected credit
enhancement fees, plus the amount of any broje4.ned
insurer premiums (if applicable). Calculations will he
performed in respect of the next following fiscal year.
32. DSCR Covenant:
33. Sinking Fuuel:
34. Conditions Precedent:
There will he no transfers outside of the Studio until or
unioss Studio operations are stabilized and debt service
coverage is 2.00x on a historic pro forma basis and 100x
on a projected basis based upon the most recent fiscal
year audited financial statements.
In addition to deposits to the Debt Service Reserve Fund,
the Borrower shall be required to deposit to the Sinking
Fund an amount equal to fifteen percent (15%) of the
balance remaining after making all required transfers
under the Flow of Funds, up to a maximum of amount of
one million and five hundred thousand dolilim
($1.500,000) per fisca: year for each of the first eight (5)
fiscal years. Any amounts remaining after such transfer
may hc transferred to Me Borrower free and clear of any
trust, lien or assignment securing the bonds or otherwise
existing under the lien Of he indenture subject to the
tenns of Equity Distributions.
Conditions precedent to the Closing Date. the issuance of
thi: Bonds and the delivery of the Credit Enhantlement to
he fulfilled in form and substance to the mutual
Page 4
i;/(f UIAincrcuTill DILI FT- fam:rry •
36. Equity Requirement:
37. Equity Distributions:
35. Other Covenants:
38. Tax Credit Guarantees:
39. Disclosure:
IYETP(XT.4PI 17-4,5
satisfaction of the parties generally include (a) legal
opinions, (h) tax opi•jem, (cl.) all representations and
warramies of the Borrower contained in the financing,
documents are true and correct in all material respects,
(ci)1 creation and perfetion of a first-priority security
interest in IL11 collateral in favor of the Trustee, KIX] (c)
deli very of bond rating letters, if applicable.
'Typical trid customary covenants. both affinntitive and
neuative shall be agreed upon, subject to approval of the
Credit Enhancers.
100% of the contemplated equity.. currently projected at
$5.0 million will be fully funded at issuance.
Distributions to equity holders shall he made no earlier
than the end of the fiscal year following the fiscal year in
which ii certificate is delivered to the Bond Trustee by the
Borrower stating that (a) Studio operations have
stabilized, and debt service coverage exceeds 2.00s on t.
historic pro forma basis and 2.Mx on a projected basis
based upon the most recent flaw] year nudited fmaneial
statements and rnanETement revenue expectations.
The Borrower shall be required to provide acceptable
glarantees with regards to the sale of tux credits in
COTIlleCti011 with the federal Now Markets Tax Credit
program and the Mitthigan Film Infrastructure Tax Credit
program.
A private placement offering memorandum for potential
investors. The Studio shall make audited financial
statements available to all investors within 120 days of
the end of each fiscal year,
Pagc 5
B-9
Exhibit C
COMPANY CERTIFICATE REGARDING
TRANSFER OF EMPLOYMENT
(Michigan Motion Picture Studios, LLC Project)
The undersigned, Michigan Motion Picture Studios, LLC, a Michigan limited liability
company (the "Company"), hereby certifies to The Economic Development Corporation of the
County of Oakland (the "EC") as follows:
1. This Certificate is made and based upon the best of the Company's knowledge
and belief, only after thorough investigation and discussion with all owners of the Company and
others who might have knowledge regarding the subject matter.
2. The Company acknowledges that this Certificate will be employed by the EDC as
the sole basis for the EDC's certification to the Board of Commissioners of the County of
Oakland as to transfer of employment as required by Section 8(3) of the Economic Development
Corporations Act, Act No. 338 of the Michigan Public Acts of 1974, as amended (the "Act").
3. The Company understands that the EDC's Certification to the Board of
Commissioners of the County of Oakland is a statutory requirement which, if improperly made
or based upon any material misrepresentation or inaccuracy, might invalidate the proceedings
regarding the Michigan Motion Picture Studios, LLC Project (the "Project") pursuant to which
the EDC expects ultimately to issue its limited obligation economic development revenue bonds
to finance all or part of the Project.
4. As of the date hereof, the Project shall not have the effect of transferring
employment of more than 20 full-time persons from a municipality (as that term is defined in the
Act) of this State to the City of Pontiac. Michigan, the municipality in which the Project wil: be
located.
s. The Company understands that a covenant to effectuate the purposes of this
Certificate will be included in those covenants to be made by the Company when bonds are
issued by the EDC for the benefit of the Project.
MICHIGAN MOTION PICTURE STUDIOS, LC
Chief Financial Officer
Dated: _January 18. 2010
By:
Its:
C-1
Exhibit D
COMPANY CERTIFICATE REGARDING
PAYMENT OF PREVAILING WAGES
(Michigan Motion Picture Studios, LLC Project)
The undersigned, Michigan Motion Picture Studios, LLC, a Michigan limited liability
company (the "Company"), hereby certifies to The Economic Development Corporation of the
County of Oakland (the "EDC") as follows:
1. The Company understands that this Certificate is a statutory requirement under
the Economic Development Corporations Act, Act No. 338 of the Michigan Public Acts of 1974,
as amended (the "Act") which, if improperly made or based upon any material misrepresentation
or inaccuracy, might invalidate the proceedings regarding the Michigan Motion Picture Studios.
LLC Project (the "Project") pursuant to which the EDC expects ultimately to issue its limited
obligation economic development revenue bonds to finance all or part of the Project.
2. Within the meaning and intent of Section 8(4)(1) of the Act, all persons
performing work on the construction of the Project will be paid the prevailing wage and fringe
benefit rates for the same or similar work in the locality in which the work is to be performed, as
determined pursuant to Act No. 166 of the Michigan Public Acts of 1965, as amended.
MICHIGAN MOTION PICTURE STUDIOS, LIX
Chief Financial Officer
Dated: January 18, 2010
By:
Its:
Exhibit E
The City of Pontiac infrastructure improvements are described in the following pages
from the Development Agreement dated May 4, 2009,
B1-1 1013515v1
DETROTI 3706,651.2
E-1
Erectilion Copy
DEVELOPMENT AGREEMENT
(Pontiac Renaissance Zone Project)
by and between
CITY OF PONTIAC
a Pvlichigari municipal corporation
and
NfOTOWN MOTION MIMES, LLC
o Michigan limited liability company
May 4, 2009
ARLIB.-554414.5W11371-0D072
05/0110
the status of the Application; and the City will promptly consult with the Developer regarding
any requests from MEDC or the IvISF Board and include, as appropriate, the Developer's
responses in the City's responses to those requests. The City will further take all commercially
reasonable steps to secure the required signatures constituting the consent of Oakland County to
the Application and the Zone as well DS any required resolution from the Pontiac City Council.
Notwithstanding the foregoing provisions of this Subseetion 2.2,1, the City will, but only at the
request of the Developer, share any draft or preliminary (unsigned) Application with MEDC
staff, and the Developer may, at any time share an draft or preliminary Application with IVIEDC
staff;
Tim."...im.-... 2.2.2 Infrastru tura, The City agrees to provide its reasonable cooperation to
the Developer to seek so-called federal or state stimulus funds and other assistance from the
United States, Oakland County and the State of Michigan for the following infrastructure
improvements for the Project ("Infrastinenne):
(a) Site work, including sanitary sewers, storm sewers, storm water
system, site earthwork and site concrete and bituminous paving at an
1
estimated cost of $3,236,685.00.
(b) Extension of primary electrical service to the Project buildings at an
estimated cost of $335,900.00.
(c) Eleotdeal site lighting and iteds at an estimated cost of $276,180.00.
The City shall not be required to expend any out-of-pocket funds to prövide its reasonable
cooperation under this Seetion 2.2,2. ....---...............„
2.2..3 Permits. City shall expedite, to the extent legally permitted to do so, the
issuance, of all Permits and City approvals for the Project, provided Developer has submitted the
required epplieation and information ender the generally applicable standards for granting snoh
Permits in. the City. Promptly following Developer's completed Permit submissions, the City
shall review same. So long as the Developer's completeffermit submissions meetthe generally
applicable standards for the grant of Permits in the City (including the posting of any tnquired
bond in. an appropriate and reasonable amount under the eircurnstances), the City will, without
payment of any permit fee or other charge (except to the extent Water and Sewer Connection
charges are imposed). Issue the following initial Permits ("Initial Permits"); soil erosion, site
grading, utility and foundation permits. Any inspections related to the Initial Permits will be
performed by the independent inspector pumuant to Subsection 3.1.5 of this Agreement.
22.4 Coo_neration Regardinc Other Assistance. The City shall support the
Developer's reasonable requests for other Incentives and assistance from U.S. agencies, addend
County agencies and State of Michigan meneles and provide its reasonable cooperation with
those agencies in connection with approvals, incentives and assistance for the Project and the
City shall provide its reasonable cooperation with the Developer with respect to the foregoing.
The City aan not be required to expend any out-of-pocket funds to provide its reasonable
cooperation under this Subsection 2.2,4.
6
AA L113:554 4 I4O7 7I.0072
175/01/35$
Exhibit F
PROJECT SITE PLAN
The proposed Project Site Plan is provided on the following page.
BH 1013515v1
DETROET 3 796651.6
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BH 1013515v1
DETR011379665 t .6
F-2
APPROVE THE FOREGOING OMR
February 2, 2013 Resolution #10024
Moved by Scott supported by Hatonett the resolution be adopted.
asdussion followed.
AYES: Gershenson, Gingell, Gosselin, Greimel, Hatchett, Jackson, Jacobsen, Long, McGillivray,
Middleton, Nash, Potts, Runestad, Schwartz, Scott, Taub, Woodward, Zack, Bullard, Burns,
CapeIlo. Coleman. Coulter, Douglas. (24)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolution was adopted.
STATE OF M:CHIGAN)
COUNTY OF OAKLAND)
I, Ruth Johnsor. Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true
and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on
February 2.2010. with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at
Pontiac, Michigan this 2nd day of February, 2010,
Gat
Ruth Johnson, County Clerk