TC Res. No. 1981-03TOWN OF AVON, COLORADO
RESOLUTION NO. U -3
Series of 1981
A RESOLUTION APPROVING A SPORTS FACILITY PROJECT FOR
BEAVER CREEK ASSOCIATES, INC., MAKING FINDINGS AND
AUTHORIZING BOND FINANCING IN CONNECTION THEREWITH
AND AUTHORIZING REPRESENTATIVES OF THE TOWN TO TAKE
ACTION INCIDENTAL THERETO.
WHEREAS, Beaver Creek Associates, Inc. (the "Company") has requested
the Town of Avon, Colorado, for assistance with financing for a project
(the "Project") consisting of certain sports and recreational facilities
and related equipment for the Avon Mountain'Resort Area to be located
within eight (8) miles of the Town as"more fully described-in a letter of
the Company dated February 12, 1981, submitted to'this meeting (a copy
of which shall be filed with the records of the Town); and
WHEREAS, the Town,desires to encourage the Company,to proceed with the
Project''in order to further the purposes of,the County'and Municipality
Development Revenue Bond Act (the "Act");
NOW, THEREFORE, BE IT RESOVLED, BY THE TOWN COUNCIL OF THE TOWN OF
AVON, COLORADO, AS FOLLOWS:
Section 1. Approval of the Project; Findings. Based upon the
representations made and information supplied by the Company, the Town
hereby approves the Project and makes the following findings in
connection therewith:
A. The Project constitutes-a "project" for purposes of the
Act in that it consists of properties, other than inventories, raw
materials and other working capital, suitable'or to be used for or in
connection with sports and recreational facilities available for use,by„
members of the general public, to be owned and operated by a com mercial'
enterprise; and
B. The Project will promote the public purposes of the Act
and the safety, welfare, convenience and prosperity'of the inhabitants of
Colorado by promoting industry and developing trade through the induce-
ment of the Company to maintain and expand its operations, mitigating
a threat of unemployment and securing and maintaining~a,balanced',and
stable economy in Colorado.
Section 2. Authorization of Bond Financing.' The Company's letter,
proposal is hereby approved. The Town will issue its Sports'Faciil'ity
Revenue Bonds or Notes for the financing of the'Project up to.a maximum
aggregate principal amount of $2,700,000, such Bonds.or notes (a)' to
be issued in compliance with the Act,,-(b) to be subject to such Iterms
and conditions as the Company and the Town Council, by ordinance, shall.
Town of Avon
Resolution
Page Two
approve, and (c) not to pledge the faith and credit or taxing power of
the Town, but to be special, limited obligations of the Town, payable
solely from the revenues of the Town derived from the payments to be
made by the Company in respect of the financing of the Project.
Section 3. Authorization of Town Representatives To Take Incidental
Action. The Mayor and Town Manager of the Town or either of them are
hereby authorized and directed to take all action necessary to accomplish
the purposes of this resolution, including the acceptance and delivery of
to Company's letter proposal and the negotiation of agreements in
connection with the financing of the Project.
Section 4. Effective Date. This resolution shall take effect
immediately upon its adoption.
INTRODUCED, READ, APPROVED AND ADOPTED, this 44-th day of ,
1981.
Mayor
Attest:
Town C k
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February 12i. 1981---
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Mayor
TOWN OF AVON
Post Office Box.
Avon Colora_do_' _8.1620
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Re: Sports Facility Financing
s' r~ -ice
Dear "Mayor Ali 3!Z;'-'_
- -
With- reference to my letter 'of January 30_, 1981-, we hereby- request
approval -of_--a-"sports and recreational facility project- under, the Colorado
County and Municipality Development Revenue Bond Act.- We propose that the
Town and this Company enter into a Financing Agreement- providing _for-.
(1) the acquisition and construction of improvements to and expansion
of mountain facilities at Beaver Creek (the "Project") and'. (2)._ the
financing of such Project.
The Project will be 'Located in the Beaver Creek recreational complex
within 8 miles of the boundaries of the Town and will consist of additions
to the snowmaking systems, a chairlift to the western side of the valley,
and certain other improvements--or additions to the Beaver Creek Mountain
facilities operated by the Company. The Project will be part of the
complex' available for use by the general public without limitation or
restriction.--The aggregate- cost of the Project is presentl estimated
at $2.7 million, including costs of financing and interest during con-
struction. A description. of the initial Project with a'breakdown of the
estimated costs is attached as Schedule A hereto. Such Schedule--includes
only the facilities we would expect to finance in the reasonably near
future,- and we would expect to consult with the Town-concerning the
financing of additional facilities as planning--continues.', It is contem-
plated that substantially all Project facilities will constitute "sports
facilities" within the meaning of Section 103 (b) (4) 'of -the Internal
Revenue Code or will qualify for other exempt, treatment- so that the
interest on obligations issued by -the- Town will-be- exempt-from federal _
income taxi=
Under' this "proposal-; the -Town and.the Company will enter into a
Financi_ng Agreement or Agreements with respect to the Project as permitted
by the Act. Under each Financing -Agreement, _ the Town will -issue notes or
bonds and loan the proceeds- to_ the Company-'to finance the" costs of the
Project. Purchase orders and-construction contracts will be awarded
and administered by. the Company; :and ;certain portion- s - of the'--work may be
done by Company personnel.' As required by the Act, each Financing _
Agreement will provide that-the Company will maintain and repair the
Project, carry all proper-insurance with respect thereto and pay-taxes,
or the equivalent, with respect to the Project to the taxing entities
Vail Associates, Inc./Post Office Box 7, Vail, Colorado 876571Phone 303-476-5601
Mayor Al Alpi
February 12, 1981 -
page Two
entitled to receive -same:, = The Company- will also pay_:all expenses
curred by the Town in -connection_ with the Project-not,"paid from the-,,:- : L
Town and'"will~indemnify,b p_-'~
proceeds of any- bondsor "notes"issue_d --by -the'
the Town,- its" officers; agents ` and employees;`f&r Any 1_abilities' whi
may arise in connection` with the financing rof'.the_ Proje
In order to finance the Project; it is contemplated that the Town..-r
will issue its revenue bonds or notes in the- amounts necessary _to pay ; .
Project costs.' _indicated by. the desires- of -.3 1 ii de=s or investors; the
bonds or notes may represent- unsecured obit aiEJ ris'or ma`y- bey secured }~y r
a mortgage or security interest in ~equipment;._ may be, issued in one -•or-
more series and might bb;- sold or placed" privately; delivered pursuant
to a loan agreement" with " institu tiohal - inve_ stors;.7 or sold by' underwriters
to be selected by the Company. _We propose that Ballard; _Spahr,.,Andrews_ = -
-
Ingersoll, of Philadelphia, - Pennsylvania; serve as bond'coiinsel"iris W==
connection with such financing. - The proceeds of the bonds or notes will be "loaned to the Company::...:-:
for deposit in a construction fund held by-a bank or_'trust company desig-
nated by the Company and satisfactory to the Town.- The"construction fund
will be used to pay costs of the Project, including costs of.financing,
interest during construction, contractors' bills and reimbursement to the-
Company for work done or moneys advanced by it and for-repayment of short
term borrowings made by the Company to provide initial construction - -
moneys. All payments will be made upon appropriate requisition by the
Company. If the construction fund is not sufficient to pay the costs in
full, the Company will pay the balance necessary to complete the Project.
The Company will repay the-loan made in respect- of -theProject by'
making payments in installments corresponding-in date-'and amount to-the
payments of interest and principal on the Town's bonds- or--notes: To ::rte
evidence its installment payment obligations; 'then Company may deliver to- "
the Town its notes specifying-equivalent-principal"and-interest-payments.
The Town's right to receive the- installment paymenti;-""taid''any.-notes- issued
by the Company to evidence the same)_ will be -assigned -directly `to -holders
of the bonds or notes of the Town, or will be held by_a_.corporate trustee- -
under a trust indenture for the benefit bi the"- Town-'s:bondholders. If _
deemed desirable by the purchasers of the bonds or'notes, the Town's -
obligations will be-guaranteed, or some other financial security will be-
provided by," the Company' s parent, Vail As-sociates,_ _Inc: The Town's.. - '
revenue bonds or notes will be special;--limited obligations of the Town;-
payable solely from the Town's revenues _derived -from this-Project repre-
sented by the Company's payments or 'those of its"-assignee; and such = - =
obligations will not pledge the credit or taxing-power of the Town:. Under
the County and Municipality Development-Revenue Bond Act, such obligations
of the Town will not constitute a debt or indebtedness of the Town within
the meaning.of the Colorado' Constitution, any-statute, or the Town's home rule charter. Therefore, such obligations will not affect bonding
capacity of the Town for other projects. = - - _ _
I
Mayor Al Alpi •
February 12, 1981
Page Three
The assistance provided by your undertaking of this Project will
encourage the continued growth and-development of the Company's operations
at Beaver Creek and the maintenance of employment opportunities in the
area of the Town. We ask that, in approving the Project, you find that
the Project will promote-the purposes of the Act by creating and
developing business and employment opportunities and assisting in
the maintenance of a balanced and stable economy,within Colorado.
If the foregoing is satisfactory to you, please indicate your
approval of the Project and your undertaking of the financing thereof
by signing and returning the enclosed copy of this letter.
Very truly yours,
BEAVER CREEK ASSOCIATES, INC.
By
JM/aj
Enclosures
APPROVED AND ACCEPTED:
Town of Avon, Colorado
i
i
By .
Mayor
' Schedule A
- BEAVER CREEK ASSOCIATES, INC:
_ Tax Exempt Financing - ~~'``r'~`•°~ =A = =
~1='`'•..~.-.sue=.-.__:;=''__:_..~ ti - ~3-
- Schedule, of Exempt Facility , _
Expenditures rand Co_llaterali~~~,:,,:
Exempt Facility Expenditures
Snowmaking-*-'-'',^~
Chairlift #12 - W_ estern Hillside.--- 900 000-==
Western_ Hillside Trails_ 200,000`x-
Financing Fees - = _ - 116,000 Interest during construction 84-, 000 Total Expenditures $2 , 700, 000 =-a- '
Collateral
The total cost of Chair 12 is estimated _at $1.1.:: = - -
million. To date, approximate~ $200,000 has been
expended and is therefore not a qualifying expenditure.: _
Other qualifying expenditures of $200,000 for Western -
Hillside Trail work is proposed.
Collateral for the financing will be Chair 12,
snowmaking and a Vail Associates, Inc. guarantee. = - - -