Financing POD Parking RampTHE CTT'Y OF
DUB E
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MEMORANDUM
March 27, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Financing for Port of Dubuque Public Parking Ramp
Economic Development Director David Heiar is recommending approval of a Financing
Term Sheet with Robert W. Baird & Co. Incorporated for financing of the public parking
ramp in the Port of Dubuque.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
Txe crrv or
MEMORANDUM
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March 27, 2007
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: Financing for Port of Dubuque Public Parking Ramp
INTRODUCTION
Financing for the Port of Dubuque Public Parking Ramp will come from two revenue
sources. The first source of revenue will be the escrow account established by the
Diamond Jo prior to a bid award on this construction project. The final amount of this
escrow will be determined by the Diamond Jo, but will not be less than the balance of
$6.3 million as established in the Development Agreement. The other revenue source
that will fund this project is the sale of TIF bonds. A minimum assessment agreement on
the proposed Diamond Jo Casino will fund the repayment of these bonds.
BACKGROUND
When an upfront bond sale is used to finance a development project, the City requires
the developer to bring a bond buyer to the table. Generally, these are smaller bond
sales and the developer utilizes a local financial institution to purchase the bonds. In this
project the bond sale is expected to be somewhere between $11-20 million. The
Diamond Jo is proposing to utilize Baird, a national firm to buy and/or sell these bonds.
It is anticipated that these bonds will be somewhat more difficult to place in the market,
unlike Dubuque G.O. bonds. These bonds will not be rated and will not have the full
faith and credit of the City standing behind them. The bonds are however backed by a
corporate guarantee of the Diamond Jo.
Baird has asked for approval by both the City and the Diamond Jo to the terms specified
in the attached Financing Term Sheet. City Attorney Barry Lindahl and Finance Director
Ken TeKippe have reviewed the Financing Term Sheet.
RECOMMENDATION/ACTION ITEM
That the City Council authorize the City Manager to sign the attached Financing Term
Sheet with Baird for financing of the Public Parking Ramp in the Port of Dubuque.
F:\USERS\DHeiar\Diamond Jo\Financing for Port of Dubuque Public Parking Ramp.doc
BAIRD
Thomas J. Gavin
Managing Director
Public Finance
March 28, 2007
Mr. Brent Stevens Mr. David Heiar
Chief Executive- Officer Director of Economic Development
Diamond Jo Casino LLC City of Dubuque
400 East Third Street Second floor of City Hall, 50 W. 13th Street
Dubuque, Iowa 52001 Dubuque, IA 52001
RE: Dubuque Ice Harbor Parking Facl7ity -Financing Term Sheet
Dear Gentlemen:
Robert W. Baird & Co. ("Baird' is pleased to have the opportunity to provide underwriting services
for the proposed Dubuque Ice Harbor Parking Facility bond offering.
The attached term sheet represents our preliminary understanding of the project to be financed and our
proposed compensation for this financing. This letter and term sheet do not represent a guarantee by
Baird that the transaction .contemplated hereby will be consummated nor that the terms will not
change.
All costs of issuance, including legal fees for bond counsel, issuer's counsel, Diamond Jo counsel, and
printing expenses are the responsibility of Diamond Jo Casino. All fees assessed or required by the
City are the responsibility of Diamond Jo Casino.
We look forward to working with you on this transaction. Please feel free to contact me if you have
any questions, or if you require additional infomlation.
Sincerely, Accepted on behalf of Diamond Jo Casino LLC
Thomas J. Gavin
Managing Director
Robert W. Baird & Co.
Enclosure
Mcmber New York Stock Exchange and SIPC
Mr. Brent Stevens
Accepted on behalf of the City of Dubuque, IA
Michael Van Milligen
Authorized Official
Robert W. Baird & Co. Incorporated
300 East Fifth Avenue, Suite 200
Naperville, IL 60563-3181
Main (630) 778-9100
Toll-free (800) 686-4346
Fax (630) 778-7179
tgavm(p~nvbaicd.com
Amount:
Dubuque Ice Harbor Parking Facility
Preliminary Financing Term Sheet*
Up to $20,000,000
Borrower: City of Dubuque (the "City'.
Nature of Financing: Tax Increment Revenue Bonds (the "Bonds'.
Use of Proceeds: Bond proceeds, together with other available funds, will be used to
construct a public multi-level parking facility to be owned and
operated by the City on real estate located adjacent to a new casino
to be developed by Diamond Jo Casino LLC ("Diamond Jo"), pay
costs of issuance on the Bonds and fund any required reserves and
capitalized interest.
Source of Payment on the Incremental property taxes to be collected on Diamond Jo real
Bonds: estate.
Minimum Assessment Minimum assessment agreement to be executed between the City
Agreement: and Diamond Jo providing for the collection of sufficient property
tax increments from Diamond Jo to satisfy the principal of and
interest on the Bonds.
Guarantee: Obligations of Diamond Jo, pursuant to the Minimum Assessment
Agreement, are to be guaranteed by Peninsula Gaming LLC.
Debt Service Reserve: Up to one year principal and interest requirement to be determined.
Tax Status of Bonds: Taxable.
Interest Rates: Fixed rates to be determined on the day of pricing.
Amortization Period: Thirty years from the date of issuance.
Payment Dates: Semi-annual interest and annual principal on dates to be
determined.
Rating: Not rated.
Underwriter's Discount: 2.25% of the offering price of the Bonds.
Cost of Issuance: All costs of issuance including bond counsel, issuer's counsel
Diamond Jo counsel, printing and other costs are to be paid from
bond proceeds.
Estimated Closing: August 2007.
*Preliminary, subject to change.