WASHINGTON CONVENTION CENTER AUTHORITY DISTRICT OF COLUMBIA

Transcription

1 WASHINGTON CONVENTION CENTER AUTHORITY DISTRICT OF COLUMBIA $524,460,000 SENIOR LIEN DEDICATED TAX REVENUE BONDS SERIES 1998 DATED: SEPTEMBER 1, 1998 CUSIP NO M 2003/2004 ANNUAL CONTINUING DISCLOSURE INFORMATION STATEMENT AS OF MARCH 22, 2005 Also available at: MuniFinancial

2 LIST OF PARTICIPANTS WASHINGTON CONVENTION CENTER AUTHORITY Tracy S. Harris Chief Financial Officer 801 Mount Vernon Place, NW Washington, DC (202) DISCLOSURE CONSULTANT & DISSEMINATION AGENT MuniFinancial* Temecula, California (951) UNDERWRITER PaineWebber Incorporated BOND COUNSEL Hunton and Williams Washington, D.C TRUSTEE Alex Chang The Bank of New York 385 Rifle Camp Rd, 3 rd Floor West Paterson, New Jersey, (973) * In its role as Disclosure Consultant and Dissemination Agent, MuniFinancial has not passed upon the accuracy, completeness or fairness of the statements contained herein.

3 I. INTRODUCTION Pursuant to an Official Statement dated September 17, 1998, $524,460,000 Senior Lien Dedicated Tax Revenue Bonds, Series 1998 (the 1998 Bonds ) were issued by the Washington Convention Center Authority ( WCCA ). The 1998 Bonds were sold to finance a portion of the construction costs of a new convention center (the New Convention Center ) in Washington D.C. (the District ) in an area bounded by 7th and 9th Streets, Mount Vernon Place and N Street, NW. The 1998 Bonds are special obligations of WCCA. These Bonds are without recourse to, not a debt of, nor a pledge of the District. The principal and interest on the 1998 Bonds are secured by and payable solely from dedicated tax receipts (the Dedicated Taxes ) and pledged funds established under a trust agreement. The Dedicated Taxes consist of 4.45% of the 14.5% sales tax on hotel room charges and 1.0% of the 10% sales and use tax on restaurant meals, alcoholic beverages consumed on premises and rental vehicle charges. The District has entered into an agreement with Wachovia Bank, formally known as First Union National Bank of Washington, D.C., pursuant to which Wachovia Bank will serve as the Lockbox Bank and maintain a Lockbox into which the Dedicated Taxes and other sales and use taxes are deposited upon collection. The 1998 Bonds are not secured by the current convention center. This Annual Continuing Disclosure Information Statement is being provided pursuant to a covenant made by WCCA for the benefit of the holders of the Bonds and includes the information specified in a Continuing Disclosure Agreement. For further information and a more complete description of WCCA and the Bonds, reference is made to the Official Statement. The information set forth herein has been furnished by the WCCA and by sources, which are believed to be accurate and reliable but is not guaranteed as to accuracy or completeness. Statements contained in this Annual Continuing Disclosure Information Statement which involve estimates, forecasts, or other matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. Further, the information and expressions of opinion contained herein are subject to change without notice and the delivery of this Annual Continuing Disclosure Information Statement will not, under any circumstances, create any implication that there has been no change in the affairs of the WCCA or any other parties described herein. 2003/04 Senior Lien Dedicated Tax, 1998 WCCA 1

4 II. BOND INFORMATION A. PRINCIPAL OUTSTANDING Bond Issue As of March 1, 2005 Senior Lien Dedicated Tax Revenue Bonds, Series 1998 $503, 550,000 B. SENIOR DEBT SERVICE RESERVE ACCOUNT Account Name As of March 1, 2005 Debt Service Reserve Account N/A* Debt Service Reserve Account Requirement $36,176,550 * The balance in the Debt Service Reserve Account represents a Surety Bond with Ambac Assurance Corp. in the amount of the Debt Service Reserve Account Requirement 2003/04 Senior Lien Dedicated Tax, 1998 WCCA 2

5 C. DEBT SERVICE Debt Service Requirements for the 1998 Bonds* For Period Ending October 1, Principal Interest Debt Service 2005 $11,190,000 $24,983,825 $36,173, ,720,000 24,452,300 36,172, ,310,000 23,866,300 36,176, ,925,000 23,250,800 36,175, ,600,000 22,572,238 36,172, ,315,000 21,858,238 36,173, ,070,000 21,106,700 36,176, ,860,000 20,315,525 36,175, ,690,000 19,482,875 36,172, ,565,000 18,606,650 36,171, ,490,000 17,684,488 36,174, ,460,000 16,713,763 36,173, ,435,000 15,740,763 36,175, ,505,000 14,667,925 36,172, ,580,000 13,592,675 36,172, ,710,000 12,463,675 36,173, ,895,000 11,278,175 36,173, ,140,000 10,033,425 36,173, ,380,000 8,791,755 36,171, ,685,000 7,491,225 36,176, ,045,000 6,128,688 36,173, ,475,000 4,701,550 36,176, ,970,000 3,206,488 36,176, ,535,000 1,640,413 36,175,413 Total $503,550,000 * The schedule does not reflect potential reductions in interest costs as a result of any unscheduled redemptions or other early extinguishment of the 1998 Bonds. III. FINANCIAL INFORMATION The audited financial statements for the WCCA for the Fiscal Year Ended September 30, 2004 will be filed separately with the Nationally Recognized Municipal Information Repositories and are hereby incorporated by reference into this Annual Information Statement. 2003/04 Senior Lien Dedicated Tax, 1998 WCCA 3

6 A. COMBINED BALANCE SHEET (in thousands) As of September 30, ASSETS Current assets: Cash $13,874 $11,005 $4,715 $5,037 Investments 7,323 7,323 4,503 7,343 Due from District of Columbia 4,035 4,536 5,506 5,735 Accounts receivable (net of allowance for uncollectible accounts) Accrued interest receivable 1, Total current assets $26,916 $24,293 $15,842 $19,393 Capital and other assets: Capital assets, net of accumulated depreciation $394,353 $624,835 $811,099 $790,963 Unamortized bond issuance costs 9,613 9,257 8,901 8,545 Total capital and other assets $403,966 $634,092 $820,000 $799,508 Restricted assets: Restricted cash $641 $631 $1,822 $- Restricted investments 412, ,563 76,727 60,151 Total Restricted Assets $412,797 $257,194 $78,549 $60,151 TOTAL ASSETS $843,679 $915,579 $914,391 $879,052 LIABILITIES Current liabilities: Accounts payable $20,841 $45,857 $36,647 $38,616 Compensation liabilities 1,341 1,298 1,060 1,229 Deferred revenue 1,765 11,591 11,939 7,004 Accrued interest payable 12,976 12,976 12,976 12,747 Construction retainage 15,846 16,186 6,341 1 Capital lease, current portion - - 1,050 1,050 Bonds payable, current portion ,225 10,685 Total Current Liabilities $52,769 $87,908 $80,238 $71,332 Long-Term Liabilities: Notes payable $- $- $- 1,050 Bonds payable, net of discount 518, , , ,952 Capital lease ,419 11,281 TOTAL LIABILITIES $570,931 $606,304 $601,061 $581,615 NET ASSETS Invested in capital assets, net of related debt $92,278 $115,696 $243,026 $234,371 Restricted for: Debt service 13,676 15,769 25,211 23,431 Construction cost 130, ,535 16,822 16,720 Marketing services contracts 20,000 20,000 20,000 20,000 Unrestricted 16,471 2,275 8,271 2,915 TOTAL NET ASSETS $272,748 $309,275 $313,330 $297, /04 Senior Lien Dedicated Tax, 1998 WCCA 4

7 B. REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS As of September 30, 2004 (in thousands) Operating Revenues: Operating Account Building Account Marketing Fund Demolition Account Total Building rental $7,423 $- $- $- $7,423 Electrical 2, ,456 Telecommunications 1, ,397 Audio-visual Food services Miscellaneous Total operating revenues $12,836 $- $- $- $12,836 Operating expenses: Personal services $13,016 $- $- $- $13,016 Contractual services 10,494 (4) - 1,042 11,532 Depreciation 1,516 27, ,165 Occupancy 4, ,391 Supplies Miscellaneous Total operating expenses $30,631 $27,649 $- $1,042 $59,322 Operating loss ($17,795) ($27,649) $- ($1,042) ($46,486) Non-operating revenue and expenses: Dedicated taxes $- $54,846 $7,354 $- $62,200 Interest income 24 2, ,037 Other Interest (650) (650) Bond interest and issue costs - (26,080) - - (26,080) Transfer to tourism responsibility centers - - (6,914) - (6,914) Inter-fund transfers to/from 18,421 (18,421) Total non operating revenues $17,795 $12,357 $441 $- $30,593 - Net income (loss) $- ($15,292) $441 ($1,042) ($15,893) Retained earnings (deficit), beginning of year 4, ,214 1, ,330 Retained earnings (deficit) end of year $4,588 $291,922 $1,969 ($1,042) $297, /04 Senior Lien Dedicated Tax, 1998 WCCA 5

8 IV. OPERATING INFORMATION A. RECEIPTS FROM DEDICATED TAXES Receipts from Dedicated Taxes (1) for Fiscal Year 1997 through 2004 (dollars in thousands) Fiscal Year Hotel Sales Tax % Change Restaurant/ Vehicle Sales Tax % Change Total Receipts % Change 1997 $31,154 $13,467 $44, , % 14, % 47, % , % 15, % 51, % , % 16, % 54, % , % 17, % 56, % ,664 (10.63)% 18, % 53,373 (5.66)% , % 18,640 (0.37)% 57,935 (2) 8.55% , % 19, ,971 (2) 6.97% (1) 1997 through 1999 estimated based upon information provided by the D.C. Office of Tax and Revenue (2) Receipts before accruals. B. DEBT SERVICE COVERAGE Fiscal Year Ending Dedicated Taxes Debt Service Debt Service Coverage 2003/04 $61,971,213 $36,173, C. OPERATING INFORMATION/COLLECTION OF REVENUES UPDATE In addition to the pledge of dedicated taxes, the District has pledged not to limit or alter any rights vested in the WCCA to fulfill agreements made with holders of the 1998 Bonds, or impair rights and remedies of bondholders until the 1998 Bonds and the interest thereon are paid in full. In connection to the projected pledge of revenues to meet the operating and debt service expenditures, if the projected revenues are insufficient, the WCCA Act requires the Mayor to impose surtax in an amount sufficient to meet the projected deficiency. The District s Auditor determined that the projected dedicated taxes for fiscal year 2005 are expected to be sufficient to meet the projected expenditures and reserve requirements. Therefore, the Mayor imposed no surtax. 2003/04 Senior Lien Dedicated Tax, 1998 WCCA 6

9 D. HOTEL AND TRAVEL TREND UPDATE The following information has been gathered by the Washington DC Convention & Tourism Corporation (WCTC). 1. HOTEL SALES TAXPAYERS The 25 largest hotels in the District account for 16,436 guestrooms and suites (58% of all hotel rooms in the District). The average hotel occupancy in the District in fiscal year 2004 was 69.1%, according to the Washington Convention & Tourism Corporation and 64.9% for fiscal year HOSPITALITY INDUSTRY IN THE DISTRICT Washington, DC hosted 16.4 million domestic visitors, an increase of 3.2%. Domestic Visitors are leisure visitors, including those whose travel purpose is to visit friends and relatives, entertainment, outdoor recreation or personal reasons. Leisure visitors using hotels also increased slightly by 2.8%. The volume of business visitors using hotels was stable in 2003, while the number of leisure travelers increase by 2.8. In 2004 a mix of leisure and business visitors came to Washington, DC for various reasons. Hotel occupancy for the week of the National World War II Memorial was 82.9%, up 36.6% from the same week in the previous year s during the Memorial Day weekend, according to the Washington DC Convention & Tourism Corporation. Washington, DC Visitors Primary Purpose of Trip For 2003 (percent of person-trips) Business/Pleasure 5% Business/Conv 29% Leisure 66% Domestic Travel Volume to the Washington, D.C. Area Source: WCTC 2003 Visitor Statistics, June 8, /04 Senior Lien Dedicated Tax, 1998 WCCA 7

10 Washington DC Domestic Visitor Volume Trends (in millions of visitors) Source: WCTC DC Update Newsletter July/August 2004 and Travel Industry Association of America 3. HOTEL SUPPLY CHANGES IN WASHINGTON, DC Property Rooms Open Mandarin 347 March 2004 Residence Inn 233 January 2005 Hampton Inn 228 January 2005 Courtyard 204 Unknown Embassy Suite 383 First Q 2005 Marriott HQ 1,200 1, / /04 Senior Lien Dedicated Tax, 1998 WCCA 8

11 V. RECENT EVENTS A. FUTURE IMPACTS The Washington Convention Center opened in April 2003 and hosted 201 events as of September 30, Also at September 30, 2004, the Authority has reserved 525 events for the convention center from 2005 to In December 2004, the Board of Directors of the Washington Convention Center Authority (WCCA) agreed to expand the meeting and ballroom capacity of the convention center by 75,000 square feet and to develop and own a 1200-room headquarters hotel with 100,000 square feet of meeting and ballroom space. WCCA staff will immediately start six-months of intensive pre-development activities to determine definitively whether or not the hotel can be built at a site next to the convention center on 9th Street between Massachusetts Avenue and M Street. Several issues for the hotel at this site including land acquisition, design, historic preservation and financing, must be explored in depth and resolved. A copy of the convention center expansion and hotel feasibility study can be obtained through the Authority s website at /04 Senior Lien Dedicated Tax, 1998 WCCA 9