To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Michael J. Hyman, Town Attorney
Trish Muller, CPA, Finance Director
Title
Resolution of the Town Council of the Town of Castle Rock Authorizing the Prepayment of Rentals Under that Certain Lease Agreement Dated September 12, 2013, by and Between UMB Bank, N.A., as Lessor, and the Town, As Lessee
Body
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Executive Summary
Town Council authorization is required for the Town to exercise its option to purchase the leasehold interest of UMB Bank (the “Trustee”) in certain property leased by the Town pursuant to a September 12, 2013, lease agreement. Rentals paid under that lease are used to pay principal and interest on $9,245,000 of Certificates of Participation that were issued by the Trustee for the purpose of financing the construction of the Town’s Miller Activity Complex at Philip S. Miller Park.
History of Past Town Council, Boards & Commissions, or Other Discussions
On July 16, 2013, Town Council voted unanimously to finally adopt Ordinance No. 2013-022 (the “2013 Ordinance”) authorizing the execution and delivery of certificates of participation pursuant to a lease transaction between UMB Bank, as lessor, and the Town, as lessee, for the purpose of financing the construction of the Miller Activity Complex.
Discussion
The 2013 Ordinance authorized the execution of a Site and Improvement Lease (the “Site Lease”) whereby the Town, as lessor, leased certain Town-owned real property and the buildings and improvements located thereon (the “Leased Property”), to UMB Bank, N.A., as lessee (the “Trustee”). The 2013 Ordinance further authorized the execution of a Lease Agreement (the “Facilities Lease”) whereby the Trustee, as lessor, leased to the Town, as lessee, the Trustee’s leasehold interest in the Leased Property. As consideration for the right to lease back the Leased Property, the Town agreed to make certain base and additional rental payments to the Trustee on a year-to-year basis (collectively, the “Rentals”), subject to the appropriation of funds in future fiscal years.
Following the execution of the Site Lease and the Facilities Lease, the Trustee executed and delivered an Indenture of Trust, (the “Indenture”), by which, the Trustee authorized the issuance and sale of Certificates of Participation in the principal amount of $9,245,000 evidencing proportionate interests in the right to receive the revenues generated from the Rentals (the “2013 Certificates”). The Town used the net proceeds of the 2013 Certificates to finance the construction of the Miller Activity Complex.
Town staff has been in negotiations with CD-Acme, LLC (the “Developer”), regarding a proposed Development Agreement for the construction of the Castle Rock Sports Center (the “Rec Center”) within the Brickyard Planned Development. The Rec Center will consist of an approximately 145,177-square foot recreation facility with associated on-site utilities, infrastructure, landscaping, and parking. In anticipation of financing the construction of the Rec Center, Town staff has recommended that the Town exercise its option to purchase the leased Property for the applicable Purchase Option Price (i.e., the outstanding principal and interest on the 2013 Certificates).
Budget Impact
The Town has appropriated the following amounts in the 2025 budget for this purpose:
• Account No. 130-5280-452.88.47 - Interest on the 2013 Certificates - $242,613.00
• Account No. 130-5280-452.88.48 - Principal on the 2013 Certificates - $5,050,000.00
Adoption of the Resolution will also give the Town additional flexibility to finance capital expenditures associated with the Rec Center.
Staff Recommendation
Town staff recommends the adoption of the resolution.
Proposed Motion
“I move to approve the Resolution No. 2025-058 as introduced by title.”
“I move to approve Resolution No. 2025-058 as introduced by title, with the following conditions: _______________.”
“I move to continue Resolution No. 2025-058 to the town council meeting on _______________.”
Attachments
Resolution