PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER 27, 2017

Transcription

1 THIS PRELIMINARY OFFICIAL STATEMENT AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO COMPLETION OR AMENDMENT IN A FINAL OFFICIAL STATEMENT. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities offered hereby in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction. PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER 27, 2017 Ratings: Moody s: Aa2 S&P: AAA NEW ISSUE BOOK ENTRY FORM ONLY See RATINGS herein In the opinion of Squire Patton Boggs (US) LLP and Forbes, Fields & Associates Co., L.P.A, ( together, Co-Bond Counsel ) under existing law (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Series 2017A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Series 2017A Bonds is included in the calculation of a corporation s adjusted current earnings for purposes of, and thus may be subject to, the corporate alternative minimum tax, and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the Series 2017A Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. Interest on the Series 2017A Bonds may be subject to certain federal taxes imposed only on certain corporations, including the corporate alternative minimum tax as a result of the inclusion of that interest in the calculation of a corporation s adjusted current earnings for purposes of the corporate alternative minimum tax. For a more complete discussion of the tax aspects, see TAX MATTERS FOR SERIES 2017A BONDS herein. In the opinion of Co-Bond Counsel, under existing law, interest on, and any profit made on the sale, exchange or other disposition of, the Series 2017B Bonds and the Series 2017C Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. INTEREST ON THE SERIES 2017B BONDS AND THE SERIES 2017C BONDS IS NOT EXCLUDED FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES. For a more complete discussion of the tax aspects, see TAX MATTERS FOR SERIES 2017B BONDS AND SERIES 2017C BONDS herein. $35,000,000 County of Cuyahoga, Ohio Sales Tax Revenue Bonds, Series 2017A (Quicken Loans Arena Project) (Tax-Exempt) OFFICIAL STATEMENT $35,265,000 County of Cuyahoga, Ohio Sales Tax Revenue Bonds, Series 2017B (Quicken Loans Arena Project) (Federally Taxable) $70,530,000 County of Cuyahoga, Ohio Sales Tax Revenue Bonds, Series 2017C (Quicken Loans Arena Project) (Federally Taxable) Dated: Date of Delivery Due: As shown on the inside cover pages herein THE SERIES 2017 BONDS ARE SPECIAL OBLIGATIONS OF THE COUNTY SECURED BY THE COUNTY S SALES TAX AND DO NOT AND SHALL NOT REPRESENT OR CONSTITUTE A GENERAL OBLIGATION, DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE COUNTY, THE STATE OF OHIO OR ANY POLITICAL SUBDIVISION THEREOF. Terms used herein with initial capitalization where the rules of grammar would not otherwise so require and not defined have the meanings given to them under DEFINITIONS or APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE herein. Principal of the Series 2017 Bonds will be payable at the main office of The Huntington National Bank, Cleveland, Ohio, as trustee, registrar, paying agent and transfer agent (the Trustee ) for the Series 2017 Bonds. Interest thereon will be payable semi-annually on January 1 and July 1 of each year beginning July 1, 2018, to the person whose name appears as the registered holder thereof on the Series 2017 Bond registration records on the record date (15th day of the calendar month next preceding an interest payment date), by check mailed to such registered holder at his address as it appears on such registration records, by such registrar, paying agent and transfer agent without deduction for exchange, collection or service charges. The Series 2017 Bonds will be issuable as fully registered bonds without coupons in the denominations set forth herein. The Series 2017 Bonds will be issuable under a book entry method and registered in the name of The Depository Trust Company ( DTC ) or its nominee. There will be no physical delivery of the Series 2017 Bonds to the ultimate purchasers. The Underwriters have satisfied the requirements of DTC for the Series 2017 Bonds to be eligible for its book entry services. See BOOK ENTRY SYSTEM herein. The Series 2017 Bonds are subject to mandatory and optional redemption, as set forth herein. See THE SERIES 2017 BONDS Redemption Provisions herein. The Series 2017 Bonds are offered when, as and if issued and received by the Underwriters, subject to prior sale and to withdrawal or modification of the offer without notice. Certain legal matters relating to the issuance of the Series 2017 Bonds are subject to the approving opinion of Squire Patton Boggs (US) LLP and Forbes, Fields & Associates Co., L.P.A., Co-Bond Counsel. Certain legal matters will be passed upon for the County by its Director of Law and by its disclosure counsel, Calfee, Halter & Griswold LLP. Certain legal matters will be passed upon for the Underwriters by their counsel, Bricker & Eckler LLP. See LEGAL MATTERS, TAX MATTERS FOR SERIES 2017A BONDS and TAX MATTERS FOR SERIES 2017B BONDS AND SERIES 2017C BONDS herein. Stifel, Nicolaus & Company, Incorporated has acted as Municipal Advisor to the County in connection with the issuance of the Series 2017 Bonds. See MUNICIPAL ADVISOR herein. This cover page contains certain information for general reference only. It is not a summary of the provisions of the Series 2017 Bonds. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. This Official Statement has been prepared by the County of Cuyahoga, Ohio in connection with the original offering for sale by it of the Series 2017 Bonds. It is expected that delivery of the Series 2017 Bonds in definitive form will be made through DTC on or about October, 2017 *. The date of this Official Statement is October 4, 2017 *, and the information herein speaks only as of that date. KEYBANC CAPITAL MARKETS PNC CAPITAL MARKETS LLC FIFTH THIRD SECURITIES INC. IFS SECURITIES, INC. Preliminary, subject to change.

2 $35,000,000 * County of Cuyahoga, Ohio Sales Tax Revenue Bonds, Series 2017A (Quicken Loans Arena Project) (Tax-Exempt) Serial Bonds Maturity (January 1) Principal Amount Interest Rate Yield Price CUSIP No $850,000 1,635,000 1,685,000 1,750,000 1,820,000 1,895,000 1,990,000 2,090,000 2,195,000 2,425,000 2,500,000 2,570,000 2,650,000 2,730,000 3,060,000 3,155,000 * Preliminary, subject to change.

3 $35,265,000 * County of Cuyahoga, Ohio Sales Tax Revenue Bonds, Series 2017B (Quicken Loans Arena Project) (Federally Taxable) Serial Bonds Maturity (January 1) Principal Amount $3,125,000 3,230,000 3,335,000 3,255,000 3,375,000 3,500,000 3,635,000 3,780,000 3,930,000 4,100,000 Interest Rate Yield Price CUSIP No. * Preliminary, subject to change.

4 $70,530,000 * County of Cuyahoga, Ohio Sales Tax Revenue Bonds, Series 2017C (Quicken Loans Arena Project) (Federally Taxable) Serial Bonds Maturity 7/1/2018 1/1/2019 7/1/2019 1/1/2020 7/1/2020 1/1/2021 7/1/2021 1/1/2022 7/1/2022 1/1/2023 7/1/2023 1/1/2024 7/1/2024 Principal Amount $1,230,000 1,700,000 1,715,000 1,730,000 1,745,000 1,765,000 1,785,000 1,805,000 1,825,000 1,845,000 1,865,000 1,890,000 1,915,000 Interest Rate Yield Price CUSIP No. $3,905,000 * % Term Bond * Maturing July 1, 2025 * % (Yield %), CUSIP No. $4,020,000 * % Term Bond * Maturing July 1, 2026 * % (Yield %), CUSIP No. $4,140,000 * % Term Bond * Maturing July 1, 2027 * % (Yield %), CUSIP No. $4,265,000 * % Term Bond * Maturing July 1, 2028 * % (Yield %), CUSIP No. $4,395,000 * % Term Bond * Maturing July 1, 2029 * % (Yield %), CUSIP No. $4,535,000 * % Term Bond * Maturing July 1, 2030 * % (Yield %), CUSIP No. $4,690,000 * % Term Bond * Maturing July 1, 2031 * % (Yield %), CUSIP No. $4,850,000 * % Term Bond * Maturing July 1, 2032 * % (Yield %), CUSIP No. $5,025,000 * % Term Bond * Maturing July 1, 2033 * % (Yield %), CUSIP No. $7,890,000 * % Term Bond * Maturing July 1, 2035 * % (Yield %), CUSIP No. * Preliminary, subject to change.

5 $35,000,000 County of Cuyahoga, Ohio Sales Tax Revenue Bonds, Series 2017A (Quicken Loans Arena Project) (Tax-Exempt) $35,265,000 County of Cuyahoga, Ohio Sales Tax Revenue Bonds, Series 2017B (Quicken Loans Arena Project) (Federally Taxable) County Council $70,530,000 County of Cuyahoga, Ohio Sales Tax Revenue Bonds, Series 2017C (Quicken Loans Arena Project) (Federally Taxable) Nan Baker Member Dan Brady President Michael J. Gallagher Member Shontel Brown Member Anthony T. Hairston Member Pernel Jones, Jr. Vice-President Yvonne M. Conwell Member Dale Miller Member Jack Schron Member Sunny M. Simon Member County Administration Armond Budish County Executive Dennis G. Kennedy, CPA County Fiscal Officer Robert J. Triozzi, Esq. Director of Law Professional Services KeyBanc Capital Markets Inc. PNC Capital Markets LLC Fifth Third Securities Inc. IFS Securities, Inc. Underwriters Squire Patton Boggs (US) LLP Forbes, Fields & Associates Co., L.P.A. Co-Bond Counsel Calfee, Halter & Griswold LLP Disclosure Counsel Stifel, Nicolaus & Company, Incorporated Municipal Advisor The Huntington National Bank Trustee Scott Tuma Member Preliminary, subject to change.

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7 REGARDING THIS OFFICIAL STATEMENT This Official Statement does not constitute an offering of any security other than the original offering of the Series 2017 Bonds of the County of Cuyahoga, Ohio (the County ) identified on the cover hereof. No person has been authorized by the County to give any information or to make any representations, other than those contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been given or authorized by the County. Statements contained in this Official Statement that involve estimates, forecasts, or matters of opinion, whether or not expressly described herein, are intended solely as such and are not to be construed as representations of facts. The information set forth herein has been obtained from the County and other sources that are believed to be reliable for purposes of this Official Statement. The information and expressions of opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the County since the date hereof. This Official Statement contains statements that the County believes may be forward-looking statements. Words such as plan, estimate, project, budget, anticipate, expect, intend, believe and similar terms are intended to identify forward-looking statements. The achievement of results or other expectations expressed or implied by such forward-looking statements involves known and unknown risks, uncertainties and other factors that are difficult to predict, may be beyond the County s control and could cause actual results, performance or achievements to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. The County undertakes no obligation, and does not plan, to issue any updates or revisions to such forward-looking statements. CUSIP data on the Cover hereof has been provided by CUSIP Global Services, which is managed on behalf of the American Bankers Association ( ABA ) by S&P Global Market Intelligence, a division of S&P Global Inc. CUSIP is a registered trademark of the ABA. The CUSIP data is being provided solely for the convenience of the owners of the Series 2017 Bonds only at the time of issuance of the Series 2017 Bonds, and the County does not make any representation with respect to such data or undertake any responsibility for its accuracy now or at any time in the future. The CUSIP data is subject to being changed after the issuance of the Series 2017 Bonds as a result of procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of the Series 2017 Bonds. Certain information in this Official Statement is attributed to the Ohio Municipal Advisory Council ( OMAC ). OMAC compiles information from official and other sources. OMAC believes the information it compiles is accurate and reliable, but OMAC does not independently confirm or verify the information and does not guarantee its accuracy. OMAC has not reviewed this Official Statement to confirm that the information attributed to it is information provided by OMAC or for any other purpose. Certain information located at websites referred to herein has been prepared by the respective entities responsible for maintaining such websites. The County takes no responsibility for the continued accuracy of any internet address or the accuracy, completeness, or timeliness of any information posted at any such address. In the absence of an express statement to the contrary, none of such information is incorporated herein by reference. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and i

8 circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. UPON ISSUANCE, THE SERIES 2017 BONDS WILL NOT BE REGISTERED BY THE COUNTY UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. THE SERIES 2017 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS ANY OTHER FEDERAL, STATE, MUNICIPAL OR OTHER GOVERNMENTAL ENTITY OR AGENCY, EXCEPT THE COUNTY, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT OR APPROVED THE SERIES 2017 BONDS FOR SALE. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, AND THERE SHALL NOT BE ANY SALE OF, THE SERIES 2017 BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2017 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITERS MAY OFFER AND SELL THE SERIES 2017 BONDS TO CERTAIN DEALERS, DEALER BANKS AND BANKS ACTING AS AGENT AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE COVER HEREOF AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITERS. General INVESTMENT CONSIDERATIONS The Series 2017A Bonds, like all obligations of state and local governments, are subject to changes in value due to changes in the condition of the market for tax-exempt obligations or changes in the financial position of the County. The Series 2017B Bonds and the Series 2017C Bonds, like all obligations of state and local governments, are subject to changes in value due to changes in the condition of the market for taxable obligation or changes in the financial position of the County. It is possible under certain market conditions, or if the financial condition of the County should change, that the market price of the Series 2017 Bonds could be adversely affected. With regard to the risk involved in a loss of the exclusion from gross income for purposes of federal income taxation of interest payable on the Series 2017A Bonds, see TAX MATTERS FOR SERIES 2017A BONDS herein. With regard to the risk involved in a downward revision or withdrawal of the rating for the Series 2017 Bonds shown on the cover hereof, see RATINGS herein. Prospective purchasers of the Series 2017 Bonds should consult their own tax advisors prior to any purchase of the Series 2017 Bonds as to the impact of the Internal Revenue Code of 1986, as amended, upon their acquisition, holding or disposition of the Series 2017 Bonds. ii

9 BOND ISSUE SUMMARY The information contained in this Bond Issue Summary is qualified in its entirety by the entire Official Statement, which should be reviewed in its entirety by potential investors. Issuer: Issue: County of Cuyahoga, Ohio $35,000,000 * Sales Tax Revenue Bonds, Series 2017A (Quicken Loans Arena Project) (Tax-Exempt) $34,995,000 * Sales Tax Revenue Bonds, Series 2017B (Quicken Loans Arena Project) (Federally Taxable) $70,530,000 * Sales Tax Revenue Bonds, Series 2017C (Quicken Loans Arena Project) (Federally Taxable) Dated Date: Date of Delivery Interest Each January 1 and July 1, beginning July 1, 2018 * Payment Dates: Principal Series 2017A Bonds: January 1, 2020 * through January 1, 2035, * inclusive. Payment Dates: Series 2017B Bonds: January 1, 2026 * through January 1, 2035, * inclusive. Series 2017C Bonds: Each January 1 and July 1, from January 1, 2018 through July 1, 2024, * inclusive, and July 1, 2025, * July 1, 2026, * July 1, 2027, * July 1, 2028, * July 1, 2029, * July 1, 2030, * July 1, 2031, * July 1, 2032, * July 1, 2033 * and January 1, * Redemption: Series 2017A Bonds: The Series 2017A Bonds maturing on and after January 1, 20 * are subject to redemption at the option of the County, either in whole or in part, in such order of maturity as the County shall determine, on any date on or after 1, 20 *, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption. See THE SERIES 2017 BONDS Redemption Provisions Optional Redemption herein. Series 2017B Bonds: The Series 2017B Bonds are subject to redemption at the option of the County, either in whole or in part, in such order of maturity as the County shall determine, on any date on or after 1, 20 *, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption. See THE SERIES 2017 BONDS Redemption Provisions Optional Redemption herein. Series 2017C Bonds: The Series 2017C Bonds maturing July 1, 2025, * July 1, 2026, * July 1, 2027, * July 1, 2028, * July 1, 2029, * July 1, 2030, * July 1, 2031, * July 1, 2032, * July 1, 2033 * and January 1, 2035 * will be subject to mandatory sinking fund redemption prior to stated maturity. See THE SERIES 2017 BONDS Redemption Provisions Mandatory Sinking Fund Redemption herein. The Series 2017C Bonds maturing on and after July 1, 20 * are subject to redemption at the option of the County, either in whole or in part, in such order of maturity as the County shall determine, on any date on or after July 1, 20 *, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption. See THE SERIES 2017 BONDS Redemption Provisions Optional Redemption herein. * Preliminary, subject to change. iii

10 Purpose: Security: Credit Rating: Tax Matters for Series 2017A Bonds: Tax Matters for Series 2017B Bonds and Series 2017C Bonds: Bank Qualification: Co-Bond Counsel: Trustee: Underwriters: Underwriters Counsel: The Series 2017 Bonds are being issued for the purpose of paying or reimbursing the costs of reconstructing, refurbishing, renovating, upgrading, improving and equipping Quicken Loans Arena, together with appurtenances and work incidental thereto, paying capitalized interest on the Series 2017 Bonds and paying expenses incurred in connection with the issuance of the Series 2017 Bonds. See THE SERIES 2017 BONDS Authorization and Purpose herein. The Series 2017 Bonds will be special obligations of the County secured by a pledge of the County Sales Tax Receipts (as defined herein). Neither the general credit of the County, nor that of the State of Ohio or of any political subdivision thereof, is pledged to the payment of principal of, or premium, if any, or interest on the Series 2017 Bonds. The Series 2017 Bonds are not secured by the full faith and credit of the County or by any revenues of the County other than the County Sales Tax Receipts. In addition, (i) the Series 2017A Bonds will be payable from Series 2017A County Contributions, (ii) the Series 2017B Bonds will be payable from Series 2017B County Contributions, the Cooperative Revenues and the Assigned Contingent Rent, and (iii) the Series 2017C Bonds will be payable from Assigned Additional Rent. See SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2017 BONDS. The County has applied for a rating on the Series 2017 Bonds from Moody s Investors Service, Inc. and S&P Global Ratings, which have rated the Series 2017 Bonds Aa2 and AAA, respectively. See RATINGS herein. In the opinion of Co-Bond Counsel, under existing law, (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Series 2017A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the Series 2017A Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. Interest on the Series 2017A Bonds may be subject to certain federal taxes imposed only on certain corporations, including the corporate alternative minimum tax on a portion of that interest. See TAX MATTERS FOR SERIES 2017A BONDS herein. In the opinion of Co-Bond Counsel, under existing law, interest on, and any profit made on the sale, exchange or other disposition of, the Series 2017B Bonds and the Series 2017C Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. INTEREST ON THE SERIES 2017B BONDS AND THE SERIES 2017C BONDS IS NOT EXCLUDED FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES. See TAX MATTERS FOR SERIES 2017B BONDS AND SERIES 2017C BONDS herein. The County has not designated the Series 2017A Bonds as qualified Tax-Exempt obligations within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Squire Patton Boggs (US) LLP and Forbes, Fields & Associates Co., L.P.A. The Huntington National Bank KeyBanc Capital Markets Inc., PNC Capital Markets LLC, Fifth Third Securities Inc. and IFS Securities, Inc. Bricker & Eckler LLP iv

11 Municipal Advisor: Book Entry System: Delivery and Payment: County Official: Stifel, Nicolaus & Company, Incorporated The Series 2017 Bonds are being issued as fully registered Bonds in book entry form and book entry interests therein will be available for purchase in amounts of $5,000 and integral multiples thereof. Owners of book entry interests will not receive physical delivery of Bond certificates. The Depository Trust Company or its nominee will receive all payments with respect to the Series 2017 Bonds from the Bond Registrar. The Depository Trust Company is required by its rules and procedures to remit such payments to its participants for subsequent disbursement to owners of the book entry interests. It is expected that delivery of the Series 2017 Bonds in definitive form will be made through DTC on or about October, 2017 *. The Series 2017 Bonds will be released to the Underwriters against payment in federal funds. Questions concerning the Official Statement should be directed to Dennis G. Kennedy, County Fiscal Officer, 2079 East 9th St., Cleveland, Ohio 43040; telephone: (216) * Preliminary, subject to change. v

12 TABLE OF CONTENTS Page No. REGARDING THIS OFFICIAL STATEMENT... i INVESTMENT CONSIDERATIONS... ii General... ii BOND ISSUE SUMMARY... iii TABLE OF CONTENTS... vi INTRODUCTORY STATEMENT... 1 DEFINITIONS... 2 THE SERIES 2017 BONDS... 6 Authorization and Purpose... 6 Form and Terms... 6 Redemption Provisions... 6 ESTIMATED SOURCES AND USES OF FUNDS SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2017 BONDS County Sales Tax County Sales Tax Bonds Additional Funds Securing the Series 2017 Bonds Application of Revenues; Payment of Bond Service Charges Prior Bonds; Issuance of Additional Bonds UNDERWRITING MUNICIPAL ADVISOR RATINGS LITIGATION LEGAL MATTERS TAX MATTERS FOR SERIES 2017A BONDS Risk of Future Legislative Changes and/or Court Decisions Original Issue Discount and Original Issue Premium TAX MATTERS FOR SERIES 2017B BONDS AND SERIES 2017C BONDS Payment of Interest Original Issue Discount and Original Issue Premium Sale, Exchange, Retirement or Other Taxable Disposition of Series 2017B Bonds and Series 2017C Bonds Information Reporting and Backup Withholding Medicare Tax Affecting U.S. Owners Non-U.S. Owners Foreign Account Tax Compliance Act BOOK ENTRY SYSTEM Revision of Book Entry System Replacement Bonds TRANSCRIPT AND CLOSING DOCUMENTS CONTINUING DISCLOSURE CONCLUDING STATEMENT THE COUNTY OF CUYAHOGA, OHIO... A-1 SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE... B-1... C-1... D-1... E-3 vi

13 INTRODUCTORY STATEMENT This Official Statement has been prepared by the County of Cuyahoga, Ohio (the County ), with the assistance of the Underwriters, in connection with the County s original issuance and sale of the Series 2017 Bonds identified on the Cover (collectively, the Series 2017 Bonds ). Certain information concerning the authorization, purpose, terms and sources of payment and security for the Series 2017 Bonds is provided in this Official Statement. The Series 2017 Bonds are being sold to KeyBanc Capital Markets Inc., PNC Capital Markets LLC, Fifth Third Securities Inc. and IFS Securities, Inc. (collectively, the Underwriters ). See UNDERWRITING. All financial and other information presented herein has been provided by the County from its records, except for information expressly attributed to other sources. The presentation of information, including tables of receipts from taxes and other sources, is intended to show recent historic information, and is not intended to indicate future or continuing trends in the financial position or other affairs of the County. No representation is made that past experience, as might be shown by such financial and other information, will necessarily continue or be repeated in the future. Certain statements contained in this Official Statement, including, without limitation, statements containing the words believes, anticipates, expects and words of similar import, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the County to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include, among others, general economic conditions, demographic changes, and existing government regulations and changes in, or the failure to comply with, government regulations. Certain of these factors are discussed in more detail elsewhere in this Official Statement. Given these uncertainties, readers of this Official Statement and investors are cautioned not to place undue reliance on such forward-looking statements. This Official Statement should be considered in its entirety and no subject discussed should be considered less important than any other subject by reason of its location in the text. Reference should be made to laws, reports or documents referred to herein for more complete information regarding their contents. As used in this Official Statement, debt service means principal of and interest on the Series 2017 Bonds. State or Ohio means the State of Ohio. OMAC means Ohio Municipal Advisory Council, a data clearing organization supported by investment banking firms active in Ohio and the State Information Depository for the State of Ohio as approved by the Ohio General Assembly and the Securities and Exchange Commission. References herein to provisions of Ohio law, whether codified in the Revised Code or uncodified, the Ohio Constitution, or federal law, are references to such provisions as they presently exist. Provisions of the Ohio law and Constitution and federal law may in the future, and from time to time, be amended, repealed or supplemented. Additional information relating to the financial condition of the County may be obtained by contacting Dennis G. Kennedy, County Fiscal Officer, 2079 East 9th St., Cleveland, Ohio 43040; telephone: (216)

14 DEFINITIONS The following capitalized terms, as used in this Official Statement and the Appendices attached hereto, have the following meanings unless otherwise indicated: Additional Bonds means any Bonds issued on parity with the Series 2017 Bonds upon the terms and conditions set forth in Article II of the Indenture. Arena Lease means the Lease and Management Agreement dated as of October, 2017, by and between Gateway and Cavaliers Operating Company, LLC, amending and replacing the Lease and Management Agreement dated December 20, 1991, as amended. Assigned Additional Rent means amounts received by Gateway and assigned to the Trustee pursuant to the Gateway Assignment Agreement Series 2017C. Assigned Contingent Rent means amounts received by Gateway and assigned to the Trustee pursuant to the Gateway Assignment Agreement Series 2017B. Board means the Board of County Commissioners of the County, as the predecessor legislative authority to the Council. Bond Service Charges means for any applicable time period or date, including an Interest Payment Date, the principal (including any Mandatory Sinking Fund Requirements), interest, and redemption premium, if any, required to be paid by the Issuer on the Bonds pursuant to the Indenture. In determining Bond Service Charges accruing for any period or due and payable on any date, Mandatory Sinking Fund Requirements accruing for that period or due on that date shall be included and principal maturities for which, and to the extent, Mandatory Sinking Fund Requirements were imposed in a prior period or for a prior date shall be excluded. Bond Registrar means the Trustee. Bonds means the County s the Series 2014 Bonds, the Series 2015 Bonds, the Series 2016 Bonds, Series 2017 Bonds, and any Additional Bonds or Series of Bonds authorized by legislation adopted by the County and issued pursuant to the Indenture. City-County Agreement means Supplemental Agreement No. 1 to Cooperative Agreement between City of Cleveland and County of Cuyahoga Relating to the Gateway Project (2017 Quicken Loans Arena Project), dated as of April 25, L.P.A. Co-Bond Counsel means Squire Patton Boggs (US) LLP and Forbes, Fields & Associates Co., Continuing County Sales Tax means the 1% County Sales Tax adopted July 6, 1987, by the Board, as the predecessor legislative authority of the Council, authorizing the levy and County collection of sales and use taxes for the purpose of providing additional general revenues for the County on a continuous basis. Cooperative Revenues means the payments in lieu of admissions tax to be paid by the Cavaliers Operating Company, LLC or Gateway to the Trustee pursuant to the terms of the City-County 2

15 Agreement and Section (h) of the Codified Ordinances of the City of Cleveland as amended by Ordinance No passed on February 24, 1992 by Council of the City and as further amended by Ordinance No passed on April 24, 2017 by the Council of the City. Council means the County Council, the County s legislative authority. County means the County of Cuyahoga, Ohio. County Fiscal Officer means the Fiscal Officer of the County. County Sales Tax means the one and one-quarter percent (1.25%) County Sales Tax authorized under Sections and of the Ohio Revised Code pursuant to the County Sales Tax Resolutions. County Sales Tax Bond Fund means the County Sales Tax Bond Fund created by the Indenture. County Sales Tax Receipts means the monies received by the County from the County Sales Tax. County Sales Tax Resolutions means (i) the resolution authorizing the Continuing County Sales Tax, (ii) the resolution adopted by the Board on July 26, 2007, authorizing an increase in the County sales and use taxes to a rate of one and one-quarter percent (1.25%); and (iii) any renewals or extensions thereof, for the purpose of providing additional general revenues for the County. Cover means the cover page and the inside cover pages of this Official Statement. Escrow Account means an account established by The Huntington National Bank for the deposit by the Cavaliers of cash or a letter of credit acceptable to the County. Amounts on deposit in the Escrow Account shall be available to the Trustee to provide for the payment of Assigned Contingent Rent. Gateway means Gateway Economic Development Corporation of Greater Cleveland. Gateway Assignment Agreement Series 2017B means the Gateway Assignment Agreement Series 2017B dated as of October, 2017 from Gateway to the Trustee assigning Gateway s rights under the Arena Lease with respect to the contingent rent payments. Gateway Assignment Agreement Series 2017C means the Gateway Assignment Agreement Series 2017C dated as of October, 2017 from Gateway to the Trustee assigning Gateway s rights under the Arena Lease with respect to the additional rent payments. Indenture means the Original Indenture, as the same may be amended or supplemented, together with Supplemental Trust Indenture No. 1, dated as of December 1, 2014, Supplemental Trust Indenture No. 4, dated as of October, 2017, Supplemental Trust Indenture No. 5, dated as of October, 2017 and Supplemental Trust Indenture No. 6, dated as of October, 2017 together with, where the context permits, any additional Supplemental Indentures, between the County and the Trustee. MSA means the Cleveland Metropolitan Statistical Area, as defined by the United States Office of Management and Budget, including Cuyahoga, Geauga, Lake, Lorain and Medina Counties. Preliminary, subject to change. 3

16 Original Indenture means the Trust Indenture, dated as of December 1, 2014, between the County and the Trustee. Pledged Revenues means the County Sales Tax Receipts and any additional county sales tax authorized and approved by the Council under Sections and of the Ohio Revised Code and specifically pledged as Revenues by the Council under the legislation imposing such additional county sales tax. Revenues means (a) the amount of County Sales Tax Receipts received by the Trustee and any other moneys deposited in the Revenue Fund, (b) the amount of any county sales tax receipts received by the County from any future additional county sales taxes imposed pursuant to under Sections and of the Ohio Revised Code, and (c) all income and profit from the investment of the foregoing moneys. Revised Code means the Ohio Revised Code. Series 2014 Bonds means the County s $137,890,000 Various Purpose Sales Tax Revenue Bonds, Series 2014, dated December 17, Series 2015 Bonds means the County s $9,180,000 Sales Tax Revenue Bonds, Series 2015A (Public Square Project), dated December 14, Series 2016 Bonds means the County s $21,030,000 Sales Tax Revenue Bonds, Series 2016 (Huntington Park Garage Project), dated December 27, Series 2017 Bonds means, collectively, the Series 2017A Bonds, the Series 2017B Bonds and the Series 2017C Bonds. Series 2017A Bonds means the County s $35,000,000 Sales Tax Revenue Bonds, Series 2017A (Quicken Loans Arena Project) (Tax-Exempt), dated October, 2017 *. Series 2017A County Contributions means the contributions made by the County and deposited in the Bond Fund, as further described in Supplemental Indenture No. 4. The use of Series 2017A County Contributions to pay a portion of the Bond Service Charges on the Series 2017A Bonds is not intended to limit the County s obligation to pay Bond Service Charges from Revenues, if necessary. Series 2017B Bonds means the County s $35,265,000 Sales Tax Revenue Bonds, Series 2017B (Quicken Loans Arena Project) (Federally Taxable), dated October, 2017 *. Series 2017B County Contributions means the contributions made by the County, as further described in Supplemental Indenture No. 5. The use of Series 2017B County Contributions to pay a portion of the Bond Service Charges on the Series 2017B Bonds is not intended to limit the County s obligation to pay Bond Service Charges from Revenues, if necessary. Series 2017C Bonds means the County s $70,530,000 * Sales Tax Revenue Bonds, Series 2017C (Quicken Loans Arena Project) (Federally Taxable), dated October, 2017 *. Special Funds includes the Revenue Fund and the Bond Fund (including the Accounts therein). State means the State of Ohio. 4

17 State Auditor means Auditor of the State. Supplemental Indenture means any indenture supplemental to the Indenture entered into between the County and the Trustee in accordance with Article X of the Indenture. Trustee means The Huntington National Bank, Cleveland, Ohio. Underwriters means, collectively, KeyBanc Capital Markets Inc., PNC Capital Markets LLC, Fifth Third Securities Inc. and IFS Securities, Inc. 5

18 THE SERIES 2017 BONDS Authorization and Purpose The Series 2017 Bonds are authorized by a resolution adopted by the County Council on March 28, 2017 (the Bond Legislation ), and Section of the Revised Code. The Series 2017 Bonds are issued in conformity with Chapter 133, Revised Code, and are, therefore, lawful investments for banks, savings and loan associations, credit union share guaranty corporations, trust companies, trustees, fiduciaries, insurance companies, including domestic for life and domestic not for life, trustees or other officers having charge of sinking and bond retirement or other funds of the State, subdivisions and taxing districts of the State, the Commissioners of the Sinking Fund of the State, the Administrator of Workers Compensation, the State teachers, public employees, and school employees retirement systems, and the police and fire pension fund, and are eligible as security for the repayment of the deposit of public moneys. The Series 2017 Bonds are issued for the purpose of paying or reimbursing the costs of reconstructing, refurbishing, renovating, upgrading, improving and equipping Quicken Loans Arena, together with appurtenances and work incidental thereto, paying capitalized interest on the Series 2017 Bonds and paying the costs of issuance in connection therewith. Form and Terms The Series 2017 Bonds will be issued in fully registered form and will bear interest from the date of delivery until maturity or earlier redemption, at the rates per annum as set forth on the Cover hereof, payable on January 1 and July 1, commencing July 1, The Series 2017A Bonds and Series 2017B Bonds will mature on January 1 in the years as indicated on the Cover of this Official Statement and the Series 2017C Bonds will mature on January 1 and July 1 in the years as indicated on the Cover of this Official Statement. The Series 2017 Bonds will be issued in denominations of $5,000 or any integral multiple thereof, provided that each Series 2017 Bond will be of a single maturity of a particular series, and will be numbered consecutively from R-1 upward. Principal of the Series 2017 Bonds will be payable at maturity or subject to sinking fund redemption, in lawful money of the United States of America, at the corporate trust office of Trustee in the City of Cleveland, Ohio, which has been designated as bond registrar, paying agent, and transfer agent for the Series 2017 Bonds (the Bond Registrar ). Interest on the Series 2017 Bonds will be payable to the person whose name appears as the registered holder thereof on the registration records maintained by the Bond Registrar, on the respective Record Date (15th calendar day of the month next preceding an interest payment date) by check mailed to such registered holder at the address of such registered holder as it appears on the registration records. No deduction shall be made for exchange, collection, or service charges. Redemption Provisions Mandatory Sinking Fund Redemption Series 2017A Bonds The Series 2017A Bonds are not subject to mandatory sinking fund redemption. Preliminary, subject to change. 6

19 Series 2017B Bonds The Series 2017B Bonds are not subject to mandatory sinking fund redemption. Series 2017C Bonds The Series 2017C Bonds maturing July 1, 2025 (the Series 2017C 2025 Term Bonds ) are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on January 1, 2025 in the amount of $1,940,000. The remaining principal amount of the Series 2017C 2025 Term Bonds ($1,965,000) will be paid at stated maturity on July 1, The Series 2017C Bonds maturing July 1, 2026 (the Series 2017C 2026 Term Bonds ) are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on January 1, 2026 in the amount of $1,995,000. The remaining principal amount of the Series 2017C 2026 Term Bonds ($2,025,000) will be paid at stated maturity on July 1, The Series 2017C Bonds maturing July 1, 2027 (the Series 2017C 2027 Term Bonds ) are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on January 1, 2027 in the amount of $2,055,000. The remaining principal amount of the Series 2017C 2027 Term Bonds ($2,085,000) will be paid at stated maturity on July 1, The Series 2017C Bonds maturing July 1, 2028 (the Series 2017C 2028 Term Bonds ) are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on January 1, 2028 in the amount of $2,115,000. The remaining principal amount of the Series 2017C 2028 Term Bonds ($2,150,000) will be paid at stated maturity on July 1, The Series 2017C Bonds maturing July 1, 2029 (the Series 2017C 2029 Term Bonds ) are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on January 1, 2029 in the amount of $2,180,000. The remaining principal amount of the Series 2017C 2029 Term Bonds ($2,215,000) will be paid at stated maturity on July 1, The Series 2017C Bonds maturing July 1, 2030 (the Series 2017C 2030 Term Bonds ) are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on January 1, 2030 in the amount of $2,250,000. The remaining principal amount of the Series 2017C 2030 Term Bonds ($2,285,000) will be paid at stated maturity on July 1, The Series 2017C Bonds maturing July 1, 2031 (the Series 2017C 2031 Term Bonds ) are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on January 1, 2031 in the amount of $2,325,000. The remaining principal amount of the Series 2017C 2031 Term Bonds ($2,365,000) will be paid at stated maturity on July 1, The Series 2017C Bonds maturing July 1, 2032 (the Series 2017C 2032 Term Bonds ) are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on January 1, 2032 in the amount of $2,405,000. The remaining principal amount of the Series 2017C 2032 Term Bonds ($2,445,000) will be paid at stated maturity on July 1,

20 The Series 2017C Bonds maturing July 1, 2033 (the Series 2017C 2033 Term Bonds ) are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on January 1, 2033 in the amount of $2,490,000. The remaining principal amount of the Series 2017C 2033 Term Bonds ($2,535,000) will be paid at stated maturity on July 1, The Series 2017C Bonds maturing July 1, 2035 (the Series 2017C 2035 Term Bonds ) are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on January 1, 2034 in the amount of $2,580,000, on July 1, 2034 in the amount of $2,630,000, and on January 1, 2035 in the amount of $2,680,000. The remaining principal amount of the Series 2017C 2035 Term Bonds ($2,680,000) will be paid at stated maturity on July 1, Optional Redemption Series 2017A Bonds The Series 2017A Bonds maturing on and after January 1, 20 are subject to redemption at the option of the County, either in whole or in part, in such order of maturity as the County shall determine, on any date on or after 1, 20, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption. When partial redemption is authorized, the Series 2017A Bonds or portions thereof will be selected by lot within a maturity in such manner in accordance with DTC procedures as the Trustee may determine, provided, however, that the portion of any such Series 2017A Bond so selected will be in the amount of $5,000 or any integral multiple thereof. The notice of the call for redemption of Series 2017A Bonds shall identify (i) by designation, letters, numbers or other distinguishing marks, such Series 2017A Bonds or portions thereof to be redeemed, (ii) the redemption price to be paid, (iii) the date fixed for redemption, and (iv) the place or places where the amounts due upon redemption are payable. From and after the specified redemption date, interest on such Series 2017A Bonds (or portions thereof) called for redemption shall cease to accrue. Such notice shall be sent by first class mail to each such registered holder at the address shown in the Series 2017A Bond registration records at least 30 days prior to the redemption date. Failure to receive such notice or any defect therein shall not affect the validity of the proceedings for the redemption of any such Series 2017A Bond. Series 2017B Bonds The Series 2017B Bonds maturing on and after January 1, 20 are subject to redemption at the option of the County, either in whole or in part, in such order of maturity as the County shall determine, on any date on or after 1, 20, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption. When partial redemption is authorized, the Series 2017B Bonds or portions thereof will be selected by lot within a maturity in such manner in accordance with DTC procedures as the Trustee may determine, provided, however, that the portion of any such Series 2017B Bond so selected will be in the amount of $5,000 or any integral multiple thereof. The notice of the call for redemption of Series 2017B Bonds shall identify (i) by designation, letters, numbers or other distinguishing marks, such Series 2017B Bonds or portions thereof to be redeemed, (ii) the redemption price to be paid, (iii) the date fixed for redemption, and (iv) the place or 8

21 places where the amounts due upon redemption are payable. From and after the specified redemption date, interest on such Series 2017B Bonds (or portions thereof) called for redemption shall cease to accrue. Such notice shall be sent by first class mail to each such registered holder at the address shown in the Series 2017B Bond registration records at least 30 days prior to the redemption date. Failure to receive such notice or any defect therein shall not affect the validity of the proceedings for the redemption of any such Series 2017B Bond. Series 2017C Bonds The Series 2017C Bonds maturing on and after 1, 20 are subject to redemption at the option of the County, either in whole or in part, in such order of maturity as the County shall determine, on any date on or after 1, 20, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption. When partial redemption is authorized, the Series 2017C Bonds or portions thereof will be selected by lot within a maturity in such manner in accordance with DTC procedures as the Trustee may determine, provided, however, that the portion of any such Series 2017C Bond so selected will be in the amount of $5,000 or any integral multiple thereof. The notice of the call for redemption of Series 2017C Bonds shall identify (i) by designation, letters, numbers or other distinguishing marks, such Series 2017C Bonds or portions thereof to be redeemed, (ii) the redemption price to be paid, (iii) the date fixed for redemption, and (iv) the place or places where the amounts due upon redemption are payable. From and after the specified redemption date, interest on such Series 2017C Bonds (or portions thereof) called for redemption shall cease to accrue. Such notice shall be sent by first class mail to each such registered holder at the address shown in the Series 2017C Bond registration records at least 30 days prior to the redemption date. Failure to receive such notice or any defect therein shall not affect the validity of the proceedings for the redemption of any such Series 2017C Bond. 9