Print
Reading Mode
Back to Calendar
Return
AI# 11042
Regular City Council Meeting
6.17.
10/11/2022:
Information
Agenda Item
Resolution - City Manager:
Consider a resolution authorizing the Mayor to approve the New Hope Cultural Education Facilities Finance Corporation's accepting a tax-exempt loan and execution of a note in evidence thereof, to obtain funds on behalf of the Red Raider Facilities Foundation, to finance Jones Stadium and Related Facilities Improvement and Expansion, and other matters in connection therewith.
Item Summary
On July 11, 2022, Texas Tech University (TTU) announced plans to expand and renovate the southern end zone of Jones AT&T Stadium beginning in late 2022. While fundraising efforts are underway to defray the overall cost to the University, the construction of the new facilities is being managed through the Red Raider Facilities Foundation, Inc. (RRFF), a Texas non-profit corporation organized under Chapter 22 of the Texas Business Organizations Code and recognized as a non-profit corporation under the Internal Revenue Code Section 501(c)(3). By using this arrangement between TTU and the RRFF, the RRFF is eligible to use tax-exempt financing through the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982.
Since the RRFF is not a governmental entity that can independently issue tax-exempt debt under the TEFRA, the RRFF must have an authorized, eligible entity issue tax-exempt on their behalf, which is commonly referred to as "conduit debt." The RRFF hired McCall, Parkhurst & Horton LLP (McCall) as their bond counsel to navigate this tax-exempt debt financing mechanism. McCall and the RRFF came to an agreement with the Town of New Hope Cultural Education Facilities Finance Corporation (Corporation) to issue a 24-month tax-exempt drawdown construction loan in the maximum amount of $225 million to finance the costs of designing, redeveloping, constructing, and equipping the south end zone at Jones AT&T Stadium and a new athletic training facility on TTU's campus, to fund capitalized interest on the loan, and to pay the costs of obtaining the loan. The City of Lubbock will have no part, or bear any responsibility, for the financing of the planned South End Zone Project.
Because of Section 147(f) of the Internal Revenue Code, the project and the loan must be approved by the applicable elected representative of the governmental unit in which the financed facility is located. The Mayor of the City of Lubbock, therefore, is being requested as the applicable elected representative of the City to approve both the Corporation's incurrence of the construction loan and the South End Zone Project, which is being managed by the RRFF. The authorization to approve the loan and the project is made solely for the purpose of satisfying the requirements of Section 147(f) and for no other purpose, and shall not be construed as a representation, warranty or other undertaking of any kind by the City, the Mayor, or the City Council with respect to the loan or the project.
Fiscal Impact
The City of Lubbock has no financial obligation as a party to this agreement. The financial obligation is between the New Hope Cultural Education Facilities Finance Corporation and the Red Raider Facility Foundation.
Staff/Board Recommending
D. Blu Kostelich - Chief Financial Officer
Attachments
Resolution - Red Raider Facilities Foundation Inc TEFRA Approval
Certificate of Resolution - Red Raider Facilities Foundation Inc TEFRA Approval
Certificate of Mayor - Red Raider Facilities Foundation Inc TEFRA Approval
AgendaQuick ©2005 - 2024 Destiny Software Inc.
All Rights Reserved.