July 1, 2008 The Honorable Mayor Carl Brewer And Council Members of the CITY OF WICHITA, KANSAS 455 N. Main Wichita, Kansas 67202-1679 RE: APPROXIMATELY $9,000,000 CITY OF WICHITA, KANSAS, TAXABLE INDUSTRIAL REVENUE BONDS, SERIES 2008, (HOOVER ROAD WAREHOUSE PROJECT) The Honorable Mayor Brewer and City Council Members: This letter is to request approval by the governing body of the City of Wichita, Kansas, for a Letter of Intent to issue Taxable Industrial Revenue Bonds in an original principal amount of approximately $9,000,000. The proceeds of the proposed Bonds will be used to pay the costs of acquiring, constructing, installing, and equipping two, 72,000 sq. ft. warehouse facilities located in Wichita, Kansas. 1. Name and Address of Business Tenant: Hoover Road, LLC Steve Clark and/or Johnny Stevens 1223 N. Rock Rd., Ste E 100 Wichita, Kansas 67206 2. A General Description of the Project: Hoover Road, LLC, plans to build two speculation warehouses located in Wichita, Kansas. The project will be built by the Company and consist of two, 72,000 sq. ft. sections enabling the Company to lease out the space to different clients if necessary. The projected cost of the land, building and equipment is estimated at $9,000,000.
3. Information on the Developers: Steve Clark is the President and CEO of Clark Investment Group (CIG). Clark Investment Groups is a privately help investment company specializing in real estate related investment since 1955. Based in Wichita, Kansas, CIG is primarily engaged in the acquisition, development, and management of real estate investments. Mr. Clark is involved in the development of office, warehouse, apartments, and self storage units throughout Kansas, California, Colorado, Connecticut, Florida, Missouri, New Mexico, New York, Ohio and Texas. Some of the local projects include the Polo Club Office Park, Airway Business Center, Rock Road Business Center, eight Security Self Storage facilities and the successful 165 acre, master planned, lake front mixed-use development The Waterfront. Johnny Stevens has been successful over the last 40 years as a developer working on warehouse and industrial space, retail space, and residential development throughout the country. Mr. Stevens has developed or redeveloped over 5,000,000 sq. ft of commercial space in that time. He has successful developments in Kansas and Texas with some of the local developments including Willowbend Golf Course, an 18 hole golf course and residential development which included over 600 home sites, the development of Sports World a family recreation park, developed over 50,000 sq. ft of office space locally, and is currently involved in The Waterfront development. Both partners are committed to being an influential and caring member of the Wichita Community. Collectively and individually the partners support a myriad of local and national non-profit organizations and charities. 4. Number of New Jobs Created: It is currently anticipated that the project will create approximately 40 new jobs that will add over a $1,000,000 in payroll for the community.
5. A Statement Explaining why the Requested Tax Exemption is a Critical Factor: At this time we are requesting a 10 year, 100% property tax abatement. Having two local warehouses would create additional jobs and businesses to the area. This is a speculation investment for large manufacturing warehouses that will create space to be immediately available to company s who want to move in now, instead of waiting over a year for a facility to be completed. This construction is a great benefit to the economic development efforts of the city. The success of these warehouses would create a real opportunity for economic development for the City of Wichita. 6. The Dollar Amount of the Bonds Requested: The total original principal amount of the Bonds requested is approximately $9,000,000. Use of proceeds: Construction Cost..$8,000,000 Equipment $300,000 Land Cost...$700,000 Total..$9,000,000 7. Administrative service fee agreements: The Applicant agrees to make a payment to the City to reimburse the City administrative costs in the amount of $2,500 per year commencing one (1) year after delivery of the Bonds. In addition, the Applicant will pay all costs of the City relative to issuance of the Bonds. All other expenses of the Bonds including the city s bond counsel fees will be paid. 8. A brief statement relative to the effects of the proposed project on the ambient air quality of the City of Wichita and Sedgwick County: The proposed facility will have no effect on the ambient air quality of the City of Wichita or Sedgwick County, nor are there any other anticipated adverse environmental effects. The Applicant will comply with all applicable policies and requirements of the City of Wichita relating to environmental matters.
9. A brief statement with respect to Equal Employment Opportunities: The Applicant will comply with all policies of the City of Wichita, Kansas with respect to equal employment opportunity. 10. Arrangement for the sale of the Bonds: Froggatte & Company, as Placement Agent will place the bonds with the tenant or an affiliate of the tenant or with a financial institution with a substantial history as a regular financing lender to the tenant. Name and Address of Bond Counsel: 11. Kutak Rock, LLP 1010 Grand Boulevard Suite 500 Kansas City, MO 64106 Telephone: (816) 960-0090 Facsimile: (816) 960-0041 Attention: Dorthea Riley 12. Name and Address of Applicants Counsel: Hinkle Elkouri, LLC 8621 East 21 st Street North Suite 200 Wichita, Kansas 67206 Telephone: (316) 267-2000 Facsimile: (316) 660-8375 Attention Jack Stallings 13. Site Plans: The site plan/floor plans of the proposed facility are attached as Appendix III.
14. Summary: To permit the Applicant to finalize the financing for the project, it is requested at this time that the City Council authorize the mayor to execute a Letter of Intent for and on behalf of the City wherein the City declares its intent to issue approximately $9,000,000 of its City of Wichita, Kansas, Taxable Industrial Revenue Bonds, (Hoover Road Warehouse Project), Series 2008, for the purpose described above. The Applicant is aware that such a Letter of Intent is only an indication of the City to issue the proposed Bonds to assist in the financing of the Project, and that such Letter of Intent is subject in all respects to the governing body s final approval of the terms and provisions of the Bond Resolution, Trust Indenture, Lease Agreement, Guaranty Agreement, and other related documents. However, upon issuance of the Letter of Intent, the Applicant is prepared to proceed in reliance thereon. Should there be any questions or requests for further information in the course of the City s evaluation of this Application, we will be pleased to promptly respond thereto. Respectfully submitted, Steve Clark, Principal Hoover Road, LLC
Proposed Site