HomeMy WebLinkAboutResolutions - 2023.08.17 - 40490
AGENDA ITEM: Reissuance of Series 2018 Bonds - the Detroit Skating Club, Inc., Project - City of
Bloomfield Hills
DEPARTMENT: Economic Development
MEETING: Board of Commissioners
DATE: Thursday, August 17, 2023 7:39 PM - Click to View Agenda
ITEM SUMMARY SHEET
COMMITTEE REPORT TO BOARD
Resolution #2023-3182 _ 23-133
Motion to adopt the attached suggested resolution.
ITEM CATEGORY SPONSORED BY
Resolution Yolanda Smith Charles
INTRODUCTION AND BACKGROUND
In 2018, the Economic Development Corporation of the County of Oakland issued bonds to The
Detroit Skating Club, Inc. The rate and amortization of the bonds are to be modified at maturity of
the original 5 year period, resulting in a reissuance. The reissuance requires a Public Hearing at the
Oakland County Board of Commissioners.
There is no effect on budget. A similar transaction for Cranbrook Educational Community was
undertaken and completed in August 2021.
A public hearing will be held on Thursday, August 17, 2023 at 6:00 p.m. in the Oakland
County Board of Commissioner's Auditorium, 1200 North Telegraph Road, Pontiac MI.
POLICY ANALYSIS
The resolution is requesting approval of the reissuance of the Series 2018 Bonds by the Economic
Development Corporation of the County of Oakland (EDC) in the principal amount not to exceed
$3,667,000 per terms and conditions as the EDC and its bond counsel determine to be necessary
and appropriate. The principal amount for the bonds issued was $4,125,000 for the Detroit Skating
Club, Inc. Project per MR #18231 in June 2018, as well as approval of the Project. Due to the
modification of the Series 2018 Bonds, the Internal Revenue Code of 1986, as amended requires
the Board to 1) hold a public hearing and 2) following the public hearing authorize the approval of
the reissuance of the Series 2018 Bonds. A public hearing in the Commissioners' Auditorium, 1200
North Telegraph Road, Pontiac, Michigan, is on Thursday, August 17, 2023, beginning at 6:00 p.m.,
central time zone.
The Detroit Skating Club requested the EDC’s assistance in modifying the Series 2018 Bonds in a
transaction where the Bank of Ann Arbor (“Lender”), the current holders of the Series 2018 Bonds,
will renew its commitment to hold the Bonds for five more years, set a new fixed interest rate on the
Bonds for a five-year term and modify the Bond amortization schedule based on the new interest
rate, that will extend the average life of the Bonds. Dickinson Wright PLLC, Bond Counsel to the
EDC, has determined that these modifications will result in the Series 2018 Bonds to be deemed
“reissued” for federal tax law purposes. The new interest rate for the bonds will not be finalized until
closer to the closing date. It will be determined based on the five-year treasury rate plus a spread
shortly before closing.
The EDC has no taxing power, and the reissuance of the Series 2018 Bonds will not obligate the
County of Oakland or any political subdivision of the State of Michigan to levy or pledge any form of
taxation for the Series 2018 Bonds or to make any appropriation for the payment of the Series 2018
Bonds. Full faith and credit of the County is not required.
http://legislature.mi.gov/doc.aspx?mcl-act-338-of-1974
*The Internal Revenue Code of 1986, as amended (the “Code”), requires that if in connection with a reissuance of private activity bonds for federal tax law
purposes, the average life of the bonds is extended, a public hearing must be held by the governing body of the governmental unit in which the economic
development corporation is located, and the reissuance of the bonds must then be approved by such governing body. The Code further requires that notice of
such public hearing must be published at least seven days before the hearing date. Note, that the ten-day notice period required by Act 338 of 1974, as
amended (the “EDC Act”) for any public hearing on the adoption of an EDC project plan is not applicable to this situation.
BUDGET AMENDMENT REQUIRED: No
Committee members can contact Michael Andrews, Policy and Fiscal Analysis Supervisor at
248.425.5572 or andrewsmb@oakgov.com, or the department contact persons listed for additional
information.
CONTACT
Catherine Rasegan, Administrator Financial Services
ITEM REVIEW TRACKING
Aaron Snover, Board of Commissioners Created/Initiated - 8/17/2023
David Woodward, Board of Commissioners Approved - 8/17/2023
Hilarie Chambers, Executive's Office Approved - 8/21/2023
Lisa Brown, Clerk/Register of Deeds Final Approval - 8/24/2023
AGENDA DEADLINE: 08/27/2023 7:39 PM
ATTACHMENTS
1. 4855-1966-2961 v1 Oakland EDC - Detroit Skating Club - Notice of Public Hearing
2. 4894-7133-7074 v2 EDC Oakland County - Detroit Skating Club - MemoNotice of Public
Hearing
COMMITTEE TRACKING
2023-08-09 Economic Development & Infrastructure - Recommend and Forward to Finance
2023-08-09 Finance - Recommend to Board
2023-08-17 Full Board - Adopt
Motioned by: Commissioner Robert Hoffman
Seconded by: Commissioner Brendan Johnson
Yes: David Woodward, Michael Spisz, Penny Luebs, Karen Joliat, Kristen Nelson, Christine
Long, Robert Hoffman, Philip Weipert, Gwen Markham, Angela Powell, Marcia Gershenson,
William Miller III, Yolanda Smith Charles, Charles Cavell, Brendan Johnson, Ajay Raman (16)
No: None (0)
Abstain: None (0)
Absent: Gary McGillivray, Michael Gingell (2)
Passed
August 17, 2023
RESOLUTION #2023-3182 _ 23-133
Sponsored By: Yolanda Smith Charles
Economic Development - Reissuance of Series 2018 Bonds - the Detroit Skating Club, Inc.,
Project - City of Bloomfield Hills
Chair and Members of the Board:
WHEREAS the Economic Development Corporation of the County of Oakland (the “EDC”) has been
requested by The Detroit Skating Club, Inc. (“Detroit Skating Club) to approve certain modifications to
the EDC’s Limited Obligation Revenue Bonds (The Detroit Skating Club, Inc. Project), Series 2018
(the “Series 2018 Bonds”) previously issued in 2018 in the principal amount of $4,125,000 for the
benefit of Detroit Skating Club for the purpose of (i) financing the costs of renovating, improving,
furnishing and equipping Detroit Skating Club’s ice skating facility located at 888 Denison Court,
Bloomfield Township, Michigan 48302 (the “Skating Facility”), (ii) refinancing outstanding
indebtedness that was incurred to refund bonds issued by the EDC in 1996 and 2005 for the benefit
of the Detroit Skating Club for capital improvements to the Skating Facility; and (iii) paying the costs
of issuance of the Series 2018 Bonds, under the Economic Development Corporations Act (the “Act”);
and
WHEREAS, this County Board of Commissioners previously approved the Project Plan related to the
Project and issuance by the EDC of the Series 2018 Bonds pursuant to MR#18231 dated June 13,
2018; and
WHEREAS because the modifications to the Series 2018 Bonds will constitute a reissuance of the
Series 2018 Bonds for federal income tax purposes, the Internal Revenue Code of 1986, as
amended, requires that the Board of Commissioners (1) hold a public hearing on the question of
whether the Series 2018 Bonds should be reissued in the principal amount not to exceed $3,667,000
and (2) following the public hearing, approve the reissuance of the Series 2018 Bonds; and
WHEREAS the Board of Commissioners, following such public hearing, hereby concurs in the
determination of the EDC to reissue the Series 2018 Bonds in the principal amount not to exceed
$3,667,000.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners hereby
approves the reissuance of the Series 2018 Bonds by the EDC in the principal amount not to exceed
$3,667,000, upon such terms and conditions as the EDC and its bond counsel determine to be
necessary and appropriate under the circumstances.
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.
Chair, the following Commissioners are sponsoring the foregoing Resolution: Yolanda Smith
Charles.
Date: August 17, 2023
David Woodward, Commissioner
Date: August 21, 2023
Hilarie Chambers, Deputy County Executive II
Date: August 24, 2023
Lisa Brown, County Clerk / Register of Deeds
COMMITTEE TRACKING
2023-08-09 Economic Development & Infrastructure - Recommend and Forward to Finance
2023-08-09 Finance - Recommend to Board
2023-08-17 Full Board - Adopt
Motioned by Commissioner Robert Hoffman seconded by Commissioner Brendan Johnson to adopt
the attached Resolution: Reissuance of Series 2018 Bonds - the Detroit Skating Club, Inc., Project -
City of Bloomfield Hills.
Yes: David Woodward, Michael Spisz, Penny Luebs, Karen Joliat, Kristen Nelson, Christine Long,
Robert Hoffman, Philip Weipert, Gwen Markham, Angela Powell, Marcia Gershenson, William
Miller III, Yolanda Smith Charles, Charles Cavell, Brendan Johnson, Ajay Raman (16)
No: None (0)
Abstain: None (0)
Absent: Gary McGillivray, Michael Gingell (2)
Passed
ATTACHMENTS
1. 4855-1966-2961 v1 Oakland EDC - Detroit Skating Club - Notice of Public Hearing
2. 4894-7133-7074 v2 EDC Oakland County - Detroit Skating Club - MemoNotice of Public
Hearing
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lisa Brown, 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
August 17, 2023, 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 Circuit Court at
Pontiac, Michigan on Thursday, August 17, 2023.
Lisa Brown, Oakland County Clerk / Register of Deeds
NOTICE OF PUBLIC HEARING REGARDING THE REISSUANCE OF BONDS
BY THE ECONOMIC DEVELOPMENT CORPORATION
OF THE COUNTY OF OAKLAND FOR THE DETROIT SKATING CLUB, INC.
NOTICE IS HEREBY GIVEN that the Board of Commissioners of the County of Oakland,
Michigan, will hold a hearing in the Commissioners' Auditorium, 1200 North Telegraph Road, Pontiac,
Michigan, on Thursday, August 17, 2023, beginning at 6:00 p.m., Michigan Time.
The hearing shall consider whether the Board of Commissioners should approve the reissuance
by The Economic Development Corporation of the County of Oakland (the “EDC”) of its Limited
Obligation Revenue Bonds (The Detroit Skating Club, Inc. Project), Series 2018 (the “Series 2018
Bonds”) in the principal amount not to exceed $3,667,000, previously issued in 2018 for the benefit of
The Detroit Skating Club, Inc., a Michigan nonprofit corporation (“Detroit Skating Club”), for the
purpose of (i) financing the costs of renovating, improving, furnishing and equipping Detroit Skating
Club’s ice skating facility located at 888 Denison Court, Bloomfield Township, Michigan 48302 (the
“Skating Facility”), (ii) refinancing outstanding indebtedness that was incurred to refund bonds issued by
the EDC in 1996 and 2005 for the benefit of the Detroit Skating Club for capital improvements to the
Skating Facility; and (iii) paying the costs of issuance of the Series 2018 Bonds. Detroit Skating Club is
the owner and operator of the Skating Facility and the assets financed with the proceeds of the Series
2018 Bonds. The hearing is held in accordance with Treasury Regulation §1.147(f)-1.
The EDC intends to assist Detroit Skating Club in a transaction whereby the interest rate and
amortization schedule of the Series 2018 Bonds will be modified. These modifications will result in the
Series 2018 Bonds to be deemed “reissued” for federal tax law purposes. A public hearing is a condition
precedent under the Code to the modification and reissuance of the Series 2018 Bonds. The Series 2018
Bonds will be reissued in a maximum principal amount of $3,667,000.
The Series 2018 Bonds will be limited obligations of the EDC payable only from loan
repayments to be made by Detroit Skating Club to the EDC and other security to be provided by Detroit
Skating Club. The Bonds will not be a general obligation of the EDC and will not be a debt of the City of
Bloomfield Hills or the County of Oakland or any other political subdivision of the State of Michigan.
The EDC has no taxing power and the reissuance of the Series 2018 Bonds will not obligate the County
of Oakland or any political subdivision of the State of Michigan to levy or pledge any form of taxation for
the Series 2018 Bonds or to make any appropriation for the payment of the Series 2018 Bonds.
The Board of Commissioners will consider whether to approve the reissuance of the Bonds by the
EDC, which are authorized to be issued by the EDC pursuant to Act 338, Public Acts of Michigan, 1974,
as amended, as required by the Code.
Information related to the Bonds is available for public inspection at the Office of Oakland
County Economic Development & Community Affairs, Bldg. 41 West, 2100 Pontiac Lake Road,
Waterford, Michigan, between the hours of 8:00 a.m. and 5:00 p.m., weekdays. Any aspect of the
planned financing may be discussed at the public hearing and all interested persons will be given an
opportunity to be heard. The hearing will provide the fullest opportunity for expression of opinion,
arguments on the merits and introduction of documentary evidence relative to the financing.
If you would prefer to send written comments for consideration, please forward them to Catherine
Rasegan, Administrator, Financial Services at the above address. If you have questions, you may call
(248) 858-5101.
Lisa Brown
Oakland County Clerk
Register of Deeds
MEMORANDUM
TO: Catherine J. Rasegan, Assistant Secretary of
The Economic Development Corporation of the County of Oakland
FROM: Craig W. Hammond, Dickinson Wright PLLC
DATE: July 26, 2023
SUBJECT: Public Hearing regarding reissuance of EDC of the County of Oakland/Detroit
Skating Club, Inc. Series 2018 Bonds
In 2018, The Economic Development Corporation of the County of Oakland (the “EDC”)
issued its $4,125,000 Limited Obligation Revenue Bonds (Detroit Skating Club, Inc. Project), Series
2018 (the “Series 2018 Bonds”) for the benefit of Detroit Skating Club, Inc., a Michigan nonprofit
corporation (“Detroit Skating Club”), for the purpose of (i) financing the costs of renovating,
improving, furnishing and equipping Detroit Skating Club’s ice skating facility located at 888
Denison Court, Bloomfield Township, Michigan 48302 (the “Skating Facility”), (ii) refinancing
outstanding indebtedness that was incurred to refund bonds issued by the EDC in 1996 and 2005
for the benefit of the Detroit Skating Club for capital improvements to the Skating Facility; and
(iii) paying the costs of issuance of the Series 2018 Bonds. The County Board of Commissioners
previously approved the Project Plan related to the Project and the issuance by the EDC of the
Series 2018 Bonds pursuant to MR#18231 dated June 13, 2018.
Detroit Skating Club has requested the EDC’s assistance in modifying the Series 2018 Bonds
in a transaction wherein the Bank of Ann Arbor (“Lender”), which is the current holders of the Series
2018 Bonds, will renew its commitment to hold the Bonds for five more years, set a new fixed
interest rate on the Bonds for a five year term and modify the Bond amortization schedule based on
the new interest rate, which will extend the average life of the Bonds. Dickinson Wright PLLC,
Bond Counsel to the EDC, has determined that these modifications will result in the Series 2018
Bonds to be deemed “reissued” for federal tax law purposes.
The Internal Revenue Code of 1986, as amended (the “Code”), requires that if in connection
with a reissuance of private activity bonds for federal tax law purposes, the average life of the bonds
is extended, a public hearing must be held by the governing body of the governmental unit in which
the economic development corporation is located, and the reissuance of the bonds must then be
approved by such governing body. The Code further requires that notice of such public hearing must
be published at least seven days before the hearing date. Note, that the ten day notice period
required by Act 338 of 1974, as amended (the “EDC Act”) for any public hearing on the adoption of
an EDC project plan is not applicable to this situation.
In the past, in connection with the EDC’s issuance of bonds for new projects or the
refinancing of outstanding EDC bonds, the Board of Commissioners has always held the public
hearing required by the EDC Act and the Code and has approved the issuance of the bonds by the
EDC.
ARIZONA KENTUCKY MICHIGAN NEVADA OHIO TENNESSEE WASHINGTON DC TORONTO
To comply with the requirements of the Code, the EDC is now requesting that the Board of
Commissioners similarly hold a public hearing for the proposed reissuance of the Series 2018 Bonds,
and approve the reissuance of the Series 2018 Bonds by the EDC, as it has in connection with other
projects and EDC bonds in the past.
Please do not hesitate to contact me if you have any questions regarding the subject matter of
this memorandum or the proposed refinancing.
Respectfully,
Craig W. Hammond
4894-7133-7074 v2 [29842-2]