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RES 2004-1563 - Memorandum for convention center hotel redevelopment project series 2004 { 1 o�D�IAHA,NAe,� Finance Department .��. � R IN E D Omaha/Douglas Civic Center 1819 Famam Street,Suite 1004 \tr.. I11 . ' ^ ►..• `>" Omaha,Nebraska 68183-1004 o F-r -� (402)444-543 �i0o -tti _ , r. +^,� Telefax(402)444-5423 } y ,,r°, t 1 r�1,0311 Carol A.Ebdon City of Omaha j r'b.H.k, Bs.. . Director Mike Fahey,Mayor Allen R.Herink City Comptroller December 7, 2004 Honorable President and Members of the City Council, Submitted for your approval is a Preliminary Limited Offering Memorandum pertaining to the issuance and sale of the Tax Allocation Bonds (Convention Center Hotel Redevelopment Project), Series 2004 in the aggregate principal amount not to exceed Twelve Million Dollars ($12,000,000). The City of Omaha and the prospective underwriters have prepared the Preliminary Limited Offering Memorandum, attached hereto as Exhibit"A". We urge your favorable consideration of this resolution. Respectfully submitted, Referred to City Council for Consideration: C, Q e Y ►sla)®ck /L- i l Carol A. Ebdon Date M or's Office Date Finance Director P:\FIN\11526pjm.doc � II EXHIBIT "A" PRELIMINARY LIMITED OFFERING MEMORANDUM DATED DECEMBER 1,2004 NEW ISSUE—BOOK-ENTRY ONLY NOT RATED In the opinion of Kutak Rock LLP,Bond Counsel, under existing laws,regulations, rulings and judicial decisions, the interest on the Series 2004 Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. Bond Counsel is also of the opinion that,under existing laws of the State of Nebraska, the interest on the Series 2004 Bonds is exempt from Nebraska state income taxation so long as it is exempt for purposes of federal income tax. See "TAX EXEMPTION"herein. $12,000,000* CITY OF OMAHA,NEBRASKA Tax Allocation Bonds (Convention Center Hotel Redevelopment Project) Series 2004 Dated: December 1,2004 Due: December 1,as shown below The Series 2004 Bonds (the "Bonds") are issuable as fully registered bonds in denominations of$5,000 and integral multiples thereof. Interest on the Bonds is payable on June 1 and December 1 of each year, beginning June 1, 2005, by check or draft mailed to the registered owner as of the applicable record date at the address shown on the books of registry maintained by First National Bank of Omaha (the"Paying Agent"). Principal of the Bonds is payable upon presentation and surrender thereof at the principal office of the Paying Agent in Omaha,Nebraska. The Bonds will be subject to optional redemption, special optional redemption and mandatory sinking fund redemption prior to maturity as more fully set forth herein. The Bonds initially will be registered in the name of Cede&Co., as nominee for The Depository Trust Company, New York, New York("DTC"),which will act as securities depository for the Bonds. Purchases of the Bonds may be made only in book-entry form in authorized denominations by credit to participating broker-dealers and other institutions on the books of DTC as described herein. Purchasers will not receive certificates evidencing the Bonds. Principal of and interest on the Bonds will be payable by the Paying Agent directly to DTC as the registered owner thereof. Disbursement of such payments to the DTC Participants is the responsibility of DTC, and disbursement of such payments to the beneficial owners is the responsibility of the DTC Participants and the Indirect Participants, as more fully described herein. Any purchaser of a beneficial interest in the Bonds must maintain an account with a broker or dealer who is,or acts through, a DTC Participant to receive payment of the principal of, premium, if any, and interest on such Bonds. See "THE BONDS—Book-Entry Only System"herein. The Bonds will be issued by the City of Omaha, Nebraska (the "City") for the purpose of providing funds for (i) the design, construction and installation of public improvements constructed, and to be constructed,under the Convention Center/Arena Redevelopment Plan,TIF Project Plan No. 1 Plan in the downtown area of Omaha,Nebraska,(ii)funding a debt service reserve fund(as more fully described herein under"SECURITY FOR AND SOURCE OF PAYMENT OF THE BONDS—Flow of Tax Allocation Revenues—Debt Service Reserve Fund")and(iii)paying the costs of issuing the Bonds.. The Bonds will be special limited obligations of the City,secured solely by and payable solely from a portion of ad valorem taxes levied by public bodies on the Redevelopment Project Area and allocable to and collected by the City. The Bonds are not general obligations of the City. The full faith and credit of the City are not pledged to the payment of the Bonds or the interest thereon. See "BONDHOLDERS'RISKS"herein for information regarding certain risks of investing in the Bonds. IN MAKING AN INVESTMENT DECISION, PROSPECTIVE INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE CITY, THE SECURITY FOR THE BONDS AND THE TERMS OF THE OFFERING,INCLUDING THE MERITS AND RISKS INVOLVED. PROSPECTIVE INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. This Limited Offering Memorandum contains limited information for quick reference only. It is not a summary of the matters related to the Bonds. Potential investors must, among other investigations, read the entire Ordinance to obtain information essential to making an informed investment decision. MATURITIES,AMOUNTS AND INTEREST RATES $ %Term Bond,Due December 1,20_,Price % $ _% Term Bond,Due December 1,20 ,Price % $ %Term Bond,Due December 1,20_,Price (Plus Accrued Interest from December 1,2004) The Bonds are offered when,as and if issued by the City and received by the Underwriter,and are subject to the approval of validity by Kutak Rock LLP,Bond Counsel,and certain other conditions. Certain other legal matters will be passed upon for the City by the City Law Department. It is expected that the Bonds will be available for delivery at DTC in New York, New York on or about December 2004 against payment therefor. KIRKPATRICK PETTIS Dated: December—,2004 Preliminary;subject to change. CITY OF OMAHA,NEBRASKA MIKE FAHEY,MAYOR CITY COUNCIL James Vokal,Jr.,President Chuck W. Sigerson,Jr., Vice President Mark Kraft Franklin T. Thompson Garry C. Gernandt Frank Brown Dan J. Welch MAYOR'S CABINET MEMBERS Carol A. Ebdon Finance Director Paul D. Kratz City Attorney Robert Peters Planning Director Gail Kinsey Thompson Human Relations Director Thomas Warren Chief of Police Robert Dahlquist Fire Chief Larry N.Foster Acting Parks,Recreation and Public Property Director Norm Jackman Acting Public Works Director/Acting Administrative Services Director Cecil Hicks,Jr. Personnel Director AGENCY DIRECTORS Ola Anderson Acting Director, Greater Omaha Workforce Development Rivkah Sass Director,Omaha Public Library Allen Herink, City Comptroller Buster Brown, City Clerk AUDITOR KPMG LLP UNDERWRITER Kirkpatrick,Pettis, Smith,Polian Inc. BOND COUNSEL Kutak Rock LLP No dealer, broker, salesperson or other person has been authorized by the City or the Underwriter to give any information or to make any representations in connection with the Bonds or the matters described herein,other than those contained in this Limited Offering Memorandum, and,if given or made, such other information or representations must not be relied upon as having been authorized by the City or the Underwriter. This Limited Offering Memorandum does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information and expressions of opinion contained herein are subject to change, without notice, and neither the delivery of this Limited Offering Memorandum, nor any sale made hereunder, shall, under any circumstances, create any implication that there has been no change in the matters described herein since the date hereof. This Limited Offering Memorandum is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. The Underwriter may offer and sell Bonds to certain dealers and others at prices lower than the offering prices stated on the cover page hereof. The offering prices may be changed from time to time by the Underwriter. TABLE OF CONTENTS Page INTRODUCTION 1 TAX ALLOCATION REVENUES 13 THE BONDS 2 Sources of Tax Allocation Revenues 13 Description 2 Procedures in Real Property Valuation Book-Entry Only System 2 and Tax Collections 14 Transfer and Exchange 5 THE ORDINANCE 14 Redemption Prior to Maturity 5 Acquisition Fund 14 SECURITY FOR AND SOURCE OF Investment of Moneys 15 PAYMENT OF THE BONDS 6 Certain Covenants of the City 16 Flow of Tax Allocation Revenues 7 Defeasance 17 BONDHOLDERS' RISKS 9 Enforcement of Ordinance 17 No Diversification of Ownership 9 Amendment to the Ordinance 18 Insufficiency of Tax Allocation UNDERWRITING 18 Revenues 9 RATING 19 Revision of State Property Tax System...10 CONTINUING DISCLOSURE 19 No Investment Rating 11 TAX EXEMPTION 19 ESTIMATED APPLICATION OF BOND ABSENCE OF LITIGATION REGARDING PROCEEDS 11 THE BONDS 20 THE HOTEL PROJECT 11 LEGAL MATTERS 20 THE CONVENTION CENTER 11 MISCELLANEOUS 20 HOTEL REVENUE 12 APPENDIX A THE ORDINANCE APPENDIX B CONVENTION CENTER/ARENA REDEVELOPMENT PLAN,TIF PROJECT PLAN NO. 1 PLAN APPENDIX C FORM OF OPINION OF BOND COUNSEL APPENDIX D CITY OF OMAHA—GENERAL INFORMATION APPENDIX E PROJECTED TAX ALLOCATION REVENUES APPENDIX F FORM OF CONTINUING DISCLOSURE UNDERTAKING IN CONNECTION WITH ITS REOFFERING OF THE BONDS, THE UNDERWRITER OF THE BONDS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN MARKET PRICES OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED,MAY BE DISCONTINUED AT ANY TIME. THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION BY REASON OF THE PROVISIONS OF SECTION 3(a)(2) OF THE SECURITIES ACT OF 1933, AS AMENDED. THE ORDINANCE HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACT. THE REGISTRATION, QUALIFICATION OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES MAY HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE GUARANTEED OR PASSED UPON THE MERITS OR SAFETY OF THE BONDS AS AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON OR UPON THE ACCURACY OR ADEQUACY OF THIS LIMITED OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS MEMORANDUM CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING AN ESTIMATE OF FUTURE AD VALOREM TAX RECEIPTS ATTRIBUTABLE TO THE HOTEL REDEVELOPMENT PROJECT. POTENTIAL PURCHASERS ARE CAUTIONED THAT FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY AND ADVERSELY FROM THOSE PROJECTED IN FORWARD-LOOKING STATEMENTS. ii LIMITED OFFERING MEMORANDUM $12,000,000* CITY OF OMAHA,NEBRASKA TAX ALLOCATION BONDS (CONVENTION CENTER HOTEL REDEVELOPMENT PROJECT) SERIES 2004 INTRODUCTION This Limited Offering Memorandum, including the cover page, is furnished in connection with the offering of$12,000,000* Tax Allocation Bonds (Convention Center Hotel Redevelopment Project), Series 2004 (the "Bonds") of the City of Omaha, Nebraska (the "City"), and of the City acting in its capacity as an authority under the Act(as defined herein). The Bonds will be issued in strict compliance with the Constitution and laws of the State of Nebraska and particularly Article 21 of Chapter 18, Reissue Revised Statutes of 1943 of Nebraska, as amended (the "Act"), the Home Rule Charter of the City of Omaha, 1956, as amended (the "Charter"), and Ordinance No. and Ordinance No. (collectively, the "Ordinance"), passed by the City Council (the "Council") of the City on November 9, 2004 and December —, 2004, respectively. See "APPENDIX A—THE ORDINANCE." The proceeds of the Bonds will be used, together with other moneys available to the City, to provide funds for (i) the design, construction and installation, including capitalized interest, of public improvements constructed, and to be constructed, under the Convention Center/Arena Redevelopment Plan, TIF Project Plan No. 1 Plan (the "Plan") in the downtown area of Omaha, Nebraska, (ii) funding a debt service reserve fund in an amount equal to the Debt Service Reserve Requirement(as defined herein under "SECURITY FOR AND SOURCE OF PAYMENT OF THE BONDS—Flow of Tax Allocation Revenues—Debt Service Reserve Fund")and(iii)paying the costs of issuing the Bonds.. This Limited Offering Memorandum contains brief descriptions or summaries of, among other matters, the Bonds, the City, the Redevelopment Project, the Plan and the Ordinance. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Ordinance and the Redevelopment Plan are qualified in their entirety by reference to such documents, and references herein to the Bonds are qualified in their entirety by reference to the form thereof included in the Ordinance. See APPENDIX A—THE ORDINANCE. Capitalized terms, not herein defined, shall have those definitions respectively provided in the Ordinance. Also attached as Appendices B, C, D, E and F, respectively, are the Plan; the form of Opinion of Bond Counsel; general information about the City of Omaha; projected Tax Allocation Revenues; and the form of the City's Continuing Disclosure Undertaking. References to particular sections of documents or particular documents are for the readers' convenience only and shall not be relied upon to the exclusion of other relevant documents and law. Additional copies of such documents may be obtained from the City by writing to the attention of Finance Director and, during the initial offering period only, from the representatives of the Underwriter, Kirkpatrick Pettis, Smith,Polian Inc., Suite 400, 10250 Regency Circle, Omaha,Nebraska 68114. *Preliminary;subject to change. THE BONDS Description The Bonds shall be issued in fully registered form and shall be in the denomination of$5,000 or integral multiples thereof. The Bonds shall be initially dated December 1, 2004 and shall bear interest from their date at the rates per annum set forth on the cover page hereof payable semiannually on June 1 and December 1 of each year, commencing June 1,2005. The principal of the Bonds is payable upon presentation and surrender at the principal office of First National Bank of Omaha, as Paying Agent and Registrar(the"Paying Agent"), in Omaha,Nebraska. Payment of interest on the Bonds will be made to the registered owner thereof by check or draft mailed by the Paying Agent to such owner at the address that appears on the registration books kept by the Paying Agent on the record date, which is the fifteenth day of the month next preceding each interest payment date. All such payments will be made in lawful money of the United States of America. The Bonds are secured as to payment of principal and interest by a pledge of the excess ad valorem real estate taxes attributable to the Hotel Project (as described herein under "HOTEL PROJECT")for a term of not to exceed 15 years, as described in the Ordinance. THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY OUT OF FUNDS PLEDGED UNDER THE ORDINANCE. THE BONDS DO NOT CONSTITUTE A DEBT OR LIABILITY OF THE CITY, EXCEPT TO THE EXTENT SET FORTH IN THE ORDINANCE, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE STATE OF NEBRASKA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED OR COMMITTED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY. The City is not prohibited from contributing other legal available moneys to pay Debt Service on the Bonds. Book-Entry Only System The Bonds initially will be issued solely in book-entry form to be held in the book-entry only system maintained by The Depository Trust Company ("DTC"),New York,New York. So long as such book-entry system is used, only DTC will receive or have the right to receive physical delivery of Bonds and, except as otherwise provided herein with respect to tenders by Beneficial Owners of Beneficial Ownership Interests, each as hereinafter defined, Beneficial Owners will not be or be considered to be, and will not have any rights as, owners or holders of the Bonds under the Ordinance. The following information about the book-entry only system applicable to the Bonds has been supplied by DTC. Neither the City nor the Paying Agent makes any representations, warranties or guarantees with respect to its accuracy or completeness. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede& Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond will be issued in the aggregate principal amount of each serial maturity of the Bonds and will be deposited with DTC. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a"clearing agency"registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues 2 of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust& Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard&Poor's highest rating: "AAA." The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are,however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds,except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede& Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative,Beneficial Owners may wish to provide their names and addresses to the Paying Agent and request that copies of notices be provided directly to them. 3 Redemption notices shall be sent to DTC. If less than all of the Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede& Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Commission as soon as possible after the record date. The Omnibus Proxy assigns Cede&Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and interest payments on the Bonds will be made to Cede& Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with Bonds held for the accounts of customers in bearer form or registered in "street name" and will be the responsibility of such Participant and not of DTC or its nominee, the Paying Agent or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained,Bonds are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event,Bonds will be printed and delivered. NEITHER THE CITY NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DIRECT PARTICIPANT, INDIRECT PARTICIPANT OR ANY BENEFICIAL OWNER OR ANY OTHER PERSON NOT SHOWN ON THE REGISTRATION BOOKS OF THE PAYING AGENT AS BEING A HOLDER WITH RESPECT TO: (1)THE BONDS; (2)THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PURCHASE PRICE OF TENDERED BONDS OR THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (4)THE DELIVERY BY ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE INDENTURE TO BE GIVEN TO HOLDERS; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (6)ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS HOLDER. Each Beneficial Owner for whom a Direct Participant or Indirect Participant acquires an interest in the Bonds, as nominee, may desire to make arrangements with such Direct Participant or Indirect Participant to receive a credit balance in the records of such Direct Participant or Indirect Participant, to have all notices of redemption, elections to tender Bonds or other communications to or by DTC which 4 may affect such Beneficial Owner forwarded in writing by such Direct Participant or Indirect Participant, and to have notification made of all debt service payments. Beneficial Owners may be charged a sum sufficient to cover any tax, fee, or other governmental charge that maybe imposed in relation to any transfer or exchange of their interests in the Bonds. THE CITY AND THE PAYING AGENT CANNOT AND DO NOT GIVE ANY ASSURANCES THAT THE DIRECT PARTICIPANTS OR THE INDIRECT PARTICIPANTS WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE BONDS (i)PAYMENTS OF PRINCIPAL OF AND INTEREST ON THE BONDS, (ii)BONDS REPRESENTING AN OWNERSHIP INTEREST OR OTHER CONFIRMATION OF BENEFICIAL OWNERSHIP INTERESTS IN THE BONDS OR (iii)REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE&CO., ITS NOMINEE, AS THE REGISTERED OWNERS OF THE BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR THAT DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFERING CIRCULAR. THE CURRENT "RULES" APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION,AND THE CURRENT"PROCEDURES"OF DTC TO BE FOLLOWED IN DEALING WITH DIRECT PARTICIPANTS ARE ON FILE WITH DTC. Transfer and Exchange The Bonds are transferable by the registered owners thereof in person or by their duly authorized agent at the principal corporate office of the Paying Agent, but only in the manner, subject to the limitations, and upon payment of the charges provided, in the Ordinance, and upon surrender and cancellation thereof. Upon such transfer, a new registered bond or bonds of the same maturity and interest rate and of a like aggregate principal amount will be authenticated and delivered to the transferee in exchange for the surrendered bonds. The Paying Agent is not required to transfer or exchange any Bonds during the 15 days next preceding any interest payment date or, in the case of any proposed redemption of Bonds, during the 45 days next preceding the date fixed for redemption of such Bonds. Redemption Prior to Maturity Optional Redemption. The Bonds maturing on or prior to December 1, 2014 shall not be subject to redemption prior to their stated maturities. The Bonds maturing on and after December 1, 2015 shall be subject to redemption prior to their stated maturities at the option of the City, on or after December 1, 2014, in whole at any time or in part from time to time, in the inverse order of the maturities of each Series, on any interest payment date by lot within each maturity from any source of funds. The Bonds so called for redemption shall be redeemed at the redemption price of 100%of the principal amount thereof (expressed as percentages of principal amount), plus in each case accrued interest to the date fixed for redemption. Special Optional Redemption. The Bonds maturing on or after December 1, 2015 shall be subject to redemption at the option of the City on or after December 1, 2014, as a whole at any time, or in part from time to time on any interest payment date,but only upon payment from moneys on credit to the Surplus Fund at the redemption price of the principal amount thereof, without premium, together with payment of interest accrued thereon to the date fixed for redemption. If less than all the Bonds outstanding are to be redeemed at any one time, the Bonds to be redeemed will be redeemed in inverse order of maturities of the Bonds and by lot within a maturity. Mandatory Sinking Fund Redemption. The Bonds maturing on December 1, 20_,December 1, 20_ and December 1, 20_ shall be subject to mandatory redemption at a redemption price equal to the 5 principal amount thereof, without premium, in the following principal amounts on the following mandatory redemption dates: Date Principal Amount (December 1) On or before the thirtieth day prior to each December 1 listed above as a mandatory redemption date, the City shall proceed to select for redemption (by lot or other random selection method in such manner as the City may determine), from all outstanding Bonds subject to such mandatory redemption, a principal amount of such Bonds, equal to the aggregate principal amount of such Bonds redeemable, and shall call such Bonds or portions thereof(any integral multiple of$5,000) for redemption on each such December 1 and give notice of such call. Notice and Effect of Redemption. In the case of redemption of Bonds prior to maturity, the City is required to mail a copy of the redemption notice to the registered owners of the Bonds to be redeemed, in each case not less than 30 days prior to the date of redemption. Interest shall cease to accrue on the Bonds from and after the date specified for their redemption, if the aforesaid notice has been given and payment thereof duly made or provided for. SECURITY FOR AND SOURCE OF PAYMENT OF THE BONDS The Bonds shall be and are special limited obligations of the City and are secured solely by an irrevocable pledge of, and are payable solely as to principal, interest and premium, if any, from, Tax Allocation Revenues(and such other funds, including,without limitation,the Debt Service Reserve Fund, as provided in the Ordinance)without privilege,priority or distinction as to the lien on the Tax Allocation Revenues (consisting of a portion of ad valorem taxes levied by public bodies for a period of not exceeding 15 years after the year in which the Plan was adopted upon taxable real and personal property in the Hotel Redevelopment Project Area and allocable to and collected by the City) or otherwise of any of the Bonds over any of the other Bonds. The Bonds are not General Obligations of the City. However, the City is not prohibited from contributing other legally available moneys to pay Debt Service on the Bonds. The Ordinance pledges to the punctual payment of the principal of, premium, if any, and interest on the Bonds and to the security thereof in accordance with their terms and the provisions of the Ordinance, subject only to the provisions of the Ordinance restricting or permitting the application thereof for the purposes and on the terms and conditions set forth in the Ordinance, (i)the Tax Allocation Revenues (excluding Tax Allocation Revenues, if any, on deposit in the Surplus Fund and the Rebate Fund), and (ii)the moneys and Investment Securities, if any, deposited in the Acquisition Fund, the Bond Fund and the Debt Service Reserve Fund,and any investment income therefrom. The Bonds shall not in any event be a debt of the City (except to the extent of its pledge of the Tax Allocation Revenues and other moneys and securities, including, without limitation,the Debt Service 6 Reserve Fund, pledged under the Ordinance), the State, nor any of its political subdivisions and neither the City (except to the extent of the aforesaid pledge), the State nor any of its political subdivisions are liable on the Bonds, nor in any event shall the principal of, interest and premium, if any, on the Bonds be payable out of any funds or properties other than those of the City as in the Ordinance set forth. Neither the full faith and credit nor the taxing power of the City(except to the extent of the aforesaid), the State or any of its political subdivisions is pledged to secure the payment of the Bonds. The Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction. Neither any officials of the City nor any persons executing the Bonds shall be liable personally on the Bonds by reason of their issuance. See the caption "TAX ALLOCATION REVENUES" for a more detailed description of the Tax Allocation Revenues. See also the caption"BONDHOLDERS' RISKS" for a description of certain risks relating to the security for the Bonds. The City covenants in the Ordinance that it will not issue any obligation secured by a lien on the Tax Allocation Revenues prior or superior to the lien of the Bonds. Additional TIF Bonds and Refunding. Bonds may be secured by a parity lien on the Tax Allocation Revenues. However, the City has no plans to issue Additional TIF Bonds secured on a parity with the Bonds. See "THE ORDINANCE—No Priority." Flow of Tax Allocation Revenues The Ordinance created and established the following funds and accounts with respect to the Bonds: the Acquisition Fund, and therein a Capitalized Interest Account, the Bond Fund, and therein a Bond Interest Account and a Bond Principal Account, the Debt Service Reserve Fund, the Surplus Fund and the Rebate Fund. See"TAX ALLOCATION REVENUES—Sources of Tax Revenues"herein. When collected, the Tax Allocation Revenues, plus any other moneys available to pay principal of, premium, if any, and interest on the Bonds ("Debt Service"), will be deposited to the credit of the Bond Fund. "Bond Year" means the period from and including December 1 in one year to and including November 30 in the next succeeding year, provided that the first Bond Year means the period from and including the date the Bonds are issued to and including the next succeeding November 30. Bond Fund. The Tax Allocation Revenues accumulated in the Bond Fund will be used in the following order of priority: FIRST, for deposit into the Bond Interest Account, an amount necessary so that the balance in such account on or before the date of the payment of interest on the Bonds is equal to the amount due on such interest payment date; and SECOND, for deposit into the Bond Principal Account, an amount necessary so that the balance in such account is equal to the next principal payment on or before the date of payment of such principal of the Bonds. After the credits set forth above have been made, and the amount on deposit in the Bond Fund exceeds the aggregate amount necessary to pay principal, interest and premium, if any, due during the current and the next succeeding Bond Year, credits in the amount of such excess shall be deposited, first, into the Debt Service Reserve Fund to the extent of any deficiency from the Debt Service Reserve 7 Requirement, and, second, into the Surplus Fund, subject to any requirement for deposit into the Rebate Fund. Debt Service Reserve Fund. Upon the issuance of the Bonds there shall be deposited in the Debt Service Reserve Fund from the net proceeds of the Bonds, an amount equal to the Debt Service Reserve Requirement. "Debt Service Reserve Requirement" means an amount equal to the lesser of(a) 10% of the stated principal amount of the Bonds, (b) the maximum annual principal and interest requirements on the Bonds and (c) 125% of the average annual principal and interest requirements on the Bonds. The Debt Service Reserve Requirement for the Bonds is $ Moneys in the Debt Service Reserve Fund shall, to the extent necessary, from time to time, be transferred into the Bond Fund, in order to meet any deficiencies in Bond Interest Account and the Bond Principal Account, respectively, of the Bond Fund for making the payment of principal of and interest on the Bonds as the same fall due. If moneys in the Debt Service Reserve Fund are not applied for such purpose, the moneys on deposit in the Debt Service Reserve Fund shall be held in trust until all Bonds issued pursuant to the Ordinance and all moneys owing to the Paying Agent with respect to such Bonds shall have been paid in full, provided that, at the time of any payment which shall constitute the last payment of principal, interest and premium, if any, on all Bonds outstanding under the Ordinance, whether at maturity or redemption prior to maturity or upon any discharge of the Ordinance pursuant to the terms thereof, the City may direct that any or all moneys held in the Debt Service Reserve Fund shall be applied to such payment. All earnings from investments of moneys held in the Debt Service Reserve Fund shall be accumulated in and credited to such fund if necessary to maintain it at an amount equal to the Debt Service Reserve Requirement, and, thereafter, such earnings shall be transferred to the Bond Fund and credited against the next payments due from the City,unless such earnings are then required for payment of any rebate due to the United States. In the event of any withdrawal of amounts from the Debt Service Reserve Fund for any purpose authorized under the Ordinance or the value of cash and Investment Securities held therein has declined such that the balance to the credit of the Debt Service Reserve Fund is reduced below the Debt Service Reserve Requirement, such required balance shall be restored from the Tax Allocation Revenues and from the Surplus Fund. (The City is not prohibited from contributing other legally available moneys to replenish the amount on deposit in the Debt Service Reserve Fund to an amount equal to the Debt Service Reserve Requirement.) All moneys and securities held in the Debt Service Reserve Fund shall be held in trust for the benefit of the holders of the Bonds, and the City shall have only such rights with respect thereto as are specifically provided for in the Ordinance. The moneys and investments in the Debt Service Reserve Fund shall be held for the exclusive benefit of the holders of the Bonds and payments due with respect to any Additional TIF Bonds shall not be payable therefrom unless and until all Bonds are no longer outstanding under the Ordinance. Any ordinance authorizing the issuance of Additional TIF Bonds may provide for the creation of a separate debt service reserve fund for such issue. Surplus Fund. Moneys on deposit in the Surplus Fund are not pledged for the payment of Debt Service on the Bonds. Amounts credited to the Surplus Fund may be used by the City for any legally permissible costs or expenses of the City relating to the Redevelopment Project Area not financed from the proceeds of the Bonds. However, if the Tax Allocation Revenues are insufficient to make the deposits required under "Flow of Tax Allocation Revenues" above, to the extent that moneys then are on deposit in the Surplus Fund, the City shall transfer such moneys from the Surplus Fund to the credit of, first, the Bond Fund and, second, the Debt Service Reserve Fund to the extent of such deficiencies in the Bond Fund or the Debt Service Reserve Fund, as the case may be. 8 BONDHOLDERS RISKS The following is a summary statement of certain risks to owners of the Bonds relating to timely Debt Service payment and the market value of the Bonds. This summary statement is intended to highlight certain risks and is not a complete statement of all such risks. Reference is made to the other portions of this Limited Offering Memorandum and in particular to "SECURITY FOR AND SOURCE OF PAYMENT OF THE BONDS" and"TAX ALLOCATION REVENUES"herein for further details of the risks to owners of the Bonds. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE CITY, THE SECURITY FOR THE BONDS AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. No Diversification of Ownership The City expects to pay Debt Service on the Bonds from Tax Allocation Revenues generated from the Hotel Redevelopment Project Area. The City may receive Tax Allocation Revenues only from collections of ad valorem taxes levied for each year through and including fiscal year 2018/2019. The Tax Allocation Revenues will derive solely from property tax payments made directly (or indirectly through the Hilton Hotel Corporation, which is the Hotel Manager) by the City of Omaha Convention Center Hotel Corporation (the "Corporation"). The payment of ad valorem taxes, which upon collection provides the Tax Allocation Revenues, and insurance premiums is the first priority use of Available Revenues. See"HOTEL REVENUE"and"APPENDIX E—Projected Tax Allocation Revenues." A number of events could arise which would have an adverse impact upon the Tax Allocation Revenues expected to be collected to pay Debt Service on the Bonds,including,but not limited to: (a) Destruction of all or a portion of the Redevelopment Project; (b) Reduction in the valuation of the Hotel caused by a significant reduction in the Hotel occupancy rate; (c) Reduction of the levy on real property because of revaluation or substitution of other tax sources or changes in applicable State law; or (d) An event of bankruptcy, insolvency, reorganization or moratorium relating to the Corporation. Insufficiency of Tax Allocation Revenues The Surplus Fund is not a debt service reserve fund and will be funded only if and to the extent of surplus Tax Allocation Revenues. As described in the Ordinance, moneys in the Surplus Fund are not pledged for the payment of Debt Service on the Bonds, but may be used by the City for certain other purposes. Thus, there can be no assurance that money, if any, deposited to the Surplus Fund will be available or sufficient to pay Debt Service on the Bonds. Nevertheless, in the event there are not sufficient Tax Allocation Revenues to pay all Debt Service on the Bonds in a timely manner, then the City will use moneys, if available, in the Surplus Fund, first,. to pay Debt Service on the Bonds and, second, to replenish the Debt Service Reserve Fund for any deficiency from the Debt Service Reserve Requirement. 9 Except for the Tax Allocation Revenues, the holders of the Bonds are not entitled to payment from any tax receipts or other moneys of the City. However, the City is not prohibited from contributing other legally available moneys to pay Debt Service on the Bonds. Revision of State Property Tax System The State of Nebraska's system of assessing and taxing personal property for purposes of local ad valorem taxation for support of local political subdivisions, including the City, has been the subject in recent years of constitutional amendment, legislation and litigation the result of which has been to substantially resolve certain challenges to the validity of the tax system. However, the State of Nebraska's system of assessing and taxing real and personal property has continued to be the object of considerable controversy,legal challenges and legislative action. Governmental units in Nebraska may not adopt budgets for fiscal years beginning on or after July 1, 1998 in excess of 102.5% of the prior fiscal year's budget plus allowable growth (which includes increases in taxable valuation for such things as new construction and annexations). However, such budgetary limitations do not apply to, among other things, revenue pledged to retire bonded indebtedness or budgeted for capital improvements. Governmental units may exceed the budget limit for a given fiscal year by up to an additional 1% upon the affirmative vote of at least 75%of the governing body or in such amount as is approved by a majority vote of the electorate. Effective July 1, 1998, the property tax levies of incorporated cities and villages, such as the City, are limited to a maximum of 450/$100 of taxable valuation (plus an additional 50/$100 to pay the municipality's share of revenue required under interlocal agreements). The levy limit does not apply to levies for preexisting lease-purchase contracts approved prior to July 1, 1998, to bonded indebtedness approved according to law and secured by a levy on property and to pay judgments. A political subdivision may exceed its levy limitation for a period of up to five years by majority vote of the electorate. The City does not expect Hotel improvements within the Hotel Redevelopment Project Area to be fully assessed and on the tax rolls until January 1, 2005. Ad valorem taxes levied on the Hotel Redevelopment Project Area for collection in 2005 are based on the partial assessment of January 1, 2004 ($30,449,700.00, all of which represents incremental assessed valuation). The consolidated 2003/2004 ad valorem levy on taxable property in downtown Omaha, including the Redevelopment Project Area, is $2.16055/$100 of taxable valuation, yielding $647,491.83 of incremental Tax Allocation Revenues after subtracting the one percent collection fee of the Douglas County Treasurer. The projected consolidated 2004/2005 levy is $2.14791/$100 of taxable valuation, which (after subtracting such one percent collection fee) would yield $1,127,008.38 of incremental Tax Allocation Revenues available for debt service in 2006, assuming $53,000,000 of incremental valuation within the Hotel Redevelopment Project Area. See APPENDIX E—PROJECTED TAX ALLOCATION REVENUES. There can be no assurance that Nebraska's system of assessing and taxing real and personal property will remain substantially unchanged, given the possibility of additional legislation, constitutional initiatives and referendums and litigation. Such changes could materially and adversely affect the amount of property tax and other revenues the City could collect in future years. The City does not believe,however, that the Nebraska Legislature, subject to any constitutional restrictions, would leave the City without adequate taxing resources to pay for its programs and meet its financial obligations, including the repayment of its bonds, lease-purchase obligations and other obligations. The opinion of Bond Counsel will be rendered based on the law existing as of the date of issuance of the Bonds and in reliance upon general legal presumptions in favor of the constitutionality of statutes and upon the holdings of existing case law. 10 No Investment Rating The Bonds are not rated by a securities rating agency. The City has not applied, and does not intend to apply, for any such rating. The absence of an investment rating may adversely affect the marketability of the Bonds. ESTIMATED APPLICATION OF BOND PROCEEDS The proceeds of the Bonds, exclusive of accrued interest, are anticipated to be used as follows: Sources of Moneys Bond Proceeds $ Total $ Use of Moneys Acquisition Fund $ Capitalized Interest Debt Service Reserve Fund Costs of Issuance Underwriter's Discount Total $ THE HOTEL PROJECT The Hotel Project consists of(a) a full-service hotel (the "Hotel") managed by the Hilton Hotel Corporation, as Hotel Manager, and containing approximately 364,480 gross square feet, including at least 450 hotel guest rooms, a full-service restaurant, a lobby bar, approximately 24,500 gross square feet of meeting space including a ballroom of 10,000 gross square feet, (b) approximately 338 parking spaces in a garage attached to the Hotel to service the needs of the Hotel and (c)a skywalk to connect the Hotel with the Omaha Convention Center and Arena(the "Convention Center," as more fully described below). The Hotel has been constructed on approximately 5.5 acres of land (the "Site," which is the Hotel Redevelopment Project Area) directly across 10th Street from the Convention Center, which Site is currently owned by the City and which has been leased by the City to the City of Omaha Convention Center Hotel Corporation (the "Corporation"), pursuant to the terms of a Site Lease, dated as of April 1, 2002 (the "Site Lease"), between the City and the Corporation. The Corporation's financial statements are accounted for as a City of Omaha enterprise fund. See"HOTEL REVENUE." THE CONVENTION CENTER The convention center, together with an attached arena(named Qwest Center Omaha and referred to herein as the "Convention Center") is a state-of-the-art facility intended to attract national and regional conventions, concerts and shows as well as sports events to the City. The design of the facility allows the Convention Center to host several different activities at the same time or meet the needs of a national event. The location of the Convention Center gives convention visitors convenient access to air and interstate transportation, as well as being within easy walking distance of downtown restaurants. The convention center portion of the Convention Center has approximately 434,000 square feet of total space. This includes a 194,000 square foot exhibition hall, a 30,000 square foot ballroom, 28,000 square feet of 11 meeting rooms and 182,000 square feet of support and administrative space. The arena portion of the Convention Center accommodates between 14,500 and 16,000 spectator seats depending on the nature of the particular event. The arena portion of the Convention Center is being used primarily as a venue for entertainment, cultural and sports events. The Convention Center has been open for business since August 2003. HOTEL REVENUE The flow of revenue attributable to the operation of the Hotel is controlled by the Indenture of Trust dated as of April 1, 2002 (the "Hotel Indenture"), between the Corporation and the bond trustee, pursuant to which the bonds financing the Hotel were issued by the Corporation, acting on behalf of the City. All Available Revenues of the Hotel are deposited in a revenue fund on the first business day of each month and, except as otherwise provided in the event of a default, will be applied for the purposes and in the priority depicted by the Flow of Funds diagram shown below. The first priority use of Available Revenues is to pay the Hotel's ad valorem taxes (which, upon collection, include the Tax Allocation Revenues) and insurance premiums. 12 FLOW OF FUNDS Project Gross Operating Revenues less Petty Cash Amount and Excluded Taxes and Other Charges Taxes and insurance Fund \] Lodrbox Fund11.0 Taxes and Insurance Set Aside Amount J Operating Repayment < Amount of AI rtdi Administrative Expenstrative Fee ses Due Costs Set Aside Operating of Short Available Amount Expenses Tenn Revenues First Tier Debt Service Account remains in Indebtedness Portion of interest andpayments Lcckbox principalP Yin Fund < on First Tier Bonds Renewal and Replacement Fund ► Amount needed to meet Renewal and Replacement Set Aside Amount Rebate Fund Rebate Requirements for Bonds,as needed Manager lit r First Tier Debt Service Reserve Fund Amount needed to meet First Tier Reserve Fund Requirement 1‹. Operating Reserve Fund Amount needed to mast Operatlng Reserve Requirement Second Tier Debt Service Account <Portion of interest and principal payments on Second Tier Bonds Second Tier Debt Service Reserve Fund ►CAmount needed to meet Second Tar Reserve Fund Requirement Third Tierll< Debt Service Account Portion of interest and principal payments on Third Tier Bonds ) Cash Trap Amount needed b meet Cash Fund Trap Fund Requirement bt< aty Beginning in 2008,only if certain conditions are met, amount of City Appropriation Repayment and any City Obligations due to City ^� Ix C Series 20028 Bonds Redemption Fund Only if certain conditions are met,amount needed to redeem at Series 20028 bonds ( Sinmking Fund Amount needed to eet Sinking Fund Requirement < Corporation It Amount necessary for payment of other secured obligations Excess Revenue Fund Balance remaining In Available Revenue Fund TAX ALLOCATION REVENUES Sources of Tax Allocation Revenues The Act provides that a portion of ad valorem taxes levied by public bodies upon real and personal property in a redevelopment project may be allocated to payment of the principal of, the interest on and premium, if any, on indebtedness incurred in the financing of such redevelopment project. The portion of the ad valorem taxes to be so allocated is defined as that amount which is produced by the levy 13 at the rate fixed each year on the valuation in excess of redevelopment project valuation at the time the redevelopment plan is approved. Such amount is defined herein as the"Tax Allocation Revenues." Except for Tax Allocation Revenues, the holders of the Bonds are not entitled to payment from any tax receipts or other moneys of the City. The Bonds are not a General Obligation of the City. However, the City is not prohibited from contributing other legally available moneys to pay Debt Service on the Bonds. Procedures in Real Property Valuation and Tax Collections Ad valorem taxes on real property are levied by the City and other public bodies within Douglas County and collected by the Douglas County Treasurer on behalf of all such public bodies. Property valuations are established by the Douglas County Assessor on all taxable real property within Douglas County on January 1 of each year. Real property taxes are levied in September of each year and become due December 31. Tax Allocation Revenues,based upon such valuations and levies,become available on April 1 and August 1 of each year following the year in which tax levies are made. The base valuation in the Hotel Redevelopment Project Area on December 31, 2003, the last date of the year prior to the effective date of the Hotel Redevelopment Plan and thus,the base date of the Hotel Redevelopment Plan, was zero dollars and exempt from ad valorem taxation. Tax Allocation Revenues available from ad valorem taxes in the Hotel Redevelopment Project Area result directly from increases in real and personal property valuations over such base Hotel Redevelopment Project Area valuation. The only development in the Hotel Redevelopment Project Area is the Hotel constructed and owned by the Corporation. See APPENDIX E—PROJECTED TAX ALLOCATION REVENUES. Appendix E to this Limited Offering Memorandum sets forth projected Tax Allocation Revenues available from ad valorem real property taxes levied in the Redevelopment Project Area. The related tax levies are made on November 1 of each year, and the ad valorem taxes are due on December 31 of such year. One-half of the ad valorem taxes becomes delinquent if not paid on or before April 1 of the following year and the remaining half becomes delinquent if not paid on or before August 1 of the following year. Accordingly,Tax Allocation Revenues,based upon such valuations and levies, and if not delinquent become available for Bond debt service not later than April 1 and August 1 of each year following the year in which tax levies are made. Principal and interest payments due on June 1 and on December 1 of each year are expected to be paid from Tax Allocation Revenues received on or before the April 1 and August 1, respectively, next preceding the June 1 and December 1 of the same year. All such moneys will be held in the Bond Fund created under the Ordinance. THE ORDINANCE The following is a summary of certain provisions of the Ordinance. This summary does not purport to be complete and is subject in all respects to the provisions of and is qualified in its entirety by reference to the Ordinance attached hereto as Appendix A. Acquisition Fund The proceeds from the sale of Bonds shall be placed in the Acquisition Fund after depositing any accrued interest on the Bonds into the Bond Fund and the amount equal to the Debt Service Reserve Requirement into the Debt Service Reserve Fund. A portion of the proceeds placed in the Acquisition 14 Fund will be placed in the Capitalized Interest Subaccount, and transferred to the Bond Fund to pay capitalized interest on the Bonds on . The remaining moneys transferred to and placed in the Acquisition Fund will be applied to the payment of a portion of the cost of the Redevelopment Project, including issuance costs of the Bonds. If any sum remains in the Acquisition Fund after the full accomplishment of the objects and purposes for which the Bonds were issued, the sum remaining in the Acquisition Fund, subject to any requirement for deposit into the Rebate Fund, will be transferred to the Bond Fund and applied as are other moneys in such Fund. Investment of Moneys Money in the Acquisition Fund, in the Bond Interest Account and the Bond Principal Account in the Bond Fund and in the Debt Service Reserve Fund shall, to the fullest extent practicable and reasonable, be invested and reinvested by the City to the extent allowed by law solely in, and obligations deposited in such funds and accounts shall be, Investment Securities which shall mature or be subject to redemption at the option of the holder thereof on or before the respective dates when the moneys in such funds and accounts will be required for the purposes intended; provided that moneys credited to the Debt Service Reserve Fund and to any debt service reserve fund hereafter established in connection with the issuance of any Additional TIF Bonds shall be invested only in such investments as shall mature (or be subject to redemption at the option of the holder)not later than five years from the date of the investment. Moneys in the Surplus Fund not required for immediate disbursement for the purposes for which said accounts and funds are created shall, to the fullest extent practicable and reasonable, be invested and reinvested by the City, to the extent allowed by law solely in, and obligations deposited in the Surplus Fund shall be,Investment Securities. Investment Securities purchased as an investment of moneys in any of the funds of accounts shall be deemed at all times to be a part of such fund or account, and the interest accruing thereon and any gain realized from such investment shall be credited to such fund (except as otherwise provided by the Ordinance with respect to investment earnings of the Debt Serviced Reserve Fund) or account, and any loss resulting from any such authorized investment shall be charged to such fund or account without liability to the City or the officials thereof;provided,however,that any investment earnings on moneys or Investment Securities held in any of the accounts in the Bond Fund shall be used in the following order of priority (subject only to any rebate requirements): (i) to make up any deficiency in another account in the Bond Fund; (ii) to make the amount on deposit in the Debt Service Reserve Fund equal to the Debt Service Reserve Requirement; and (iii) to the extent the required amounts are in each of the accounts in the Bond Fund and in the Debt Service Reserve Fund,to the Surplus Fund. The City shall sell at the best price obtainable or present for redemption any obligation so purchased whenever it shall be necessary to do so in order to provide moneys to meet any payment or transfer from a fund or account as required by the Ordinance. "Investment Securities" means any of the following which at the time are legal investments under the laws of the State of Nebraska and the Charter of the City, for the moneys held under the Ordinance then proposed to be invested therein: (i)direct and general obligations of, or obligations the payment of the principal of and interest on which are unconditionally guaranteed or assumed by, the United States of 15 America; (ii)obligations of the Federal Land Bank, Federal Home Loan Banks, Federal National Mortgage Association, Federal Intermediate Credit Banks, Federal Banks for Cooperatives; Government National Mortgage Association, International Bank for Reconstruction and Development and Asian Development Bank and direct and general obligations of any agencies of the United States of America not included in the foregoing listing; (iii)direct and general full faith and credit obligations of the State of Nebraska or any political unit in the State of Nebraska, provided that, at the time of purchase, such obligations are rated in either of the two highest rating categories (without regard to gradation or numerical modifier) by two nationally recognized bond rating agencies and are legal investments for fiduciaries in Nebraska; (iv)obligations of savings and loan associations, banks or trust companies to the extent the same are insured by the Federal Deposit Insurance Corporation; and (v)shares of open-end diversified investment companies which invest solely in securities described in clause(i) above; and (vi)certificates of deposit of,or guaranteed investment contracts with, any bank,trust company or savings and loan association, if such certificates of deposit or guaranteed investment contracts are collaterally secured by securities of the type described in clauses(i), (ii) and (iii) above held by another bank (including a Federal Reserve Bank), trust company or savings and loan association, as escrow agent or custodian of a market value not less than the amount of the certificates of deposit so secured, including interest. Certain Covenants of the City Arbitrage and Tax Covenants; RebateFund. The City covenants in the Ordinance that it shall not use or permit the use of any proceeds of Bonds or any other funds of the City from whatever source derived, directly or indirectly, to acquire any securities or obligations and shall not take or permit to be taken any other action or actions which would cause any Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code or which would otherwise cause interest on the Bonds to become subject to federal income tax, other than any applicable alternative minimum tax. The City covenants in the Ordinance to establish a Rebate Fund with the Trustee for the purpose of accepting any deposits of rebate amounts, and that it shall at all times do and perform all acts and things permitted by law and which are necessary or desirable in order to assure that interest paid by the City on the Bonds shall, for the purpose of federal income tax, be exempt from all income taxation, other than any applicable alternative minimum tax,under the Code or any other valid provision of law. Other Covenants. The City also makes the following covenants under the Ordinance: (a) The City has completed the Hotel Redevelopment Project in accordance with the Act and the Plan. (b) The City will use the proceeds of the sale of Bonds as provided in the Ordinance and will cause all properties owned by it and comprising a part of the Hotel Redevelopment Project to be managed and operated in a sound and businesslike manner while the same is owned and controlled by the City. (c) The City will not issue any obligations having a lien on the Tax Revenues superior to the lien of the Bonds on such Tax Allocation Revenues. Except as permitted with respect to the issuance of Refunding Bonds, the City will not issue any obligations, payable as to principal or interest from the Tax Allocation Revenues, which have, or purport to have, any lien upon the Tax Allocation Revenues on a parity with the Bonds; provided, however, that nothing in the Ordinance prevents the City from issuing and selling bonds or other obligations which have, or purport to have, any lien upon the Tax Allocation Revenues which is junior to the Bonds, or from issuing and selling bonds or other obligations which are payable in whole or in part from sources other than the Tax Allocation Revenues. Nothing prevents the City from issuing 16 Additional TIF Bonds payable from the Additional Tax Revenues. However, the City does not plan to issue any such Additional TIF Bonds except on a subordinate lien basis. (d) The City will duly and punctually pay or cause to be paid the principal of and interest on the Bonds on the dates, at the places and in the manner provided in the Bonds. (e) The City will keep or cause to be kept proper books of account completely and accurately depicting all transactions relating to the Redevelopment Project, Tax Allocation Revenues and funds relating to the Redevelopment Project. The City will further cause such books of account to be audited within 120 days after the close of each of its fiscal years by an independent certified public accountant. (f) The City will not dispose of more than 10% of the land area in the Hotel Redevelopment Project Area to anyone whose property is tax exempt, without first obtaining a certificate of the Finance Director of the City to the effect that the estimated Tax Allocation Revenues derived from the remaining land area in the Redevelopment Project Area will be sufficient to enable the City to comply with all covenants of the Ordinance. (g) The City will, to the extent permitted by law, defend, preserve and protect the pledge of and security interest granted with respect to the Tax Allocation Revenues and other moneys, securities and funds pledged under the Ordinance and all the rights of the holders of the Bonds under the Ordinance against all claims and demands of all persons. (h) The City will not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of interest thereon or claims for interest by the purchase or funding of such Bonds, interest or claims of interest or by any other arrangement. The City may issue refunding bonds as provided in the Ordinance, and such issuance will not be deemed to constitute an extension of maturity of Bonds. Defeasance The City's obligation as to any Bond shall be discharged when there has been deposited with the Paying Agent or an appropriate fiduciary institution acting as escrow agent, in trust solely for such purpose, cash or United States government direct or guaranteed obligations maturing in such amount and at such times as will provide funds sufficient to retire such Bond at maturity or earlier permitted redemption date and pay interest and premium,if any,thereon to such retirement date. Enforcement of Ordinance So long as any of the Bonds are outstanding, each of the obligations, duties, limitations and restraints imposed upon the City by the Ordinance shall be deemed to be a covenant between the City and every holder of the Bonds, and the Ordinance and every provision and covenant hereof, the Act and the Charter shall constitute a contract of the City with every holder from time to time of the Bonds. Any holder of a Bond or Bonds may,by mandamus or other appropriate suit, action or proceeding at law or in equity in any court of competent jurisdiction, enforce and compel performance of the Ordinance and every provision and covenant hereof, including, without limiting the generality of the foregoing, the enforcement of the performance of all duties required of the City by the Ordinance,by the Charter and by the Act and any other applicable laws of the State of Nebraska. 17 Amendment to the Ordinance The City shall not amend the Ordinance,except in accordance with the following provisions: (a) The City may from time to time and without the consent of any holder of the Bonds (i)make any amendments or modifications to the Ordinance which may be required to permit the Ordinance to be qualified under the Trust Indenture Act of 1939, as amended; (ii)make any modification or amendment of the Ordinance not inconsistent with the Ordinance required for the correction of language or to cure any ambiguity or defective provision, omission, mistake or manifest error therein contained; (iii)make any amendments or supplements to the Ordinance to grant to or confer upon the holders additional rights,remedies,power and authority, or to grant to or confer upon any Bondholders' committee or trustee for the Bondholders any additional rights,remedies,power or authority; (iv)provide for the use of a book-entry system of registration; and(v)provide for the issuance of coupon bonds. (b) From time to time the holders of 662/3% in principal amount of the Bonds of a series then outstanding, by an instrument or instruments in writing signed by such holders and filed with the City, shall have power to assent to and authorize any modification or amendment that shall be proposed by the City of the provisions of the Ordinance or of the rights and obligations of the City and of the holders of such Bonds, and any action authorized in the Ordinance to be taken with the assent and authority given as aforesaid of the holders of 662/3% in principal amount of such Bonds at the time outstanding shall be binding upon the holders of all of such. Bonds outstanding and upon the City as fully as though such action were specifically and expressly authorized by the terms of the Ordinance, provided always, that, without the consent of the holder of each Bond affected thereby, no such modification shall be made which will (i)extend the time of payment of the principal of or the interest on any Bond or reduce the principal amount thereof or the rate of interest thereon or the premium payable upon the redemption thereof, (ii) give to any of said Bonds any preference over any other Bonds or Bonds secured equally and ratably therewith, (iii) authorize the creation of any pledge prior to or on a parity with the pledge afforded by the Ordinance, (iv)deprive any holder of such Bonds of the security afforded by the pledge of the Ordinance, or(v)reduce the percentage in principal amount of such Bonds required to assent to or authorize any such modification to the Ordinance. For the purpose of computations required by this paragraph, Bonds directly or indirectly owned or controlled by the City shall be disregarded. Any modification or amendment or supplementing of the provisions of the Ordinance or of any ordinance supplemental thereto shall be set forth in an ordinance to be enacted by the City. UNDERWRITING Under the Bond Purchase Agreement with respect to the Bonds (the "Agreement"), entered into by and between the City and Kirkpatrick, Pettis, Smith, Polian Inc. (the "Underwriter"), the Bonds are being purchased at % of the principal amount of such series for public reoffering by the Underwriter. The Agreement provides that the Underwriter will purchase all of the Bonds if any are purchased. The obligation of the Underwriter to accept delivery of the Bonds is subject to various conditions contained in the Agreement, including the absence of pending or threatened litigation questioning the validity of the Bonds or any proceedings in connection with the issuance thereof and the absence of material adverse changes in the financial or business condition of the City. The Underwriter intends to offer the Bonds to no more than 35 institutional investors who do not have the present intention of reselling Bonds pursuant to a limited public offering initially at the offering 18 prices set forth on the cover page of this Limited Offering Memorandum, which prices may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering price. RATING The Bonds are not rated by any ratings service, and the City has not applied to any ratings service for a rating of the Bonds. CONTINUING DISCLOSURE The offering of the Bonds is exempt from the continuing disclosure requirements of Securities and Exchange Commission Rule 15c2-12 by virtue of paragraph(d)(i) of such Rule. Nonetheless, the City has undertaken (the "Undertaking") for the benefit of the holders and Beneficial Owners of the Bonds to send certain financial information and operating data about the Tax Allocation Revenues and the City to certain information repositories annually and to provide notice to the Municipal Securities Rulemaking Board or certain other repositories of certain events, pursuant to the requirements of Section(b)(5)(i) of Securities and Exchange Commission Rule 15c2-12 (17 C.F.R. § 240.15c2-12) (the "Rule"). See"APPENDIX F—Form of Continuing Disclosure Undertaking." The City is in compliance with its prior such undertakings under the Rule. A failure by the City to comply with the Undertaking will not constitute an event of default with respect to the Bonds, although any holder will have any available remedy at law or in equity, including seeking specific performance by court order, to cause the City to comply with its obligations under the Undertaking. Any such failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. TAX EXEMPTION In the opinion of Kutak Rock LLP, Bond Counsel, to be delivered at the time of original issuance of the Bonds, under existing laws, regulations, rulings and judicial decisions, interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the Code's alternative minimum tax provisions. The opinions set forth above are subject to continuing compliance by the City with its covenants regarding federal tax laws in the Ordinance. Failure to comply with such covenants could cause interest on the Bonds to be included in gross income retroactive to the date of issue of the Bonds. The accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of certain recipients such as banks, thrift institutions,property and casualty insurance companies or other financial institutions, corporations (including S corporations and foreign corporations operating branches in the United States), Social Security or Railroad Retirement benefit recipients or taxpayers otherwise entitled to claim the earned income credit and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations, among others. The nature and extent of these other tax consequences will depend upon the recipients' particular tax status or other items of income or deduction. Bond Counsel expresses no opinion regarding any such consequences and 19 investors should consult their own tax advisors regarding the tax consequences of purchasing or holding the Bonds. In Bond Counsel's further opinion, under the existing laws of the State of Nebraska, the interest on the Bonds is exempt from Nebraska state income taxation so long as it is exempt for purposes of the federal income tax. From time to time, there are legislative proposals in Congress that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether,if enacted, it would apply to bonds issued prior to enactment. Each purchaser of the Bonds should consult his or her own tax advisor regarding any pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal tax legislation. ABSENCE OF LITIGATION REGARDING THE BONDS There is not now pending any litigation restraining or enjoining the issuance or delivery of the Bonds or questioning or affecting the validity of the Bonds or the proceedings and authority under which they are to be issued. LEGAL MATTERS Certain legal matters incident to the authorization and issuance of the Bonds and the tax treatment of interest on the Bonds are subject to the approving opinions of Kutak Rock LLP, Bond Counsel, whose approving opinion will be delivered with the Bonds and the form of which is attached hereto as Appendix C. Certain other legal matters will be passed upon for the City by the City Law Department. Except for descriptions contained in this Limited Offering Memorandum of the Ordinance and the state law and federal tax law pertinent to the tax treatment of interest paid on the Bonds, Kutak Rock LLP has not assumed or undertaken responsibility for the preparation of this Limited Offering Memorandum or undertaken an independent investigation to determine the accuracy, completeness or sufficiency of the information contained herein. Except to the extent provided in the preceding sentence, Kutak Rock LLP is not responsible for any description of matters relating to an evaluation of the likelihood of payment of, or creditworthiness of,the Bonds, the adequacy of the security provided to owners of the Bonds, or any descriptions of the City,the Hotel or the Convention Center. MISCELLANEOUS Any statements made in this Limited Offering Memorandum involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. This Limited Offering Memorandum is not to be construed as a contract or agreement between the City and the purchasers or owners of any of the Bonds. The information contained in this Limited Offering Memorandum has been taken from sources considered to be reliable, but is not guaranteed. To the best of the knowledge of the undersigned, the Limited Offering Memorandum does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances under which they were made,not misleading. 20 The execution and delivery of this Limited Offering Memorandum have been duly authorized by the City as of the date shown on the cover hereof. CITY OF OMAHA,NEBRASKA By/s/ Mike Fahey,Mayor 21 APPENDIX A THE ORDINANCE [A COMPLETE COPY OF THE ORDINANCE IS AVAILABLE UPON REQUEST. PLEASE CONTACT KIRKPATRICK PETTIS AT 402-392-7979] APPENDIX B CONVENTION CENTER/ARENA REDEVELOPMENT PLAN, TIF PROJECT PLAN NO. 1 PLAN APPENDIX B CONVENTION CENTER/ARENA REDEVELOPMENT PLAN. TIF PROJECT PT,AN NO. 1 PLAN RECEIVED • Planning Department �►� '! w s•�• Omaha/Douglas Civic Center .��*•t 14 03 OEC —2 AM 03 1819 Farnam Street,Suite 1100 -7 if 1 _ Omaha.Ncbrxska 68183-0110 o r.' �i� �" (402)644-5200 9Ar� Cl . 0,�1� NO- a t, " �„ (402)444-5150 6v FEAR 1 . '``' felefax(402)444-6140 City of Omaha Robert C.Peters Mike Fahey,Mayor December 2, 2003 Director Honorable President and Members of the City Council, The attached proposed Resolution is submitted to transmit for your review and approval the Second Amendment to the Convention Center/Arena Redevelopment Plan The amendment to the plan authonzes and includes the provision for the use of Tax Increment Financing (TIF) and establishes the effective date for the utilization of Tax Increment Financing (TIF) to be the date of the passage of the Second Amendment to the Convention Center/Arena Redevelopment Plan The developer has requested that the Convention Center/Arena Redevelopment Plan he amended to allow the use of TIF as referenced in the Convention Center/Arena Redevelopment Plan as approved on October 26, 1999 by the Omaha City Council The associated project plan for the Convention Center/Arena provides for TIF to be one of the various funding sources to be used for the payment of Bonds or other related expenses generated by the development of the project General Obligation Bonds were issued by the City of Omaha to pay for a portion of the project The repayment of the Bonds was to come from the use of excess ad valorem taxes (TIF) generated by the convention center hotel It is estimated that the TIF will exceed S 10,000,000 00 The amendment will allow the capture of taxes resulting from the higher property valuations as a result of the completion of the redevelopment project to be used to fund the bonded indebtedness Your review and approval of the Amendment is appreciated, Respectfully submitted, Referred to City Council for Consideration l/ " l Z • / 'o� /z Robert C Peters Date Mayor's Office Date Planning Director Approved as to Funding yik 02, Stanley P Timn Date Finance Director Advertisement for Publication: December 4, and December 11, 2003 P\Pln5\9895pjm doe Public Hearing: December 16, 2003 Second Amendment of the Convention Center/Arena Redevelopment Plan On October 26, 1999, the City Council adopted the Convention Center/Arena Redevelopment Plan, and its First Amendment on February 15, 2000 (together called the "Redevelopment Plan") The Redevelopment Project within the Redevelopment Plan provides for the use of a vanety of public and private funding sources, including the option to use Tax Increment Financing General Obligation Bonds of the City of Omaha ("Bonds") were issued to pay for a portion of the Project The use of the excess ad valorem taxes ("TIF") generated by the convention center hotel was submitted as one of the sources of payment for the Bonds or other expenses generated by the development of the Redevelopment Project This submission was made by the City Finance Department to the City Council prior to the passage of the ordinance approving the Bonds But for such submission, the scope of the Redevelopment Project would have been reduced It is estimated that the principal amount of the TIF will exceed S 10,000,000 00 By the approval of this Second Amendment, the Convention Center/Arena Redevelopment Plan is hereby amended to include the provision for the use of Tax Increment Financing(TIF)with the effective date to be the date of the passage of this, the Second Amendment to the Convention Center/Arena Redevelopment Plan This amendment only authorizes TIF for the Convention Center Hotel See the attached map, entitled "Union Pacific Place Lots I and 2 Final Plat" for the boundary of the proposed "TIF project area. Additional amendments will be submitted for any future TIF financed redevelopment projects P Tin519902pjm doe CASE C3-99-239 5 APPLICANT Planning Department REQUEST Approval of an Amendment to the Convention Center/Arena Redevelopment Plan LOCATION Generally bounded by Cuming Street, Dodge Street, 16th Street, and Abbott Drive SUBJECT AREA IS SHADED- NOVEMBER 2003 lik.tja . e,..... . ., , ,_,. . ,,. .. _v., . ,,, , , 1 I , Ir. /yam '''QY. ` wnlit up. .., is- . : . .. 0 .... , , ;j1:1 , _ . —,' i , I a l r_71 r-iFiE3 as '1 !' =........ f ,__i i . 4rara� - ' 00 :ir_ _ IL-opc,EI� moil , , 1 ..... ..,.. .gi. _Calming. sr 9 _ .:-, IEEaE1EPR .Ea8BE. '_11. ( Ill I Li_ _, eEl E3 0 00 . 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PUT M.M..pr•M. u1M ron _ ��r.ru j UNION PACIFIC PLACE (LOTS 1 AND 2) -� .. • I MI, C-25A CI ■ jf OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA WHEREAS, the primary objectives of the City of Omaha's Master Plan and Community Development Program are to encourage additional private investment and infill development within inner-city neighborhoods, and to eliminate conditions which are detrimental to public health, safety and welfare, by developing vacant, underutilized property within these neighborhoods, and, WHEREAS, the Convention Center/Arena Redevelopment Plan was approved by the Omaha City Council on October 26, 1999 and amended on February 15, 2000 by the First Amendment,and, WHEREAS, the Convention Center/Arena Redevelopment Plan as approved and amended provides for the utilization of Tax Increment Financing(TIF) and other appropriate and approved financing as a source of payment for a portion of the project cost,and, WHEREAS, the Second Amendment is required to authorize and implement the utilization of Tax Increment Financing(TIF) with the effective date to be the date of the passage of this Second Amendment, and, WHEREAS, the Second Amendment TIF Project Area is described as Lots 1 and 2, UNION PACIFIC PLACE as replatted, and, WHEREAS. this Redevelopment Plan is located within an area previously declared "blighted and substandard and in need of redevelopment"by City Council, and, WHEREAS, the Amended Convention Center/Arena Redevelopment Plan includes a provision for the application of T1F as referenced in the proposed Second Amendment, attached hereto and made a part hereof, and, WHEREAS, the Amended Redevelopment Plan provides for the use of Tax Increment Financing for eligible site specific development costs, and, WHEREAS, Section 18-2108 of the Nebraska Revised Statutes requires the City of Omaha to adopt a redevelopment plan before taking an active part in a redevelopment project, including the division of ad valorem taxes under Sections 18-2147 through 18-2150, Revised Statutes of Nebraska, and, By Counc i lrnem ber Adopted City Clerk Approved Mayor ep 0 c v :a is a. 8 o n 25A CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska PAGE 2 WHEREAS, the Amended Convention Center/Arena Redevelopment Plan was approved by the City of Omaha Planning Board on November 5,2003 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA THAT, the Amended Convention Center/Arena Redevelopment Plan as previously approved by the Omaha City Council be and hereby is amended, and that the attached Second Amendment to the Convention Center/Arena Redevelopment PIan, containing a provision for the division of ad valorem taxes under Section 18-2147 through 18-2150, Revised Statutes of Nebraska, be and hereby is approved and incorporated in and made a part of the Convention Center/Arena Redevelopment Plan area bounded on the west by North 16th Street north of 1-80, on the north by Izard Street from 11th to 16`h Streets, one-half block north of Nicholas Street between 10th Street and I lth Street and Seward Street from 10th Street to the Grace Street Sewer Outlet just east of the Omaha Recycling Facility and Fire/Rescue Training Facility. On the east, the redevelopment area is defined by the Grace Street Sewer Outlet north of Abbott Drive, Abbott Drive south to the City Dock and the western edge of the proposed ASARCO Park The south boundary is generally defined by Dodge Street from approximately 6th Street to 10th Street, Davenport Street from 10th Street to 12th Street and 1-480 from 12th to 16th Streets In addition to this defined area, a right-of-way associated with the existing Illinois Central and Union Pacific Railroads that are north and west of the Redevelopment Area is also included within this Redevelopment Plan The TIF Project Plan Area is Lots 1 & 2 of UNION PACIFIC PLACE as replatted Future TIF projects will require amendments to the Cenvention Center/Arena Redevelopment Plan The sole effective date for the provision of the division of ad valorem taxes in the Amended Convention Center/Arena Redevelopment Plan area shall be the date of the approval of Second Amendment to the plan APPROVED AS TO FORM 12_1_4).3 ri3ST CITY ATTORNEY DATE P\P1n5\9888pjm doc t r. • 1)14/6040t . By CLif ouncilmember Adopted 0 C, 1 6 2003 b-d �� CEtyCierk • �� Approved I ) f *r/43 M C, ... n a P cD n m 3 O 7 t' a.. CD t= Pt C .: (n a :..) ° ,Sr:� C+ G J ,_, CD o " ,,- ,n C , rJ p O- w p - O 0 r va ti co CD O- W O§ qN �� - co 0 0 `< C� V O p 0 Qq — r p L n ^ F- z c w Sb tv < G) CD g .. n 5 0 _ CL - A; r. < 0 CD CD ,- C G. c- CD C , a- ,, "' E. v t , 1 T OVI ~ V 0 FD 3, = Cl.aoot 0 'Po {) c n cv c o _ ., c \ ,.,,,...... ,—, , 0- — c - s - o(ra- - o o U0. 5..< 0 -� • `\\ W o c� s° o_ a CD -. CD 0 < x 0 Q C� ° a v b - Fir; - a o R D }�^'^ cr 0 5' r�i 0-p p 0E M = tD a. ..,, 3 .I ?) al. in `< A3 3 CU V o 00 p O c roCc, pQcva > a CEL; t 00i:: C _ on t CD - ooGTDac7 ° i R° �,-.0 r . < o -, l ca. o A - = CN H A) a G a c ' CD 't O C 0 a. S'' r— ;n CD ="n co . ti O z A -ap fa. `4 CD CD 0 � °-n a o 3 x CD =' .-4 ty e Uo .0 �` -n • - CD -ot ^ h D = 0 O 0 Y ti � ?; O rW. C ^s co = 5 = n :.i = AD 0 7 = A n- s '�� p - c, C c� co C: n t a A. -. a. co '" CD ram'. a. co O co in i S. G- -`-4 a,. -- Cg APPENDIX C FORM OF OPINION OF BOND COUNSEL [Letterhead of Kutak Rock LLP] December_, 2004 City Council of the City of Omaha,Nebraska Omaha/Douglas Civic Center 1819 Farnam Street Omaha,NE 68183 City of Omaha,Nebraska Tax Allocation Bonds (Convention Center Hotel Redevelopment Project) Series 2004 Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance and sale by the City of Omaha, a municipal corporation in the State of Nebraska, of $ aggregate principal amount of its Tax Allocation Bonds (Convention Center Hotel Redevelopment Project), Series 2004 (the "Bonds"). The Bonds are issuable as fully registered Bonds without coupons dated as of December 1, 2004 in the denomination of$5,000 or any integral multiple thereof, bearing interest payable semiannually on June 1 and December 1 of each year, commencing June 1, 2005, at the rates per annum set forth in the schedule below and maturing as term bonds in numerical order on December 1, on each of the dates and in the principal amounts as follows: Interest Maturity Amount Rate December , 2004 Page 2 The Bonds recite that they are issued by the City of Omaha under the authority of and in full conformity with the Constitution and statutes of the State of Nebraska, including particularly Article 21 of Chapter 18, Reissue Revised Statutes of Nebraska, 1997, as amended, and the Home Rule Charter of the City of Omaha, 1956, as amended (the "Charter"), and under and pursuant to Ordinance No. , duly passed by the Council of the City on December_, 2004 (the "Ordinance"), for the purpose of financing (i) all or a part of the cost of the improvement, development and redevelopment of public streets, sewers and parking lots in conformance with the Convention Center/ Arena Redevelopment Plan approved and adopted as amended by the City, pursuant to Resolution No. 2817, on October 26, 1999 (the "Project"), (ii)funding a debt service reserve fund and(iii)paying costs of issuing the Bonds. The City of Omaha has covenanted in the Ordinance to comply with all necessary provisions of the Internal Revenue Code of 1986, as amended(the "Code"), to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes. Noncompliance by the City with such restrictions may cause the interest on the Bonds to be subject to federal income taxation retroactive to their date of issue. We have examined the Constitution and statutes of the State of Nebraska, the Charter of the City of Omaha, certified copies of proceedings of the City Council of the City of Omaha authorizing the issuance of the Bonds and an executed bond of said issue. In our opinion, the Bonds have been authorized and issued in accordance with the Constitution and Statutes of the State of Nebraska and the Charter of the City of Omaha, and constitute valid and legally binding special, limited obligations of the City, and of the City in its capacity as an authority under Article 21 of Chapter 18, Reissue Revised Statutes of Nebraska, 1943, as amended (the "Act"), secured solely by and payable solely from a portion, but only such portion, of receipts derived from ad valorem taxes levied upon the taxable property within the area of the Project designated by the Ordinance, all as provided in the Ordinance. The Bonds are not general obligations of the City of Omaha. The rights of the owners of the Bonds and the enforceability thereof may be subject to valid bankruptcy, insolvency,reorganization,moratorium and other laws for the relief of debtors. It is also our opinion that, assuming compliance by the City with the covenant referred to in the third paragraph of this letter, the interest on the Bonds is excluded from gross income for federal income tax purposes and is not a special preference item for purposes of the federal alternative minimum tax imposed on individuals and corporations. Interest on the Bonds, however, must be included in the "adjusted current earnings" of certain corporations (i.e., alternative minimum taxable income as adjusted for certain items, including those items that would be included in the calculation of a corporation's earnings and profits under Subchapter C of the Code) and such corporations are required to include in the calculation of alternative minimum taxable income 75%of the excess of each such corporation's adjusted current earnings (which includes tax-exempt interest) over its alternative minimum taxable income (determined without regard to this adjustment and prior to reduction for certain net operating losses). The accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will depend upon the recipient's particular tax status or other items of income or deduction. We express no opinion regarding any such consequences. Purchasers of the Bonds, particularly purchasers that are corporations (including D-2 December ,2004 Page 3 n h in the United States and corporations subject S corporations and foreign corporations operating braces rp � to the environmental tax imposed by Section 59A of the Code),property or casualty insurance companies, banks, thrifts or other financial institutions or certain recipients of Social Security or Railroad Retirement benefits, taxpayers otherwise entitled to claim the earned income credit or taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations are advised to consult their tax advisors as to the tax consequences of purchasing or holding the Bonds. It is further our opinion that, under the existing laws of the State of Nebraska, the interest on the Bonds is exempt from Nebraska state income taxation so long as it is exempt for purposes of the federal income tax. Very truly yours, [To be signed and delivered on the Closing Date by Kutak Rock LLP] D-3 APPENDIX D CITY OF OMAHA GENERAL INFORMATION AND SELECTED ECONOMIC INDICATORS The following information is provided as a general introduction to the City of Omaha. The City of Omaha is NOT generally obligated with respect to the payment of the principal of and interest on the Bonds offered by the Limited Offering Memorandum. GENERAL INFORMATION Form of Government Omaha operates with a strong mayor form of government. The Mayor is the City's full-time Chief Executive Officer. The City has a seven-member City Council. As a home-rule city, Omaha has all of the powers available to a home-rule city under the Nebraska Constitution. The Mayor and Council are elected for four-year terms. The Mayor is elected in a citywide election while the City Council members are elected by district. City Administration The executive and administrative powers of the City are vested in the Mayor, who is popularly elected for four years on a nonpartisan basis. The Honorable Mike Fahey was elected on May 15, 2001, his first involvement in an election as a candidate, to a four year term of office ending June 2005. He officially took office June 12, 2001. In 1978, Mayor Fahey founded American Land Title Company, a title insurance business. In 1990, Mayor Fahey sold the business but remained on as its CEO. He is now retired from the company. For ten years starting in January 1982, Mayor Fahey served on the Omaha Planning Board and was Chairman of the board from January 1986 through December 1991. The Mayor's cabinet consists of the chief officers of ten City Departments. The Mayor appoints each Department head. City Financial Management and Controls City financial management is the responsibility of the Finance Department. The head of the Finance Department is the Finance Director of the City, Carol A. Ebdon. Dr. Ebdon has been Finance Director of the City since May 28, 2004. Most recently, she was an Associate Professor of Public Administration at the University of Nebraska at Omaha since 1997; her research and teaching were in the areas of public budgeting and finance. She previously worked in budgeting and finance positions in the City of Rochester,New York, including Deputy City Treasurer and Director of Accounting. Major duties of the Finance Director include serving on the Mayor's Cabinet, Mayor's Budget Committee, the City's Annexation Task Force, Capital Improvement Priority Committee, Subdivision Review Committee and Tax Increment Financing Review Committee and serving as administrator of the Police and Fire Pension Board. Dr. Ebdon holds a Ph.D. in Public Administration from the State University of New York at Albany. Allen R. Herink, City Comptroller, has 29 years of experience as an Accountant with the City of Omaha. He began his career with the City working in the Grants Accounting Division of the Finance Department. In 1990, he was transferred to the Budget and Accounting Division. In 1997, Mr. Herink was promoted to Division Manager. H.e became Acting City Comptroller in July 2001 and City Comptroller in August 2003. Mr. Herink holds a Bachelor of Science degree with a major in Accounting from the University of Nebraska at Omaha. Kenneth E. Hofman,Revenue Manager,has 33 years of experience with the City of Omaha. .Mr. Hofman also began his career in the Grants Accounting Division of the Finance Department. He transferred to the Budget and Accounting Division and in 1982 was promoted to Accountant III. In 1994, Mr. Hofman was selected to head the.Revenue Division and was promoted to Revenue Manager in 1998. As Revenue Manager,Mr. Hofman serves as the investment officer for the City;manages and supervises the Revenue Division,which includes the Central Cashier, Violations Bureau, Centralized Billing Section and Keno Section. As a revenue analyst, Mr. Hofman is responsible for analyzing, forecasting, formulating and administering all City revenue sources for the preparation of the"Summary of Revenue." Mr. Hofman holds a Bachelor of Science degree with a major in Business Administration from the University of Nebraska at Lincoln. In total, the Finance Department consists of 49 employees and is organized by division. The Budget and Accounting Division under the Mayor's direction prepares the annual budget. The Budget and Accounting Division's responsibilities include: maintenance of general accounting records; preparation of all warrants; pre-audit of all purchase orders, invoices and disbursements; accountability of City owned property; Special Assessments; and Enterprise Funds. It is responsible for preparing and maintaining accounting records to comply with provisions of Federal and State grants. The Revenue Division's activity includes budget implementation and the continuous monitoring and internal control of revenue against budget appropriations. It is responsible for the City's centralized billing procedures, the collection and deposit of moneys by the Central Cashier and the Violation Bureau and administration of the keno game. Financial Reporting Systems and Control Systems The Budget and Accounting Division of the Finance Department performs significant and ongoing monitoring of the financial performance of the operating departments/divisions after budget adoption. All equipment spending is prioritized, scheduled into semiannual acquisition periods and submitted by department heads to staff accountants for analysis and review prior to any purchasing activity by the City Purchasing Agent. All purchases and contracts in excess of $20,000 must be approved by formal City Council action. Department Directors and Division Managers run status reports detailing actual to budget performance as needed. The City Charter requires quarterly budget status reporting. These reports forecast year end revenue and expenditure balances for all operating departments/divisions. Material variances are investigated promptly as they occur. Remedial actions to return a division/department to budget might include, but are not limited to, such actions as (i) staff accountant review and approval of all requisitions prior to receipt by the Purchasing Division, (ii) postponement or reductions in quantity of materials and equipment purchased, or (iii) deferral of major budgeted expenditures. Location and General Background Omaha, founded in 1854, is the largest city in the State of Nebraska. Omaha is the hub of a vast transportation network leading to all parts of the nation and thus offers significant advantages to business and industry competing in regional and national markets. This fact is substantiated by the growth of population,employment and income during recent years. D-2 Area and Population The U.S. Census Bureau reports that at the end of 2003 the population of the eight-county Omaha Metropolitan Statistical Area ("MSA"), comprising five Nebraska counties and three Iowa counties, numbered 784,463, with over 1.1 million within a 50-minute drive. As of that time, the population of the City of Omaha was 399,357. Transportation Nearly 3.7 million passengers, over 138 million pounds of cargo and over 58 million pounds of mail passed through the Eppley Airfield, Omaha's principal airport, in 2003. In the last decade, Eppley has made over$110 million in investments in terminal, apron,cargo area and runway expansions. Eppley Airfield offers 180 flights per day and is serviced by eight national air carriers, 12 regional airlines, eight air freight carriers and two full-service general aviation facilities. A total of 161 general aviation aircraft, including 30 executive jets, are based at Eppley Airfield. There are 90 nonstop flights out of Eppley Airfield daily. Omaha is general headquarters for the Union Pacific Railroad. Two other mainline railroads and a terminal railway combine to make Omaha an important rail center. Two interstate highways (Interstate 80 and Interstate 29), five federal highways and seven state highways provide fast all-weather routes within Nebraska and to and from the rest of the nation. In addition, Interstate 480 (downtown spur) and Interstate 680 (circumferential route) provide quick access to all parts of the metropolitan area. More than 85 motor common carriers haul freight to and from Omaha and all parts of the nation, making Omaha a major Midwestern trucking center. Greyhound Bus Lines furnishes Omaha with transcontinental passenger service. Several smaller bus lines operate between Omaha and points in Iowa and Nebraska. Utility Services Residential, commercial and industrial electric service rates in Omaha historically have been below the national averages, according to reports of the Edison Electric Institute in its Statistical Yearbook of the Electrical Utility Industry. In addition to low rates, the Omaha Public Power District, a Nebraska political subdivision, assures its customers ample power with a net generating capability of 2,227,100 kW. The Metropolitan Utilities District("MUD"), a Nebraska political subdivision, distributes natural gas and water in the Omaha area. Rates compare favorably with those prevailing in other metropolitan areas in the nation. Omaha has a plentiful water supply (Missouri River and Platte River wells) and a water system designed to the standards of the National Board of Fire Underwriter, with a current capacity of 234 million gallons a day. MUD's supply of natural gas is purchased wholesale from Northern Natural Gas Company. This supply is supplemented with peak-sharing storage facilities which can provide up to approximately 30% of peak demand. There have been no interruptions of natural gas service to firm commercial and residential customers and no interruptions are expected in the foreseeable future. MUD continues to add new natural gas customers. D-3 Military The United States Strategic Command ("USSTRATCOM") is headquartered at Offutt Air Force Base,just south of Omaha. USSTRATCOM has been assigned planning and targeting responsibility for the nation's strategic nuclear weapons. Economy From an economy founded on the livestock industry in the late nineteenth century, Omaha is a major grain exchange market in the United States. Food processing is also an important part of the economy and is represented by such companies as ConAgra Foods, Inc., Kellogg Company and Omaha Steaks International. The geographic centrality of Omaha in the United States has encouraged commercial development, and the City is home to five Fortune 500 companies, which represent a diverse array of industries: Berkshire Hathaway, ConAgra, Mutual of Omaha, Peter Kiewit Sons', Inc. and Union Pacific Railroad. The City's economy continues to diversify, although it still remains agriculturally oriented. The Omaha MSA contains more than 860 manufacturing plants, including plants operated by Lozier Corporation and Valmont Industries Inc. In the early 1980's, Omaha began developing as a major participant in the reservation and direct-response center industry. Currently, there are 42 such firms located within the City. In total they employ a labor force in excess of 20,000. Major employers in this group include First Data Resources, Hyatt Reservations, Dial America Marketing Services, Marriott Reservations, Sitel Corporation and West Corporation. Omaha is the home of Ameritrade, a major discount stock brokerage firm, and 21 insurance companies (with over 50 employees each), including Mutual of Omaha, the world's largest mutual health and accident company, and Woodmen of the World Life Insurance Society, the largest fraternal life insurance company. The district offices of the Farm Credit System for Nebraska, Iowa, South Dakota and Wyoming are headquartered in Omaha. The City is economically attractive to potential residents. The cost of living in the City in 2002 across all categories was 92% of the national average. Omaha MSA residents enjoy a median effective buying income of$41,216, compared to the national median of $38,365. And as of November 2003, Omaha's unemployment rate was 3.6%, compared to a rate of 5.6%for the United States. D-4 SELECTED ECONOMIC INDICATORS Omaha MSA Population and Employment Year Population Employment2 1950 366,395' 163,050 1960 457,873' 188,950 1970 542,646' 214,650 1980 569,614' 261,532 1990 618,262' 331,953 1991 624,2003 326,360 1992 634,9003 333,887 1993 656,4343 335,540 1994 662,8013 368,772 1995 670,3223 357,190 1996 696,4003 385,988 1997 703,9003 398,269 1998. 693,9003 404,014 1999 697,4004 415,486 2000 716,998' 424,400 2001 723,2103 424,151 2002 734,270 430,667 2003 784,4635 431,035 'Source: United States Bureau of Census. 'Estimated annual averages based on place of employment, from Reports of Nebraska Department of Labor, Division of Employment Research and Statistics;all employment figures are for the former five-county MSA. 'Estimate from the Consumer Preference Survey published by the Omaha World-7lera/d. 'Omaha Chamber of Commerce estimate of January 1999. `Population for the new eight-county MSA;previous years'populations are for the former five-county MSA. Largest Employers-Omaha MSA' January 2004 Offutt Air Force Base/USSTRATCOM2 Department of Defense 10,500 Omaha Public Schools School System 7,035 First Data Corp Credit Card Processors 7,000 Alegent Health Health Care 5,500 Methodist Health System Medical Services 4,687 Mutual of Omaha Companies Insurance 4,596 Oriental Trading Company Wholesale 4,200 First National Bank of Omaha Commercial Bank 4,091 Union.Pacific Railroad Railroad 3,629 Conagra Food service Mfg. 3,104 Nebraska Health System Hospital,Medical Services 3,072 University of Nebraska Medical Center Health Science/Education 3,058 'Source:Greater Omaha Chamber of Commerce and Midlands Business Journal(ranked by number of Omaha employees). 'Located in Sarpy County(immediately south of Omaha) D-5 Omaha MSA Nonagricultural Wage and Salary Employment May 2004 Average for 2003 %of %of Number Total Number Total Industry Manufacturing 31,198 7.4% 32,005 7.5% Natural Resources,Mining&Construction 24,364 5.8% 23,905 5.6% Trade,Transportation,Warehouse,Utilities 90,856 21.6% 95,171 22.4% Information 13,203 3.1% 13,703 3.2% Financial Activities 37,153 8.8% 36,814 8.7% Professional&Business Services 56,773 13.5% 57,898 13.6% Education&Health Services 57,960 13.7% 57,544 13.5% Leisure&hospitality 39,776 9.4% 39,230 9.2% Other Services 15,155 3.6% 14,910 3.5% Total Government(Public Administration) 55,114 13.1% 53,887 12.7% Total(Non-Farm Employment) 421,552 100.00 425,066 100.00 Source: Reports of Nebraska Department of Labor,Division of Employment and Research Statistics. Omaha MSA Effective Buying Income. Year Total(000) Per Household 1950 $ 558,006 $ 4,978 1960 966,698 6,856 1970 1,956,095 11,734 1980 4,991,836 21,524 1990 9,527,248 31,166 1995 11,813,171 38,825 1996 12,672,246 39,389 1997 13,547,027 41,365 1998 14,172,379 44,053 1999 14,990,549 46,575 2000 15,910,949 49,098 2001 14,202,201 41,216 2002 14,145,516 40,430 Effective Buying Income: personal income (wages, salaries, interest, dividends,profits and property income) minus federal, state and local taxes. Source: Annual surveys of buying power,Sales and Marketing Management. D-6 1 Retail Sales—Douglas County Retail Year Sales(000) 1980 $1,873,004 1990 3,717,333 1991 3,567,814 1992 4,266,146 1993 4,739,758 1994 5,058,311 1995 5,248,178 1996 5,203,261 1997 5,558,533 1998 6,005,705 1999 7,464,680 2000 7,574,648 2001 7,467,307 2002 7,861,940 Source: Sales and Marketing Management Annual Survey of Buying Power. Value of Building Permits—City of Omaha Year Amount Year Amount 1950 $ 24,105,401 2000 $ 473,849,942 1960 46,927,523 2001 1,558,867,305 1970 61,626,242 2002 701,502,687 1980 136.736,312 2003 633,542,187 1990 318,473,517 Source: Department of Permits and Inspections,City of Omaha. D-7 APPENDIX E PROJECTED TAX ALLOCATION REVENUES APPENDIX E PROJECTED TAX ALLOCATION REVENUES 2003-2004 2004-2005 Institution Levy % Levy Omaha Public Schools $ 1.27698 1.25452 City of Omaha 0.43387 0.43387 Douglas County 0.26801 0.26801 Metro Area Transit 0.05048 0.05054 Metro Technical Community College 0.06740 0.06740 Metropolitan Utility Hydrant 0.00722 0.00699 Education Service Unit No.19 0.01499 0.01500 City-County Building Commission 0.01096 0.01096 Papillion Natural Resource District 0.03064 0.04062 $ 2.16055 2.14791 2005 2006 Hotel Valuation 30,449,700 53,000,000 Tax Due 654,032.15 1,138,392.30 Less treasurer collection fee 1% (6,540.32) (11,383.92) TIF Proceeds 647,491:83 1,127,00E1'38 APPENDIX F FORM OF CONTINUING DISCLOSURE UNDERTAKING The following is the Continuing Disclosure Undertaking of the City of Omaha, excerpted from Section 6.10 of Ordinance No. ,passed on December 2004 by the City Council of the City of Omaha: "(a)The City does hereby covenant and agree and enter into a written undertaking for the benefit of the holders and beneficial owners of the Bonds required by Section(b)(5)(i) of Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (17 C.F.R. § 240.15c2-12) (the "Rule"). Capitalized terms used in this Section and not otherwise defined in this Ordinance shall have the meanings assigned such terms in subsection(d) hereof. It being the intention of the City that there be full and complete compliance with the Rule, this Section shall be construed in accordance with the written interpretative guidance and no-action letters published from time to time by the Securities and Exchange Commission and its staff with respect to the Rule. (b) The City undertakes to provide the following information as provided in this Section: (i) Annual Financial Information; (ii) Audited Financial Statements,if any; and (iii) Material Event Notices. (c)(i) The City shall, while any Bonds are Outstanding, provide the Annual Financial Infonnation on or before the date which is 270 days after the end of each fiscal year of the City (the "Report Date") to each then existing NRMSIR and the SID, if any. The City shall include with each submission of Annual Financial Information a written representation to the effect that the Annual Financial Information is the Annual Financial Information required by this Section and that it complies with the applicable requirements of this Section and that it has been provided to each then existing NRMSIR and the SID, if any. If the City changes its fiscal year, it shall provide written notice of the change of fiscal year to each then existing NRMSIR or the Municipal Securities Rulemaking Board (the "MSRB") and the SID, if any. It shall be sufficient if the City provides to each then existing NRMSIR and the SID, if any, any or all of the Annual Financial Information by specific reference to documents previously provided to each NRMSIR and the SID, if any, or filed with the Securities and Exchange Commission and, if such a document is a final official statement within the meaning of the Rule,available from the MSRB. (ii) If not provided as part of the Annual Financial Information, the City shall provide the Audited Financial Statements when and if available while any Bonds are Outstanding to each then existing NRMSIR and the SID, if any. (iii) If a Material Event occurs while any Bonds are Outstanding, the City shall provide a Material Event Notice in a timely manner to each then existing NRMSIR or the MSRB and the SID, if any. Each Material Event Notice shall be so captioned and shall prominently state the date, title and CUSIP numbers of the Bonds. (iv) The City shall provide in a timely matter to each then existing NRMSIR or the MSRB and to the SID, if any, notice of any failure by the City while any Bonds are Outstanding to provide to the NRMSIRs and the SID, if any,Annual Financial Information on or before the Report Date. (v) Any filing under this Section may be made solely by transmitting such filing to the Texas Municipal Advisory Council (the "MAC") as provided at http://www.disclosureusa.org unless the United States Securities and Exchange Commission has withdrawn the interpretive advice in its letter to the MAC dated September 7,2004. (d) The following are the definitions of the capitalized terms used in this Section and not otherwise defined in this Ordinance: (i) "Annual Financial Information" means the financial information or operating data with respect to the City and the Redevelopment Project, provided at least annually, of the type included in Appendix D and Appendix E of the final limited offering memorandum with respect to the Bonds. The financial statements included in the Annual Financial Information shall be prepared in accordance with generally accepted accounting principles ("GAAP"). Such financial statements may,but are not required to be,Audited Financial Statements. (ii) "Audited Financial Statements" means the annual financial statements, if any, of the City prepared in accordance with GAAP, which financial statements shall have been audited by such respective independent auditors as the City shall select. (iii) "Material Event" means any of the following events, if material, with respect to the Bonds: (A) Principal and interest payment delinquencies; (B) Non-payment related defaults; (C) Unscheduled draws on debt service reserves reflecting financial difficulties; (D) Unscheduled draws on credit enhancements reflecting financial difficulties; (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions or events affecting the tax-exempt status of the Bonds; (G) Modifications to rights of Bondholders; (H) Unscheduled Bond calls; (I) Defeasances; (J) Release, substitution or sale of property securing repayment of the Bonds; and (K) Rating changes. F-2 (iv) "Material Event Notice"means written or electronic notice of a Material Event. (v) "NRMSIR" means a nationally recognized municipal securities information repository, as recognized from time to time by the Securities and Exchange Commission by no-action letter for the purposes referred to in the Rule. The NRMSIRs as of the date of this Undertaking are: Bloomberg Municipal Repository, 100 Business Park Drive, Skillman, New Jersey 08558, Phone: (609) 279-3225, FAX: (609) 279-5962; http://www.bloomberg.com/markets/rates/municontacts.html and E-Mail: Munis@Bloomberg.com; DPC Data Inc., One Executive Drive, Fort Lee, New Jersey 07024, Phone: (201) 346-0701, FAX: (201) 947-0107, http://www.dpcdata.com and E-Mail: nrmsir@dpcdata.com; Standard & Poor's Securities Evaluations, Inc., 45th Floor, 55 Water Street, New York, New York 10041, Phone: (212) 438-4595, FAX: (212) 438-3975, www.jjkenny.com/jjkenny/pser_descrip_data_rep.html and E-Mail: nnnsir_repository@sandp.com; and FT Interactive Data, Attn:NRMSIR, 100 William Street, New York, New York 10038, Phone: (212)771-6999, FAX: (212)771-7390 (Secondary Market Information), (212) 771-7391 (Primary Market Information), http://www.interactivedata.com and E-Mail: NRMSIR@FTID.com. (Updates are available at: http://www.sec.gov/info/municipal/nrmsir.htm.) (vi) "SID" means a state information depository as operated or designated by the State and recognized by the Securities and Exchange Commission by no-action letter as such for the purposes referred to in the Rule. As of the date of this Ordinance, there is not an SID in the State of Nebraska. (e) Unless otherwise required by law and subject to technical and economic feasibility, the City shall employ such methods of information transmission as shall be requested or recommended by the designated recipients of the City's information. (f)(i) The continuing obligation hereunder of the City to provide Annual Financial Information, Audited Financial Statements, if any, and Material Event Notices shall terminate immediately once the Bonds no longer are Outstanding. This Section, or any provision hereof, shall be null and void in the event that the City obtains an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which require this Section, or any such provision, are invalid, have been repealed retroactively or otherwise do not apply to the Bonds, provided that the Issuer shall have provided notice of such delivery and the cancellation of this Section to each then existing NRMSIR or the MSRB and the SID,if any. (ii) This Section may be amended,without the consent of the Bondholders,but only upon the City obtaining an opinion of nationally recognized bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the compliance of this Section and by the City with the Rule, provided that the City shall have provided notice of such delivery and of the amendment to each then existing NRMSIR or the MSRB and the SID, if any. Any such amendment shall satisfy, unless otherwise permitted by the Rule,the following conditions: (A) The amendment may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law or change in the identity, nature or status of the obligated person or type of business conducted; (B) This Section, as amended, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and F-3 (C) The amendment does not materially impair the interests of Bondholders, as determined either by parties unaffiliated with the City (such as nationally recognized bond counsel), or by approving vote of Bondholders pursuant to the terms of the Ordinance at the time of the amendment. The initial Annual Financial Information after the amendment shall explain, in narrative form, the reasons for the amendment and the effect of the change, if any, in the type of operating data or financial information being provided. (g) Any failure by the City to perform in accordance with this Section shall not constitute an Event of Default with respect to the Bonds. If the City fails to comply herewith, any Bondholder may take such actions as may be necessary and appropriate, including seeking specific performance by court order,to cause the City to comply with its obligations hereunder." F-4 c-25a CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: WHEREAS, the City Council of the City of Omaha, Nebraska has been advised by the Finance Department of the City of Omaha that it is necessary and in the best interests of the City that tax allocation bonds be authorized to be issued and sold by private, negotiated sale, and that the City issue said tax allocation bonds as a single issue of Tax Allocation Bonds (Convention Center Hotel Redevelopment Project), Series 2004 in the aggregate principal amount not to exceed Twelve Million Dollars ($12,000,000) (the "Bonds"); and, WHEREAS, to enable the prospective underwriter of said Bonds to comply with Rule 15c2-12 under the Securities Exchange Act of 1934, as amended, it is necessary for the City of Omaha to provide said prospective underwriter with a limited offering memorandum which (except for certain omissions permitted by said Rule 15c2-12) the City deems final as of its date; and, WHEREAS, the Finance Department of the City of Omaha and the prospective underwriter have prepared the Preliminary Limited Offering Memorandum (attached hereto as Exhibit A)pertaining to the issuance and sale of said Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: THAT, the Preliminary Limited Offering Memorandum dated December 1, 2004 pertaining to the issuance and sale of the Bonds in Exhibit A attached hereto and by this reference made a part hereof as fully as if set forth herein is hereby approved in substantially the form attached hereto, the Preliminary Limited Offering Memorandum is hereby deemed final as of its date, within the meaning of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (except for certain omissions permitted by said Rule 15c2-12), the delivery of the aforesaid Preliminary Limited Offering Memorandum on behalf of the City of Omaha by the Finance Director is hereby confirmed, ratified, authorized and approved, and the distribution of the Preliminary Limited Offering Memorandum by the prospective underwriter of the Bonds is hereby confirmed, ratified, authorized and approved. 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