Agreement contains bond, leasing details

Here is how the proposed Jordan Valley Park projects would be financed, according to the developer agreement:

The Springfield Center City Development Corporation, a not-for-profit corporation created by the city to develop Jordan Valley Park, would assist the city to finance improvements by issuing revenue bonds, some tax-free, some taxable.

A public building corporation, likewise created by the city, also can and has issued revenue bonds to develop the area. So far, the PBC has issued more than $10 million in Series A 2000 leasehold revenue bonds to acquire and clear by demolition a portion of the baseball stadium land.

Leasehold bonds are bonds payable by rental income from a lease.

Under the developer agreement, the SCCDC would be asked by the city to issue revenue bonds to buy the land, build the stadium and provide parking.

The bonds also would be used to cover costs to renovate the trade center and construct the shell, which are not covered by the exposition contribution fund.

Additionally, the bonds would cover the costs to issue them, to pay interest during construction and to fund a debt service reserve for the bonds.

Repayment of the taxable bonds is the responsibility of the Hammonses. Under a sublease and operating agreement, the Hammonses would pay rent equal to the amount of principal and interest due on the bonds.

Once the exposition space, the trade center or the baseball stadium is issued a certificate of occupancy, the Hammonses must within six months start paying a monthly installment equal to one-sixth of the semi-annual amounts due as interest on the taxable bonds and one-twelfth of the annual amounts due as principal on the taxable bonds.

Until then the Hammonses would pay $1 annually in rent for all the properties leased to them in the agreement.

The leases and subleases are suggested to operate as follows, according to the developer agreement:

The Hammonses would lease the trade center to the SCCDC, which would sublease it to the city which would sublease it back to the Hammonses. The adjacent parking garage will be deeded to the city, in exchange for which the city will forgive existing Urban Development Action Grant debt.

The PBC would lease the already acquired parking land to the SCCDC which would lease it back to the city.

The PBC would grant the SCCDC a leasehold estate in the baseball land and parking land to give it the power to lease them to the Hammonses. The SCCDC would lease the baseball land, the expo center and the trade center to the city, which would sublease all those properties to the Hammonses.

The baseball stadium would be leased by the Hammonses to a AA minor league baseball club. That lease would be assigned to the city by the Hammonses as collateral.

All revenues from events on those properties, except for event ticket surcharges and parking fees, would belong to the Hammonses, who also would receive an exclusive right to operate the businesses while the bonds are outstanding.

A provision in the agreement would pay off some of the bonds already issued. Part of the Series A 2000 bonds issued by the PBC to buy baseball stadium land could be paid for by new taxable bonds issued by SCCDC.

To fund more parking south of Trafficway, the SCCDC would issue tax-exempt bonds. These bonds, too, would pay the costs of their issuance and debt service.