University of Toledo/ ParkUToledo Parking Concession P3
CHALLENGE: Further differentiate and enhance the Port Authority’s expertise as an experienced participant in an innovative P3 by both creating the actual concessionaire as its affiliate and by acting as issuer of low rate tax-exempt parking system revenue bonds.
SOLUTION: FBT Project Finance Advisors acted as a special municipal advisor to the Toledo-Lucas County Port Authority in connection with a public-private partnership (P3) involving not only a parking concession but also a mobility concession utilizing a 35-year lease of all parking assets from the University of Toledo to ParkUToledo Inc., a new Ohio non-profit corporation created by the Port Authority. According to KeyBanc Capital Markets, this was the lowest net interest rate P3 parking concession ever successfully completed in the U.S. That result was achieved by using tax-exempt bonds and several levels of reserves, including a $5,000,000 escrow created by the University of Toledo.
RESULTS: $68,670,000 in tax-exempt bonds issued by the Port Authority and sold at a premium to produce more than $74,500,000 of gross proceeds.
Columbus Hilton Hotel Expansion
CHALLENGE: Double the existing Hilton Hotel size to 1,000 hotel rooms on both sides of High Street at the Greater Columbus Convention Center within a single enterprise and under common management.
SOLUTION: FBT Project Finance Advisors LLC acted as Municipal Advisor to Franklin County, in connection with the negotiation, structuring and documentation of bonds. $91,765,000 of the Bonds were “Lease Appropriation Bonds” backed by the joint lease for 30 years of the Hilton Expansion Project by the Franklin County Convention Facilities Authority (the “CFA”) to the City of Columbus and Franklin County, subject to annual appropriation. This complex and innovative financing also included a second series of CFA bonds and $151,815,000 of Project Revenue Bonds secured primarily by the net operating income of the expanded Hilton Hotel and local hotel motel bed taxes.
RESULTS: The Franklin County Convention Facilities Authority (the “CFA”) issued two series of tax-exempt Bonds totaling $243,580,000 in principal amount to expand the Columbus Convention Center Hilton Hotel.
Columbus Crew MLS Stadium and Community Sports Park
CHALLENGE: “Save the Crew,” when the team’s prior owner planned to move the MLS franchise to Austin, TX.
SOLUTION: FBT Project Finance Advisors LLC acted as Municipal Advisor to Franklin County, in connection with the negotiation, structuring and documentation of bonds and a complex financing arrangement. Under the P3 arrangement, $140 million in public economic development financing and infrastructure resources would be combined with more than $200 million of funds from the Crew ownership to build a new downtown 20,000-seat MLS stadium and plaza and to renovate the existing MAPFRE MLS stadium into a vibrant community sports park.
RESULTS: The first phase of financing for the new Columbus Crew MLS Stadium closed with the issuance of $45,515,000 of stadium and sports park project bonds.
Ohio School Districts
CHALLENGE: Create a structure to lower borrowing costs.
SOLUTION: Working closely with Bradley Payne LLC and PRISM Municipal Advisors, principals of FBT Project Finance Advisors created and documented an innovative forward starting interest rate swap “swaption” refinancing program for Ohio school districts. The program lowered borrowing costs on several hundred millions of dollars of debt and brought in millions of dollars in payments from the bank counterparties. The new money financed permanent school improvements that were previously unfunded. The FBT team made certain that the security and payment obligations of each bank counterparty were fully collateralized by U.S. Treasury bonds; and the borrowing costs of the districts were at the lowest competitive rates available.
RESULTS: More than $10 million new money to certain Ohio school districts.
Ohio Market Access Program
CHALLENGE: Identify ways for municipal utilities to better finance/refinance short-term debt.
SOLUTION: Principals of FBT Project Finance Advisors worked with the Ohio Treasurer of State to create the Market Access Program (OMAP), which adds the State’s ‘SP-1+’ credit rating to short-term (one year) notes issued by local governments, thereby increasing market access and lowering borrowing costs. In addition we discovered a solution that allows American Municipal Power members to qualify for OMAP to finance/refinance their short-term debt and significantly lower borrowing costs.
RESULTS: Each credit-enhanced note issued saves issuers thousands of dollars in interest cost per $1 million of debt.
City of Cleveland, County of Cuyahoga, the Cleveland-Cuyahoga County Port Authority
CHALLENGE: To finance the $270 million Ernst & Young Tower and the $400 million Cleveland Convention Center and Global Center for Health Innovation.
SOLUTION: Principals of FBT Project Finance Advisors assisted the City of Cleveland, County of Cuyahoga, and the Cleveland-Cuyahoga County Port Authority, as well as underwriting firms Robert W. Baird Incorporated and Stifel Nicolaus & Company, in finding creative ways to generate funds for these projects. The FBT team, working closely with the agencies and investors, facilitated a P3 structure for the Convention/Global Health Center project where Merchandise Mart Properties entered into a DBFOM lease for the Center; and used tax-exempt and taxable bonds as part of a unique financing package for the Ernest & Young Tower that included 35 separate bond, grant, tax-credit, EB-5 and other funding sources.
RESULTS: More than $30 million saved in financing costs for each project.
The Toledo-Lucas County Port Authority
CHALLENGE: Secure tax-exempt funding to modernize parking systems.
SOLUTION: Principals of FBT Project Finance Advisors worked with the Port Authority and City of Toledo examining innovative finance solutions to create a public agency partnership program that secured funding for the projects. The City and Port Authority used tax-exempt debt with a rate of interest that was much lower than taxable debt. The structure included private expert managers, which lowered operating costs, increased efficiency and generated more revenue for the projects.
RESULTS: More than $3 million was saved in interest cost by the Toledo-Lucas County Port Authority.
Ohio County Fairgrounds P3
CHALLENGE: Upgrade the county’s fairground and entertainment facilities cheaper and faster.
SOLUTION: Working with the local port authority and developer, FBT Project Finance Advisors and Frost Brown Todd structured a program where the port authority and county shared powers, allowing the county to use the port’s simpler non-bid procurement powers, each allowing construction of the project without prevailing wages.
RESULTS: Time and money saved and a reduced project budget and revenue requirement in the future.