City of Wichita - Industrial Revenue Bonds Standard Letter of Intent Conditions
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Wichita, KS 67202

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Allen Bell
Director

Mandy Pankratz
Management Analyst


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Standard Letter of Intent Conditions

  1. Negotiation of a lease Agreement and preparation of an appropriate Bond Ordinance, which will ordinarily contain a provision pledging the financed property and net earnings therefrom as security for payment of the bonds, pursuant to K.S.A. 12-1744.

  2. Execution of guarantees for the payment of the bonds (which, for the tenant, may be in the form of an unconditional guaranty incorporated in the Lease).

  3. Agreement to pay all costs incurred by the City for processing the application and issuance of the bonds.

  4. Agreement to enter into the City's Administrative Service Fee Agreement providing for annual payments of $2,500 each year for the time period in which the bonds are outstanding.

  5. Agreement that, prior to the issuance of the bonds, the applicant will have an approved Equal Employment Opportunity/Affirmative Action Plan on File with the City.

  6. Agreement to include in the Lease provisions requiring the applicant to comply with the ordinances of the City, as then exist or as may thereafter be adopted, pertaining to civil rights and equal employment opportunity, as required by Section 2.12.950 of the Code of the City of Wichita.

  7. If the project involves new construction, substantial renovation or landscaping, an agreement to provide the City with documented evidence that the applicant used procedures, prior to the issuance of the bonds, that do not exclude qualified Minority-owned Business Enterprises (MBE) and Women-owned Business Enterprises (WBE) from serving as contractors, subcontractors, engineers, architects, suppliers and vendors on the bond-financed project.

  8. If the project involves substantial new construction, or renovation or landscaping materially impacting water usage, an agreement that, prior to the issuance of the bonds, the applicant will have obtained approval from City staff of a proposed water conservation plan.

  9. If the project involves new construction, substantial renovation or landscaping, an agreement to submit building and site plans to the Design Council for review, and to modify the proposed design as necessary to comply with reasonable Design Council recommendations or conditions.

  10. An agreement to make any payment in lieu of tax required as a condition of the letter of intent, or which may be required as a contingent payment in the Lease in the event that certain conditions (including failure to comply with other conditions of the letter of intent) occur during the time period in which the bonds are outstanding.

  11. Where the project involves the acquisition of any interest in real property, an agreement to provide the City, at the time the proposed Lease agreement is submitted, an Environmental Site Assessment ("ESA"), performed by an independent consultant recognized as an expert in the area, that documents the environmental condition of the property; bonds generally will not be issued if the ESA discloses environmental conditions that might lead to monetary liability for owners or operators of the property

  12. An agreement, to be incorporated in the Lease agreement, that the applicant will use and operate the project in accordance with all applicable environmental laws and regulations, and will indemnify and hold the City harmless from any and all liabilities (other than liabilities resulting from environmental contamination primarily caused by the City's own agents or employees) arising under any environmental law or regulation.

  13. An agreement to furnish copies of any annual financial audits to the City.

  14. An agreement to cooperate with any annual compliance audit procedure(s) the City may adopt to monitor compliance with conditions, including any annual reports required of the applicant and any inspections of the applicant's premises or interviews with the applicant's staff.

  15. A commitment to achieve and maintain its proposed employment goals, and to meet its Equal Employment Opportunity/Affirmative Action goals, during the term of the bond issue, subject to a revocation of any tax abatement or imposition of payments in lieu of taxes in the event the City Council finds that the tenant did not make a good faith effort to achieve such goals.

  16. An agreement to obtain all insurance the City may require in connection with the construction, maintenance or operation of the project, or liabilities arising out of the operation of the project, including (without limitation) a performance bond sufficient to secure completion of the project.

  17. An agreement that, prior to issuance of the bonds, the applicant will provide proof that all ad valorem property taxes on the project property due and owing up to the proposed date of issuance have been paid.

  18. If the project is a proposed office headquarters facility, an agreement that the applicant will maintain its headquarters in the City so long as any of the bonds are outstanding and for the term of any approved tax abatement.

  19. Arrangement (such as a Bond Purchase Agreement or Bond Placement Agreement) for the sale/placement of the bonds, which shall contain suitable indemnification agreements from the prospective tenant and underwriter(s) indemnifying and holding the City harmless from liabilities arising from disclosure or registration provisions of state or federal securities laws.

  20. If the bonds are to be sold by public sale, an agreement that the applicant will not, while any of the bonds are outstanding, have a commercial banking relationship with the trustee of the bond issue; or, if the bonds are to be privately placed, an agreement that the applicant will not have such a relationship with the trustee of the bond issue unless the purchasers in the placement of the bonds shall first acknowledge in writing the existence of the relationship and waive any conflict that might exist as a result of such relationship.

  21. If the proposed bond issue is requested for the purpose of advance-refunding outstanding IRBs previously issued by the City of Wichita upon which interest paid to bondholders is properly exempt from federal income taxation, an opinion of bond counsel or special tax counsel, prior to the issuance of the refunding bonds, that the proposed refunding will have no adverse impact upon the tax treatment of the interest paid to holders of the refunded bonds.

  22. An agreement that prior to the issuance of the bonds, the prospective tenant will obtain a suitable commitment for a policy of title insurance insuring the title of any real property conveyed to the City in connection with the financing.

  23. An opinion of counsel participating in the preparation of the preliminary official statement and the official statement (which may be bond counsel, tenant's counsel, or the underwriter's counsel), to the effect that such counsel, after reasonable investigation, is of the opinion that the disclosures therein do not contain any untrue statements of material fact, and do not omit material facts necessary in order to make the statements made therein, in light of the circumstances under which they are made, not misleading.

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Related to
Industrial Revenue Bonds
IRB Overview: "Industrial Revenue Bond Issuance in the State of Kansas"
IRB Procedure
Main
Standard Letter of Intent Conditions
Tax Exemption Calculation Tables


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