Title
Consideration of a Resolution to redeem certain Subordinated Taxable Industrial Refunding and Improvement Revenue Bonds in an outstanding aggregate principal amount of $710,000.
Body
Recommended Action: Adopt the Resolution.
Background: Sedgwick County has issued the following Bonds for the benefit of United Warehouse Company: (i) Taxable Industrial Revenue Bonds, Series A, 2000 (United Warehouse Company) (the "2000 Bonds"), (ii) Taxable Industrial Revenue Bonds, Series A, 2002 (United Warehouse Company) (the "2002 Bonds"), (iii) Subordinated Taxable Industrial Revenue Bonds, Series 2005 (United Warehouse Company) (the "2005 Bonds") and (iv) Taxable Industrial Revenue Bonds, Series 2006 (United Warehouse Company) (the "2006 Bonds") for the purpose of paying the cost of acquiring, constructing, furnishing and equipping a Distribution Center and Warehouse facility (the "Facility") located at 901 East 45th Street North in the unincorporated area of the County, but within three miles of the City of Wichita, Kansas and the City of Park City, Kansas.
United Warehouse Company (the "Corporation") is going to completely redeem the 2005 Bonds. The 2005 Bonds are subordinated to the 2000 Bonds, 2002 Bonds and the 2006 Bonds (the "Parity Bonds"). With the consent of the owner of the Parity Bonds, the Corporation will redeem the 2005 Bonds on December 15, 2014. The Corporation has properly instructed the County to call the 2005 Bonds. The proposed redemption of the 2005 Bonds will result in lower interest costs to the Corporation.
Alternatives: The County could deny the company's requested Resolution. Doing so would cause the company to incur interest cost on the 2005 Bonds that it intends to avoid by the early redemption the Resolution would authorize. Neither approval or denial of the Resolution have any effect on the County's debt or financial condition. The County has never denied requests such as this one.
Financial Considerations: There are no property tax or sales tax considerations in connection with the redemption of the 2005 Bonds. United Warehouse's other bonds will remain outstanding. The portion of the Facility refinanced with the 2005 Bonds was returned to the tax rolls in 2011.
Legal Considerations: The County is authorized to redeem the 2005 Bonds pursuant to Kansas law and the documents relating to the 2005 Bonds. J.T. Klaus of Triplett, Woolf & Garretson, LLC is the proposed Bond Counsel and has prepared the Redemption Resolution. The County's Bond Counsel, Mr. Joe Norton of Gilmore & Bell, P.C., has reviewed the Resolution and has approved it as to form.
Policy Considerations: Redemption of the 2005 Bonds will provide economic benefits to the Corporation at no cost to the County. The County has not previously denied a request to redeem bonds previously issued.