Fiscal Note
See attached Fiscal Note report.
Title
SUBSTITUTE - Authorizing the Mayor and City Clerk to execute amendments to the Operation and Cooperation Agreement with Madison Cultural Arts District and to the Option Agreement with Overture Development Cooperation; to execute a credit agreement with a financial institution selected to restructure the Overture Center construction financing; and to execute such other documents that may be deemed necessary by the City Attorney to implement the transaction.
Body
In June of 2001, Overture Development Corporation ("ODC") borrowed $115,000,000 through bonds issued by the Community Development Authority of the City of Madison (the "Bonds") as part of the financing of Phase I construction of the Overture Center. To assist the project, the City contributed necessary property, but retained a reversionary interest wherein if at any time the property was not used as a public cultural arts facility, the land and improvements would revert to the City (the "Reversionary Interest"). The City and ODC entered into an Option Agreement, under which the City has the right to purchase the property for one dollar when the Bonds are fully paid. The Overture Center is leased by ODC to the Madison Cultural Arts District (the "District') which manages and operates the facility.
Debt service on the Bonds is paid from the rent received by ODC from the District and is the sole obligation of ODC. ODC has secured repayment of the Bonds through a letter of credit which is further backed by the gift from W. Jerome Frautschi and additional temporarily pledged assets from Mr. Frautschi and from Overture Foundation (collectively, the "Pledged Assets"). The intent at the time of the Bonds' issuance was for investment income from the Pledged Assets, which are held by the Madison Cultural Arts Support Trust ("MCAST") to provide a revenue stream to help support the Overture Center operations, beginning in 2004. The Pledged Assets did...
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