Dickies Arena Update. Presented to the City Council by Susan Alanis, Assistant City Manager June 6, 2017

Size: px

Start display at page:

Download "Dickies Arena Update. Presented to the City Council by Susan Alanis, Assistant City Manager June 6, 2017"

Kathryn Paul
5 years ago
Views:

1 Dickies Arena Update Presented to the City Council by Susan Alanis, Assistant City Manager June 6,

2 Purpose of Presentation Update on Project Status Review City Council actions on tonight s agenda M&C approving Venue Tax Ordinances M&C authorizing Parameters Ordinance and delegation of pricing to staff to Issue of Revenue Bonds 2

3 Guiding Principles Public funding is capped at $225M with no increase in property, sales or hotel-occupancy tax rates or impact to operating funds and debt capacity Private sector will contribute more than half of the cost as a philanthropic gift to the citizens of Fort Worth as well as funding for any added-cost enhancements Arena Complex will be owned by the City and managed by private sector non-profit Multipurpose Arena Fort Worth (MAFW) Arena will be financially self-sufficient, with no public money for operations or maintenance 3

Status of Project Parking garage on schedule for completion in November 2017 Sales Center scheduled to open in November 2017 Event Facilities Fort Worth finalized construction

22% contracted participation to date, above 15% target Held first board meeting for Multipurpose Arena Fort Worth Completed Ratings with Fitch & Moody s Already booked 2022 NCAA

4 Status of Project Parking garage on schedule for completion in November 2017 Sales Center scheduled to open in November 2017 Event Facilities Fort Worth finalized construction contract with Beck with a total project cost of $540 million Continued MBE outreach resulting in an estimated 17.22% contracted participation to date, above 15% target Held first board meeting for Multipurpose Arena Fort Worth Completed Ratings with Fitch & Moody s Already booked 2022 NCAA Men s Basketball Tournament and 2020, 2021 and 2022 NCAA Women s Gymnastics Championships Fort Worth s own Williamson Dickies Co. announced as arena naming rights sponsor with revenue supporting operations, maintenance and capital improvements 4

5 Proposed Debt Issue $96,262,588 Special Tax Revenue Bonds, Series 2017A $142,530,000 Special Tax Revenue Bonds, Taxable Series 2017B Allows delivery of $200 million in remaining public sector commitment plus 2 years capitalized interest for the Arena portion Allows $18.5 million in improvements at adjacent Will Rogers Memorial Center (WRMC) support facilities No impact to City s General Fund 5

6 Investment in Adjacent WRMC Support Facilities Added $15.5 million to this debt issue to provide the next phase of updates to the Cattle Barns in 50/50 partnership with the Stock Show Added $3 million to accelerate HVAC systems and technology improvements that support a large portion of the campus. Result: Clarifies applicability of the venue taxes by funding improvements across the campus Adds minimal cost to the debt service since Stock Show reimbursing for half of the expense of the cattle barns and the resulting increased venue tax revenue 6

7 Terms Pledges all revenue from Project Financing Zone, Venue Taxes, local Hotel- Occupancy Tax and DFW Revenue Share---debt will be superior to all other operational needs 7-year call that will allow refinancing after venue taxes proven, allowing progress on Convention Center plans Estimated maximum annual debt service of $15.2 million Safeguards Expect to accumulate more than 1-year of debt service in project fund by 2020 when Maximum Annual Debt Service occurs Currently fund $3M plus in cash-funded capital that will grow to $5.7M as existing debt is paid Conservative HOT estimates lower than the last 10 years including recession 7

8 Pledged Tax Revenue Breakdown Fiscal Year 2016 Total = $33.4 million Projected Fiscal Year 2022 Total = $50.5 million Gross Airport Shared Revenues (2) $5.8 million $1.3 million PFZ Funds PFZ Funds 6-year CAGR: 21.9% $4.3million 334 Revenues (1) 2-year CAGR: 1.0% $6.3 million City Hotel Occupancy Tax $26.3 million Gross Airport Shared Revenues (2) 6-year CAGR: - 0.3% $5.7 million City Hotel Occupancy Tax 6-year CAGR: 4.4% $34.2 million (1) Venue tax revenue to begin in (2)Airport Shared Revenues reflect the gross amount of the revenues received by the City under revenue sharing agreements with participating municipalities for certain activity at the Airport before payment of debt service on the City s Certificates of Obligation *CAGR (Compounded Annual Growth Rate) using a base year of 2016 through

9 City HOT Projections (9% HOT) $40 Historical HOT Revenue Projected HOT Revenue $35 $30 FY 2017YTD HOT Revenue: $10.7 million (through February 2017) $25 $20 $15 $10 $15.6 $17.6 $19.2 $19.9 $22.0 $23.7 $24.7 $26.4 $16.9 $29.0 $30.2 $31.5 $32.8 $34.2 $5 $10.7 $ Source: Preliminary Official Statement Projected Revenue as provided by City of Fort Worth 9

Additional Hotel Developments Hotel development is occurring throughout various areas of the City, including the City s cultural district Smaller hotels are currently in the process of or have

Inn and Suites, among other projects Collectively, these projects will add approximately 1,523 hotel rooms to the City by 2019 Existing and proposed 380 Agreements allow HOT rebates to be paid from

10 Additional Hotel Developments Hotel development is occurring throughout various areas of the City, including the City s cultural district Smaller hotels are currently in the process of or have recently completed construction/refurbishment, including Park Central Hotel s redevelopment into a Fairfield Inn and Suites, construction of the Marriott Autograph Collection Hotel, and a new Hampton Inn and Suites, among other projects Collectively, these projects will add approximately 1,523 hotel rooms to the City by 2019 Existing and proposed 380 Agreements allow HOT rebates to be paid from any lawfully available source so they do not disrupt priority of bonds Upcoming Hotel Openings Hotel Rooms Anticipated Opening Date Hampton Inn & Suites Downtown 245 Q Fairfield Inn & Suites Downtown 114 Q Home Suites Southwest Cityview 93 Q Autograph Collection The Sinclair 164 Q Aloft Downtown 180 Q Springhill Suites by Marriott 170 Q AC Hotels by Marriott Downtown 218 Q Hilton Garden Inn Downtown 162 Q Hotel Renovo 177 Q Average 169 Total 1,523 Aloft Hotel Fairfield Inn and Suites 10

PFZ Overview State PFZ Funds generated from various hotel-associated revenues, including incremental State HOT and State sales and use taxes, are pledged as security for the Bonds 2013 base year

4 million of State sales tax Hotel-Generated Sales Tax State sales and use tax revenue collected in the Zone from all hotels located therein Dickies Arena Fort Worth Convention Center 53 hotels are

11 PFZ Overview State PFZ Funds generated from various hotel-associated revenues, including incremental State HOT and State sales and use taxes, are pledged as security for the Bonds 2013 base year revenues of $5.7 million State HOT and $2.4 million of State sales tax Hotel-Generated Sales Tax State sales and use tax revenue collected in the Zone from all hotels located therein Dickies Arena Fort Worth Convention Center 53 hotels are located within the PFZ including: The Worthington Hotel (504 rooms) Sheraton Downtown Hotel (429 rooms) The 614 room Omni Hotel built in 2009 serves as the anchor hotel for the FWCC, and related Omni-State-PFZ rebates are set to expire in FY2019 PFZ Revenues Actual Projections FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 Annual State HOT Increment $ 1,349,380 $ 1,597,364 $ 2,598,779 $ 2,986,300 $ 3,395,469 $ 3,820,108 $ 4,260,802 Omni-State-PFZ Increment ,659,902 2,301,731 2,393,801 2,489,553 Total $ 1,349,380 $ 1,597,364 $ 2,598,779 $ 4,646,202 $ 5,697,200 $ 6,213,908 $ 6,750,354 Y/Y Growth % 18.4% 62.7% 78.8% 22.6% 9.1% 8.6% 11

12 334 Revenues Overview Venue Taxes (approved by the voters in November 2014) generated at the Venue Project which includes Dickies Arena and WRMC Ticket Tax tax on each ticket sold as admission to an event held at the Venue Project at a rate of 10% of the price of the ticket sold as admission (excludes primarily catering events) Parking Tax tax on each motor vehicle parking in a parking facility that services or will serve the Venue Project at a rate of 50% of the charge imposed, not to exceed $5 Stall Tax tax on each stall or pen used or occupied by livestock during an event held on one or more consecutive days in which the Venue Project are used in the amount of $1.00 per stall or pen per day, not to exceed $20.00 in the aggregate stall or pen rental for any event (excludes the Tarrant County Junior Livestock Show) All Venue Taxes will be applicable to the Fort Worth Stock Show and Rodeo 334 Revenues are pledged as additional security for the Bonds 334 Revenues are available to pay 100% of the debt service of the Taxable Series 2017B Bonds and are limited to pay 5% of the debt service of the Series 2017A Bonds 334 Revenue Projections FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 Parking Tax $ 3,387,124 $ 3,387,124 $ 3,387,124 $ 3,387,124 $ 3,387,124 $ 3,387,124 $ 3,387,124 Stall Tax 338, , , , , , ,327 Ticket Tax 2,492,289 2,554,596 2,618,461 2,683,923 2,751,021 2,819,796 2,890,291 Total $ 6,217,740 $ 6,280,047 $ 6,343,912 $ 6,409,374 $ 6,476,472 $ 6,545,247 $ 6,615,742 Y/Y Growth % 1.0% 1.0% 1.0% 1.0% 1.1% 1.1% 12

13 Sources and Uses Sources Tax-Exempt Series 2017A Financing Taxable Series 2017B Financing (1) Total Par Amount 84,835, ,530, ,365,000 Premium 11,427,588-11,427,588 Total Sources 96,262, ,530, ,792,588 Uses Tax-Exempt Series 2017A Financing Taxable Series 2017B Financing (1) Total Project Fund 86,860, ,637, ,498,000 Capitalized Interest Fund 8,400,000 10,267,925 18,667,925 Surety Policy (2) 124, , ,321 Cost of Issuance 878,048 1,445,294 2,323,342 Total Uses 96,262, ,530, ,792,588 (1) $18.5 million of the taxable proceeds will be allocated toward improvements at the Will Rogers Memorial Center campus (the "Adjacent Support Facilities Project"), including cattle barn improvements, air conditioning improvements and technology updates (2) The City anticipates meeting debt service reserve fund requirements with a surety policy provided by Assured Guaranty Note: The City has spent approximately $26.1 million in furtherance of Venue Project development, which is counted toward the Public Contribution the City is obligated to make under the Funding Agreement 13

14 Pro Forma Debt Service Overview (millions) 30.0 Taxable Arena Financing Tax-Exempt Arena Financing FY2017 Budgeted 9% HOT Revenues % HOT Revenue Net Airport Shared Revenue (1) State PFZ Funds Collected 334 Revenues Total Revenues Pro Forma Maximum Annual Debt Service (1) Assumes revenue growth through FY2022 provided by the City with 2.00% HOT revenue growth thereafter and no other revenue growth; assumes elimination of PFZ revenues in 2043 upon the expiration of the zone 9% HOT Revenues Only MADS Coverage Total Revenues FY 2013 $ 21,951,422 $ 2,543,875 $ - $ - $ 24,495,297 $ 15,160, x 1.62x FY 2014 $ 23,682,541 $ 2,223,848 $ 898,276 $ - $ 26,804,665 $ 15,160, x 1.77x FY 2015 $ 24,697,096 $ 2,390,336 $ 850,971 $ - $ 27,938,403 $ 15,160, x 1.84x FY 2016 $ 26,384,647 $ 2,492,331 $ 1,349,380 $ - $ 30,226,358 $ 15,160, x 1.99x 14

Next Steps June 7 th : Release Preliminary Offering Statement June 19 th : Retail order period June 20 th : Institutional order period July 12 th : Bond closing The City of Fort Worth is offering

15 Next Steps June 7 th : Release Preliminary Offering Statement June 19 th : Retail order period June 20 th : Institutional order period July 12 th : Bond closing The City of Fort Worth is offering bonds to fund the Public Contribution for the construction and development of the new Dickies Arena located at the Will Rogers Memorial Center Campus. The City s Series 2017A and Series 2017B Bonds will be offered for sale to potential retail investors on Monday, June 19th 1 with priority for retail investors in the City. For more information, please visit [ 1 Preliminary, subject to change These Bonds may not be sold, nor may offers to buy be accepted, prior to the time an Official Statement is delivered in final form. Under no circumstances shall this announcement constitute and offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the Bonds in any jurisdiction in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such jurisdiction. The Bonds will only be sold by means of an Official Statement. Before purchasing any Bonds, contact your tax advisor to determine any applicable federal, state, and local tax consequences. 15

16 2018: Permanent Parking Agreement Sign Agreement Prepare systems and processes for collection of Venue Taxes beginning upon opening of Arena Next Steps, cont. 16

1998 Sports Arena Project Bonds Optional Redemption. Finance, Audit & Accountability January 12, 2009

1998 Sports Arena Project Bonds Optional Redemption Finance, Audit & Accountability January 12, 2009 Purpose Provide an update on the funds available redeem 1998 Sports Arena Project Bonds Seek committee