On July 23, 2007, the City of Sparks approved Ordinance No. 2370 creating the City of Sparks, Nevada, Tourism Improvement District No. 1 (Legends at Sparks Marina) (the “District”) for the purpose of carrying out the acquisition, improvement, equipping, operation and maintenance of certain real and personal property within the District suitable for retail, tourism or entertainment purposes.

Pertaining to the development of the Legends at Sparks Marina, the City of Sparks entered into a Disposition, Development and Financing Agreement, effective March 20, 2006, and amended and restated on April 2, 2008 (DDFA), with Sparks Legends Development, Inc. and the City of Sparks Redevelopment Agency.

In order to finance the development of Legends at Sparks Marina, the City issued Senior Sales Tax Anticipation Revenue (STAR) Bonds, Series A, in 2008 in the amount of $83,290,000 by way of a limited offering public sale to qualified institutional buyers.  Concurrently, the City also authorized Subordinate STAR Bonds, Series A, in 2008 in the amount of $36,600,000, the total of which were subsequently issued through a series of bond draws which were privately placed solely with the project developer Sparks Legends Development, Inc.

Finally, under a separate agenda item for the Sparks City Council’s consideration today, the City is currently pursuing issuing three series of refunding bonds intended to refund the outstanding Senior and Subordinate Bonds that were issued in 2008.  If approved, those refunding bonds are intended to include 1) the Senior STAR Refunding Bonds, Series 2019A; 2) the Subordinate STAR Refunding Bonds, Series 2019B (Tax Exempt); and 3) the Subordinate STAR Refunding Bonds, Series 2019C (Taxable).

The attached Memorandum of Understanding (MOU) is intended to memorialize the present understanding of the City of Sparks and Sparks Legends Development, Inc. of certain provisions outlined within Article 7 of the DDFA that pertain to future issuances of Senior and Subordinate STAR Bonds. 

Specifically, the attached MOU memorializes the parties’ current understanding that Sparks Legends Development, Inc. may request that the City issue additional Senior STAR Bonds in accordance with the provisions of the DDFA.  The MOU further memorializes the parties’ expectation that the next series of additional Senior STAR Bonds will be the final series of Senior STAR Bonds to be issued pursuant to the DDFA, and that such additional Senior STAR Bonds may be issued in an original principal amount of less than $25,000,000. 

Further, the attached MOU memorializes the parties’ current understanding that no additional Subordinate STAR Bonds may be issued with the final series of Senior Star Bonds.  Consequently, and because the next series of additional Senior START Bonds is expected to be the final series, the MOU memorializes the parties’ understanding that no additional Subordinate STAR Bonds are likely to be issued pursuant to the DDFA.

It’s important to note that the attached MOU is a memo of understanding between the City of Sparks and Sparks Legends Development, Inc. and is not intended to amend or modify the DDFA in any way and does not constitute a binding agreement between the parties.

1. Council may choose to approve the attached Memorandum of Understanding.

2. Council may choose to not approve the attached Memorandum of Understanding and provide the City Manager with further guidance.

“I move to approve Memorandum of Understanding (AC-5625) as presented between the City of Sparks, Nevada, and Sparks Legends Development, Inc.”