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Text of Barbara Ingram School for the Arts resolution

July 31, 2007

The following is the resolution concerning Barbara Ingram School for the Arts as amended and approved Monday by the Washington County Board of Education:

Resolutions of Board of Education of Washington County



July 30, 2007

WHEREAS, the Board of Education of Washington County (the "Board") intends to arrange for the construction of the Barbara Ingram School for the Arts (the "School") to be located at 7-11 Potomac Street in Hagerstown, Maryland ("Property") in the former Henry's Theatre and Elks Lodge; and

WHEREAS, the Board will (a) pursuant to an assignment of Ground Lease between the Board and Hagerstown Neighborhood Development Partnership, Inc. (the "Assignment of Ground Lease"), assign its rights in the Barbara Ingram School for the Arts Lease Agreement dated as of November 8, 2006 (the "Ground Lease") between the Board and the City of Hagerstown with a term of 20 years to Hagerstown Neighborhood Development Partnership, Inc., (b) solicit bids from several financing institutions to provide financing for the School in an amount not to exceed $8,324,000, with a lease rental interest rate not to exceed 6.00 %, (c) enter into a sublease of the Property (the "Sublease") between the Board, as sublessee, and Hagerstown Neighborhood Development Partnership, Inc., as a sublessor, which Sublease shall have a term of 20 years, and (d) enter into a development (the "Development Agreement") among the Board, Hagerstown Neighborhood Development Partnership and the City of Hagerstown pursuant to which the construction of the School shall commence; and

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WHEREAS, the Board agrees that the execution of the Assignment of Ground Lease, the Sublease and the Development Agreement are in the best interests of the Board.

NOW, THEREFORE, be it resolved that the Board will derive a direct benefit from the Assignment of Ground Lease, the Sublease and the Development Agreement;

AND IT IS FURTHER RESOLVED, that the Board execute the Assignment of Ground Lease, the Sublease, the Development Agreement and such other documents, instruments and certificates in connection with the construction and acquisition of the School as may be required;

AND IT IS FURTHER RESOLVED, that each of the Superintendent of Schools and the President of the Board and the Vice President of the Board (collectively, the "Authorized Persons") are hereby authorized, directed and empowered to execute and deliver any and all other instruments and documents and do or cause to be done all such further acts and things as shall be deemed necessary, advisable, convenient or proper by the Authorized Persons in connection with the Assignment of Ground Lease, the Sublease and the Development Agreement, which acts and things heretofore done to effectuate the purpose or purposes of these Resolutions are hereby in all respects ratified, confirmed and approved as the act or acts of the Board;

AND IT IS FURTHER RESOLVED, that the Authorized Persons are hereby authorized to execute and deliver the Assignment of Ground Lease, the Sublease and the Development Agreement in substantially the forms to be presented to the Board. Provided, however, that the Authorized Persons are hereby authorized in their discretion to approve such changes in the form, substance and content of the Assignment Ground Lease, the Sublease and the Development Agreement, as they may deem necessary or advisable, their execution and delivery of the Assignment of Ground Lease, the Sublease and the Development Agreement on behalf of the Board to be conclusive evidence of such approval;

AND IT IS FURTHER RESOLVED, that the original aggregate principal amount of the transaction to finance the construction of the School shall not exceed $8,324,00.00;

AND IT IS FURTHER RESOLVED, that the obligation of the Board to make payments pursuant to Sublease shall be subject to appropriation by the Board in each and every year that the Sublease is outstanding and is in effect;

AND IT IS FURTHER RESOLVED, that the Board intends that the adoption of these Resolutions shall be and constitute and "official intent resolution" within the meaning of Section 1.150-2 of the Income Tax Regulations prescribed by the U.S. Treasury Department;

AND IT IS FURTHER RESOLVED, that the Board covenants that it will not make any use of the proceeds of the purchase of the Sublease or any monies, securities or other obligations on deposit to the credit of the Board or otherwise which may be deemed by the Internal Revenue Service to be proceeds of the financing pursuant to the Internal Revenue Code of 1986, as amended, and income tax regulations thereunder (collectively, the "Code"), which would cause the financing of the Sublease, or payments thereunder, to be "arbitrage bonds" or "private activity bonds" within the means of the Code;

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