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HomeMy WebLinkAboutR2004-141 08-23-04 RESOLUTION NO. R2004-141 RESOLUTION EXPRESSING THE CITY'S INTEREST IN PARTICIPATING IN A PROPOSED FORTY-FOUR (44) BED HOSPITAL PROJECT IN PEARLAND, TEXAS AND RESOLVING OTHER MATTERS RELATING THERETO STATE OF TEXAS COUNTY OF BRAZORIA CITY OF PEARLAND WHEREAS, Diversified Municipal Finance Corporation ("DMFC") and Pearland Community Hospital ("PCH") have proposed to the City Council (the "City Council") of the City of Pearland, Texas (the "City") that DMFC develop a forty-four (44) bed hospital (the "Project") within the City near the Pearland High School on State Highway 35 and have further proposed a financing and operating structure for the Project that includes a lease-purchase agreement between DMFC and the City (the "Lease-Purchase Agreement") and a sublease of the Project by the City to PCH (the "Sublease Agreement"); WHEREAS, DMFC and PCH have made certain representations regarding the Project to the City, including an analysis of the need for the Project and the necessity of the City's participation in the Project in order to facilitate the financing thereof; WHEREAS, DMFC and PCH have also represented to the City that the City would not have any legal, financial or other liability in connection with the Project and that repayment of any certificates of participation or other debt instruments (collectively, the "COPs") issued to finance the Project would be limited solely to the revenues of the Project or other non-City third party sources; and WHEREAS, DMFC has requested that the City express its willingness to participate in the Project, and the City Council desires to provide such an expression of interest subject to presentation of a definitive financing structure and financing terms acceptable to the City and approval of all related financing and legal documents by the City's legal counsel and financial consultants. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. Preamble. The facts and recitations contained in the preamble of this Resolution are hereby found and declared to be true and correct. Section 2. Description of Proposed Financing of the Project. DMFC has represented to the City that DMFC will arrange for the sale of its COPs through a placement agent or underwriter (the "Underwriter") and the proceeds from the sale of the COPs will be used to (i) HOU:2343258.3 RESOLUTION NO. R2004-141 develop the Project, (ii) provide capitalized interest and reserve funds required in connection with the financing, and (iii) pay certain costs of issuance of the COPs. Section 3. City Expression of Interest. By adoption of this Resolution, the City Council officially expresses its interest in the proposed Project and confirms that it will give strong consideration to the Project upon presentation of a definitive financing structure and financing terms for the Project (including, but not limited to, final interest rates, principal amounts, maturities, third party guarantee provisions, etc.) that are acceptable to the City and upon review and approval of the legal documents and related financing documents by the City's legal counsel and financial consultants. Upon presentation of a definitive financing structure, financing terms and legal documents, the City will give proposed Project strong consideration and may at such time agree to the City's participation in the Project; provided, however, the City will be under no legal obligation to participate in the Project at such time and may in its sole discretion determine not to do so. Section 4. Authorization of Other Matters Relating Thereto. The City Manager or his designee of the City is hereby authorized and directed to do any and all things necessary or desirable to carry out this Resolution including, but not limited to, directing the City's legal counsel and financial consultants to review materials provided by DMFC relating to the structure, financial terms and legal documentation for the proposed Project. Section 5. Authorization of Market Analysis. The Mayor of the City of Pearland, Texas is directed to immediately address and send letters to HCA and to Memorial Hermalm Hospital in substantially the form suggested by DFMC and attached hereto, and to advise DMFC and City Council of the responses. The City Manager or his designee is also authorized and directed to take any additional actions necessary or required to assess the feasibility of the Project including additional market analysis and analysis of potential competition within the market. Section 6. Effective Date. This Resolution shall take effect immediately upon passage. Section 7. Public Meeting. It is officially found, determined and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time place and subject matter of the public business to be considered at such meeting, including this Resolution, was given all as required by the Texas Government Code, Chapter 551, as amended. HOU:2343258.3 RESOLUTION NO. R2004-141 Section 8. Recision of Prior Resolution. This Resolution rescinds and supercedes City Council's prior Resolution No. R2002-177 dated December 9, 2002. PASSED AND APPROVED THIS 23rd day of August_ ,2004. Mayor City of Pearland, Texas ATTEST: {ySecr~ry APPROVED AS TO FORM: Da/fin M. Coker City Attorney HOU:2343258.3 DRAFT OF A PROPOSED LETTER TO MEMORIAL HERMANN HOSPITAL , 2004 Mr. Daniel J. Wolterman Memorial Hermann Hospitals 1635 North Loop, West Houston, TX 77008 Dear Mr. Wolterman: The City of Pearland, Texas (the "City") for some time now, has been considering the development of a new hospital on State Highway 35 across the street from the Pearland High School. This proposed facility has been recently downsized to a 44 bed, full service hospital (the "Project"), with some room for future growth. Our consultants have advised the City that the catchment area for this facility does not have significant overlap with the market area for either Memorial Hermann Southeast or your proposed new facility. The Project would be a not-for- profit owned facility and would be located about 9 miles from Memorial Hermann Southeast and about 8 miles from your proposed facility on Texas 288 and Shadow Ranch Road. We are currently working on the financing for the Project and would like to move forward promptly if the Project is determined to be feasible. The City believes that a hospital in the proposed location is important to our constituents. On that basis, we solicit your prompt answers to the following questions: 1) Would Memorial Hermann be interested in leasing the proposed Project from the City in order to operate it as an ancillary facility to your other facilities? An annual lease arrangement could be worked out and the Project could be modified as it is constructed to meet your requirements. Chattel could also be included if desired. 2) Would Memorial Herman view development of the project in a competitive manner or could we look forward to cooperative agreements for the benefit of the residents of Pearland? 3) Does Memorial Hermann have any market analysis of the greater Pearland area that it would be willing to discuss with the City? We look forward to your early response and we are prepared to answer any questions you may have concerning the Project. Sincerely, Mayor, City of Pearland, Texas HOU:2343258.3 DRAFT OF A PROPOSED LETTER TO HCA , 2004 Mr. Mike Snow Gulf Coast Division HCA One Park Plaza Nashville, TN 37203 Dear Mr. Snow: The City of Pearland, Texas (the "City") for some time now, has been considering the development of a new hospital on State Highway 35 across the street from the Pearland High School. This proposed facility has been recently downsized to a 44 bed, full service hospital (the "Project"), with some room for future growth. Our consultants have advised the City that the catchment area for this facility does not have significant overlap with the market area of your proposed new facility. The Project would be a not-for-profit facility and would be located about 9 miles from the proposed HCA facility at Texas 288 and FM 2234. We are currently working on the financing for the Project and would like to move forward promptly if the Project is determined to be feasible. The City believes that a hospital in the proposed location is important to our constituents. On that basis, we solicit your prompt answers to the following questions: 1) Would HCA be interested in leasing the proposed Project from the City in order to operate it as an ancillary facility to your other facilities? An annual lease arrangement could be worked out and the Project could be modified as it is constructed to meet your requirements. Chattel could also be included if desired. 2) Would HCA view development of the Project in a competitive manner or could we look forward to cooperative agreements for the benefit of the residents of Pearland? 3) Does HCA have any market analysis of the greater Pearland area that it would be willing to discuss with the City? We look forward to your early response and we are prepared to answer any questions you may have concerning the Project. Sincerely, Mayor, City of Pearland, Texas HOU:2343258.3 NEW BUSINESS ITEM #15