Board of Selectmen Special Meeting May 14, 2015
TOWN OF SIMSBURY – BOARD OF SELECTMEN "Subject to Approval"
SPECIAL MEETING MINUTES – MAY 14, 2015
CALL TO ORDER
The Special Meeting of the Board of Selectmen was called to order at 7:30 a.m. in Room 103 of the Simsbury Town Offices. Present were: First Selectman Lisa Heavner; Board members Sean Askham, Cheryl Cook, Nancy Haase, and Michael Paine. Also in attendance were: Tom Cooke, Director of Administrative Services, Charles Houlihan, Counsel to the Town of Simsbury in connection with a request from the International Skating Center of Connecticut, L.L.C. ("ISCC") for approval of a mortgage refinancing, Glenn Turk (counsel to ISCC) and Bob Crawford of ISCC.
PLEDGE OF ALLEGIANCE
PUBLIC AUDIENCE
No members of the public spoke at Public Audience.
SELECTMEN ACTION
a) Consideration of and possible action on request of International Skating Center of Connecticut (ISCC) for approval of refinancing and possible extension of lease term
At the request of Ms. Heavner, Mr. Houlihan explained that ISCC was seeking to refinance existing debt and that under the terms of the ground lease, Town approval is required. He noted that the original documents provided by ISCC provided for cross-collateralization with Simsbury-based collateral used to secure loans for other facilities owned by ISCC and that the documents had been revised to provide that ISCC assets in Simsbury would be used as collateral with respect to the Simsbury location only.
Mr. Houlihan explained that because the term of the loan exceeded the current term of the lease, approval of the refinancing would require an extension of the lease from 2019 to 2029. Mr. Houlihan proceeded to review the terms of a proposed "Simsbury Board of Selectmen Resolution - ISCC, LLC Extension of Ground Lease and Approval of Refinancing" (the "Resolution"), a copy of which is attached hereto. Upon questioning from the Board of Selectmen, Mr. Houlihan confirmed that the value of the assets had been assessed recently and exceeded the amount of debt secured. He also stated that personal guarantees had been reviewed and were acceptable.
Members of the Board of Selectmen noted that they had been contacted by constituents who expressed concern that ISCC had caused delay in the finalization of Big Y’s purchase of adjacent land. The Board of Selectmen noted that the Board itself had completed its review and approval of ISCC’s request in three days. Representatives from ISCC stated that ISCC had not caused any delay in the Big Y transaction.
Mr. Askham made a motion that the Resolution be included in the minutes as if read into the record. Mr. Paine seconded the motion and it passed unanimously. Ms. Cook made a motion to approve the resolution. Ms. Haase seconded the motion and it passed unanimously.
ADJOURN
Mr. Askham made a motion to adjourn at 7:51 a.m. Ms. Haase seconded the motion and it passed unanimously.
Respectfully submitted,
Thomas F. Cooke
Director of Administrative Services
SIMSBURY BOARD OF SELECTMEN
RESOLUTION
ISCC, LLC EXTENSION OF GROUND LEASE AND APPROVAL OF REFINANCING
WHEREAS, the Simsbury Board of Selectmen has issued notice for a special meeting on May 14, 2015 at 7:30 a.m. to consider the request of ISCC, LLC for approval of the refinancing of existing debt and the possible extension of the term of the existing ground lease for the International Skating Center of Connecticut located at 1375 Hopmeadow Street, Simsbury, Connecticut; and
WHEREAS, the Town of Simsbury (the "Town") entered into a ground lease with World Skate, Inc. for certain property located at 1375 Hopmeadow Street, Simsbury, Connecticut, which ground lease is recorded in Volume 428, Page 1097, of the Simsbury Land Records (the "1994 Lease") and World Skate, Inc. assigned its interest in the ground lease to World Skate of Connecticut, L.L.C., pursuant to an Assignment and Assumption Agreement dated October 17, 1994 (the "1994 Assignment") and Lessor has consented to the 1994 Assignment and World Skate of Connecticut, L.L.C. assigned its interest in the Ground Lease to International Skating Center of Connecticut, L.L.C., pursuant to an Assignment and Assumption of Lease dated August 2, 1996 (the "1996 Assignment") and International Skating Center of Connecticut, L.L.C. has assigned its interest in the Ground Lease to ISCC, LLC, a Connecticut limited liability company ("Lessee") pursuant to an Assignment and Assumption Agreement dated February 4, 2000 (the "2000 Assignment') and the Town and JSCC, LLC amended the ground lease by a "First Amendment to Ground Lease" dated February 24, 2006 as amended December 11, 2007 (the 1994 Lease, the 1994 Assignment, the 1996 Assignment, the 2000 Assignment and the First Amendment to Ground Lease dated February 24, 2006 as amended December 11, 2007, collectively, the "Ground Lease"); and
WHEREAS, the Ground Lease requires ISCC, LLC to obtain written consent from the Town to pledge the Ground Lease and the improvements constructed thereunder as collateral for any financing arrangement with an institutional lender; and
WHEREAS, ISCC, LLC has requested the Town to approve a ten-year loan from TD Bank, N.A. in the original principal amount of $3,750,000.00 secured by, among other things, a leasehold mortgage and security agreement encumbering the Ground Lease and the improvements constructed thereunder; and
WHEREAS, the purpose of the loan is to refinance the existing debt at a lower interest rate; and
WHEREAS, TD Bank, N.A. qualifies as an institutional lender under the terms of the Ground Lease; and
WHEREAS, the value of the assets made the basis of the collateral exceed the amount of debt to be secured by the leasehold mortgage according to the records of the Simsbury Tax Assessor and the representation of TD Bank, N.A.; and
WHEREAS, the ten-year loan exceeds the remaining primary term of the Ground Lease, which expires in April 2019; and
WHEREAS, the Ground Lease does not permit ISCC, LLC to exercise the option to extend the Ground Lease of an additional ten-year term until April 2017 (the "Two Year Limitation"); and
WHEREAS, ISCC,LLC has requested the Town to waive the Two Year Limitation with respect to the Extended Term under the Ground Lease so that ISCC, LLC can exercise its option to extend the Ground Lease immediately and thereby cause the proposed loan to mature and be paid during the contractual period of tenancy; and
WHEREAS, in April 2013, the Town approved a Solar Power & Service Agreement between C-TEC PPA, ISC, LLC and the International Skating Center of Connecticut, LLC, the term of which exceeded the remaining primary term of the Ground Lease to permit the installation of solar generation facilities at the skating center; and
WHEREAS, ISCC, LLC is not in default of any material provisions of the Ground Lease and is therefore eligible to exercise the right to renew for the Extended Term but for Two Year Limitation; and
WHEREAS, TD Bank, N.A. has agreed that the principal amount of the loan debt will not increase without the written consent of the Town; and
WHEREAS, the debt secured by the leasehold mortgage and security agreement relates solely and exclusively to the operations of ISCC, LLC and does not secure debt or other obligations unrelated to the operation of the Simsbury skating center; and
WHEREAS, it is in the public interest to have ISCC, LLC commit to operate the skating center for the long term and the agreement to allow the Extended Term to be exercised at this time will obtain a commitment extending through April 17, 2029; and
WHEREAS, the extension of the Ground Lease will render the proposed tenyear loan compliant with the requirement that the debt obligation not exceed the remaining term of the Ground Lease.
NOW, THEREFORE, BE IT RESOLVED THAT THE BOARD OF SELECTMEN:
1. Waives the Two Year Limitation to allow ISCC, LLC to exercise its right to renew the Ground Lease for the Extended Term, to wit, April 18, 2019 through April 17, 2029. The waiver of the Two Year Limitation is solely for the purpose of these proceedings and does not waive such requirement for future extensions under the Ground Lease.
2. Authorizes Lisa Heavner as First Selectman to execute the extension agreement attached hereto and thereby extend the Ground Lease for the Extended Term.
3. Finds that TD Bank, N.A. is a qualified institutional lender under the Ground Lease and that the loan agreement meets all of the qualifications for TD Bank, N.A. to be approved as Permitted Mortgagee under the Ground Lease.
4. Approves TD Bank, N.A. as a Permitted Mortgagee under the Ground Lease.
4. Authorizes Lisa Heavner as First Selectman to execute and accept the Permitted Mortgagee Agreement on behalf of the Town, a copy of which is attached.
5. Authorizes Lisa Heavner as First Selectman to execute and deliver on behalf of the Town the acknowledgment that ISCC, LLC is not in default of the Ground Lease, a copy of which is attached.
6. Authorizes Lisa Heavner as First Selectman to execute any and all other necessary or convenient documents to consummate the option to renew the Ground Lease through the Extended Term and to facilitate the financing agreement by and between ISCC, LLC and TD Bank, N.A.