R7D - Issue $267m Tax Increment Bonds

Resolutions - R7 D

COMMISSION MEMORANDUM

10:00 a.m. Public Hearing

RECOMMENDATION

Approve the resolution to allow for the issuance by the Miami Beach Redevelopment Agency (“RDA”) of its Revenue Refunding Bonds, Series 2025 City Center/Historic Convention Village (“Series 2025 Refunding Bonds”) in the amount of $267,000,000.

BACKGROUND/HISTORY

The Chief Financial Officer, in conjunction with the City’s Financial Advisor, PFM Financial Advisors LLC (the “Financial Advisor”), has identified a refinancing opportunity to achieve debt service savings. A debt refunding opportunity is a chance to replace existing debt obligations with new ones that offer cost savings and improved financial conditions for the RDA.

At the February 21, 2024 City Commission meeting, the Mayor and Commission approved a referral to the Finance and Economic Resiliency Committee (“FERC”) to review and discuss a possible refunding opportunity for RDA bonds. The City’s Chief Financial Officer and Financial Advisor presented the opportunity, which was discussed by the FERC on April 19, 2024, and the FERC recommended that Administration move forward with the refinancing. At the September 11, 2024 meeting, the City Commission as well as the RDA approved the selection of the underwriters for the Series 2025 Refunding Bonds.

As the Miami-Dade County (“County”) Board of County Commissioners would have to approve the refunding of the RDA Bonds, City/RDA staff met with County staff to discuss the opportunity. During these discussions, it was determined that a Sixth Amendment to the RDA Interlocal Agreement (the “Sixth Amendment”), would need to be approved to allow for the refunding to move forward.

In connection with the proposed issuance of the Series 2025 Refunding Bonds by the RDA to refund a portion of the RDA’s Tax Increment Revenue and Revenue Refunding Bonds, Series 2015A (City Center/Historic Convention Village), which refunding will generate debt service savings, and as otherwise requested by the County, it was necessary to further amend the Interlocal Agreement through a Sixth Amendment to the Interlocal Agreement which needed to be executed among the County, the City, and the RDA. The Sixth Amendment does, among other amendments to the Interlocal Agreement, amend the Interlocal Agreement, as previously amended, to provide for the issuance of the Refunding Bonds and to amend certain of the

provisions with respect to the Distribution of Series 2025 Trust Fund Revenues in order to delete the requirements thereunder that commencing in Fiscal Year 2024, excess revenues must be used to extinguish early, or if not subject to prepayment or redemption at that time, establish an escrow for, any “Agency Indebtedness” (which includes bonds issued by the RDA) and, in lieu of those provisions, provide for the uses as set forth in Sections H, I and J of Paragraph XII of the Interlocal Agreement as described in the Sixth Amendment. These changes were necessary to provide for the issuance of the Series 2025 Refunding Bonds.

At the October 30, 2024 City Commission meeting, the Mayor and Commission approved the Sixth Amendment to the RDA Interlocal Agreement. At the November 6, 2024 County Commission meeting, the County Commission approved the Sixth Amendment to the RDA Interlocal Agreement. The Sixth Amendment to the RDA Interlocal Agreement was executed on December 18, 2024.

ANALYSIS

In 2015, the RDA issued Series 2015A Miami Beach Redevelopment Agency Tax Increment Revenue Bonds (“Series 2015A Bonds”) in the amount of $286,245,000 primarily for renovation and expansion of the Miami Beach Convention Center and to refund certain prior bonds issued by the RDA. The Series 2015A Bonds became callable on February 1, 2024, have a final maturity on February 1, 2044, and were issued with interest rates of 4.00% to 5.00% payable semiannually. Currently, the amount of outstanding Series 2015A Bonds is $256,485,000.

The RDA may be able to achieve savings through a tax-exempt refunding. The net present value savings is estimated at $10.3 million, which would be 4.0% of refunded bonds. The total savings over 19 years would be approximately $15.3 million. The final maturity of the refunding will not be later than February 1, 2044, which is the final maturity of the outstanding Series 2015A Bonds.

The foregoing information is summarized in the table below:

Because of the character of the Series 2025 Refunding Bonds, the complexity of structuring an issue of bonds secured by Trust Fund Revenues, prevailing market conditions, the desire to premarket and educate potential investors, the recommendation of PFM Financial Advisors LLC, the financial advisor to the RDA, was that a negotiated sale of the Series 2025 Refunding Bonds is in the best interest of the RDA

The RDA Resolution for the issuance of the Series 2025 Refunding Bonds will delegate to the RDA Executive Director, relying upon the recommendation of the Chief Financial Officer and the RDA’s Financial Advisor, certain matters, including the determination of various terms of the Series 2025 Refunding Bonds, and their sale and the refunding of the Series 2015A Bonds, and all other actions necessary or desirable in connection with the issuance of the Series 2025 Refunding Bonds.

U.S. Bank Trust Company, National Association, is being appointed as Paying Agent and Registrar for the Series 2025 Refunding Bonds.

The officers, agents and employees of the City, the Bond Registrar and DAC are hereby authorized and directed to do all acts and things and execute and deliver all documents, agreements and certificates required of them by the provisions of the Series 2025 Refunding Bonds, the Bond Resolution, the Series 2025 Refunding Bond Purchase Agreement, the Series 2025 Continuing Disclosure Agreement and this Series Resolution, for the full, punctual and complete performance of all the terms, covenants, provisions and agreements of the Series 2025 Refunding Bonds, the Bond Resolution, the Series 2025 Refunding Bond Purchase Agreement, the Series 2025 Continuing Disclosure Agreement and this Series Resolution.

The firms selected by the RDA for the Series 2025 Refunding Bonds are as follows:

• •

Senior Manager: BofA Securities. Inc. Co-Managers: Estrada Hinojosa & Company, Inc.; Jefferies LLC; PNC Capital Markets LLC; Raymond James & Associates, Inc.

The underwriters for the Series 2025 Refunding Bonds were also approved at the City Commission meeting on September 11, 2024.

FISCAL IMPACT STATEMENT

The RDA may be able to achieve savings through a tax-exempt refunding. The net present value savings is estimated at $10.3 million, which would be 4.0% of the refunded bonds. The total savings over 19 years would be approximately $15.3 million.

Does this Ordinance require a Business Impact Estimate? (FOR ORDINANCES ONLY)

If applicable, the Business Impact Estimate (BIE) was published on: See BIE at: https://www.miamibeachfl.gov/city-hall/city-clerk/meeting-notices/

FINANCIAL INFORMATION

CONCLUSION

The Administration recommends that the Mayor and City Commission of the City of Miami Beach approve the resolution to allow for the refunding of $267,000,000 of tax increment revenue refunding bonds of the Miami Beach Redevelopment Agency.

Applicable Area

Citywide

Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? No

If so, specify the name of lobbyist(s) and principal(s):

Department

Finance

Sponsor(s)

Co-sponsor(s)

Condensed Title

Joint, 10:00 a.m. PH, Issue MBRDA Tax Increment Revenue Refunding Bonds, Series 2025. FN

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