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HomeMy WebLinkAboutResolution - 2003-R0550 - Amendment To The Land Acquisition Agreement - Science Spectrum - 12/18/2003 (2)Resolution No. 2003-R0550 December 8, 2003 Item No. 40 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, an Amendment to the Land Acquisition and Management Agreement, by and between the City of Lubbock and Science Spectrum, and all related documents. Said Amendment is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council this 8th day of /,7 Decemb%K" , 2003. UGAL, MAYOR ATTEST: becca Garza, City APPROVED AS TO CONTENT: City Manager APPROVED AS TO FORM*: y Silnr istant City * SEE ALSO THE LEGAL OPINION ATTACHED HERETO ke/ccdocs/Res-Amendment to Agrmnt-Science Spectrum December 5, 2003 Resolution for Amendment to Science Spectrum Land Acquisition and Management Agreement Page 1 of 3 STATE OF TEXAS § COUNTY OF LUBBOCK § AMENDMENT Resolution No. 2003—RO550 December 8, 2003 Item No. 40 TO LAND ACQUISITION AND MANAGEMENT AGREEMENT BETWEEN THE CITY OF LUBBOCK AND SCIENCE SPECTRUM This Amendment to Agreement is effective this 0 day of November, 2003 between the City of Lubbock, a Texas municipal corporation (hereinafter called "the City") and Science Spectrum, a non-profit corporation (hereinafter called "Manager"). WHEREAS, the Manager and the City have previously entered into a Land Acquisition and Management Agreement dated February 28, 1991 (hereinafter called "the Agreement"); and WHEREAS, the City and the Manager hereby desire to amend said Agreement: NOW THEREFORE, the City and the Manager hereby agree to amend the Agreement as follows: 1) Article Three of the Agreement is hereby amended as follows: ARTICLE THREE CREATION OF FUNDS AND ACCOUNTS: CREDITS THERETO AND PAYMENTS THEREFROM Section 3.1 Creation of Manager Funds and Accounts. The Manager agrees to create an "Omni Theater Repair Fund" and such other Funds and Accounts as the parties shall deem advisable. Science Spectrum Amend 2 Page 1 of 4 Section 3.2. All Gross Revenues, less Two Hundred Thousand Dollars and No/100 ($200,000.00) per year (the "Funds"), shall be collected by the Manager. Section 3.3. Deposits to Omni Theater Repair Fund. Manager agrees to deposit an amount from the Gross Revenues, not less than Two Hundred Thousand Dollars and No/100 ($200,000.00), each year that this Agreement is in effect in the Omni Theater Repair Fund. Section 3.4. Payments from Omni Theater Repair Fund. The funds on deposit in the Omni Theater Repair Fund shall be expended by Manager solely for any and all necessary repairs, remodeling and/or renovation of the Exhibition Hall/Auditorium and for the repairs, upgrade, or renovation of the Equipment. Any amounts remaining in the Omni Theater Repair Fund at the end of each fiscal year shall be retained and expended for any such repair, remodeling, renovation and/or upgrading that may be necessary for any subsequent years. Any funds remaining in the Omni Theater Repair Fund at the termination of this Agreement shall be remitted to the City. Section 3.5. Use of the Funds. (a) The Manager agrees to use the Funds first for the payment of Maintenance and Operating Expenses (other than amounts owed to it for services as the Manager) and second, if there be any amounts remaining after the payment by the Manager for Maintenance and Operating Expenses (other than amounts owed to it for services as the Manager) to pay it for services as Manager. The Manager agrees to use its fee, for its exempt purpose within the corporate limits of the City for the direct benefit of the City and its citizens to accomplish public Science Spectrum Amend 2 Page 2 of 4 purposes of the City. Manager agrees to maintain records of all revenue and expenses related to the Funds. (b) The Funds are available to Manager only to the extent the Funds are then in existence. The Manager shall have no lien or encumbrance on Gross Revenues except to the extent required and allowed by the Act. The Funds are to be used for the benefit of the City; it being expressly agreed that funds shall not be used or expended in such a manner which results in a lending of credit of the City or a gratuitous application of public funds to private use. 2) This Amendment to the Agreement shall be effective upon execution. The remainder of the Agreement shall remain in full force and affect except as changed herein. Executed the 8th of December , 2003, as first written as affected as provided herein. SCIENCE SPECTRUM: Cassandra L. Henry, President Board of Directors ATTEST: Re6ecca Garza, City Secretary Science Spectrum Amend 2 Page 3 of 4 APPROVED AS TO CONTENT: Quincy Whit , ssistant City Manager APPROVED AS TO FORM*: Afnyl. Sr istant Ci ttorney �v *SEE ALSO THE LEGAL OPINION ATTACHED TO THE RESOLUTION Science Spectrum-amend2.Agreement.Accptd December 8, 2003 Science Spectrum Amend 2 Page 4 of 4 12/08/03 14:54 FULBR1GH1 bbs5glbsb��s�ldeerr5 NU. -r-rb Ir✓YJC Resolution No. 2003—RO550 ATTACHMENT FULBRIGHT & JAWORSKI L.L.P. A REGi5TEREo L1M1TEo LIABILITY PARTNERSHIP 1301 McKINNEY, SUITE $100 HOUSTON, TexAS 77010-3095 WWW.FULBRIGHT.COM GJONESQFULDRIGHT.COM TELEPHONE: (713) 651-5151 DIRECT OlAk.; (713) 651-3610 FACSIMILE: (713) 631.5246 December 8, 2003 VIES. FACSIMILE NO.806-775-3307 Army Sims, Esq. Assistant City Attorney City of Lubbock P.O. Box 2000 Lubbock, TX 79457 Dear Me. Sims: We acted as bond counsel to the City of .Lubbock (the "City") in connection with the issuance of the City's Combination Tax and Limited Exhibition Hall/Auditorium Revenue Certificates of Obligation, Series 1991 (the "Certificates") which financed the construction of an Omnimax Theatre to be managed by Science Spectrum (the "Manager'), a nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), pursuant to a Lazed Acquisition and Management Agreement between Manager and the City dated as of February 28, 1991 (the "Agreement"). A capitalized term used and not defined herein has the meaning assigned to it in the Agreement. We also acted as bond counsel to the City in connection with the issuance of the City's General Obligation Refunding Bonds, Series 1997 and the City's General Obligation Refunding Bonds, Series 1999 (together, the "Bonds"), each of which refunded a portion of the outstanding Certificates. We understand that the City and Manager propose to amend the Agreement. The proposed amendment (the "Proposed Amendment") would delete the requirement that the City receive $200,000 per annum from the Gross Revenues, and instead would require Manager to deposit $200,000 of Gross Revenues into the Omni Theatre Repair Fund to be used to make repairs, renovations and improvements to the Exhibition Hall/Auditorium and repairs, renovations or upgrades to the Equipment. .Any amount remaining in the Omni Theatre Repair Fund at the termination of the Agreement will be remitted to the City. The balance of the Gross Revenues will be collected by the Manager and used to pay first, all Maintenance and Operating Expenses, and then the fee of Manager. The Proposed Amendment also requires the Manager to account separately for the Gross Revenues and Maintenance and Operating Expenses. You have asked our opinion as to whether entering into the Proposed Amendment would adversely affect the excludability of the interest on the Certificates or the Bonds from the gross income of the owners thereof for federal income tax purposes. 40119W2.2 Resolution for Amendment to Science S ectrum Ld Ac 1Ci 1�n an�j { 1IowayoN + Ne- YORM . W-XMIMGTON DC. AuOTIN • DP4Ln4 . LO GELICE -P.. NEP tS l•�SifI.F•FTkTy'144�1ag ]]�q��jl(;g N • MV.H ICH Fage 2 of 3 12/0HIO,:s 14 : 54 F-ULI_ H I LiH I -i lJI� 5541 VI SlJ4 SS�1 Eil�b'('�5 NU. ( (b Wb3 Amy Sims, Esq. December 8, 2003 Page 2 In rendering this opinion, we have reviewed and rely upon a letter to the City from Cassandra L. Henry, President of Manager, representing that all proceeds of the Certificates were used to pay expenses related to the Omnimax Theatre and that none of such proceeds were used with respect to the Science Spectrum Museum. We have also reviewed and rely upon certain information provided to us by Manager and the City with respect to certain revenues and expenses of the Omnimax Theatre. We have assumed the conformity to original copies of all documents submitted to us as facsimiles and copies, including electronic versions of copies, the genuineness of the signatures, and the accuracy of the statements contained in such documents. Based upon the foregoing information and having due regard for such legal considerations as we deem relevant, we are of the opinion that entering into the Proposed Amendment will not adversely affect the excludability of the interest on the Certificates or the Bonds from the gross income of the owners thereof for federal income tax purposes under Section 103 of the Code. In rendering such opinion, we express no opinion with respect to the current status of the interest on the Certificates or the Bonds under Section 103 of the Code or any other federal tax matter. This opinion is rendered to you for your sole use and benefit and is not to be disclosed to or relied upon by third parties without our prior express consent. Our opinion is an expression of professional judgment and not a guarantee of result. We do not undertake to advise you of subsequent changes in the law or facts which come to our attention subsequent to the date of this letter which may affect the opinion expressed above. Very truly yours, Gregg ones 40119D42.2 Resolution for Amendment to Science Spectrum Land Acquisition and Management Agreement Page 3 of 3