Common use of TDD Financing Clause in Contracts

TDD Financing. A portion of the costs of the Project would be paid for by the existing 1% add-on TDD sales tax that commenced collection on April 1, 2018, and will continue for 22 years from that date. The TDD was a part of the Original Development Agreement and was used to finance the interchange that was constructed pursuant to the City's agreement with the Kansas Department of Transportation ("KDOT"). KDOT will have access to the first $11M of TDD revenue for repayment of its costs in funding the interchange. The Developer will have access to TDD revenues thereafter, up to an amount equal to the TDD Cap. The Developer's TDD Cap is proposed to be reduced from $40.1M to a. the TDD collection period ends twenty-two (22) years from the date that the TDD sales tax is first imposed (in this case ending on April 1, 2040); b. reimbursement would be limited to TDD-eligible expenses specifically agreed upon and shown on the Project Budget and as certified in accordance with terms described in the proposed amended and restated Agreement; c. upon Developer's Substantial Completion of the Minimum Improvements for Phase 1 of the Project, Developer will have access to $21M of the TDD revenues; and upon Developer's Substantial Completion of the Minimum Improvements for Phase 2 of the Project, Developer will have access to the balance of the TDD revenues up to the $35M TDD Cap; and; and d. in Section 8.05, Developer would also be limited by an Aggregate Public/Private Ratio that would, after factoring out the STAR Bond costs and STAR Bond proceeds, limit Developer's costs being paid with TDD and CID financing to an amount that never exceeds 30% of the aggregate project costs. Also, the Agreement contemplates what might happen if - for one reason or another - the Multi-Sport Complex is not developed and delivered by Developer. Essentially, the Agreement says that if that happens, we largely revert to the financing structure in the Original Development Agreement: Developer can still get $21M of TDD financing and EDRBs for the exemption of sales taxes for construction materials if Developer completes the Minimum Improvements for Phase 1 and Phase 2, plus an additional 88,000 square feet of New Retail Space by December 31, 2028 (an extension of the previous deadline of December 31, 2026). This would represent a total Project that includes no less than 400,000 square feet of retail and entertainment space by Dec. 31, 2028. However, this would not include any STAR Bond or CID financing – both of which would be completely forfeited by Developer without the Arena and Multi-Sports Complex.

TDD Financing. A portion The Parties hereby agree that the proceeds from the TDD Sales Tax shall be disbursed by the City quarterly from the TDD Sales Tax Fund on a pay-as-you-go basis ("Pay-As-You-Go TDD Financing"), to pay KDOT and/or reimburse the Developer for eligible TDD Improvement Costs, if and to the extent that (i) there are TDD Sales Tax Proceeds in the TDD Sales Tax Fund, (ii) Developer has fully satisfied all of the costs of conditions as set forth in Section 4.05, (iii) the Project would be paid Term has not yet expired, (iv) Developer has not already been reimbursed for by the existing 1% add-on eligible TDD sales tax that commenced collection on April 1, 2018, and will continue for 22 years from that date. The TDD was a part of the Original Development Agreement and was used to finance the interchange that was constructed pursuant to the City's agreement with the Kansas Department of Transportation ("KDOT"). KDOT will have access to the first $11M of TDD revenue for repayment of its costs Improvement Costs in funding the interchange. The Developer will have access to TDD revenues thereafter, up to an amount equal to the TDD CapCap (as defined below), and (v) Developer is not in default under the terms and conditions of this Second Amended and Restated Agreement. Notwithstanding anything herein to the contrary, TDD Sales Tax Proceeds deposited in the TDD Sales Tax Fund prior to the expiration of the Term may be disbursed to Developer following expiration of the Term. The DeveloperParties further agree as follows: (a) Developer hereby acknowledges and agrees that the City shall have certain obligations to KDOT pursuant to the KDOT Agreement, including among other things, that the City has pledged and agreed to distribute the first $11,000,000 received into the TDD Sales Tax Fund to KDOT for reimbursement of KDOT's expenses arising out of the design, construction and completion of the Interchange. Developer also acknowledges and agrees that the City has agreed and shall be obligated to distribute the first $11,000,000 of the TDD Sales Tax Proceeds to KDOT for KDOT's costs related to the Interchange pursuant to the terms and conditions of the KDOT Agreement (the "KDOT Payment"). Further, Developer hereby understands and agrees that Developer shall not be entitled to any reimbursement from Pay-As-You-Go TDD Financing whatsoever unless and until KDOT is fully reimbursed as set forth herein. (b) Following full satisfaction of the KDOT Payment, the TDD Sales Tax available to Developer for reimbursement of eligible TDD Improvement Costs shall in no event exceed $40,145,000 35,000,000 (the "TDD Cap"). The TDD Cap is proposed shall, for all purposes set forth herein, operate as a cap on the use of TDD Sales Tax for reimbursement to be reduced from $40.1M to a. Developer of any and all eligible TDD Improvement Costs including without limitation, any construction period interest on eligible TDD Improvement Costs prior to reimbursement thereof. Notwithstanding anything set forth herein (or within the TDD collection Ordinance) to the contrary, Developer understands that the TDD Administrative Fee shall be paid within the TDD Cap, and such TDD Administrative Fee does not effectively increase the TDD Cap in any way. Once Developer has received an amount equal to the TDD Cap for reimbursement of eligible TDD Improvement Costs through Pay-As-You- Go TDD Financing, the Parties understand and agree that the TDD District shall thereafter terminate, and the TDD Sales Tax shall terminate and no longer be levied or collected within the TDD District. (c) The TDD Sales Tax shall be collected within the TDD District for a period ends twentythat commences on the date that the TDD Sales Tax is first imposed within the TDD District up to and concluding upon that date which is the earlier of the following: (i) the date that Developer has been reimbursed for all eligible TDD Improvement Costs by Pay-As-You- Go TDD Financing (up to the TDD Cap), or (ii) regardless of whether the Developer has been fully reimbursed for all eligible TDD Improvement Costs, that date which is twenty- two (22) years from the date that the TDD sales tax Sales Tax is first imposed (the "TDD Collection Period"). At the end of the TDD Collection Period, the Parties understand and agree that the TDD District shall thereafter terminate, and the TDD Sales Tax shall terminate and no longer be levied or collected within the TDD District. (d) Developer shall not receive any reimbursements from Pay-As-You-Go TDD Financing unless and until the conditions precedent set forth in this case ending on April 1Section 4.05 have been fully satisfied as determined by the City in its sole reasonable discretion. (e) In Notwithstanding anything set forth herein to the contrary, 2040); b. reimbursement would be limited to TDD-eligible expenses specifically agreed upon and shown on the Project Budget and as certified in accordance with terms described in the proposed amended and restated Agreement; c. upon Developer's Substantial Completion event that Developer fails to timely shall fail to complete the Multi-Sport Complex and/or Arena for any reason whatsoever, but Developer does timely complete all of the other components of Minimum Improvements for Phase 1 described in Section 2.06(a) and all of the Project, Developer will have access to $21M components of the TDD revenues; and upon Developer's Substantial Completion of the Minimum Improvements for Phase 2 of the Project, Developer will have access to the balance of the TDD revenues up to the $35M TDD Cap; and; and d. described in Section 8.052.06(b), and Developer would also be limited by an Aggregate Public/Private Ratio that woulddevelops and completes at least 88,000 – Phase I, after factoring out the STAR Bond costs and STAR Bond proceeds, limit Developer's costs being paid with TDD and CID financing to an amount that never exceeds 30% of the aggregate project costs. Also, the Agreement contemplates what might happen if - for one reason or another - the Multi-Sport Complex is not developed and delivered by Developer. Essentially, the Agreement says that if that happens, we largely revert to the financing structure in the Original Development Agreement: Developer can still get $21M of TDD financing and EDRBs for the exemption of sales taxes for construction materials if Developer but otherwise timely completes the Minimum Improvements for Phase 1 and Phase 2, plus an additional 88,000 at least 266,000 square feet of the additional New Retail Space on or before by December 31, 2028 20262028, then the TDD Cap described in subsection (an extension b) above shall be reduced to $21,000,000 , and Developer shall have access to a maximum of $21,000,000 of Pay-As-You-Go-TDD Financing as long as all of the previous deadline of December 31, 2026). This would represent a total Project that includes no less than 400,000 square feet of retail and entertainment space by Dec. 31, 2028. However, this would not include any STAR Bond or CID financing – both of which would be completely forfeited by Developer without the Arena and Multi-Sports Complex.conditions set forth in Section