The Authority entered into a Project Financing, Construction and Operation Agreement dated as of August 1, 1991 (the “Financing Agreement”), with the State, the County and the City. The Financing Agreement provides for the application of the proceeds of the Project Bonds issued by the Authority, authorizes the Authority to issue Additional Bonds, provides for the repayment of each respective series of bonds from funds appropriated annually by the State, the County and the City, respectively, and provides for the operation and maintenance of the Dome.
Pursuant to the Financing Agreement, the Authority has leased the Dome to the State, the County and the City (collectively referred to as the “Sponsors”) and the Sponsors have subleased the Dome back to the Authority. The Base Rental Payments made by the State, the County and the City under the Financing Agreement are designed to be sufficient to pay the principal of and interest on each respective series of outstanding Bonds.
Each Sponsor has covenanted in the Financing Agreement to include in its annual budget proposal a request for appropriation of moneys sufficient to pay its required payment during the next succeeding fiscal year. The obligations of the Sponsors to make such payments are absolute and unconditional under the Financing Agreement; notwithstanding the foregoing, however, no Sponsor is obligated under the Financing Agreement to appropriate funds or otherwise make payments in any year beyond such Sponsor’s then current fiscal year in which the Financing Agreement is in effect with respect to that Sponsor.
A Preservation Fund has been established under the Project Indentures (as defined in the Financing Agreement) for each series of bonds issued to finance or refinance the Dome and was initially funded from proceeds of the 1991 Project Bonds in the amount of $10,000,000. Beginning on August 1, 1994 and semiannually thereafter during each Sponsor’s fiscal year in which the Financing Agreement is in effect with respect to that Sponsor, the Financing Agreement requires the State to make a Preservation Payment in the amount of $1,000,000 ($2,000,000 annually) and requires the County and the City to make Preservation Payments in the amount of $500,000 each ($1,000,000 each annually). The Preservation Payments are subject to annual appropriation by the respective Sponsors.
Preservation Fund moneys must be first used to pay all insurance premiums for insurance policies required by the Financing Agreement which will come due within the next succeeding year. The remaining moneys in the Preservation Fund may be used at the option of the Authority for any of the following purposes:
1. to pay Preservation Costs, which are defined as the cost of repairs and replacements of the physical structure, fixtures, appurtenances, furniture, machinery, equipment and components which are necessary to preserve the physical integrity, value, utility, use and marketability to users and potential users of the Project, and shall include:
2. to pay any costs of operating and maintaining the Dome, other than Preservation Costs, incurred by the Authority pursuant to the Financing Agreement;
3. to pay debt service on the Bonds or to restore any amount withdrawn from the Bond Reserve Funds pursuant to the provisions of the Financing Agreement; or
4. to reimburse any Credit Provider under any Project Indenture for any draws on any related Credit Enhancement (none currently anticipated).
No Mortgage of the Dome or the Cervantes Convention Center
Payment of principal and interest on the Bonds is not secured by any deed of trust, mortgage or other lien on the Dome or the Cervantes Convention Center or any portion thereof, nor by any pledge of the revenues to be derived from the operation of the Dome or the Cervantes Convention Center.
The Agreement Term shall terminate as to each Sponsor upon the earliest of the occurrence of any of the following events with respect to such Sponsor: (1) the last day of the fiscal year of a Sponsor during which an Event of NonAppropriation occurs and continues with respect to such Sponsor; provided, however, that the Agreement Term shall again commence for such Sponsor if, among other things, the Sponsor appropriates all amounts required at the time to be appropriated pursuant to the Financing Agreement and pays all Sponsor Payments of such Sponsor required at the time to have been paid; (2) an Event of Default with respect to such Sponsor and termination of the Agreement Term under the Financing Agreement; or (3) August 1, 2021, which date constitutes the last day of the Agreement Term, or such later date as all Sponsor Payments required pursuant to the Financing Agreement are paid by the respective Sponsor.
Marty Finn
finn@stlrsa.org
314-342-5156