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Home My WebLink AboutR-85-1027RESOLUTION NO. SS -1027 A RESOLUTION AUTHORIZING THE NEGOTIATED SALE OF $17,O10,000 CITY OF MIAMI, FLORIDA INDUS- TRIAL DEVELOPMENT REVENUE BONDS, SERIES 1985 (BAYSIDE CENTER LIMITED PARTNERSHIP PROJECT); AWARDING THE SALE THEREOF TO WILLIAM R. HOUGH & CO., SHEARSON LEHMAN BROTHERS INC. AND AIBC INVESTMENT SERVICES CORPORATION SUBJECT TO THE TERMS AND CONDITIONS OF A PURCHASE CONTRACT; AUTHORIZING MUNICIPAL BOND INSURANCE ON SAID BONDS; APPOINTING A TRUSTEE, PAYING AGENT AND REGISTRAR; APPROVING THE TERMS OF AND AUTHOR- IZING DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT; AUTHORIZING PREPARATION OF AND DISTRIBUTION OF A FINAL OFFICIAL STATEMENT IN SUBSTANTIALLY THE FORM OF THE ATTACHED PRELI- MINARY STATEMENT, IN CONNECTION WITH THE ISSUANCE OF THE BONDS; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Miami, Florida (the "Issuer") has by resolution, adopted on April 11, 1985, as amended and supplemented (the "Resolution"), authorized the issuance of not to exceed $18, 500, 000 City of Miami, Florida Industrial Development Revenue Bonds, Series 1985 (Bayside Center Limited Partnership Project) (the "Bonds"), to finance the cost of acquiring and constructing a permanent, multi -level urban parking facility containing not less than 1,200 parking spaces including appurtenances and facilities incidental thereto, and other improvements necessary and conven- ient therefor (the "Project"), for the use of Bayside Center Limited Partnership, a limited partnership organized and existing under the laws of the State of Maryland and authorized to do business in the State of Florida; and WHEREAS, the Issuer has received an offer from William R. Hough & Co., Shearson Lehman Brothers Inc. and AIBC Investment Services Corporation to purchase $17,010,000 of the Bonds subject to the terms and conditions set forth in the Bond Purchase Agree- ment, a copy of which is attached hereto as Exhibit "A" (the "Purchase Contract"); and WHEREAS, the Issuer now desires to sell its Bonds pursuant to the Purchase Contract and in furtherance thereof to appoint a Trustee, Paying Agent and Registrar in connection with the issu- ance of the Bonds and to approve the terms of and authorize prepa- ration and distribution of a preliminary official statement and an official statement; and CITY COMMISSION MEETING OF OCT 10 1985 r... RESOLUTION No. REMARKS d t `\ WHEREAS, the Bonds have been validated by judgment of the Circuit Court in and for Dade County, Florida, subject to deletion of all provisions for a mortgage on the leasehold interest in the land on which the Project is located; and WHEREAS, the Issuer has been provided all applicable disclosure information required by Section 218.385, Florida Statutes, a copy of which is attached hereto as Exhibit "B"; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF IMIAMI, FLORIDA AS FOLLOWS: SECTION 1. Due to the volatile nature of the market for municipal tax exempt revenue obligations, the critical importance of the timing in the sale of the Bonds, the complexity of public - ally marketing bonds for parking facilities and due to the will- ingness of William R. Hough & Co., Shearson Lehman Brothers Inc. and AISC Investment Services Corporation to purchase $17,010,000 in aggregate principal amount of City of Miami, Florida Industrial Development Revenue Bonds, Series 1985 (Bayside Center Limited Partnership Project), at interest costs favorable to the Issuer in the national market for tax exempt obligations, it is hereby determined that it is in the best interest of the public and the Issuer to sell the Bonds at a negotiated sale, and such sale to William R. Hough & Co., Shearson Lehman Brothers Inc. and AISC Investment Services Corporation is hereby authorized and approved. SECTION 2. The Bonds are hereby sold to William R. Hough & Co., Shearson Lehman Brothers Inc. and AIBC Investment Services Corporation upon the terms and conditions set forth in the Purchase Contract attached hereto as Exhibit "A" and incorporated herein by reference. The Mayor is hereby authorized to execute such Purchase Contract in substantially the form attached as Exhibit "A", with such additional changes, insertions and omissions therein as do not change the substance thereof and as may be approved by the said officer of the Issuer executing the same, such execution to be conclusive evidence of such approval. SECTION 3. The Fronds shall be dated and shall bear interest payable at certain times and shall mature in the years and be subject to redemption as provided in the Purchase Contract 2 8.,--1027 attached hereto as Exhibit "A" and incorporated herein by refer- ence. SECTION 4. The Bonds shall be issued under and secured as provided in the Resolution and shall be executed and delivered by the Mayor or the City Manager and City Clerk of the Issuer in substantially the form set forth in the Indenture of Trust approved by the Resolution, with such additional changes and insertions therein as conform to the provisions of the Purchase Contract, and such execution and delivery shall be conclusive evidence of the approval thereof by such officers. SECTION 5. Sun Bank, National Association, shall serve as Trustee, Paying Agent and Registrar for the Bonds. SECTION 6. till references in the Indenture of Trust, the Financing Agreement, the Guaranty approved by the Resolution and in the Resolution to the Mortgage are hereby deleted. Notwith- standing such deletion the findings set forth in the Resolution are hereby ratified and confirmed. SECTION 7. Insurance to irrevocably guarantee to the holder of any Bond the full and complete payment of principal and interest on behalf of the Issuer is hereby authorized to be pur- chased and payment for such insurance is hereby authorized from the proceeds of the Bonds. A statement of insurance is hereby authorized to be printed on or attached to the Bonds for the bene- fit and information of the holders of the Bonds. SECTION 8. The distribution of the Preliminary Official Statement and a final Official Statement of the Issuer relating to the Bonds, are hereby approved, such official statements to be in ' substantially the form of the document attached hereto as Exhibit "C." The Mayor is hereby authorized to execute such official statements, with such additional changes, insertions and omissions as may be made and approved by such officer of the Issuer execut- ing the same, such execution to be conclusive evidence of any such approval. SECTION 9. The remaining authorized but unissued Bonds in the amount of $1,490,000 are hereby cancelled and shall not be sold or delivered. 3 SS-1027 r r; SECTION 10. All prior resolutions of the Issuer inconsistent with the provisions of this resolution are hereby modified, supplemented and amended to conform with the provisions herein contained and except as otherwise modified, supplemented and amended hereby shall remain in full force and effect. SECTION 1 1 . The Mayor, the City Manager, the City Clerk or any other appropriate officers of the City are hereby authorized and directed to execute any and all certifications or other instruments required by the Resolution, the Purchase Contract or any other document referred to above as a prerequisite or precon- dition to the issuance of the Bonds and any such representation made therein by officers of the City shall be deemed to be made on behalf of the City. All action taken to date by the officers of the City in furtherance of the issuance of the Bonds is hereby approved, confirmed and ratified. SECTION 12. This resolution shall take effect immediately upon its adoption. Adopted this 10th day of OCTOBER , 1985. (SEAL) PREPARED AND APPROVED BY: �-v Miriam Maer Assistant City Attorney APPROjED A��Q FORM AND�ORREC S: Lucia A. Doug rty City Attorne 4 MAURICE A. FERRE Maurice A. Ferre Mayor Su -1027 x /*"N CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANCIUM TO Honorable Mayor and Members of the City Commission FROM Sergio Pereira City Manager DATE October 3, 1985 PILE 1 SUBJECT Bayside Center Parking Garage Industrial Development Revenue Bonds REFERENCES City Commission Agenda October 10, 1985 ENCLOSURES ( 1 ) It is recommended that the City Commission adopt the attached Resolution authorizing the negotiated sale of an amount not to exceed $18,500,000 of City of Miami, Florida Indus- trial Development Revenue Bonds, Series 1985 (Bayside Center Limited Partnership Project); awarding the sale thereof to William R. Hough & Co., Shearson Lehman Brothers Inc., and AIBC Investment Services Corporation; subject to the terms and conditions of a purchase contract; authorizing municipal bond insur- ance on said bonds; appointing a trustee, paying agent and registrar; approving the terms of and authorizing distribution of a Preliminary Official Statement; authorizing preparation of and distribution of a Final Official Statement, in substantially the form of the attached Preliminary Official State- ment, in connection with the issuance of bonds; providing certain other matters in connection therewith; and providing an effec- tive date; these Industrial Development Revenue Bonds do not constitute a credit obligation of the City and the City has no obligation to repay the principal and inter- est on the bonds. The City Commission by Resolution No. 85-405, dated April 11, 1985, authorized the issuance of an amount not to exceed $18,500,000 City of Miami, Florida Industrial Development Revenue Bonds to facili- tate the Bayside Center Limited Partnership financing of the Bayside parking facility at a tax-exempt interest rate. The bonds are not an obligation of the City and the City has no obligation to repay the principal or interest on the bonds. 8"': 10 2 f W Mayor and Commission -2- October 3, 1985 The bonds have been validated by Circuit Court and offer to pur- chase the bond has been received from William R. Hough and Co., Shearson Lehman Brothers, Inc., and AIBC Investment Services Corpo- ration, a local minority firm. The final size of the bond issue and the interest rates to be paid by the Bayside Center Limited Part- nership will be determined on October 9, 1985, in accordance with market transactions of comparable quality Industrial Development Revenue Bonds (IDBs). The revenues from this IDB sale will be used solely for the con- struction and related costs of the Bayside Parking Garage and repayment of the IDB will be the sole responsibility of the Bay - side Center Limited Partnership (the "Partnership"). Repayment will be accomplished through the revenues generated by the parking garage and is backed by IDB insurance and a letter of credit. Additionally, the Partnership is guaranteeing the completion of the facility. The City's role in this transaction is limited to that of a con- duit, allowing the Partnership to borrow project funds at a lower interest rate due to the tax-exempt status of the bonds. It is recommended that the attached resolution authorizing the sale of the bonds and all ancillary actions required be adopted by the City Commission. K -ia2'7 $17,010000 CITY OF MIAMI, FLORIDA INDUSTRIAL DEVELOPMENT REVENUE BONDS, SERIES 1985 (Bayside Center Limited Partnership Project) BOND PURCHASE AGREEMENT October 10, 1985 City of Miami, Florida City Hall 3500 Pan American Drive Coconut Grove, Florida 33133 Honorable Mayor and City Commissioners: William R. Hough & Co. and Shearson Lehman Brothers Inc. (collectively, the "Managers") and AIBC Investment Services Corporation and such other underwriters as may be listed in Exhibit A attached hereto, as said list may be changed by the Managers at or prior to the Closing Date, hereinafter defined (the Managers and the Underwriters listed on said Exhibit A are herein collectively called the "Underwriters"), hereby offer to enter into the following agreement with you (the "City"), and Bayside Center Limited Partnership, Rouse -Miami, Inc. and The Rouse Company (collectively, the Company") which, upon acceptance of this offer by the City and the Company, will be binding upon the City, the Company and the Underwriters. This offer is made subject to acceptance by the City and the Company by execution of this Bond Purchase Agreement and its delivery to the Managers prior to 4:00 P.M., New York time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Managers upon notice to the City at any time prior to acceptance hereof by the City. The Managers represent that they are authorized on behalf of themselves and the other several Underwriters to enter into this Bond Purchase Agreement and that the Managers are authorized to execute this Bond Purchase Agreement and to take any other actions which may be required hereby on behalf of the Managers and the other Underwriters. - 1 - SEA, --1927 1. Purchase and Sale of Bonds. (a) Subject to the terms and conditions and upon the basis of the representations, warranties and covenants herein- after set forth, the Underwriters, jointly and severally, hereby agree to purchase from the City, and the City hereby agrees to sell to the Underwriters, all (but not less than all) of the City's $17,010,000 aggregate principal amount of Industrial Development Revenue Bonds, Series 1985 (Bayside Center Limited Partnership Project) (the "Series 1985 Bonds") , dated September 1, 1985, at the aggregate purchase price of $16,489,097.28 plus accrued interest on the Series 1985 Bonds from October 1, 1985, to the Closing Date (hereinafter defined) and less $160,000 (being the amount of the Good Faith Deposit pursuant to Section 2 hereof). (b) The Series 1985 Bonds shall be as described in the - Official Statement (hereinafter defined) and a Resolution of the City Commission of the City duly adopted on March 28, 1985, as amended and supplemented, fixing the terms and setting certain other details including the award of the Series 1985 Bonds, to the Underwriters (the "Bond Resolution"). The Preliminary Official Statement of the City relating to the Series 1985 Bonds, dated October 3, 1985, including the cover page and Appendices thereto and any amendments or supplements thereto authorized for use with respect to the Series 1985 Bonds (the "Preliminary Official Statement") attached hereto as Exhibit B, as amended to delete the preliminary language, reflect the date of this Bond Purchase Agreement and as further amended to reflect the maturities, interest rates, redemption provisions and reoffering terms of the Series 1985 Bonds and with such additional changes and amendments as shall be approved by the Managers is hereinafter referred to as the "Official Statement". The Series 1985 Bonds shall have the maturities and bear interest at the rates set forth in the Official Statement relating to the Series 1985 Bonds including the cover page and Appendices thereto and any amendments or supplements thereto authorized for use with respect to the Series 1985 Bonds. The financial disclosure required to be provided to the City pursuant to Section 218.365, Florida Statutes is attached hereto as Exhibit C. (c) At the time of the City's acceptance of this Bond Purchase Agreement (or as soon as reasonably practicable there- after but no later than the Closing), the City shall deliver to the Managers (i) a certified copy of the Bond Resolution, (ii) a copy of the Official Statement, which prior to the Closing shall be manually signed on behalf of the City by the Mayor or Vice- L�r — Mayor, (iii) the Indenture of Trust dated as of October 1, 1985 between the City and Sun Bank, National Association, as Trustee (the "Indenture"), the Financing Agreement dated as of October 1, 1985 between the City and the Bayside Center Limited Partnership (the "Partnership") (the "Financing Agreement), the Lease Agreement dated January 14, 1985, as amended, between the City and the Partnership (the "Lease Agreement"), the Agreement by and between the City, the City of Miami Downtown Development Authority and the Department of Community Affairs of the State of Florida (the "Development Agreement") and the Management Agreement dated January 4, 1985 between the City of Miami Department of Off Street Parking ("DOSP") and the Partnership (the "Management Agreement") (collectively, the "Agreements"). Upon the Company's acceptance of this Bond Purchase Agreement, (or as soon as reasonably practicable thereafter but no later than the Closing), the Company shall deliver the Documents (as defined herein) to the Managers. Upon receipt by the Managers of such documents as described in this paragraph (c) and subject to the other conditions set forth herein, the Underwriters agree to make a bona fide public offering of the Series 1985 Bonds at the initial offering prices set forth on the cover page of the Official Statement. (d) The City and the Company authorize the Underwriters to use copies of the Official Statement and the information contained therein and copies of the Bond Resolution in connection with the public offering and sale of the Series 1985 Bonds and agrees not to supplement or amend or cause to be supplemented or amended the Bond Resolution, or the Official Statement, at any time prior to the Closing (as hereinafter defined), without the consent of the Managers. The City and the Comopany ratify and consent to the use by the Underwriters of the Preliminary Official Statement. (e) Subject to Section 8(a), the City agrees to deliver to the Underwriters such reasonable quantities of the Official Statement, the Agreements and the Bond Resolution as the Underwriters may request for use in connection with the offering and sale of the Series 1985 Bonds. (f) If, during and prior to such time as the Official Statement is used in connection with the public offering and sale of the Series 1985 Bonds, any event known to the City or the Company relating to or affecting the City, the Company, the Bond Resolution, the Agreements, the Documents or the Series 1985 Bonds shall occur which might affect the correctness or completeness of any statement of a material fact contained in the Official Statement, the City or the Company, as the case may be, - 3 - 8S -102 f". 4 It will promptly notify the Managers in writing of the circumstances and details of such event. If, as a result of such event or any other event, it is necessary, in the opinion of Bond Counsel or Counsel to the Underwriters, to amend or supplement the Official Statement in order to state any material fact necessary in order to make the statements made therein, in the light of the circum- stances under which they were made, not misleading and any such counsel shall have so advised the City and the Company, the City will, subject to Section l(d) hereof, forthwith prepare and furnish to the Underwriters at the expense of the Company a reasonable number of copies of an amendment of or a supplement to such Official Statement, in form and substance satisfactory to the Underwriters, which will so amend or supplement such Official Statement so that, as amended or supplemented, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 2. Good Faith Deposit. The City hereby acknowledges receipt of a cashiers check in the amount of $160,000 as security for the performance by the Underwriters of their obligation to accept and pay for the Series 1985 Bonds at the Closing in accordance with the provisions of this Bond Purchase Agreement. Upon compliance by the Underwriters with such obligation, the $160,000 shall reduce the amount paid to the City pursuant to Section 1 hereof. If the City does not accept this offer, the $160,000 shall be immediately returned to the Underwriters. In the event of the City's failure to deliver the Series 1985 Bonds at the Closing, or if the City shall be unable at or prior to the Closing to satisfy the conditions to the obligations of the Underwriters contained herein, or if the obligations of the Underwriters shall be terminated for any reason permitted by this Bond Purchase Agreement, such $160,000 shall be immediately returned to the Underwriters. If the Underwriters fail (other than for a reason permitted hereunder) to accept and pay for the Series 1985 Bonds upon tender thereof by the City at the Closing as herein provided, the $160,000 shall be retained by the City as and for full liquidated damages for such failure and for any and all defaults hereunder on the part of the Underwriters, and the retention of such funds shall constitute a full release and discharge of all claims, rights and damages for such failure and for any and all such defaults. 3. Closing. (a) Before 12:00 Noon, prevailing Eastern time, on October 31, 1985, or at such other time or on such earlier or later date as shall have been mutually agreed upon by 4 - 8"' -102.7 I 't the City, the Company and the Managers, the City will deliver, or cause to be delivered, to the Managers, the Series 1985 Bonds, in definitive form, duly executed on the City's behalf, together with the other documents hereinafter mentioned; and, the Managers on behalf of the Underwriters, will accept such delivery and pay the purchase price of the Series 1985 Bonds (plus accrued interest) as set forth in Section 1 hereof by delivering to the City a check or checks payable to the order of the City in Federal funds. Payment for and delivery of the Series 1985 Bonds as aforesaid shall be made at such place in New York, New York, as shall be agreed upon between the City and the Managers. Such payment and delivery is herein called the "Closing" and the date of the Closing is herein called the "Closing Date". The Series 1985 Bonds will be delivered as fully registered bonds in denomi- nations of $5,000 and integral multiples thereof, and if requested by the Managers, shall be registered in such names as shall be designated by the Managers to the printer of the Bonds at least five business days prior to the Closing Date and will be made available to the Managers for checking and packaging not less than one business day prior to the Closing at a place designated by the Managers. (b) If the City is unable to deliver the Series 1985 Bonds in definitive form and delivers Series 1985 Bonds in temporary form at Closing (the "Temporary Bonds"), the City shall use its best efforts to deliver, or cause to be delivered, to the Managers at the offices of Shearson Lehman Brother Inc. in New York, New York, or such other place as the parties hereto agree, on behalf of the Underwriters, the Series 1985 Bonds in definitive form, duly executed on the City's behalf (the "Defin- itive Bonds"), as soon as possible after the Closing and in any event before 12:00 Noon, New York time, on November 14, 1985. At such time and on such date, the Managers on behalf of the Underwriters, will accept such delivery of the Definitive Bonds and deliver to the City the Temporary Bonds. Such exchange of the Definitive Bonds for the Temporary Bonds is herein called the "Delivery." The Company agrees to reimburse the Underwriter for any reasonable costs of carrying the Bonds beyond the date of Closing in the event the Closing does not occur in sufficient time to permit the Underwriter to redeliver the Bonds because of the Partnership or The Rouse Company. The Definitive Bonds will be delivered as fully registered bonds in denominations of $5,000 and integral multiples thereof, and will be made available to the Managers for checking and packaging not less than one business day prior to Delivery at a place designated by the Managers. (c) The failure of the City to use its best efforts to deliver the Series 1985 Bonds in definitive form as soon as 5 - possible after Closing and in any event before 12:00 Noon, New York time, November 14, 1985, as provided in Subsection 3(b), shall constitute a breach of this Bond Purchase Agreement for which the City and the Underwriters agree that the Underwriters shall have any and all rights and be entitled to any and all remedies legally available to it, including the right to have an injunction issued by any court of equity of competent jurisdiction requiring the City to specifically perform its obligation to deliver the Definitive Bonds. 4. Representations, Warranties and Covenants of the City. The City, by its acceptance hereof, represents, warrants and covenants to each of the Underwriters that: (a) the City is and will be on the Closing Date a Muni- cipal Corporation existing under the laws of the State of Florida duly organized and validly existing under the Constitution and laws of the State of Florida; (b) the City has full right, power and authority under the Constitution and laws of the State of Florida (i) to manage, though DOSP, the 1,200 space multi -level parking garage to be constructed by the Partnership, as more fully described in the Official Statement, (the "Project"), (ii) issue industrial development revenue bonds, such as the Series 1985 Bonds., and (iii) to secure the Series 1985 Bonds in the manner contemplated by the Bond Resolution; (c) the City has and had, as the case may be, full legal right, power and authority (i) to adopt the Bond Resolution and the execute and deliver this Bond Purchase Agreement and the Agreements, (ii) to issue, sell and deliver the Series 1985 Bonds to the Underwriters as provided in this Bond Purchase Agreement, and (iii) to carry out and consummate all other transactions contemplated by the aforesaid instruments, and the City has complied or will have complied as of the Closing Date with all provisions of applicable law in all matters relating to such transactions; (d) the City has duly authorized or ratified (i) the adoption of the Bond Resolution and the execution, delivery and performance of this Bond Purchase Agreement, the Agreements and the Series 1985 Bonds, (ii) the distribution of the Official Statement, and (iii) the taking of any and all such action as may be required on the part of the City to carry out, give effect to s and consummate the transactions contemplated by the aforesaid instruments, and shall before the Closing Date authorize and execute the Agreements; SS -IL027 (e) the Bond Resolution, this Bond Purchase Agreement and the Agreements, when executed and delivered by the parties thereto, will constitute the legal, valid and binding obligations of the City enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally; (f) the City has complied, or will at the Closing be in compliance, in all respects with the Bond Resolution; (g) when delivered to and paid for by the Underwriters at the Closing in accordance with the provisions of this Bond Purchase Agreement, the Series 1985 Bonds will be duly authorized, executed, issued and delivered and will constitute legal, valid and binding obligations of the City enforceable in accordance with their terms and the terms of the Bond Resolution, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally; (h) at the Closing, all approvals, consents and orders of and filings with any governmental authority or agency which would constitute a condition precedent to the issuance of the Bonds or the execution and delivery of or the performance by the City of its obligations under this Bond Purchase Agreement, the Agreements the Series 1985 Bonds or the Bond Resolution will have been obtained or made and any consents, approvals and orders so received or filings so made will be in full force and effect; provided, however, that no representation is made concerning compliance with the federal securities laws or the securities or Blue Sky laws of the various states; (i) the adoption and performance by the City of the Bond Resolution and the authorization, execution, delivery and performance of this Bond Purchase Agreement, the Series 1985 Bonds, the Agreements and any other agreement or instrument to which the City is a party, used or contemplated for use in consummation of the transactions contemplated hereby or by the Official Statement, and compliance with the provisions of each such instrument, do not and will not conflict with, or constitute or result in a violation or breach of or a default under, the Constitution of the State of Florida, or any existing law, admin- istrative regulation, rule, decree or order, state or federal, or material provision of any agreement, indenture, mortgage, lease, note or other instrument to which the City or its properties or any of the officers of the City as such is subject or result in the creation or imposition of any prohibited lien, charge or - 7 - po, 19 11 encumbrance of any nature whatsoever upon any of the revenues, property or assets of the City under the terms of the Constitu- tion of the State of Florida or any law, instrument or agreement; (j) the Official Statement does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not mis- leading; provided, however, that the City makes no representa- tions or warranties as to information contained in or omitted from the Official Statement or any amendment or supplement thereto in reliance upon information furnished to the City in writing by or on behalf of the Underwriters or the Company expressly for use in connection with the preparation thereof; (k) between the time of the acceptance hereof by the City and the Closing, except as reflected in or contemplated by the Official Statement, the City will not have executed or issued any bonds or notes or incurred any other obligations for borrowed money payable from, or secured by a pledge of, the Revenues (as defined in the Bond Resolution) and there will not have been any adverse change of a material nature in the financial position or method of operation of the City; (1) the City agrees to reasonably cooperate with the Underwriters and their counsel in any endeavor to qualify the Bonds for offering and sale under the securities or "Blue Sky" laws of such jurisdictions of the United States as the Underwriters may request. If consent to service or process or written consent to suit by the City is required in order to successfully qualify the Series 1985 Bonds and, in the reasonable judgment of the Underwriters, lack of qualification would adversely affect the ability of the Underwriters to market the Bonds, the Underwriters may, at their option, be relieved of their obligation to purchase the Bonds under this Contract of Purchase unless the City agrees to file written consent to suit or service of process; (m) other than as described in the Official Statement, as of the date hereof there is no action, suit, proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body pending, against or, to the best knowledge of the City, threatened or affecting the City (or to the best knowledge of the City any basis therefor) or any of the officers of the City in their respective capacities as such, wherein an unfavorable decision, ruling or finding would, in any way, materially adversely affect (i) the transactions contemplated by this Bond Purchase Agreement or by the Official Statement, or (ii) the validity or enforceability of the Series 1985 Bonds, the Bond Resolution, this Bond Purchase Agreement, the Agreements or any other agreement or instrument to which the City is a party, used or contemplated for use in consummation of the transactions contemplated hereby, or (iii) the exemption from federal income taxation of the interest on the Series 1985 Bonds; (n) the City will not take or omit to take any action, which action or omission would adversely affect the exemption from federal income taxation of the interest on the Series 1985 Bonds under the Internal Revenue Code of 1954, as amended; (o) within the last 25 years the City has not been in default in the payment of principal of, premium, if any, or interest on, or otherwise been in default with respect to, any bonds, notes or other material indebtedness or other obligations in the nature of material indebtedness which it has issued, assumed or guaranteed as to payment of principal, premium, if any, or interest, and, other than the Bond Resolution the City has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the Revenues (as defined in the Bond Resolution) or other assets, properties, funds or interests, if any, pledged pursuant to the Bond Resolution; and (p) any certificate signed by any official of the City and delivered to the Underwriters shall be deemed to be a repre- sentation and warranty by the City to each of the Underwriters as to the statements made therein. (q) the description of the Series 1985 Bonds and the Bond Resolution in the Official Statement conform in all material respects to the Series 1985 Bonds and the Bond Resolution. 5. Representations, Warranties and Covenants of the Partnership, Rouse -Miami, Inc. and The Rouse Company. The Partnership and The Rouse Company, by their acceptance hereof, and Rouse -Miami, Inc. by its execution hereof, represent, warrant and covenant to each of the Underwriters that% (a) The information under the headings "The Partnership and the Project" and "Sources and Uses" contained in the Official Statement is, and as it may be amended or supplemented at the Closing Date will be, true and correct in all material respects, and the information in the Official Statement under the headings "The Partnership and the Project" does not, and as it may be amended or supplemented at the Closing Date will not, contain any untrue or misleading statement of a material fact or omit to rt state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) Any financial disclosures with respect to The Rouse Company set forth in the Official Statement, or incorporated therein by reference, present fairly the financial position of The Rouse Company in conformity with generally accepted accounting principles applied on a consistent basis, except to the extent noted therein. (c) Since the respective dates as of which any information with respect to the Company is given in the Official Statement, there has been no material adverse change in the business, properties, condition (financial or otherwise) or operations of the Company or Rouse -Miami, Inc. from that set forth therein. (d) Other than as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body, of which the Company is aware, pending or, to the best knowledge of the Company, threatened challenging the validity of or seeking to enjoin the performance by the Company of its obligations with respect to the Financing Agreement, the Lease Agreement, the Management Agreement and the Guaranty Agreement between The Rouse Company and Sun Bank, National Association, as Trustee (collectively the "Documents"). (e) there is no action, suit, proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body, pending or, to the best knowledge of the Company, threatened against or affecting the Company (nor to the best knowledge of the Company is there any basis therefor) wherein an unfavorable decision, ruling or finding would materially and adversely affect any of the transactions contemplated by the Documents or the Official Statement, including any amendments or supplements thereto, or which might result in any material adverse change in the Company's ability to perform under this Bond Purchase Agreement, the Financing Agreement, the Guaranty or the Official Statement. (f) All permits (including building permits), licenses and other authorizations necessary for the acquisition, construction, installation and operation of the Project required to be obtained on or before the date hereof have been obtained or will be obtained. (g) The Company undertakes to use its best efforts to procure all permits, licenses and other authorizations as may be required - 10 - in the future to complete and operate the Project on or prior to the date that it is legally required to obtain. (h) The Company is not now aware of any reason why any such additional permits, licenses and other authorizations would not be issued. (i) This Bond Purchase Agreement has been duly authorized, executed and delivered by the Company and when duly executed and delivered by the other parties hereto will constitute a legal, valid and binding obligation of the Company enforceable in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally, and the Documents upon being duly executed and delivered by the Partnership or The Rouse Company as the case may be, will constitute valid and binding obligations of the Partnership or The Rouse Company as the case may be, enforceable in accordance with their terms, except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting the rights of creditors generally, equitable remedies and as rights to indemnity hereunder may be limited by applicable law. (j) Other than pursuant to state securities laws or as set forth in paragraph (g) above, no approval, permit, consent or authorization of, or registration or filing with any governmental or public agency, authority or person not already obtained is required to be obtained by the Company in connection with the execution and delivery by the Company of, or the performance of its obligations under, the Documents. (k) The Partnership is a limited partnership, duly formed and validly existing in good standing under the laws of the State of Maryland, and is authorized to engage in business in the State of Florida (the "State"). Rouse -Miami, Inc. is a corporation duly formed and validly existing in good standing, under the laws of the Maryland and is authorized to engage in business in the State. The Rouse Company is a corporation duly formed and validly existing under the laws of the State of Maryland. The Partnership and Rouse -Miami, Inc. have all necessary power and authority to own its properties (including, without limitation, the Project), to conduct its business as presently conducted and as contemplated to be conducted by the Official Statement and the Documents and to execute, deliver and perform the the Documents and the Bond Purchase Agreement. (1) The execution, delivery and performance of the Documents and the Bond Purchase Agreement and the consummation of the transactions contemplated thereby will not conflict with or r constitute a breach of or default under any partnership agreement, articles, by-laws or other documents of governance of the Company, or under any indenture, mortgage, deed of trust, lease, note, or other instrument or obligation to which the Company is a party or by which the Company or any of its property is bound, or under any law, rule, regulation, or any judgment, order or decree to which the Company is subject or by which any of its property is bound. 6. Conditions of Closing. The obligations of the Underwriters hereunder shall be subject to the performance by the City of its obligations to be performed hereunder at or prior to the Closing, to the accuracy of and compliance with the repre- sentations, warranties and covenants of the City and the Company herein, in each case as of the time of delivery of this Bond Purchase Agreement and as of the Closing, and are also subject, in the discretion of the Managers, to the following further conditions: (a) at the Closing, (i) the Bond Resolution shall be in full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Managers, and the City shall have executed and there shall be in full force and effect such additional agreements, and there shall have been taken in connection therewith and in connection with the issuance of the Series 1985 Bonds all such action as shall, in the opinion of Sparber, Shevin, Shapo & Heilbronner, P.A. and Bryant, Miller & Olive, P.A.,("Bond Counsel'), or Broad and Cassel, Miami, Florida (hereinafter referred to as "Underwriters' Counsel") counsel to the Underwriters, be necessary in connection with the transactions contemplated hereby, (ii) the Series 1985 Bonds shall have been duly authorized, executed and delivered, (iii) the Official Statement shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Managers, and (iv) the City and the Company shall perform or have performed all of its obligations under or specified in this Bond Purchase Agreement and the Agreements to be performed at or prior to the Closing; (b) at the Closing, the Underwriters shall receive the opinion of Lucia A. Dougherty, Esq., City Attorney, dated the Closing Date, in substantially the form attached hereto as Exhibit D; (c) at the Closing, the Underwriters shall receive the final unqualified approving opinion of Bond Counsel, dated the Closing Date, in substantially the form attached as Appendix E to the Official Statement; - 12 - W, -s, (d) at the Closing, the Underwriters shall receive the supplemental opinion of Bond Counsel, dated the Closing Date, in substantially the form attached hereto as Exhibit E; (e) at the Closing, the Underwriters shall receive the opinion of Underwriters Counsel, dated the Closing Date, to the effect that the Series 1985 Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Bond Resolution is exempt from qualification under the Trust Indenture Act of 1939, as amended. Such opinion shall also state that, based upon their participation in the preparation of the Official Statement as counsel to the Underwriters and without having undertaken to determine independently the accuracy or completeness of the contents of the Official Statement, such counsel has no reason to believe that the Official Statement (except for the financial and statistical data included therein as to which no view need be expressed) as of its date contained or as of the Closing Date contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (f) at the Closing, the Underwriters shall receive a certificate, dated the Closing Date, signed by the Mayor or Vice - Mayor of the City to the effect that, other than as disclosed in the Official Statement, to the best of his knowledge and belief, no litigation or other proceedings are pending or threatened in any court or other tribunal, state or federal, (i) restraining or enjoining or seeking to restrain or enjoin the issuance, sale, execution or delivery of any of the Bonds, or (ii) in any way questioning or affecting the validity of any provision of the Series 1985 Bonds, the Bond Resolution, the Agreements, this Bond Purchase Agreement, or the validation proceedings for the Series 1985 Bonds, or (iii) in any way questioning or affecting the validity of any of the proceedings or authority for the authori- zation, sale, execution or delivery of the Series 1985 Bonds, or of any provision, program, or transactions made or authorized for their payment, or (iv) questioning or affecting the organization or existence of the City or the title of any of its officers to their respective offices (but in lieu of such certificate the Underwriters may accept an opinion by Bond Counsel, or of other counsel acceptable to the Underwriters, that in their opinion the issues raised by any such pending or threatened litigation or proceeding are without substance or that the contentions of any plaintiffs therein are without merit); - 13 - certificate, dated the Closing Date., signed by the Mayor or Vice -Mayor of the City, to the effect that, to the best of his knowledge and belief, (i) the representations and warranties of the City herein contained are true and accurate as of the Closing, (ii) the City has complied or is presently in compliance with all agreements and has satisfied all conditions on its part to be observed or satisfied hereunder and under the Bond Resolution at or prior to the Closing, (iii) since the respective dates as of which information is given in the Official Statement and except as set forth therein, there has not been any material adverse change in the condition, financial or other, of the City, and (iv) the City has no knowledge or reason to believe that the Official Statement as of its date and as of the Closing Date makes any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; (h) the City shall have received the binding municipal bond insurance policy of FGIC, in standard form and substance, insuring the timely payment of principal of, and interest on, the Series 1985 Bonds; (i) at the Closing, the Underwriters shall receive a copy of the Bond Resolution certified by the City Clerk of the City as a true and correct copy of the original thereof, as currently in full force and effect and as not having been otherwise amended since its adoption; (j) The representations and warranties of the City contained in Section 4 and of the Company contained in Section 5 hereof shall be true on and as of the Closing Date with the same effect as if such representations and warranties had been made on and as of the Closing Date, the City and the Company shall not be in default under the Agreements, the Documents, or this Bond Purchase Agreement (assuming the same to have been effective and binding instruments from the date hereof) and each of the City and the Company shall have delivered to the Underwriters a certificate dated as of the Closing Date to the effect set forth above. (k) At the Closing the Underwriters shall receive the opinion of Greenberg, Traurig, Askew, Hoffman, Lipoff, Rosen & Quentel, P.A., counsel to the Company dated the Closing Date, in substantially the form attached hereto as Appendix F and the opinion of the office of General Counsel of The Rouse Company, in form acceptable to counsel to the Underwriters. - 14 - (1) at the Closing, the Underwriters shall receive letters from Standard & Poor's Corporation and Moody's Investors Service, Inc. confirming the ratings on the Bonds as set forth in in the Official Statement. (m) at the Closing, the Letter of Credit and Guarantee Agreement shall be delivered by the appropriate parties in form acceptable to the Manager and Bond Counsel. (n) at the Closing, the Underwriters shall recieve such additional legal opinions, certificates (including such certifi- cates as may be required by regulations of the Internal Revenue Service in order to establish the tax exempt character of the Series 1985 Bonds, which certificates shall be satisfactory in form and substance to Bond Counsel) and other evidence as the Managers or Bond Counsel or Underwriters' Counsel may reasonably deem necessary to evidence the truth or accuracy as of the Closing of the representations and warranties of the City and the Company herein contained and of the Official Statement and the due performance and satisfaction by the City and the Company at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by it; and (o) If between the date of this Bond Purchase Agreement and the date of the Closing any event shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City and the Company, as the case may be, shall notify the Managers thereof, and, if in the reasonable opinion of the Managers such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Company will at its expense supplement or amend the Official Statement in a form and in a manner approved by the _ Managers. The opinions and certificates and other evidence referred to above shall be in form and substance satisfactory to the Managers. If the City or the Company shall be unable to satisfy the conditions to the obligations of the Underwriters contained in this Bond Purchase Agreement, or if the obligations of the Underwriters shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriters nor the City shall be under any further obligation hereunder, except as provided in 1) 1 Section 8 hereof and except that the check referred to in Section 2 hereof shall be returned to the Underwriters by the City. 7. Termination of Agreement. The Managers may terminate this Bond Purchase Agreement, without liability there- for, by notification to the City and the Company, if at any time subsequent to the date of this Bond Purchase Agreement and at or prior to the Closing: (a) legislation shall be enacted by the Congress of the United States or a bill introduced (by amendment or otherwise) or favorably reported by a committee of the House of Representatives or the Senate of the Congress of the United States, or a decision by a court of the United States or the Tax Court of the United States shall be rendered, or a ruling, regulation or fiscal action shall be issued or proposed by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency with respect to or having the purpose or effect of imposing federal income taxation upon interest received on bonds of the general character of the Series 1985 Bonds, which, in the reasonable opinion of the Managers, materially affects the market for the Series 1985 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Bonds to be purchased by them; or (b) any legislation, rule or regulation shall be intro- duced in, or be enacted by any department or agency in the State of Florida, or a decision by any court of competent jurisdiction within the State of Florida shall be rendered which, in the rea- sonable opinion of the Managers, materially affects the market for the Series 1985 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 1985 Bonds to be purchased by them; or (c) any amendment to the Official Statement is proposed by the City or deemed necessary by Bond Counsel, or Counsel to the Underwriters pursuant to Section l(f) hereof which, in the reasonable opinion of the Managers, materially affects the market for the Series 1985 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Bonds to be purchased by them; or (d) any fact shall exist or any event shall have occurred which, in the reasonable opinion of the Managers, makes the Official Statement, in the form as originally approved by the City Commissioners of the City, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; or - 16 - *V, (e) there shall have occurred any outbreak or escalation of hostilities or any national or international calamity or crisis, financial or otherwise, including a general suspension of trading on any national securities exchange, which, in the reasonable opinion of the Managers, materially adversely affects the market for the Series 1985 Bonds or the sale, at the contem- plated offering prices, by the Underwriters of the Series 1985 Bonds to be purchased by them; or (f) legislation shall be enacted or any action shall be taken by, or on behalf of, the Securities and Exchange Commission which, in the reasonable opinion of Counsel to the Underwriters, has the effect of requiring the contemplated distribution of the Bonds to be registered under the Securities Act of 1933 or the Bond Resolution to be qualified under the Trust Indenture Act of 1939, or any laws analogous thereto relating to governmental bodies, and compliance therewith cannot be accomplished prior to the Closing; or (g) a general banking moratorium shall have been declared by the United States, New York or Florida authorities, which, in the reasonable opinion of the Managers, materially adversely affects the market for the Series 1985 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 1985 Bonds to be purchased by them; or (h) any national securities exchange, or any govern- mental authority, shall impose, as to the Series 1985 Bonds or obligations of the general character of the Series 1985 Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the change to the net capital requirements of the Underwriters (i) any rating of the Series 1985 Bonds or the rating of any class of securities of the City shall have been downgraded or withdrawn by a national rating service, which, in the Managers reasonable opinion, materially adversely affects the market for the Series 1985 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 1985 Bonds to be purchased by them; or trading in any securities of the City shall have been suspended on any national securities exchange; or any proceeding shall be pending or threatened by the Securities and Exchange Commission against the City. 8. Expense. (a) The Company agrees to pay all expenses incident to the performance of its obligations hereunder, including but not limited to (i) the cost of the preparation, printing or other reproduction (for distribution prior to, on, or 17 I IN after the date of acceptance of this Bond Purchase Agreement) of copies of the Official Statement and Preliminary Official Statement, as the Managers may deem necessary to sell the Series 1985 Bonds in a public offering, (ii) charges made by rating agencies for the rating of the Series 1985 Bonds, (iii) the cost of printing and signing the Series 1985 Bonds, (iv) the fees and disbursements of Bond Counsel and the agreed upon fees of Special Counsel retained by the City and the agreed upon fees of the City Attorney's Office and (v) the premium for the municipal bond insurance guaranty policy issued by the Municipal Bond Insurance Association. (b) The Underwriters shall pay (i) the cost of deliver- ing the Series 1985 Bonds from New York, New York, to the purchasers thereof, and (ii) all other expenses incurred by them or any of them in connection with their offering and distribution of the Series 1985 Bonds, including the fees and disbursements of Underwriters' Counsel . 9. Miscellaneous. (a) All notices, demands and formal actions hereunder shall be in writing and mailed, telegraphed or delivered to: The Underwriters% William R. Hough & Co. 100 South Second Avenue South St. Petersburg, Florida 33701 Attn: Peter Zent - 18 - r r: 'Hy4: The City: City of Miami City Hall 3500 Pan American Drive Coconut Grove, Florida 33133 Attn: Finance Director The Company: The Rouse Company 10275 Little Patuxent Parkway Columbia, Maryland 21044 Attn: General Counsel (b) This Bond Purchase Agreement will inure to the bene- fit of and be binding upon the parties and their successors and assigns, and will not confer any rights upon any other person. The terms "successors" and "assigns" shall not include any pur- chaser of any of the Series 1985 Bonds from the Underwriters merely because of such purchase. (c) All the representations, warranties, covenants and agreements of the City and the Company in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any of the Underwriters or (ii) delivery of and any payment for the Series 1985 Bonds hereunder. (d) Section headings have been inserted in this Bond Purchase Agreement as a matter of convenience of reference only, and it is agreed that such section headings are not a part of this Bond Purchase Agreement and will not be used in the inter- pretation of any provisions of this Bond Purchase Agreement. (e) If any provision of this Bond Purchase Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any Constitution, statute or rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provi- sion in question invalid, inoperative or unenforceable in any other case or circumstances, or of rendering any other provision or provisions of this Bond Purchase Agreement invalid, inopera- tive or unenforceable to any extent whatever. (f) This Bond Purchase Agreement may be executed in several counterparts, each of which shall be regarded as an - 19 - ,IN '"N original and all of which shall constitute one and the same docu- ment. (g) This Bond Purchase Agreement shall be governed by, and construed in accordance with, the laws of the State of Flor ida. (h) This Bond Purchase Agreement shall become effective upon the execution by the appropriate City and the Company officials of the acceptance hereof by the City and the Company and shall be valid and enforceable at the time of such acceptance. With respect to their representation, warranties and covenants contained in Section 5 and Sections b(j) and 9. Rouse -Miami, Inc. By: Title: Vice President '- William R. Hough 6 Co. Shearson Lehman Brothers Inc. AIBC Investment Services Corporation BY: ill' m R. Hou Co. By:O'l e Presiden Accepted as of the ate first above written: Bayside Center Limited Partnership By: Rouse -Miami, Inc., General Partner By: Title: Vice President The Rouse Company By: Title: Vice President - 20 - I Accepted as of the date first above written. CITY OF MIAM1, FLORIDA A MUNICIPAL, CORPORATION AT`PEST : MATTY HIRA1, CITY CLERK By: _ -----SERGIO PE RI'IRA- CITY iMANAGER iPPROVED O PREPARED AND APPROVED BY: PO D ECTNESS: G. MIRIAM MAER LUCIA A. I}0GHr:ltTY------------ ASSISTANT CITY ATTORNEY CITY ATTORNLY -21.- BFGIIAGTI Exhibit A List of Underwriters William R. Hough & Co. Shearson Lehman Brothers, Inc. AIBC Investment Services Corporation Daniels & Bell, Inc. Pryor, Govan Counts & Company, Inc. Southwestern Capital Markets, Inc. 22 Exhibit B Preliminary official Statement §FGllAGTl 23 Sot-) — 10 2 , ®®} — »�«� \�.��- — William R. Hough & Co. Shearson Lehman Brothers Inc. October , 1985 - ---------------- - ►:1.I IH1" ttFFlt:l.11, SI A I IA f VN l ltA I I'D I 'Iat 3, 198.5 NEW ISSUE:J.'_ings* Standard & Poor's Moody's t (Financial Guaran • in red) In the opinum of Bond t:ounsel. assuming I milldionce kith the Internal Ret•eriue Code of 1954. cis amended, l e 'ode'.l intemst on the Bonds is oxvilipt from all present 14,derol Income taxes under existing statutes, ruhni!s (Ind co t d visions. except for interest on am Bond for ani prrwd during which such Bond is held hi• a person who, within the ring of Section 1031141131 of the i;ode. is a "substantial user" of the facilities financed by such Bonds or a "rrluted person" and the Bonds and the income thereon are e.x'empf from income taxation under I'loridu law. except as to estate taxes and tuxes imposed hv Chupter 220, I•'lnrido Statutes, on interest. income or profits on debt obligotions oii•ned hi• corporations as defined in said Chapter 220. $16,200,000** CITY OF MIAMI, FLORIDA Industrial Development Revenue Bonds, Series 1985 (Boyside Center Limited Partnership Project) Dated: October 1, 1985 Due: July 1, as shown below The S1ti,;,3(?o,000** Industrial Uevelopnient Revenue Bonds, Series 14R5 113ays0e Center Limited Partnership Projectj Ithe "Bonds"I are special obligations of the Cite of ,Miami, Florida Ithe "fit* ") payable from 1i) certain ret�enurs generated from the operation of o multi-levvi parking garage with appmxrmotelt 1,zoo spaces fthe "Project"I to be owned by Bayside Center Limited Partnership (the "Partnership"► a ,Maryland limited partnership, the general partner of which is Rouse - Miami, Inc. and (ii) monies on deposit in certain funds and accounts established pursuant to an Indenture of 'Trust dated October 1, 1985 between the City and Sun Bank, National .Association, Orlando. Florida, as trustee Ithe "'Trustee" ►. Bonds will be issuable as fully registered bonds in the denomination of S5,000 or any integral multiple thereof. 7mj Interest on the Bonds shall be paid semiannually on January I and July 1 in each year, commencing 1. 1486, by check or draft mailed to the registered owners thereof at the addresses shown on the reigstratinn books kept by the 'Trustee, as Bond Registrar. Principal of the Bonds is payable upon presentation and surrender it -hen due at the principal corporate trust office of the 'Trustee. The Bonds are subject to optional and mandatory redemption prior to maturity as further described herein. Proceeds received from the sale of the Bonds will be used lil to finance the cost of the Project. Iii► to make a deposit to the Reserve Fund. Iiii) to make a deposit to the Capitalized Interest .Account and fivi to pay the costs of issuing the Bo A municipal bond insurance policy issued by: !' FINANCIAL GUARANTY INSURANCE COMPANY** r(l�l,c guarantees payment of the principal and interest on the Bonds, as described herein. FW_ THE BONDS SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OF THE CITY OF MIAMI AND THE CITY IS NOT OBLIGATED TO PAY THE BONDS OR THE INTEREST THEREON EXCEPT FROM THE CERTAIN FUNDS SPECI- FLED IN THE INDENTURE, AND THE FAITH AND CREDIT OF THE CITY ARE NOT PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE CITY TO LEVY OR TO PLEDGE ANY TAXES WHATEVER THEREFOR OR TO MAKE ANY APPROPRIATION FROM THE REVENUES OF THE CITY FOR ITS PAYMENT EXCEPT _ FROM SAID FUNDS. Maturities, Amounts, Interest Rates and Prices 'Sa10, OOC> Serial Bands i7/ !Gel/88 175,UUt).UO 6.750 07/01/94 270,000.00 8.400 ie7/eat/89 185,00.0U 7.0 07/01/95 �95,000.00 8.600 07/01/9U 00,000.00 7.400 07/01/96 320,OU0.00 8.800 07/01/91 215,000.00 7.65U 07/01/97 345,U00.00 8.900 07/01/9^ 230,000.00 7.900 07/01/98 375,000.00 9.000 07/01/9.7 250,000.00 e.150 07/01/99 410,000.00 9.100 _ 1 y 151600 Ci,�7v Term bonds due � cm 5' .ry i , Om t�1, 9• o Term Bonds due oZ D t y 13� (plus accrued interest f romOL16b 4it X , 1985► The Bonds are offered K,hen, as and if issued and received by the Underwriters, subject to the unqualified approval of legality by Sparber, Shevin, Shapo & Heilbronner, P.A., Miami, Florida and Bryant, Miller and Olive, P.A., Tallahassee, I•'lorido, Bond Counsel. Certain matters will be passed upon for the City by Lucia A. Dougherty, Esq., City Attorney, for the Underwriters by their counsel, Broad and Cassel, Miami, Florida and for the Company by its counsel, Greenberg, Trourig, Askew, Hoffman, Lipoff, Rosen & Quentel, P.A., Miami, Florida. It is expected that the Bonds in definitive form will be ready for delivery in New York, New York on or about October 31, 1985. T s � � r" C • * See "Ratings" ** See ecurtty for the Bonds" AIBC Investment Services Corporation a THE CITY OF MIAMI, FLORIDA MEMBERS OF THE BOARD OF CITY COMMISSIONERS MAURICE A. FERRE, ;Mayor JOE CAROLLO DEMETRIO PEREZ, JR. CITY OFFICIALS MILLER J. DAWKINS J.L. PLUMMER, JR. CityManager..........................SERGIO PEREIRA Assistant. City Manager ....... RANDOLPH 13. ROSENCRANTZ CityAttorney ......................LUCIA A.DOUGHERTY Director of Finance.................CARLOS E. GARCIA CityClerk...............................MATTY HIRAI BOND COUNSEL Sparber, Shevin, Shapo & Heilbronner, P.A. Miami, Florida Bryant, Miller and Olive► P.A. Tallahassee, Florida FEASABILITY CONSULTANT Conrad Associates East Chicago, Illinois No person has been authorized to give any information or to make any representations other than those contained in this Offi- cial Statement in connection with the offer made hereby and, if given or made, such information or representations must not be relied upon as having been authorized by the City or the Partnership. Neither the delivery of this Official Statement nor any sale hereunder shall create any implication that there has not been a change in the affairs of the City or the Partnership since the date hereof. This Official Statement does not constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. This Official Statement is submitted in connection with the initial public offering of the Bonds. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRI- TERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAIN- TAIN THE MARKET PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. Y, 6 1. F: f TABLE OF CONTENTS Page Summary Statement .......................................... iii Introductory Statement ..................................... 1 Authorization and Validation ............................... 2 The Partnership ............................................ 2 The Project ................. a ...... ...... .................. 3 The Manager - Department of Off -Street Parking ............. 7 Security for the Bonds ..................................... 8 Estimated Sources and Uses of Funds ........................ 13 Description of the Bonds ................................... 14 Annual Debt Service Requirements ........................... 17 Litigation ................................................. 18 Underwriting ............................................... 18 Legal Matters .............................................. 18 Ratings .................................................... 19 Tax Exemption .............................................. 19 Miscellaneous .............................................. 19 Appendix A -- Summary of Certain Documents ................. A-1 Appendix B -- Consolidated Financial Statements for The Rouse Company and its subsidiaries for the year ending December 31, 1984............ B-1 Appendix C -- Description of the City ...................... C-1 Appendix D -- Form of Municipal Bond Insurance Policy...... D-1 Appendix E -- Form of Bond Counsel Opinion ................. E-1 SUMMARY STATEMENT Subject in all respects to more complete information contained in this Official Statement The City The City of Miami, situated at the mouth of the Miami River on the western shore of Biscayne Bay, is a main port of entry in Florida and the county seat of Metropolitan Dade County which encompasses 2,000 square miles of Florida's southeastern region. The City comprises 34.3 square miles of land and 19.5 square miles of water. Dade County is often referred to in this document as Greater Miami or the Miami area. Purpose of the Bonds Proceeds from the sale of the Bonds will be used (i) to finance the cost of the Project, (ii) to make a deposit to the Reserve Fund, (iii) to make a deposit to the Capitalized Interest Account and (iv) to pay the costs of issuing the Bonds. The Project The "Project" consists of a multi -level parking facility with approximately 1,200 spaces which will be constructed adjacent to the proposed Bayside Specialty Center on a site which in the aggregate consists of approximately twenty acres adjacent to the existing Miamarina in an area located at the southeast corner of Biscayne Boulevard and N.E. 5th Street in downtown Miami. The Bayside Specialty Center will, in addition to the Project, con- sist of approximately 235,000 square feet of retail space inclu- ding 35,000 square feet of retail space that will be developed in an existing restaurant facility. i The Partnership The "Partnership" is the Bayside Center Limited Partnership, a Maryland limited partnership, formed in December of 1984, the general partner of which is Rouse -Miami, Inc., a Maryland corporation formed in 1979. Rouse -Miami, Inc. is an affiliate of The Rouse Company, a Maryland corporation. 1 i�u, Security for the Bonds Pursuant to certain resolutions adopted by the City Commis- sion of the City, as supplemented and amended (collectively the "Resolution"), the Bonds will be payable from and will be secured by (i) certain revenues generated from the operation of the Project owned by Bayside Center Limited Partnership a Maryland limited partnership (the "Partnership"), the general partner of which is F:ouse-Miami, Inc., and operated by the City of Miami Department of Off -Street Parking ("DOSP") pursuant to a Management Agreement between DOSP and the Partnership and (ii) monies on deposit in certain funds and accounts established pursuant to an Indenture of Trust, dated as of October 1, 1985, between the City and Sun Bank, National Association, Orlando, Florida, as Trustee. Pursuant to the Resolution, the Reserve Fund will be funded and maintained in an amount equal to the lesser of the Maximum Debt Service Requirement or 125% of the Average Annual Debt Service Requirement on the Bonds. See "Security for the Bonds". The full faith and credit of the City is not pledged for the payment of the Bonds and the Bonds do not constitute a general indebtedness of the City within the meaning of any constitutional or statutory provision or limitation. The City shall not be obligated to pay the principal of or interest on the Bona or other costs incident thereto, except from the revenues and cer- tain other funds available pursuant to the Resolution. No holder of the Bonds shall ever have the right to compel the levy of ad valorem taxation for the payment of principal of, or interest on, the Bonds or to make any payments provided for in the Resolution. The Bonds shall not constitute a lien upon the Project, or any part thereof, or any other property of the City, or its agencies or instrumentalities, or the State of Florida. Redemption Provisions are subject "Security for redemption Bonds". Financial Guaranty Insurance effective as of the date on which of insurance which guarantees the and interest on the Bonds. See Insurance" and Appendix D attachec Company has the Bonds payment, w} "Security i i hereto. committed to issue, re issued, a policy n due, of principal r the Bonds - Bond row Additional Parity Bonds The City may issue additional bonds on a parity with the Bonds subject to compliance with certain conditions set forth in the Resolution. See "Security for the Bonds - Additional Parity Obligations". Debt Service Coverage The table that follows shows a projection by Conrad Asso- ciates East, nationally recognized parking consultants, of Chicago, Illinois, of the revenues that are estimated to be available to pay the estimated maximum annual debt service on the Bonds during each of the five fiscal years, ending September 30, 1987 through 1994. The amounts and availability of any of the sources of the revenues are subject to change, including reduc- tion or elimination, as a result of changes in State or Federal law or such factors as changing economic conditions, changing physical or social characteristics of the community, and other future conditions or events not presently ascertainable. _ Projections* (Amounts in Thousands) Year Ended June 30, 1987 1988 1989 1990 1991 1992 1993 1994 operating Revenue $ 783 $2,350 $ 2,613 $2,961 $3,282 $3,501 $3,689 $4,009 Operating Expense 295 888 932 979 1,027 1,074 1,122 1,177 Net Operating Revenue 488 1,462 1,681 1,983 2,255 2,427 2,567 2,832 Interest Inoome(1) 149 149 149 149 149 149 149 149 Net Revenue 637 1,611 1,830 2,131 2,404 2,576 2,716 2,981 Debt Service 1,650(2) 1,650(2) 1,650 1,650 1,650 1,650 1,650 1,650 Net Income 637 1,611 201 505 776 948 1 85 11350 Debt Service Coverage Ratio(3) LOX LOX 1.18x 1.37x 1.55x 1.66x 1.75x 1.92x *Subject to change (1) Interest income computed with 9.13% which represents the weighted average coupon on the Bonds. (2) Interest is capitalized in the Bond issue through October, 1987. (3) Coverage ratio is computed with the average annual debt service of $1,650,000. (v) wo- OFFICIAL STATEMENT 1 �1 01 01 000 CITY OF MIAMI, FLORIDA INDUSTRIAL DEVELOPMENT REVENUE BONDS, SERIES 1985 (Bayside Center Limited Partnership Project) O,ccv INTRODUCTORY STATEMENT This Official Statement is furnished in connection with the ff ering by the City of Miami, Florida (the "City") of its $ , , Industrial Development Revenue Bonds, Series 1985 (Bayside Center Limited Partnership Project) (the "Bonds"), pur- suant to an Indenture of Trust (the "Indenture") dated as of October 1, 1985 between the City and Sun Bank, National Association, Orlando, Florida, as Trustee (the "Indenture"). The Bonds are being issued by the City on behalf of Bayside Center Limited Partnership, a Maryland limited partnership (the "Part- nership"), to (i) finance the cost of a multi -level parking facility with approximately 1,200 spaces (the "Project"); (ii) to fund the Reserve Fund and (iii) to pay the cost of issuing the Bonds. The trustee, paying agent and bond registrar (the "Trustee") for the Bonds is Sun Bank, National Association, Orlando, Florida. The Partnership plans to construct the Project in connection with the construction of the proposed Bayside Specialty Center. The Partnership will develop the Bayside Specialty Center on a site which in the aggregate will consist of approximately twenty acres adjacent to the existing Miamarina in an area located at the southeast corner of Biscayne Boulevard and N.E. 5th Street in downtown Miami. The Bayside Specialty Centerwill, in addition to the Project, consist of approximately 235,000 square feet of retail space including 35,000 square feet of retail space that will be developed in an existing restaurant facility. All summaries of statutes, documents or law contained in this Official Statement are subject to all the provisions of and are qualified in their entirety by reference to such statutes, docu- ments and laws, and references herein to the Bonds are qualified in their entirety by reference to the form of the Bonds, a speci- men copy of which is available from the City. Any capitalized term used herein and not otherwise defined herein has the meaning assigned to it in "Summary of Certain Documents - Definitions" in Appendix A hereto. * ect to Chan 1 Ll AUTHORIZATION AND VALIDATION The Bonds are to be issued pursuant to the author i t,' of the Constitution and laws of the State of Florida, particularly Chap- ter 159, Florida Statutes, a Resolution adopted y the City Commission ,f t:�e City (the "City Commissio:,") on a:c" 2J► 1985, and certain resolutions in furtherance thereof (Collectively, the "Resolution"). The Bonds were validated by judgment of the Circ::it Court of �985 and the ti..e fir t3k. g Dade Count}•, Florida on June 20, n appeals thereon has expired without any appeal being THE PARTNERSHIP The "Partnership" is the Bayside Center Lim.ite4- Partnership, a Maryland limited partnership, formed in Decemiter of 1984► the general partner of which is Rouse -Miami, inc., s corpor- ation formed in 19719. Rouse -Miami, Inc. is an a`_`_liat5 of The Ro:ise a Maryland corporation. Tle Rouse Company was founded in 1956. The Ro.s= onnpany currently operates 59 retail projects in 19 State t'-e District of Col- mt;a and Canada, including 38 retail :A.':ter: Prising giver 3o million square feet of space. Among t ese ar_ Fa^e:il "all Marketplace in Boston, the Gallery at a: k_t E'ast in Philadelphia, Harborplace in Baltimore, Santa Monica P_a=e ;^ .os Angeles, The Grand Avenue in Milwaukee and the So-';--: St:=et Sea- port .n New Fork. The additional 14 retaii cent__= - ntafi' - moo_ ning approximately: 3.8 million square feet of mall spac_ a: _ �pe:ated under incentive management contracts. Thle Rouse Co.-,.ra is also the developer of the new city of Colombia, 'nary+anf, » is is located between Washington and Baltimore. ::o» i3 :ears old, Columbia has approximately 60,000 residents :ror ' 600 businesses and industries, 18 schools, branches of `o :r cc' _eces, a full -service hospital, library, theatre, wus _a:__io and many other cultural, entertainment, and rep:eational activities. Set forth below are certain = �n�ial results of The Rouse Company: -- _�... 2 VV 7 SJMMARY FINANCIAL RESULTS OF THE ROUSE COMPANY (1) (000's omitted) 1984 Current Value(2) Cost Basis Basis Assets $1,457,393 $800,250 Liabilities 726,312 713,037 Common Stock and Other Shareholders Equity 731,081 87,213 1383 Current Value(2) Cost Basis Basis $1,276,534 $716,172 670,454 655,793 606,080 60,379 1982 Current Value(2) Cost Basis Basis $1,052,304 $631,862 577,123 572,173 475,181 59,689 1984 1983 1982 Gross Revenues(3) $199,063 $176,546 153,616 Earnings Before (3) Non -Cash Charges 31,225 27,052 21,518 Net Earnings (3) 6,994 8,146 6,855 Earnings per Share(3) .45 .53 .46 1. Excerpted from The Rouse Company 1984 Annual Report. See Appendix B - Consolidated Financial Statements for The Rouse Company and its Subsidiaries for the year ending December 31, 1984. ' 2. The Rouse Company's operating properties and a certain other assets have appreciated in value and current investment values # exceed their cost basis net book value determined in conformity with generally accepted accounting principles. Management of The Rouse Company believes that the current value basis financial } statements more realistically reflect the economic bases for The Rouse Company's financial position. 3. From Continuing Operations. THE PROJECT Background Pursuant to the Parking Garage Lease Agreement dated January 14, 1985, as amended, the City is leasing approximately 3.7 acres to the Partnership upon which the Partnership is to construct and operate a multi -level parking garage with approximately 1,200 spaces to be constructed in connection with the development of 3 i the i3ay:;ide Center. I'lw i t) j( rt_ will he constructed in the area now occupied by the 11,-iyfront Auditorium and the adjacent City of Miami Department of Off -Street Larking Municipal Lots. The Bayside Specialty Center will he developed on a site which in the aggregate consists of approximately 20 acres located adjacent to the Project and the Miamarina in an area located at the southeast corner of Biscayne Boulevard and N.E. 5th Street in downtown Miami. The site includes the existing Bayfront Park Auditorium, the Reflections on the Bay Restaurant, the Dockside Terrace Restaurant and adjacent Municipal Parking Lots. The opening of the Bayside Specialty Center as well as the Project is scheduled for the second calendar quarter of 1987. The Bayside Specialty Center will include a festival market retail center containing approximately 200,000 square feet of retail space in new facilities along the edge of the existing 208 slip Miamarina. An additional 35,000 square feet of retail space will be developed in an existing restaurant facility. In connection with the construction of the Bayside Specialty Center, the City intends to make certain improvements to an adjacent portion at Bayfront Park which include, construction of an amphitheater with 3,000 permanant spectator seats and 7,000 grassy terraced seats, a stage, ancillary theatre facilities and over 20 acres of passive park. Construction of the foregoing is being financed from various sources, including Federal government grants and private sector funding. The Project will be constructed of cast -in -place concrete and will be a split level garage with three levels on one side and four levels on t}te other side including the roof. The structure will be constructed so as to provide for the addition of two floors which, if added at a later date, would expand the Pro- ject's capacity to approximately 1,900 parking spaces. Vehicular access to the Project will be provided by an easterly extension of N.E. Fourth Street and from Port Boulevard. The Project will include four elevators and five sets of stairs and, at the third level, two pedestrian bridges will connect the Project to the upper level of the retail area of the Bayside Specialty Center. Estimated Economic Feasibility On August 6, 1985, Conrad Associates East, Chicago, Illinois, a nationally recognized parking consultant, submitted to the City a report entitled "Bayside Parking Facility -- Feasibility Study" (the "Feasibility Study"). The Feasibility Study estimates the current and probable future parking demand for the Bayside Specialty Center. The following table, prepared by Conrad Associates East, sets forth certain financial projections for the Project. 4 fPMf 333 a. hS` 4 FINANCIAL PROJECTIONS FOR THE PROJECT* (Amounts in Thousands) Years Ended June 30 (6) 1987 Visitor Revenue $ 731 Monthly Revenue 52 Total Operating Revenue 733 Less: Operating Jxpenses 175 DOSP Management Fee(1) 27 Taxes 83 City Ground Lease 10 Total Operating Expense Net Operating Revenue Interest Income(2) Net Revenue Debt Service Net Income Debt Service Coverage Ratio(4) Distribution of Net Income: City Share (5) Rouse Share Cumulative to City Cumulative to Rouse *Subject to change 1988 1989 1990 1991 1992 $2,194 $2,449 $2,789 :$3,099 $3,306 156 163 173 1.83 194 2,350 2,613 2,961 3,282 3,501 548 580 615 652 691 80 91 104 115 123 250 250 250 250 250 10 1.0 10 10 10 295 888 932 979 1,027 1,074 488 1,462 1,681 1,983 2,255 2,427 149 149 149 149 149 149 637 1,611 1,830 2,131 2,404 2,576 1,650(3) Note(3) 1,650 1,650 1,650 1,650 637 1,611 201 505 776 948 1.0 1.0 1.18 1.37 1.55 1.66 1993 1994 $3,483 $3,791 206 218 3,689 4,009 733 777 129 140 250 250 10 10 1,122 1,177 2,567 2,832 149 149 2,716 2,981 1,650 1,650 1,085 1,350 1.75 1.92 358 846 141 293 428 514 583 715 278 766 61 213 348 434 503 635 358 1,204 1,344 1,639 2,068 2,582 3,164 3,879 278 1,044 1,104 1,319 1,668 2,102 2,604 3,239 (1) 3.5% of gross revenue but not less than $75,000. (2) Interest income computed with 9.13% which represents the weighted average coupon on the Bonds. (3) Interest is capitalized in Bond issue through October, 1987. (4) Coverage ratio is computed with the average annual debt service of $1,650,000. (5) To the extent there is net income available for distribution, the City is to receive the sum of eighty thousand dollars plus fifty percent of the remaining net income available for distribution, if any, after payment of the above noted eighty thousand dollars, and after the Partnership has been reimbursed up to ninety thousand dollars for any negative cash flow previously paid by the Partnership. (6) Note: Numbers may not add exactly due to rounding. _ 8v ~1027 5 l ;1 k r. 41, {ws�� is expected to result from construction of the Bayside Specialty Center, the Bayfront Park Redevelopment Project and the Project, is prepared to submit an application for a City of Miami Downtown DRI pursuant to 380.06(21), Florida Statutes. The City, DDA and the Department entered into an agreement ("DRI Agreement") on June 28, 1985 whereby the Bayfront Park Redevelopment Project, the Bayside Specialty Center and the Pro- ject may be constructed and (with the exception of the amphi- theater) operated prior to the issuance of a DRI Development Order for the proposed City of Miami Downtown DRI. Construction of the Bayside Specialty Center, the Bayfront Park Redevelopment Project and the Project will proceed concurrently with the sub- mission of the Application for Development Approval ("ADA") for the Downtown DRI. The ADA must be submitted within 12 months of the date of execution of the DRI Agreement and shall consider the improved Bayfront Park (pursuant to the Bayfront Park Redevelop- ment Project), the Bayside Specialty Center and the Project as existing facilities. If the ADA is not filed within that time, then the City and DDA have agreed to submit an ADA for a DRI for the Bayside Specialty Center, the Bayfront Park Redevelopment Project and the Project within 16 months from the date of exec- ution of the DRI Agreement. Notwithstanding the default of the City or DDA in the performance of their obligations under the DRI Agreement, the Partnership shall not be prohibited by the Department in constructing or operating the Project or the Bayside Specialty Center. THE MANAGER - DEPARTMENT OF OFF-STREET PARKING In November, 1955, the State Legislature enacted a special act now contained in the City's Charter creating the City of Miami Department of Off -Street Parking (the "DOSP") and the Off - Street Parking Board (the "Board") and vesting the Board with the power, duties and responsibilities customarily vested in the board of directors of a private corporation. DOSP is an agency and instrumentality of the City and is charged with the opera- tion, management and control of the off-street parking facilities of the City and all properties pertaining thereto. DOSP's budget and rates must be approved by the City Commission and its bonds must be issued pursuant to ordinance enacted by the City Commis- sion. All expenses DOSP and the Board incur in carrying out their duties are paid solely from revenues generated by DOSP. Tax money has never been used to pay debt service or the operating expenses of DOSP. The objective of DOSP continues to be the development of a long-range, comprehensive parking program for the City. DOSP will operate the Project pursuant to a Management Agreement by and between DOSP and the Partnership. 7 Chu -102 M W Members of Off -Street Parking Board Member Mr. Arnold Rubin, Chairman Mr. H. Gordon Wyllie, Vice Chairman Mrs. Dianne Saulney Smith, Member Mr. David Weaver, Sr., Member Mr. Leslie Pantin, Sr. Member Occupation President, HUB Fashions President, Southeast Properties, Inc., Division of Southeast Bank, N.A. Assistant County Attorney, Dade County Chairman, Intercap Investments President, Pantin Insurance Agency DOSP presently employs 108 full-time and two part-time persons. Approximately one-half of the employees perform meter maintenance, meter collection and parking regulation enforcement functions. Roger Carlton has been the Director of DOSP since June, 1981. Mr. Carlton earned an M.B.A. degree from Georgia State University and is a Ph.D. candidate in Administration at the University of Miami. He was previously an Assistant County Manager of Dade County. Other senior department personnel include Arthur Brawn, Assistant Director of Operations, Daniel Morhaim, Assistant Director for Finance, Raymond Sanders, Director of Accounting, Risa Ashman, Director of Marketing and Tim Phillips, Director of Management Information Systems. DOSP operates five parking garages, thirty seven parking lots and on -street meters with a total capacity of 20,000 parking spaces. Three of the five parking garages are owned and financed by DOSP. The other two parking garages are owned by the City of Miami and managed by DOSP under a management agreement. In addition, DOSP operates the 12,000 space Metrorail Parking System for Metro -Dade County, and the Town of Surfside Parking System under management agreements for a total of 33,000 spaces. SECURITY FOR THE BONDS General The principal of and interest and premium, if any, on the Bonds shall be payable and secured by the proceeds of the follow- ing: 0 7 1. Payments to be made by the Partnership to the Trustee pursuant to a Financing Agreement, dated as of October 1, 1985 by and between the City and the Company (the "Agreement"), pursuant to which the Partnership has covenanted to pay the principal of and interest and premium, if any, on the Bonds along with the fees and expenses and expenditures of the Trustee incurred in connection with the Project and the Bonds; 2. Funds on deposit in the Construction and Acquisition Fund until expended to pay costs of the Project. 3. Funds on deposit in the Reserve Fund. The "Reserve Requirement" is an amount equal to the lesser of the Maximum Debt Service Requirement or 125% of the Average Annual Debt Service Requirement. The Reserve Fund shall be initially funded from the proceeds of the Bonds. In the event the amount in the Reserve Fund is less than the Reserve Requirement, the Partnership is required, pursuant to the Agreement, to make, in no more than sixty consecutive installments, monthly deposits to the Reserve Fund equal to at least 1/60 of the Reserve Requirement until it is met. 4. Funds on deposit from time to time in the Revenue Fund. The Bonds shall not be deemed to constitute a debt of the City of Miami and the City is not obligated to pay the Bonds or the interest thereon except from the special funds specified in the Indenture, and the faith and credit of the City are not pledged to the payment of the principal of or interest on the Bonds. The issuance of the Bonds shall not directly or indirectly or contingently obligate the City to levy or to pledge any taxes whatever therefor or to make any appropriation from the revenues of the City for its payment except from said special funds. Guaranty The Bonds are also secured by a Guaranty Agreement between The Rouse Company, a Maryland corporation as Guarantor, and the Trustee, dated as of October 18 1985 (the "Guaranty"), pursuant to which the Guarantor has agreed to pay all Operating Deficits (defined as the amounts the Company is required to pay under the Agreement) to (a) meet the scheduled principal, premium, and interest payments on the Bonds; (b) maintain the Reserve Require- ment and (c) pay the fees and expenses of the Trustee and Opera- tion and Maintenance Expenses which are, at the time the same is payable under the Agreement, in excess of Revenues. The Guaranty expires on the occurrence of the earliest of the following 9 IL r1•z evt:nt !;: (a) t ht, Nri ;:rvt,nut`:: of tile Project have been at Bonds for least three 1 . 'ill t i mr:; the Dolot :•ter v i co Requirement on the amount of prin- C 0111, t•Cut ivO twelve-mont'l r.rr it,tjs; (b) the entire the Bonds has been cipal ot, .111d intcit,:;t an.l any premium on, anniversary of the 0,Ii,3 .11 }�1��vi�ltIt1 fti1 .,r (.-) the £fifteenth ,l,at-r tit C01111let.ioll of the rloject. 11ond i n s u t anc.:e C k In t'u11011t IV wit': tat` i:,suance of the Bonds, Financial Guar - ant\' (1,1'i:lancial Guaranty") will issue its �tuni.�ii`,31 i:,`:l,i Ntw 1 =ur i l8uranc� Folicy for the Bonds (the "r.l is •'� (:;t,o A-ppon.ii.\ for a copy of the Policy) . The kinco'n'i i t. 1 l\' a:1.1 :':'evocably guarantees the payment of t1;,3t_ ;`,`: ti,11l .`f tl;e iaoi,`al .): ani interest on the Bonds which ;•a:; :�r; .�,1,e ;h' 1,01 r`,3.•.TCnII , t` It s`•lall be unpaid by reason of non- i`,3v r,rilt :`\tt,t: ; t \ . 'r i na:l.: i al Guaranty will make such payments t` ltl. •3:1�, �..�. , �`I' :t: sll;:eSSOr as its agent (the "Fiscal Aar:lt. 33te on which such principal and ilit rrt`.t i. .:;:c, on t':e 11;js_ness da;: next following the day on .:;:.-I.rantv have rec e ive3 telephonic or tele- 3�`�1:.'_:me3 :n writing, or written no - Bonds tt`:1:. i„i� 1, irO:u an of � or t b the Trustee t.,e :lo: : a'. ;�e;:t of suc': 3,<<oun,. y it 1.0"a�' `: ;. � .. ,, .. t: ...•, . "is:al , Agent.,� will 3isbsrse such .:1on, t, it_ owner ;zon receipt by the Fiscal t .he Fiscal Agent of the owner's due or , Y:-n •, ' yht to ::c: t ; ont t'-:e . r incip al and interest f pa On. .in t=v..:C;;7C-, in 1,: :ng a:: y appropriate instruments Of owner's rights to payment of such -':a;l re_`e3 is Financial Guaranty. :'•le ter - : " ; e - _`e, = of 3 Bon-` 4 nc lu3e s any payment 'f o: i::.ore_t ;+.atn owner of a Bond which has .0, : VC: C1: ..: .7_.:17 Dane: . suant to the ' nite3 States .. a. '.'.,� \. . ,:t '• ._ ...._ ..� _.. _ -::K: ,.Yt..; in aCCor :a;,Ce with d cc":_ '.:ar_hg competent: j 1. \ ♦ � ., l \ \ ♦ \.:' Po. _ :Y the premium will be fully -,".e Bon' ..le Po, i cv covers the So:,3s o: thei_ respective stated 1ratQ:: t';e same shall 'are been called r Tr, n,,at,7, y 'S.nk:. � ree:r._ __on, an3 :-lot on any other date ,'.:C 5\� ,:_ Z:: ' �t•C ;,ee- a\celeste^, and covers the _ .._____.,. ... _ _-nterest on the statec date for i i s t t s Financial Guaranty is a wholly -owned subsidiary of. FGIC Cor- poration, a Delaware holding company. FGIC Corporation is owned by the following investors or affiliates thereof; General Elect- ric Credit Corporation, General Re Corporation, Lumbermens Mutuo' Casualty Company (affiliated with the Kemper Group), Shearsor Lehman Brothers Inc_., Merrill Lynch & Co., Inc., J.P. Morgan & Co. Incorporated and Gerald L. Friedman. The investors of FGIC Corporation are not obligated to pay the debts of or the claims against Financial Guaranty. Financial Guaranty is domiciled in the State of New York and is subject to regulation by the State of New York Insurance Department. As of March 31, 1985, the total capital and surplus of Financial Guaranty was approximately $116,700,000 as reported to the State of New York Insurance Department. The Partnership will provide a letter of credit (the "Letter of Credit") to Financial Guaranty issued by Sun Bank/Miami, National Association, in an amount equal to the original principal amount of the Bonds, less the amount on deposit in the Reserve Fund. The Letter of Credit will not secure the Bonds and can be drawn upon only by Financial Guaranty. After construction of the Project has been completed, the stated amount of the Letter of Credit shall be decreased to an amount equal to one year's Average Annual Debt Service on the Bonds. The Letter of Credit requirement shall remain in force until October 1, 1993, or until Net Revenues have been equal to 1.50 times Average Annual Debt Service on the Bonds for a period of three consecu- tive years. The Letter of Credit is subject to cancellation by Sun Bank/Miami, National Association prior to the termination of the Letter of Credit requirement in which event the Partnership is obligated to provide a substitute letter of credit. Under certain other circumstances, Financial Guaranty can require the Partnership to provide a substitute letter of credit. The obligation to repay Sun Bank/Miami, National Association for any draw under the Letter of Credit will be set forth in a Reimbursement Agreement dated as of October 1, 1985 between Sun Bank/Miami, National Association, the Partnership and The Rouse Company. The Letter of Credit will be issued pursuant to an Insurance Agreement dated as of October 1, 1985 between the Partnership, Financial Guaranty and Citibank, N.A. as Financial Guaranty's Insurance Agent. Reserve Fund The Indenture provides for the establishment and maintenance of a Reserve Fund. There shall be deposited into the Reserve Fund upon issuance of the Bonds, a sum equal to the lesser of the Maximum Debt Service Requirement or 125% of the Average Annual 11 '9r, ...11,�•7w =�v t'. Dent Service Requirement, which sum shall be maintained for the benefit of the holders of the Bonds (the Reserve Requirement). Moneys in the Reserve Fund shall be used only for the purpose of paying principal and interest on the Bonds when moneys in the Bond Fund are insufficient therefore. Any moneys withdrawn from the Reserve Fund must he restored from Revenues available there- fore after all require3 payments have been :Wade for the payment of dent service on the Bands over not more than a sixty month period. Additional Parity Obligations The City has reserve) the right to issue additional obliga- tions upon request for same by the Partnershi?, payable on a parity with the Bonds ("Additional Parity Obligations") for the purpose of (i) financing the acquisition, construction and installation of additional facilities to be made a part of the Project, (ii) financing completion of the Project or (iii) repairs or capital improvements to the Project of a major nature arising from casualty or unanticipated conditions after completion of the Project. The City may not be required or compelled to issue any such obligations but has agreed to use reasonable efforts to assist in the completion of the Project. The proceeds of any such Additional Parity Obligations shall be loaned to the Partnership upon execution of a promissory note and upon the appropriate supplementation of tha Indenture and the Financing Agreement. The issuance of Additional Parity Obligations, payable on a parity from the Revenues wit:; the Bonds are subject to certain restrictions set forth in the In3enture and the Financing Agreement, including in the case of Additional Parity Obligations issued for the purposes set forth in (i) and (iii) above the filing with the City and the Trustee of a certificate of a feasibility consultant stating: (1) that the books and records of the Partnership and the applicable books and records of the City have been reviewed by him; (2) the amount of the Revenues derived for each of the three Bond Years preceding the Sate of issuance of t-e nropose3 A33itional Parity Obligations with respect to which such certificate is :Wade and the Revenues expected to be 3erive3 from, the Bond Year immediately following the date of issuance of the proposed Additional Parity Obligations wit respect to wh;--� ... such certificate is m33e for each such Bond Year is equal to not less 25% of t`.e Maximum De t Seri _,.e RegL_ ema 1 t.�3n �'J „^ `' r e t on al outstanding Bon-4s, including the A33itional Parity Obligations witettier i �h h respect to wh_ch G:1�.. zertificate _5 made toget! 10ns y w00% of Operation an-4 Maintenance 'xaenses and all other pay rents required to `:e mma3e �:rsus t to the Financi- _ Agreement and the I^ ;.a_c�,a.:^. tie 'daxi.,.:; - Service lett Re.:;:ire:aent �r J. in connection with the issuance of the Additional Parity Obligations for the purposes set forth in (i) and (iii) above, the feasibility consultant may take into consideration the rates in effect on the date of such calculation, but shall not include any proposed or projected rate increases. ESTIMATED SOURCES AND USES OF FUNDS Proceeds of the Bonds, after payment of underwriter's dis- count and costs of issuance, will be utilized to provide for the financing of the costs of construction and acquisition of the Project, to fund the Reserve Fund and as set forth below: Sources: Bond Proceeds Accrued Interest Total Uses: Deposit to the Construction and Acquisition Fund for payment of costs of Project Deposit to Capitalized Interest Account (1) Deposit of Accrued Interest to the Bond Fund Deposit to Reserve Fund (2) Underwriters' Discount Bond Insurance Premium Legal, Printing, Consulting, Letter of Credit Fee and Miscellaneous (3) Rcb►'gact "o o-t— Total 0101oot5-oo �Zg,tiya,cfl $11 $ 85o O1y.03 V3I%610•02 1 '�. $ I y a►. %,4 SOB Itilt - � $ 1-71 (1 R% 14a, G(-I (1) Interest on -the Bonds has been capitalized through l" / 1987. ' _ ' -' (2) ThL de0osit to the Reserve Fund shall equal the lesser of: (a) Maximum -Debt Service Requirement or (b) 125% of Average Annual Debt Service Requirement. (3) The Letter of Credit Fee will be capitalized throughcp&� . 13 �u�1027 DESCRIPTION OF THE BONDS Maturities, Interest Rates and Place of Payment The Bonds will be dated October 11 1985, will bear interest at the rates and will mature, subject to the redemption provisions described herein, in the amounts and on the dates as set forth on the cover page of this Official Statement. Interest will be payable on January 1, 1986 and semiannually thereafter on July 1 and January 1. The Bonds are issuable as fully registered bonds, without coupons, in the denominations of $5,000 each, or integral multiples thereof. Principal on the Bonds will be payable at the principal corporate office of the Trustee. Optional Redemption The Bonds •mcltuning - on or prior to July 1, 1993 will not be subject to optional 'redemption prior to maturity except as set forth below under "Extraordinary Redemption" and "Special Redemption". The Bonds maturing on or after July 1, 1994 are subject to redemption prior to their respective maturities, at the opti,on.,of• trie Cofomission of the City at the request of the Partnership,. on and after July 1, 1993, in whole on any date, or in part in the' 'inTerse order of their maturities and by lot within any maturity from time to time on any Bond Service Payment Date, at- the, fol�owirg redemption prices, plus accrued interest to the date of redemption: Redemption Price gedemptiore Period (percentage of (daE:s'inclusive) principal amount) July 1, ,1993 to June 30, 1994 102 % July 1, 1994 'to June 30, 1995 101 1/,2% July 1, 1995 to,June 30, 1996 101 $ July 1; 'l99% to June 30, 1997 100 1/2% July 1, 1997 and thereafter 100 % ` 0J Mandatory Redemption 1 The Bonds met are subject to mandatory redemption, by lot, pursuant to the Amortization Installments set forth below, on each mandatory redemption date, at 100% of the principal amount thereof plus accrued interest to the redemption date. As and for the mandatory redemption for the retirement of Bonds, the Amortization Installment required to be deposited into the Bond Fund shall include amounts sufficient to redeem on each mandatory redemption date the principal amount of Bonds set oppo- site the year as follows: 14 07, 1 i 1_�C) 451:), C oc). t:11:) C►, /I:11 /ia1 490,1:)C)(-). c)(::) C-� ', Q'Ia,i�l:1C). i►i.) 7 i (:)1 ; c:1.Y .,91:) , (i(it:►, c_iC► : 7 ; 01 i : 9 1 , �_ l_I , CIC )I:1. C►C) 7/0 1 ; 1 1, 1 15, 000. . 00 C17 71:)5 I:I1:11:1. t:)C) )7/U1i 12 1,�1: 40,01),(:)o 17/(i1 - 1 1 , 470, OCK). C)p �7/I:)1; 14 1,61�i�iiC)C>.i.1C► Extraordinary Optional Redemption The Bonds are subject to redemption in whole on any date or in part in the inverse order of their maturities and by lot within any maturity prior to maturity by the Issuer, at the request of the Partnership, on any Bond Service Payment Date, pursuant to provisions set forth in the Indenture in,the event of damage, destruction and condemnation of the Project, at par plus accrued interest. In addition, in the event all or any portion of the Bayside Specialty Center is taken by power of eminent domain or shall be conveyed to avoid such proceedings, or is damaged or destroyed by reason of fire or any other casualty, and is not restored, and it shall not be economically feasible to complete restoration, the Partnership may elect not to restore and the Bonds may be immediately called at par, plus accrued interest, as more fully provided in the Indenture. �1�+�,A,, N"iJa?t0Ry �V~ Wok - Special Gp�wel Redemption If interest on the nds is declared taxable for any rea n, then the Bonds, e ,'mmediatel called at Ear, plus accrued inte In e alterna ive, the Bons s a ear interest at an creased rate equal to % per annum, said increased rat all be applied retroactively to the date on which Brest on the Bonds became taxable, vial Mandatory o inaD 400 The Bonds are subject to specia �H whole, on the first date for which notice can be provided in the event the Trustee and the Issuer have not received notice from the Partnershig&prior to October 1, 19V7 that the completion date p, Cextension. the ro�ect, as defi ed in the ampletion Date"), has .occurred prior to 0 tober 1, 987ess such date has been extended by Financial uaranty and in h event the Trustee and the Issuer have no received notice m the Partnershi pri r to the date of such xtension that the pletion Date h o occurred prior to he date of such w 15 ` Npp�'ty SS-1a2'7 a� , Unless waived in writing by Financial Guaranty, the Bonds are subject to special mandatory redemption, in whole (if prior to the Completion Date) or in part (if on or after the Completion Date) , in an amount equal to the stated amount of the Letter of Credit, on the business day immediately preceding the expiration of the Letter of Credit, unless the Company has provided notice to the City, the Trustee and Financial Guaranty that Net Revenues, as certified by a nationally recognized firm of independent accountants acceptable to Financial Guaranty and the Partnership have been equal to 1.50 times the Average Annual Debt Service Requirement for a period of three consecutive Bond years. All Bonds so called for redemption will cease to bear inter- est on the specified redemption date, provided funds for their redemption are on deposit at the place of payment at that time, and shall no longer be protected by the Indenture and shall not be deemed to be outstanding under the provisions of the Inden- ture. Notice of Redemption Notice of the call for redemption identifying the Bonds to be redeemed shall be given by mailing a copy of the redemption notice by first class mail at least thirty (30) days (except for a Special Mandatory Redemption, in which case not less than 15 days) but not more than sixty (60) days prior to the date fixed for redemption to the Holder of each Bond to be redeemed at the address shown on the registration books; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of any proceedings for the redemp- tion of the Bonds. Bonds to be redeemed pursuant to Special Mandatory Redemption will be selected on a proportionate basis from among all of the maturities of the Bonds which proportionate basis shall be determined as nearly as practicable by the Trustee by multiplying the total amount of moneys available to redeem Bonds (or portions thereof) on the redemption date by the ratio which the aggregate principal amount of all Bonds in each maturity then outstanding 'bears to the total of the aggregate principal amount of all Bonds then outstanding. 16 1 DATE (.17 ; !_)1 i 87 7//88 !:)7: C)1 /89 07/01 i 91 07/01 /9-- C)7 / 01 / 94 C)7/!:)1 /95 Q7/!:)1/96 C)7/C)1 /97 07/!►1 /98 /99 07/!i1/ClC) f_i 7 .)1 / �:► 07/01 /(-)5 C)7/C)1 /06 Q_7 1 / C)7 .1 )1/0,9 C) 7 / 01 : 1,:) !?7/01 / 11 07; 01/12 Q1 / 1 3 !►7/01/14 TOTAL 0 ANNUAL DEBT SERVICE REQUIRffiMENTS PRINCIPAL 175, C 0o. c.i(:) 185, C-)C)C). C)C► '2(:)(l , O00. 00 15, 000. 0C) 000. ►0 . 00 '1501t.tl, 0. 00 270, OCtt:t. Ct0 3 75 , 000. 00 41! i, C)00. 0Cl 450, 000. 00 49C) 9 o0c). 00 535, 00C). 00 645 9 000. 00 7O5 , 000. 00 77C), C)(:)(). C)ca 845, 000. t:►t:t 1 , CS C), (:)(:)C). 00 1,115,000.00 1 2225, 000. 00 1 , 340, 000. 00 1 , 470, 000. 00 1 , 61 !) , 000.00 17,C)1C),fiC)0.0c) RATE 6.750 7. f:►00 7. 400 7. 650 7. 9t:0 S. 150 8. 400 B. 600 8.800 8.900 9. Cu7C) 9. 100 9. 500 9. 500 9. 500 9. 500 9. 500 9. 500 9.625 9.625 9.625 9.625 9.625 9.625 9.625 9.625 9.625 INTEREST 1 , 193, 052. 25 1,5901736.-5 1,590,736.25 1,578,923.75 1,565,973.75 1,551,173.75 1,534,726.25 1,516,556.25 1,496,181.25 1 9 47.3, 501 . 215 1,4469131.25 194199971.25 1,3899266.25 19355,516.25 1,318,206.25 1,275,456.25 19228,906.25 19178,081.25 19122,031.25 1, 060, 756. 25 993,781.25 919 , 668. 75, 8.38 , 337. 50 748,825.00 65C)9 650.00 5439331.25 425,425.00 296,450.00 154,962.50 ANNUAL D/S 1, 197, 052.215 1,59C),776.25 1 , 765, 7.36. 2-5 1 1 76.3 , 92 3 . 75 1,765,977.75 1,766,173.75 1, 764, 726. 25 1,766,556.25 1,766,181.25 1, 768, 5! i 1. 25 1,768,131.25 1,764,971.25 1,764,266.25 1,765,516.25 1,768,206.25 1,765,456.25 1,763,906.25 1, 768, 081. 25 1,767,031.25 1,765,756.4-5 1,763,781.25 1,764,668.75 1, 768, 3-17-7. 50 1, 768, 825. 00 1, 7165,650. 00 1, 768, Z31. —25 1,765,425.00 1, 766, 450. 00 1,764 , 962. 50 33,459,314.69 50,469,314.69 17 S". -ia2'7 f IN LITIGATION There is not now pending any litigation restraining or en- joining the issuance of delivery of the Bonds or questioning or affecting the validity of the Bonds or the proceedings and auth- ority under which they are to be issued. Neither the creation, organization or existence, nor the title of the present members of the City Commission or other officers of the City to their respective offices is being contested. An association of owners of boats docked at the City -owned Miamarina docks has filed suit claiming that the City has injured them by the City's having entered into management and lease agreements for the development of the Bayside Specialty Center in the dock area. The development of the Bayside Specialty Center calls for a termination or relocation of the boats dockage in the area. The suit has recently been dismissed without prejudice and the City is in the process of negotiating a settlement agreement which will call for the relocation of the dock space. There is no litigation pending or to the knowledge of the management of the Partnership and the management of the Guarantor threatened which, if it were decided against the Partnership or the Guarantor or the Project, would have a materially adverse effect upon the financial affairs of the Partnership or the Guar- antor. UNDERWRITING William R. Hough & Co., Shearson Lehman Brothers Inc. and AIBC Investment Services Corporation (the "Underwriters") have agreed to purchase he Bond from the City at an aggregate purchase price of $ 9 a plus accrued interest from 1, 1985. he Underwriters obligations are subject to certain conditions precedent, and they will be obligated to purchase all the Bonds if any Bonds are purchased. The Bonds may be offered and sold to certain dealers (including Underwriters and other dealers depositing such Bonds into investment trusts) and others at prices lower than such public offering price. LEGAL !MATTERS The proposed form of opinion of Sparber, Shevin, Shapo & Heilbronner, P.A., Miami, Florida and Bryant, Miller and Olive, P.A., Tallahassee, Florida, Bond Counsel is set forth in Appendix C to this Official Statement. Certain legal matters will be passed upon for the City by Lucia A. Dougherty, Esq., City Attorney, for the Company by its counsel, Greenberg, Traurig, Askew, Hoffman, Lipoff, Rosen & Quentel, P.A., Miami, Florida and for the Underwriters by their counsel, Broad and Cassel, Miami, Florida. 18 RATINGS An application has been made for ratings on the Bonds from Moody's Investors Service, Inc. and Standard and Poor's Corporation. The ratings will be based solely on the issuance of the Policy. Any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same. Generally, rating agencies base their ratings on the information and materials furnished to them and on investigations, studies and assumptions by the rating agencies. There is no assurance that a particular rating will be maintained for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment of the agency originally establishing the rating, circumstances so warrant. The Underwriters have undertaken no responsibility either to bring to the attention of the holders of the Bonds any proposed revision or withdrawal of the rating on the Bonds or to oppose any such proposed revision or withdrawal. Any such change in or withdrawal of such rating could have an adverse effect on the market price of the Bonds. For any additional description of the ratings and their meaning, Moody's Investors Service, Inc. and Standard & Poor's Corporation should be contacted. TAX EXEMPTION In the opinion of Bond Counsel, assuming compliance with the Internal Revenue Code of 1954, as amended (the "Code"), interest on the Bonds is exempt from all present Federal income taxes under existing statutes, rulings and court decisions, except for interest on any Bond for any period during which such Bond is held by a person who, within the meaning of Section 103(b)(13) of the Code is a substantial user of the facilities financed by such Bonds or a related person, and the Bonds and the income thereon are exempt from income taxation under Florida law, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations as defined in said Chapter 220. MISCELLANEOUS This Official Statement includes descriptions of the terms of the Bonds, the Guarantee, the Indenture, the Financing Agreement, the Letter of Credit, the Resolution and certain other agree- ments, and certain provisions of state and federal legislation. Such descriptions do not purport to be complete and all such des- criptions and references thereto are qualified in their entirety by references to each such document, copies of which may be ob- tained from the City or, during the period of the offering, from 19 Wi I I iam P,. 'j"Iqh & Co., St. Petersburg, Florida and Shearson 1,ellman 3rothors Tnc., Miami, Florida. The information contained in this Official Statement has been complied from official and other sources deemed to be reliable, and is believed to be correct as of this date, but is not guaran- teed as to accuracy or completeness byr and is not to be construed as a representation by the Underwriters. Any statoment male in this Official Statement involving mat- ters of opinion or of estimates, whether or not so expressly sta- ted, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City of Miami or the Partnership, Rouse -Miami, Inc. or The Rouse Company since the date hereof. The execution authorized by the Partnership. BF0163SI of this Official Statement has been duly Commission of the City of Miami and the 20 THE CITY OF MIAMI, FLORIDA By: Mayor BAYSIDE CENTER LIMITED PARTNERSHIP By: Rouse -Miami, Inc., General Partner By: Vice President APPENDIX A SUMMARY OF CERTAIN PROVISIONS OF INDENTURE AND FINANCING AGREEMENT This summary is subject to the more complete information and definitions contained in the Indenture and Financing Agreement and should not be considered to be a complete statement of facts material to making any investment decision. INDENTURE DEFINITIONS "ACT" shall mean Chapter 159, Part II, Florida Statutes (1983), as amended. "ADDITIONAL PARITY OBLIGATIONS" shall mean additional bonds or obligations issued in compliance with the terms, conditions and limitations contained in the Indenture and in the Financing Agree- ment and which shall have an equal lien on the Revenues to he derived by the Issuer from the Financing Agreement and, unless the terms of the Indenture and the Agreement indicate otherwise, rank equally in all respects with the Series 1985 Bonds. "AGREEMENT" or "FINANCING AGREEMENT" shall mean the l'in:.nci ng Agreement, dated as of September 1, 1985, to be executed by and between the Issuer and the Company, together with any supplements executed pursuant to Section 12.06 of the Agreement. "AMORTIZATION INSTALLMENTS" with respect to the Term Bonds of a series, shall mean an amount so designated for mandatory princi- pal installments (for mandatory call or otherwise) payable on the Term Bonds issued pursuant to the Indenture. "ANNUAL BASIC RENTAL" shall have the same meaning as set forth in the Lease Agreement. "AUTHORIZED COMPANY REPRESENTATIVE" and "AUTHORIZED ISSUER REPRESENTATIVE" shall mean the persons at the time designated to act on behalf of the Company or the Issuer pursuant to the Agreement. "AUTHORIZED OFFICERS" shall mean the City Manager of the Issuer and the President of the General Partner of the Company, authorized by law or resolution to sign on behalf of the Issuer and the Company, respectively, or the Clerk and Secretary thereof, respectively, authorized to countersign and attest to the signa- ture of the officers of the Issuer and the Company, respectively, and to certify documents of the Issuer and the Company, respec- tively. As used in the Indenture relating to execution of the A-1 G "A t i:r,. Officers" si;a11 mean `hp t`a - r a. ;D t:-.e �ierk MI!.1! n\!`. to,`„?�,�i Clerk shall incl'JJF? J` p .1C- •'a^sr G� F. i SSJer, rl i rearenCes o ea SD re — ; o1L tilts l•Fllt'i 31 Y drtiier of the iA :rariy an C r, � Vice-Presi- t of the CO„; an;' shallall include an � -r;1t f t.ht, General i artner of the CO3,pans• ana an., =n` Mier Of t e Cc_ an. is sje6 C ^:, :7 �aG a t o \'!' tit \: i i-t'� . .. lel.-..` �O a+ a �•_.,..: - .. a > n ni = seraev�i3Os ..l,. i,?a 0 ..i . �, a ate.... n♦.e \. ., .; �. \' ,,, (',. •.`\ t�', 1� a, : ( ,J.' f f': ' r y7 Y.a _.. -.... .. ..re ZCG_-u .. ..+ at. C ^_. ,., •. .... ,<''. ;?,. 1 i`f' '."i .: .: \: f'\, w.. t. .".e .a.� .'.r�'� C �e :r �:Ic J1.Ga :..., ....: .ii r:, .:� r►1L a►Jri. C r c St `sa.. n t s e G .... to . , � 1, : , , a , a \ .... 1 i ,. , i \- �. a 1 ♦. .. A '. ♦',\. \,\\,\�.�. I.' ~1..�a♦ l,C r.. C��.••,,I ..�I♦..�. � ie..� :i Le.. a.r.rr ca �,. . . ♦. • .1: .... i. �. a � i t t � �.. ... a a . J C,�.. r!c'r f . ...a .1'E'. L't�'a� ^'t� . :(: \'t ...:t :�,i\:. .�.. -�•S .: F \.e ii�Cr r►7.1 ►G'... aG_.. ....:.� ... t- I.e�- .r • . .�\. a*\:. �1r ...-... Me G.. a+:Gn is EI b.: a: r an r_\' a .G..a a_ G Z--7. ' \ .. � r �. 1 ate.- .•: � 4 � �\ . .l a a.' S .'..� . 1 ME Ca .. one .j C � E'... Zan- :.� S„:. N-7, anv stare wn:--i ar. erZ76 . S Mr i d T , "COMPANY" shall mean Bayside Center Limited Partnership, a Maryland limited partnership authorized to do business in the State of Florida, and any successors or assigns and any surviving, resulting or transferee entity. "COMPLETION DATE" shall have the same meaning as set forth in t h e L . "CONSTRUCTION AND ACQUISITION FUND" shall mean the "City of Miami, Florida, Industrial Development Revenue Bonds, Series 1985 (Bayside Center Limited Partnership Project) "onstruction and Acquisition Fund" created pursuant to Section 305 of the Indenture. "CONSULTANT" shall mean a consulting architect or engineer recommended by the Company and acceptable to the Issuer and approved by the Trustee or the authorized representative thereof designated to the Trustee by certificate of the Company. "CONSUMER PRICE INDEX" shall mean that price index computed and issued monthly by the Bureau of Labor Statistics of the U.S. Department of Labor for all Urban Consumers (U.S. Average). "DEBT SERVICE REQUIREMENT" shall mean for a given Bond Year the remainder after subtracting any accrued and funded interest for that year that has been deposited into the Bond Fund, from the sum of: ( 1 ) The amount required to pay the interest coming due on Bonds during that Bond Year, (2) The amount required to pay the principal of Serial Bonds maturing during that Bond Year, and (3) the Amortization Installment for all Series of Term Bonds for that Bond Year. With respect to Adjustable Rate Obligations, except as pro- vided below, the interest rate used to calculate Debt Service Re- quirement shall be assumed to be one hundred ten percent (110%) of the greater of (a) the daily average interest rate on such Adjust- able Rate Obligations during the twelve months ending with the month preceding the date of calculation or (b) the most recent effective interest rate on such Adjustable Rate Obligations prior to the date of calculation. If such Adjustable Rate Obligations were not outstanding for a full twelve months ending with the month immediately preceding the date of calculation, the rate de- scribed in clause (b) of the immediately preceding paragraph shall be used. If Bonds are payable at the option of the Holder the "Put" date or dates shall be disregarded and the stated maturity dates thereof (or dates established for payment of Amortization A-3 g ;-102% 1 4 Installments) shall be used for purposes of this calculation. The rate of interest used to calculate the Reserve Requirement for Adjustable Rate Obligations shall be determined upon the issuance of such Adjustable Rate Obligations. "DEFAULT RATE" shall mean an annual interest rate equal to the lesser of one hundred twenty-five percent (125%) of the rate of interest on the Bonds or the maximum rate of interest allowed by law. "DEPARTMENT OF OFF-STREET PARKING" or "DOSP" shall mean the Department of Off -Street Parking of the City of Miami, Florida. "DETERMINATION OF TAXABILITY" shall have the same meaning as set forth in the Indenture. "EVENT OF DEFAULT" means those defaults specified in and defined by Section 1001 of the Indenture. "EXCESS EARNINGS FUND" shall mean the "City of Miami, Florida Industrial Development Revenue Bonds (Bayside Center Limited Partnership Project) Excess Earnings Fund" created pursuant to Section 306 of the Indenture. "EXPIRATION DATE" shall mean the date of expiration of the Letter of Credit, as such date may be extended from time to time. As used herein, the term "Expiration Date" shall not include a stated expiration date of the Letter of Credit if a substitute Letter of Credit shall then be in full force and effect as pro- vided in the Insurance Agreement. "FEASIBILITY CONSULTANT" shall mean a firm of nationally recognized engineers, appraisers or independent certified public accountants, recommended by the Company, acceptable to the Issuer and approved by the Trustee who shall perform the duties set forth in the Agreement. "FINANCING PAYMENTS" or "PAYMENTS" means the payments made or to be made on the Promissory Note for the payment of the principal, interest and redemption premiums, if any, on the Bonds pursuant to the terms of the Agreement. "GUARANTORS" shall mean The Rouse Company, a corporation organized and existing under the laws of the State of Maryland. "GUARANTY" shall mean that certain Guaranty Agreement from the Guarantors to the Trustee dated September 1, 1985, evidencing the guaranty of payment of the Series 1985 Bonds. "HOLDER OF THE BONDS", "BONDHOLDERS", "HOLDERS" or any simi- lar term shall mean any person who shall be the registered owner of any Outstanding Bond or Bonds. A-4 A W "INDENTURE" or "TRUST INDENTURE" or "INDENTURE OF TRUST" shall mean the Indenture of Trust, dated as of September 1 , 1985, to be executed by and between the Issuer and the Trustee, together with any supplements executed pursuant to Article XII of the Indenture. "INSURANCE AGREEMENT" shall have the same meaning as set forth in Section 702 of the Indenture. "INSURER'S AGENT" shall mean , or any successor agent of the Bond Insurer appointed pursuant to the Insurance Agreement. "ISSUER" shall mean the City of Miami, Florida, a municipal corporation organized and existing under the laws of the State of Florida. "LEASE AGREEMENT" shall mean that certain Lease Agreement between the Company and the Issuer dated as of January 14, 1985, as amended and supplemented, pursuant to which, among other things, the land on which the Project is located is leased to the Company by the Issuer. "LETTER OF CREDIT" shall mean the letter of credit and any substitute letter of credit provided by the Issuer pursuant to the Insurance Agreement to the Bond Insurer to secure its obligations under its policy of municipal bond insurance. "MANAGEMENT AGREEMENT" shall mean that certain Parking Garage Management Agreement originally between the Company and DOSP dated as of January 14, 1985, as amended and supplemented. "MANAGER" shall mean initially DOSP and any successor or replacement thereto. "MAXIMUM DEBT SERVICE REQUIREMENT" shall mean, as of any particular date of calculation, the greatest amount of aggregate Debt Service Requirement for the then current or any future Bond Year. "NET REVENUES" shall mean Revenues minus Operation and Main- tenance Expenses. "OPERATION AND MAINTENANCE EXPENSES" shall mean all Annual Basic Rental and all actual maintenance and operating costs of the Project, incurred, or charges made therefor, in any particular fiscal year or period, but only if said charges are made in con- formity with generally accepted accounting principles, and exclu- sive of depreciation or reserves therefor, amortization of intan- gibles or other bookkeeping entries of a similar nature. A-5 R` execuLion and (jelivery of ;,�;,plemental ino ture securing such Additional Parity Obligations and a•.aardi nrj such Additional Parity Obligations to the p.rrcha7,rs thereof an-9 authorizing the issu- ance, sale and delivery of such TvIditinnal Parity Obligations. (2) An original ?Xecllte,i cc,.rnteroart of any amendment or supplement t(-) the Indor,tur,� to provide for pledges and pay.-nrnts sufficient in t, m-ik- all required payments into the Ron•l Fun(1 in ord-_,r to ray wii-n m- the Debt Service Require- mrnt 011 ')11. ►3ond;; then to be Out:3f-andin_1 and any payment required nt.--,) the other various f,rn 1s rep juire•d by the Indenture �r ,ut)plethereto. ( 3) A certificate of the Tr,.rstee _tat in q that all require- ments of Section 10.02(1) of the Agreoment have been met. (4) The written opinion of E3ond C:),rn.,el expressing the con- clusion that: (a) Any indenture su:)plempntal to the Indenture or any resolution of. the Issuer providing for the issuance of the Addi- tional Parity Obligations has been duly authorized, executed and delivered by the Issuer and constitutes a valid and legally bind- ing instrument enforceable in accordance with its terms (except as the enforcement thereof may be limited by discretionary equitable remedies, bankruptcy, insolvency, moratorium, reorganization or other laws relating to or affecting generally the enforcement of creditors' rights), and the Additional Parity Obligations have been validly authorized and executed, and, when authenticated and delivered pursuant to the request of. the Issuer, will be valid and legally binding limited obligations of the Issuer, enforceable in accordance with their terms (except as aforesaid) entitled to the benefits and security created by the Indenture; and (b) The issuance of such series of Additional Parity Obligations will not adversely affect the exemption from federal income taxation on the interest paid on any Outstanding Bonds under the Code. (5) A certificate of the Trustee and the Authorized Company Representative stating that, to the best of the signer's knowledge and belief, a default or Event of Default or a state of facts that upon the giving of the notice required under the Indenture would become a default or an Event of Default does not exist under the Indenture. (6) A request and authorization to the Trustee on behalf of the Issuer and signed by Authorized Officers to authenticate and deliver the Additional Parity Obligations in the aggregate princi- pal amount as stated in said request and authorization to the purchasers therein identified upon payment to the Issuer of a sum specified in such request and authorization, plus accrued interest thereon to the date of delivery. A-9 (3) Unless provided from other funds of the Company on the date of issuance of the Bonds, a sum sufficient to equal the Reserve Requirement shall be deposited in the Reserve Fund. (4) The balance of moneys received from the sale of the Bonds shall be paid into the Construction and Acquisition Fund and shall be held and administered by the Trustee for the payment of issuance expenses and Development Costs incurred and to be incurred by the Company as provided in Section 2.03 of the Agree- ment. Any moneys derived from Bond proceeds remaining in the Con- struction and Acquisition Fund after payment or provision for payment of all of the costs of the Project shall be used to redeem the largest portion of Outstanding Bonds, callable at the earliest possible date under terms of the Resolution, the Indenture and the Agreement, that does not exceed the amount of such unexpended Bond proceeds. In furtherance of the foregoing, all such unex- pended Bond proceeds shall be placed in a special escrow account within the Bond Fund and used by the Trustee until depleted by redemption of Bonds at the earliest possible call date or maturity of the Bonds whichever occurs first, and the amounts so used shall be considered a reduction in the payments required under Section 4.03 of the Agreement. The amount placed in escrow shall not be invested to produce a yield greater than the yield on the Bonds. Any amount derived from investment earnings on the Construction and Acquisition Fund remaining in said fund after provision for payment of all of the costs of the Project shall be deposited in the Bond Fund and used for the purposes thereof, and said amount shall be considered a reduction in the payments required under Section 4.03 of the Agreement for the Bond Fund. DEPOSITS TO AND DISBURSEMENTS FROM THE REVENUE FUND The Company will deposit all Revenues derived from the use or operation of the Project upon receipt thereof on a daily basis in the Revenue Fund. PAYMENT OF OPERATION AND MAINTENANCE EXPENSES Pursuant to the Agreement the Company has covenanted and agreed that prior to completion of the Project and so long as Bonds shall remain Outstanding under the Indenture, to maintain in a depositary bank an amount equal to the estimated Operation and Maintenance Expenses for the next two calendar months together with amounts sufficient to pay Operation and Maintenance Expenses for the current month. The Issuer and the Trustee agree that daily payments of Operation and Maintenance Expenses shall be paid by the Company from said account and that the Company shall be entitled to be reimbursed for said expenditures only as provided in this Section. The Company shall submit an itemized statement to the Trustee showing all Operation and Maintenance Expenses incurred during the preceding calendar month and upon receipt of such statement and after approval thereof by the Trustee, the A-11 K'-I0"i the C eraticn arr .v 0111 11tt\I1t`s t`II N,—, it in t"}le Revenue C F.r an Amk,un of c>\`tlt y cu f f is ient tre.-..r-�- }`.111\'y- 11'1'. 1\'1V}(`X (';' fit\`\;'\'. I .fit' lKrV.'N:'.. It tt•t �`.3\' .;t`ttt .`t \'t`C. a :.`;, d�x. I t..`... t,2` ;£.. ZZ .1'\' .i"..t :,,tt•it•. t .i. i a."..;: a� It �:t•i ,•(• :'\' .';it ... .t\�. �=a. :�. .. ... ��.. .. ... �. -_ —t. _=_ -- C . . . ♦ . . .fit . �. � .. ." ... � .. _ --' _ .. C C t J W In making the deposits set forth in (1) and (2) above, the Trustee shall deduct therefrom any moneys on deposit in the Bond Fund and available for such purpose. After making all payments set forth in (1) through (4) above, all moneys remaining on deposit in the Revenue Fund shall be promptly transferred by the Trustee to the Company for distribu- tion pursuant to the Lease Agreement. USE OF MONEYS IN RESERVE FUND If at any time funds for the payment of the principal of, Amortization Installments, and the interest on the Bonds shall be interest on the Bonds shall be insufficient to pay the total amount due, then the Trustee shall draw on the funds available therefor in the Reserve Fund, which funds shall be transferred to the Bond Fund. DEPOSIT TO AND APPLICATION OF MONEYS IN EXCESS EARNINGS FUND Unless the gross proceeds are spent within 6 months of the date of the Indenture then on the business day immediately preced- ing the date one year after the date of the Bonds, and every year thereafter and on the Business Day immediately preceding the date that all Outstanding Bonds are redeemed or purchased (the "Deter- mination Date"), the Trustee shall transfer from the Construction and Acquisition Fund, the Reserve Fund and the Bond Fund to the Holding Account within the Excess Earnings Fund an amount equal to the excess of (a) all investment earnings paid or accrued (includ- ing accrued discount on any investments purchased at a discount) since the later of the date of the Bonds or the last previous Determination Date, less realized losses on investments sold on the Bond Fund, the Reserve Fund and the Construction and Acquisi- tion Fund, but excluding the Excess Earnings Fund, over (b) the amount which would have been earned on such Funds since the later of the date of the Bonds or the last Determination Date if the amounts in such Funds had been invested at a rate equal to the yield on the Bonds calculated in a manner consistent with Section 103(c)(6) of the Code or any successor Code section. Earnings on moneys in the Holding Account within the Excess Earnings Fund shall on each Determination Date after the first Determination Date be transferred to the Deposit Account within the Excess Earnings Fund. If the gross earnings on the Bond Fund in any bond year are less than $100,000 then the investment earnings in the Bond Fund shall not be taken into account in applying the prior sentence, unless the Issuer elects to the contrary. If on the Business Day immediately preceding a Determination Date, the amount determined pursuant to (b) above exceeds the investment earnings described in (a) above, no transfer will be made to the Excess Earnings Fund. Moneys deposited and held in the Excess Earnings Fund shall not be subject to the pledge of the Indenture but shall be held for the benefit of the United States Government and the Company. A-13 such notice by mailing, or any defect therein, shall not affect the validity of any proceedings for the redemption of the Bonds. Prior to the date that the redemption notice is mailed as aforesaid the Issuer shall place in trust with the Trustee suffi- cient funds to pay such Bonds and accrued interest thereon and the premium, if any, to the redemption date. notice of redemption having been given as aforesaid, the 13onds or portions thereof so to be redeemed shall, on the date fixed for redemption, become due and payable at the redemption price and on and after such redemp- tion date (unless the Issuer shall default in the payment of the redemption price), the Bonds or portion thereof thus called shall not bear interest, shall no longer be protected by the Indenture and shall not be deemed to be Outstanding. INVES`PMENT OF FUND MONEYS Any moneys held as part of the funds established in the Indenture shall, at the telephonic request of the Authorized Com- pany Representative, be invested or reinvested by the Trustee in accordance with the Agreement, based upon written guidelines sub- mitted by the Company from time to time and approved by the Issuer. The request shall include the issuer or obligor, the principal amount, maturity date and interest rate of such invest- ment. Any and all income received from investment of the Con- struction and Acquisition Fund shall remain in the Construction and Acquisition Fund for the purposes thereof until completion of the Project. Thereafter, investment income earned in all funds created in the Indenture shall be deposited in the Revenue Fund and, unless an Event of Default exists and continues, be used by the Trustee as provided in the Indenture. Notwithstanding the foregoing, investment income earned on the Reserve Fund shall remain on deposit in the Reserve Fund until such time as the Reserve Requirement is on deposit therein and thereafter shall be transferred to the Revenue Fund. INVESTMENTS THROUGH TRUSTEE'S BOND OR OTHER DEPARTMENT The Trustee may make any and all investments permitted by the Indenture through or from the Trustee's bond or other appro- priate department provided, however, that any fees, commissions, expenses or other compensation paid to the Trustee's bond or other department shall not be greater than the fees, commissions, expenses or other compensation which would have been paid if such services had been contracted at arm's length in the open market. DISCHARGE OF INDENTURE If (a) the Issuer shall either (i) deposit with the Trustee an amount of money equal to the principal, premium, if any, and interest to become due on the Bonds, whether at maturity or upon call for redemption, or (ii) deposit with the Trustee investments authorized by Section 5.04 of the Agreement in such amount as will, with the income thereon or the increment thereto be suffi- cient to pay the principal of, redemption premium, if any, and A-15 SS~-102'7 f X V (4) Failure of Issuer to perform any of ine other covenants, conditions and agreements which are to be performed by the Issuer in the Indenture or the Bonds and the continuance of such failure or default for a period of thirty (30) days after notice thereof to the Issuer and the Company in writing from the Trustee (which notice shall specify the respects in which the Trustee contends that the Issuer has failed to perform any such covenants, condi- tions and agreements), unless such default cannot be cured within thirty (30) days and the Issuer within said thirty (30) day period shall have commenced and thereafter shall have continuer dili- gently to prosecute all actions necessary to cure such default, said failure shall constitute an Event of Default under the Inden- ture. The Trustee and the Issuer acknowledge that the Company shall have the right, but not the obligation, to cure Issuer's failures or defaults under the Indenture and the Bonds and, if Company exercises such right to cure, the Company shall be afforded the same rights and opportunity to cure as provided the Issuer under this subparagraph (3). Notwithstanding the foregoing, to the extent the Trustee receives payment pursuant to the Guaranty in order to allow the due and punctual payment of interest and/or principal on the Bonds, failure by the Issuer to make payments specified in this Section shall not constitute an Event of Default. DECLARATION OF ACCELERATION If an Event of Default shall have occurred and be continuing, the Trustee may, with the consent of the Bond Insurer and upon request of the Holders of a majority in aggregate principal amount of Bonds then outstanding shall, with the written consent of the Bond Insurer by notice in writing delivered to the Issuer and the Company, declare the principal of all Bonds then outstanding, plus any premium thereon which shall have become payable prior to such declaration, immediately due and payable. Such declaration may be rescinded as provided in the Indenture. REMEDIES; RIGHTS OF BONDHOLDERS If an Event of Default shall have occurred and be continuing, the Trustee may pursue any available remedy granted by the Consti- tution and laws of the State of Florida, as it may deem best, including any remedy at law or in equity by suit, action, mandamus or other proceeding to enforce the payment of the principal of, premium, if any, and interest on the Bonds then Outstanding, and to specifically enforce and compel the performance of the duties and obligations of the Issuer as set forth in the Indenture and the duties and obligations of the Company under the Agreement, and including any and all other remedies provided for in the Inden- ture. While any Bonds are outstanding, the Issuer shall not exer- cise any of the remedies specified in the Agreement or otherwise available to the Issuer without the prior written consent of the Trustee. A-17 (4) Failure of Issuer to perform any of the other covenants► conditions and agreements which are to be performed by the Issuer in the Indenture or the Bonds and the continuance of such failure or default for a period of thirty (30) days after notice thereof_ to the Issuer and the Company in writinq from the Trustee (which notice shall specify the respects in which the Trustee contends that the Issuer has failed to perform any such covenants, condi- tions and agreements), unless such default cannot be cured within thirty (30) days and the Issuer within said thirty (30) day period shall have commenced and thereafter shall have continued dili- gently to prosecute all actions necessary_ to cure such default, said failure shall constitute an Event of Default under the Inden- ture. The Trustee and the Issuer acknowledge that the Company shall have the right, but not the obligation, to cure Issuer's failures or defaults under the Indenture and the Bonds and, if Company exercises such right to cure, the Company shall be afforded the same rights and opportunity to cure as provided the Issuer under this subparagraph (3). Notwithstanding the foregoing, to the extent the Trustee receives payment pursuant to the Guaranty in order to allow the due and punctual payment of interest and/or principal on the Bonds, failure by the Issuer to make payments specified in this Section shall not constitute an Event of Default. DECLARATION OF ACCELERATION If an Event of Default shall have occurred and be continuing, the Trustee may, with the consent of the Bond Insurer and upon request of the Holders of a majority in aggregate principal amount of Bonds then outstanding shall, with the written consent of the Bond Insurer by notice in writing delivered to the Issuer and the Company, declare the principal of all Bonds then outstanding, plus any premium thereon which shall have become payable prior to such declaration, immediately due and payable. Such declaration may be rescinded as provided in the Indenture. REMEDIES; RIGHTS OF BONDHOLDERS If an Event of Default shall have occurred and be continuing, the Trustee may pursue any available remedy granted by the Consti- tution and laws of the State of Florida, as it may deem best, including any remedy at law or in equity by suit, action, mandamus or other proceeding to enforce the payment of the principal of, premium, if any, and interest on the Bonds then Outstanding, and to specifically enforce and compel the performance of the duties and obligations of the Issuer as set forth in the Indenture and the duties and obligations of the Company under the Agreement, and including any and all other remedies provided for in the Inden- ture. While any Bonds are outstanding, the Issuer shall not exer- cise any of the remedies specified in the Agreement or otherwise available to the Issuer without the prior written consent of the Trustee. A-17 If an "Event of Default" under the Agreement or the Indenture shall have occurred and he continuing, the Trustee may pursue any and all available remedies provided for or permitted by Section 9.02 of the Agreement and Section 1 003 of the Indenture, and any and all remedies provided for in the Agreement with respect to the c:ornp,any's interest in tho Project may also be exercised with respect to thca interest (if any) of the Issuer therein. If an Event of. Default under Section 1001(a) or (b) shall haVt' oCrurred under the Agreement or the Indenture, the Bond Tnsuror shall be deemo-A tho Holder of all the Bongs then Outstand- ino for the purposes of receiving notices, granting consents and taking or directinci the Trustee to take actions upon an Event of D('fault; provided, however, the Fond Insurer is not then in default under its polio' Of municipal hand insurance. If an Event of Default shall have occurred and be continuing, if regki,,:?teki so to do by the holders of thirty-f ive percent (35% ) .)r mort� in aggregate principal amount of Bonds then Outstanding, and if indemnified as provided in Section 1105 of the Indenture, the Trustee shall be obliged to exercise such one or more of the riohts, powers anA remedies conferred by this Section as the 'rt-Ustee shall deem most expedient in the interest of the right, power or reme,iy hereby conferred upon or reserved to the Trustee (or to the Bond -alders) is intended to be exclusive of any ri.Iht, power or remedy, but each and every such right, power or remedy shall be cumulative and shall be in addition to nv ether right, power or remedy given to the Trustee or 'Co the Bondholders hereunder or under the Agreement or now or hereafter t,xisting at law or in equity or by statute. \o ja.jament under the Indenture s:.all be rendered against the I: _•uer which in an.- minnor enc,,1-mbers the General funds or property Issuer or requires the -payment of a Nona: judgment out of 3:1y fsn.;s or Pr0'.erty of the Issuer other than the funds and .• . ;'ert� _aletined in the grant ina clause contained herein. All mono_ s receive i by the Tr..stee aursua to any rig�L ,e'en o! a t.on tatien i^. 3n ��ent Of Default shall, after pdVneRt t::e C-1st 311 expanc'-s J` c0liect''On, Deposited in the Bond moneys in the Bond :'una z-hali be aDpi Jed: the Principal of all the Bonds s 3i1 '^.ave become 3 'lave z n. _? `a"3'�Q, 311 s°:C^ mone,'S shall _ st: _o ti e =v ent of al installments of interest ^--urity of amo:.nt available i W then to the payment ratably, installment, to the persons mination or privilege; and according to the amounts due on such entitled thereto, without any discri- Second: To the payment of the unpaid principal of and premium, if any, on any of the Bonds which shall have become due (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of the Indenture), in order of their due dates, and if the amount available shall not be sufficient to pay all Outstanding Bonds due on any particular date, then to the payment ratably, according to the amount of principal due on such date, without any discrimination or privi- lege. (2) If the principal of all the Bonds shall have become due or shall have been declared due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, without preference or priority of prin- cipal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due, respectively, for principal and interest, without any discri- mination or privilege. (3) If the principal of all the Bonds shall have been declared due and payable, and if such declaration shall thereafter have been rescinded and annulled, then, subject to the provisions of subsection (2) of this Section in the event that the principal of all the Bonds shall later become due or be declared due and payable, the moneys shall be applied in accordance with the provi- sions of subsection (1) above. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF BONDHOLDERS The Issuer and the Trustee may pursuant to Section 1201 of the Indenture, without the consent of or notice to any of the Bondholders, enter into an indenture or indentures supplemental to the Indenture as shall not be inconsistent with the terms and provisions thereof: (a) to cure any ambiguity or formal defect or omission in the Indenture; or (b) to grant to or confer upon the Trustee for the benefit of the Bondholders any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Bondholders or the Trustee or either of them; or (c) to subject to the lien and pledge of the Indenture addi- tional revenues; or (d) to assure compliance with Federal "arbi- trage" provisions in effect from time to time; (e) to authorize the issuance of Additional Parity Obligations; (f) to reflect amendments approved by Bond Insurer. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF BONDHOLDERS Exclusive of supplemental indentures covered by Section 1201 of the Indenture, the Holders of not less than two-thirds in aggregate principal amount of the Bonds then Outstanding and Bond A-19 INSURANCE DURING CONSTRUCTION In compliance with or if not required by the Lease Agreementr the Company shall maintain or cause to be maintained in full force and effect at all times during the period of construction of and equipping of the Project, with the Issuer, and the Trustee named as loss -payees as their interests may appear (except with respect to the policy described in (5) below) and with a 30-day notice required to the Issuer and the Trustee of any reduction in or cancellation of coverage, the following: (1) Insurance on the Project against "All Risks" of physical loss or damage, including the expense of the removal of debris of such property as a result of damage by an insured peril, written on as broad an "All Risk" form as is commercially available. At the option of the Company the aforementioned insurance may be provided on a Completed Value Builder's Risk Policy. (2) Automobile liability insurance and equivalent policy forms covering all owned, non -owned and hired vehicles used in connection with any work arising out of the Lease Agreement. Such insurance shall afford protection to at least a combined single limit for bodily injury and property damage liability of $1,000,000 per occurrence. (3) Comprehensive general liability insurance, including contractural liability, or an equivalent policy form providing liability insurance against claims for personal injury or death or property damage occuring on or about the Project. Such insurance shall afford protection to at least a combined single limit for bodily injury and property damage liability of $10,000,000 per occurrence. (4) Theft coverage insurance covering employer fidelity, inside or outside loss and burglary with a limit of not less than $100,000 per occurrence. (5) Worker's Compensation and Employer's Liability Insurance insurance as required by Florida law. (6) Flood insurance in an amount satisfactory to the Issuer and the Company. The Company shall not commence construction of the Project until such time as all required insurance is obtained and the carriers are bound and shall remain in full force and effect until final acceptance of the Project or until the Project is used for the public parking of vehicles, which ever first occurs. All insurance shall be effected under valid and enforceable policies issued by insurers of recognized responsibility, which are licensed to do business in the State of Florida. All such companies must be rated at least "A" as to management, at least Class "X" as to financial strength in the latest edition of Best's Insurance Guide, published by Alfred M. Best Co., Inc., 75 Fulton Street, New York, New York. A-21 8IS-W2 i 4 - a .. _ ♦ _ _ ... _ _ ._ _ t _ _ .. L 4. payments required below, which represent payments to be made under the Note. until the principal of and interest on the Bonds shall have been fully paid or provision for the payment thereof shall have been made in accordance with the Agreement, the Company shall pay to the Trustee in the manner provided above, an amount equal to the sum of the following; ( 1 ) An amount equal to one -sixth (1/6) of the interest coming due on the next Bond Service Payment Date together with the amount of any deficiency in prior deposits for interest. (2) On a parity with the deposits set forth in (A) above, an amount equal to one -twelfth (1/12) of the principal and Amortiza- tion Installments coming due on the next Bond Service Payment Date together with the amount of any deficiency in prior deposits for principal and or Amortization Installments. (3) After the deposits set forth in (1) and (2) ahove have been made, after taking into consideration the amounts on deposit therein, an amount not less than one -sixtieth (1/60) of the difference between the amounts currently on deposit in the Reserve Fund and the Reserve Requirement. ( 4 ) Af ter the deposits set forth in ( 1 ) , ( 2) and (3) above have been made the amount of all reasonable fees and expenses of the Trustee which may be charged in connection with the perfor- mance of its duties and services with respect to such current payments of principal, Amortization Installments and/or interest Amortization Installments and/or interest and as otherwise re- quired or indicated by the Indenture or the Agreement together with the amount of deficiencies in prior payments due pursuant to this subsection (4) . The Trustee shall furnish to the Company all itemized statement of the payments due to be made by the Company to the Trustee pursuant to this paragraph (4) as they become clue. The Company shall pay within thirty (30) days of receipt of such statement the sums required by this paragraph (4) . The Trustee's failure to furnish such a statement shall not affect the Company's unconditional obligation to pay when due the sums required by paragraphs (1) , (2) and (3) above. In making the deposits set forth in (1) and (2) above, the Company shall deduct therefrom any moneys on deposit in the Bond Fund and available for such purpose. Pursuant to and subject to the provisions of the Indenture, amounts on deposit in the Revenue Fund after the deposits set forth in ( 1 ) through (4 ) above have been made shall be remitted promptly to the Company to be dis- bursed as provided in the Lease Agreement. OBLIGATION TO PAY UNCONDITIONAL So long as any of the Bonds or interest thereon or any other obligations of the Company under the Agreement shall be Outstand-- ing, or until payment thereof has been duly provided for, the A-23 �v--1a27 k V PERFORMANCE OF OBLIGATIONS UNDER INDE14TURE AND LEASE AGREEMENT The Issuer and the Company agree to perform all duties and obligations required by them under the Indenture and the Lease Agreement. To the extent the Indenture or the Lease Agreement imposes duties or obligations on the Company or the Issuer to be performed in addition to the duties and obligations set forth in the Agreement, such provisions are incorporated as a part of the Agreement as though fully set forth therein. PAYMENT OF OPERATION AND MAINTENANCE EXPENSES Prior to completion of the Project and for so long as any Bonds shall remain Outstana : — under the Indenture, the Company shall maintain or cause to be maii,tained at all times in a deposi- tory bank an amount of money equal to the estimated Operation and Maintenance Expenses for the next two calendar months together with amounts required for the current months Operation and Main- tenance Expenses. The Company hereby agrees that the Company shall pay or cause to be paid daily payments of Operation and Maintenance Expenses from said fund. The Trustee shall be required to reimburse the Company on a monthly basis for said payments as provided in the Indenture. MAINTENANCE, MODIFICATIONS AND ADDITIONS The Company agrees that while any Bonds shall remain out- standing it will at its own expense (a) operate and keep or cause to be operated and kept the Project in as reasonably safe condi- tion as its normal operations shall permit and (b) keep or cause to be kept all improvements forming a part of the Project in good repair and in good operating condition, making or causing to be made from time to time all renewals and replacements thereof as shall be reasonably necessary. In furtherance of the covenant of the Company to operate and maintain the Project as provided in the preceding paragraph, the Company shall retain under contract the services of an Acceptable Operator. The Company agrees to initially engage DOSP pursuant to the Management Agreement. Subject to the terms and provisions of the Lease Agreement, the Company may, also at its own expense or in the manner provided in Article X of the Agreement, make from time to time any addi tions, modifications or improvements to any portion of the Project it may deem desirable for its business purposes that do not ad- versely affect the structural integrity of the Project. All such additions, modifications and improvements so made by the Company shall become a part of the Project and shall be subject to the Agreement and relevant documents executed pursuant to the Agreement. A-25 19:, --.102 r .0 0 SUBSTITUTION OF EQUIPMENT Except as provided in the Lease Agreement, neither the Trustee, nor the Issuer shall be under any obligation to renew, repair or replace any inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary equipment. In any instance where the Company in its discretion determines that any items of equipment included as part of the Project have become inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary, the Company may remove and dispose of such items of equipment from the Project and sell, trade in, exchange or otherwise dispose of them ( as a whole or in part) without any responsibility or accountability to the Issuer or the Trustee therefor; provided, however, if such items have a depreciated value (calculated in accordance with generally accepted accounting practice) of more than $10,000 each or $50,000 in the aggregate annually, ( but in each event adjusted annually to reflect changes in the Consumer Price Index), then the Company shall: ( 1 ) Substitute and install anywhere in the Project other equipment having equal or greater utility and value and having a similar function in the operation of the Project as an urban parking facility in Miami, Florida (provided such removal and substitution shall not impair operating unity or the operation of the Project) , all of which substituted equipment shall be free of all liens and encumbrances, shall become a part of the Project and shall be evidenced by appropriate recording of financing state- ments naming the Trustee as secured party; or ( 2 ) Pay into the Bond Fund, within thirty ( 30 ) days after the end of any calendar quarter in which such equipment is removed from the Project, (a) in the case of the sale of any such equip- ment, or in the case of the scrapping thereof, the proceeds from such sale or the proceeds, if any, from such scrapping, as the case may be, (b ) in the case of the trade-in of such equipment for other equipment not installed in the Project, the amount of the credit received by it in such trade-in, and (c) in the case of any disposition other than as provided in clauses ( 2) (a) or ( 2) (b) an amount equal to the original cost thereof less depreciation at rates calculated in accordance with generally accepted accounting practices followed by the Company; or (3) In the event that the Company has acquired and in- stalled, prior to such removal and disposal of items of equipment from the Project other than under preceding subsection (1) of this Section, an additional item or items of equipment or made addi- tions, modifications or improvements to the Project with its own funds, free of all liens and encumbrances, which have become part of the Project, either by virtue of the first paragraph of Section 6.01 of the Agreement or by virtue of not being tagged or suitably �.`, -,-10 tiw A-27 liie"ntif iOki rol'Sll3ilt tJ the thirJ paragraph of Section 5.G' klvot'mollt , the Company mar take credit to t!ie extent Of ;I)(, lit :t �� it againsthe reauire-.en' t lat it ei-`.er —1 _. * :-e 3ll.j install ot.!lt't equip lent hap: ing equal or grateror t 113t i t —make pament into the a. n:: Fungi . If _. aIvoadv ow•nod by the Coil; anv, the val ue of S .c Ar-_-. Test fOr t�lo rj e . "ev it s 'nail be t~e V 31 u e. The reMl��•a1 fr,-Nm _ _,�- .a i`3:"t Of :he FY:t'Ct a^ _'-:e ��ti_.`_.::i�.., a_....G.n- �: _tee is t�l0:'0f17'1- I'll iSL)cl'l: t0 t'ne 'Z'17 ;CFI n; ,.S Ct: �..�_- :;�`_ C—n- F.;1311:1i1y tat^.E'1:.. i`d�'3:1J .-ner Se.^.1C' Y.__ __ e _---,��=• T:nc� C70 77,pa'IV W l pro— . } :eL._ _: t`-:e T...Zte= __ 1. _ ♦ ♦ 1. 1• J I a a z r-2z 3 ... . a n .. �. :G�. `..G� , __..�_1 _.._e , lam:♦:`��C?. .�: .. � t .'. Cam... � a .. ..� a . �`-.. ♦. � l •. _ � � J � .. J � _ ...... _ � _ .. _ C ... C ,.' .., .. � S_.woe_ .._ ...- .. 17 t ere- :: - A V (3) Garagekeepers Legal Liability with limits not less than $5,000,000 per occurrence plus an excess coverage policy in an amount of not less than $10,000,000. This policy shall be en- dorsed to name the Issuer and the Company as additional insureds. (4) Theft Coverage covering employee fidelity, inside or outside loss and burglary with a limit of not less than $100,000 per occurrence. (5) Worker's Compensation as required by Florida Statutes, Chapter 440. (6) Flood Insurance in an amount satisfactory to the Company. (7) Business Interruption Insurance covering loss of Gross Revenues for a period of at least two (2) years. (8) Insurance on the Project against all risks of physical loss or damage, including the expense of removal of debris of such property damaged by an insured peril. Such policy shall be for "full replacement costs". (9) Errors and Omissions Coverage, if available, in limits not less than $1,000,000. OBLIGATION IN EVENT OF DAMAGE OR DESTRUCTION So long as any of the Bonds remain Outstanding if the Project or any of the equipment, if any, is destroyed (in whole or in part) or is damaged by fire or other casualty, the Company shall be obligated to continue to pay the Financing Payments. Whenever the Project, or any part thereof, ( including any personal property furnished or installed in the premises) shall have been damaged, or destroyed, the Company shall promptly make proof of loss in accordance with the terms of the insurance policies. (1) If the claim for loss resulting from such destruction or damage is not greater than $500,000 [as adjusted periodically pursuant to the Lease Agreement) , the Company will promptly repair, rebuild or restore the property damaged or destroyed to substantially the same condition as it existed as of the comple- tion date of the Project, with such changes, alterations and modi- fications ( including the substitution and addition of other pro- perty) as may be desired by the Company and permitted by Section 9.8 of the Lease Agreement in such a manner as will not impair operating unity or productive capacity or the value of the Project as an urban parking facility; and the Company will pay the costs thereof and will be entitled to retain all proceeds of insurance in respect of such claim. A-29 19v he entitled to �7ny _imhu; ,i .,,t frr)m the Issue- or the Trust-ee or-' any delay, abatement or dimin+.ition of the Financing Payments pay- able under this kgreement or any other sums payable by the Company hereunder. Any balance of sucl", insurance proceeds remaining in the Construction and Acquisitiun E;Iund after the payment of all the costs of such repair, rebuilding ,')r resLoraLion shall be paid into the Bond Fund and shall be us,-,d within twelve (12) months of deposit therein by the Trustee for the purchase or redemption of Outstanding Bonds as provided in the Indenture. In the event that less than all of the Bonds are to be purchaseA or redeemed, the Company shall furnish to the Trustee a certificate of the Company or the Consultant, as the Trustee may require, stating that the property forming a part of the Project that was damaged or destroyed is not essential. tv thp Company's use or occupancy of the Project or the Project has been restored to a condition sub- stantially equivalent to its condition as of the completion date of the Project and improvements which are fully adequate for the Company's operations at the Project have been acquired and made a part of the Project, and in any case the value of the Project after such damage, destruction or partial repair is not reduced below that existing on the completion date of the Project or the date of such destruction or damage, whichever is greater. The Financing Payments shall be reduced to the extent of such Bonds purchased or redeemed under the prov is ions of this paragraph. Provided however, the obligation of the Company to deposit Reve- nues pursuant to Section 4.02 of the Agreement shall not be decreased. (3) If , at the time insurance proceeds for such damage or destruction are paid, no Bonds remain Outstanding or any insurance proceeds shall remain in the hands of the Trustee after all Outstanding Bonds have been paid in full or provision for payment made and all expenses and fees of the Trustee and Issuer have been paid, such insurance proceeds will be paid to the Company, subject to the rights of the Issuer pursuant to the Lease Agreement. (4) Any moneys held by the Trustee as provided in this Section at the request of the Company, shall be invested in such investments as are authorized for investment of fund moneys pursuant to the provisions of the Agreement, maturing not later than the date or dates specified by the Company, on which such moneys shall be needed for the purposes herein provided. Any earnings or profits on such investments shall be considered as part of the insurance proceeds and the amount of any losses on such investments shall be forthwith reimbursed to the Trustee by the Company. OBLIGATION IN EVENT OF CONDEMNATION So long as any Bonds remain Outstanding if title to the Project or any part thereof shall be taken under the exercise of A-31 S,~-1027 r the property forming a part of the Project that was taken by such condemnation proceedings is not essential to the Company's use or occupancy of the Project, or (ii) the Project has been restored to a condition substantially equivalent to its condition and value as existed on the date of the commencement of such condemnation proceedings, or (iii) improvements which are fully adequate for the Company's operations at the Project and which in the opinion of the Trustee maintain the value of the Project at substantially the same value as they existed on the date commencement of such condemnation proceedings, have been acquired and made a part of the Project. (4) If at the time such damages for such condemnation are paid, no Bonds remain Outstanding under the terms of this Agree- ment, or any balance of condemnation proceeds remain after all Outstanding Bonds, shall have been paid in full or provision for payment having been made and all expenses of the Trustee and the Issuer have been paid, then to the Company, subject to the rights of the Issuer under the Lease Agreement. The Company shall within ninety (90) days from the date of entry of a final order in any eminent domain proceedings granting condemnation, unless appealed, direct the Issuer and the Trustee in writing as to which of the ways specified in this Section the Company elects to have the condemnation award applied. Any moneys held by the Trustee under the provisions of this Section at the request of the Company, shall be invested or rein- vested by the Trustee, as specified by the Company in such request, and approved by the Issuer, in such investments as are authorized for investment of fund moneys pursuant to the provi- sions of Article v of the Agreement, maturing not later than the date or dates specified in writing by the Company on which such moneys shall be needed for the purposes provided in the Agreement. Any earnings or profits on such investments shall be considered as part of the condemnation proceeds. The Trustee by the Indenture agrees to cooperate fully with the Company in the handling and conduct of any prospective or pending condemnation proceedings with respect to the Project or any part thereof and, to the extent it may lawfully do so, permit the Company to control the defense of the proceedings, but in no event will the Company voluntarily settle or consent to the settlement of any prospective or pending condemnation proceedings with respect to the Project or any part thereof without the written consent of the Trustee and the Issuer. If no default is continuing hereunder, the Company, subject to the rights of the Issuer pursuant to the Lease Agreement, shall be entitled to the proceeds of any condemnation award or portion thereof separately awarded for damages to or takings of its own A-33 i nt oro!zt t.) accrue thereon to the next interest payment date on w1li.ch Plot: ice pursuant to Section 702 of the Indenture can be given, reasonable Trustee's charges and expenses including attor- ney' s fA�:;, in which event all of the Bonds then Outstanding shall be redeemed by the Trustee on the next succeeding interest payment date which occurs at least sixty (60) days after the deposit of sa id funds in the Bond Fund. Such redemption shall be effected in thc. manner provided in the Indenture. PR'JVI' TON CONCERNING CONDEMNATION Upon certification by the Company or the Consultant, as the Trustee may require, that the Project shall have been taken by the exercise of the power of eminent domain, or if such certification shall be made with respect to a substantial portion of the Pro- ject, that it shall be economically unfeasible to effect restora- tion, then the Company may elect not to replace or restore the property taken by the power of eminent domain and in such event, the Company shall forthwith deposit to the credit of the Bond Fund such sums which, together with the condemnation award, shall be sufficient to pay the principal of all the Bonds then Outstanding at par plus accrued interest thereon and interest to accrue there- on to the next interest payment date for which notice pursuant to Section 702 of the Indenture can be given, and to pay reasonable Trustee's charges including its attorneys fees. The Trustee shall redeem all of the Bonds then Outstanding on the next succeeding interest payment date which occurs at least sixty (60) days after the deposit of said funds into the Bond Fund. Such redemption shall be effected in the manner provided in the Indenture. CASUALTY TO BAYSIDE SPECIALTY CENTER In the event that all or any portion of the Bayside Specialty Center is taken by power of eminent domain or shall be conveyed to avoid such proceedings or is damaged or destroyed by reason of fire or any other casualty pursuant to Sections 10.06 and 9.11 of the Lease Agreement, respectively, and is not restored such that, in the good faith opinion of the Company, it shall be economically feasible to use and enjoy the Project, the Issuer shall, at the request of the Company, but solely with funds of the Company redeem all the Outstanding Bonds as provided in Section 701 of the Indenture. NO WARRANTY OF CONDITION OR SUITABILITY BY ISSUER Except as otherwise provided in the Lease Agreement, the Issuer makes no warranty, either express or implied, as to the title or condition of the Project, or that it will be suitable for the Company's purposes or needs, or that it can be improved according to the Plans and Specifications with the proceeds from the sale of the Bonds. A-35 • & JV RIGHT OF ACCESS TO PROJECT The Company agrees that the Issuer, the 'Trustee and their duly authorized agents shall have the right at all reasonable times to enter upon the Project as may be necessary to carry out .-)r determine compliance with the Agreement, but such entry will be subiect to the giving of reasonable notice and to the execution of reasonable release of liability agreements and similar matters, MAINTENANCE OF EXISTENCE The Company agrees that during the term of the Agreement it will maintain its existence as a li:nited par_nersnip, will not dissolve or otherwise dispose of all or substantially all of its assets, or partnerships, and will not consolidate with or merge into another corporation or partnership, or permit one or more other c.)rporations or partnerships, to consolidate with or merge into it, unless such change shall be approved in writing by the Issuer. EVENT AND DETERMINATION OF TAXABILITY In the event there shall be a Determination of ;axabil ity as a result o. an Event of Taxability, the rate of :r,teres:. on �`:e Rends shall be increased retroactively to the Date of Taxability as pret•i3ed in the Indenture, and any additional interest payable on tie B.�n3s, either retroactitelretroactivelyor _. stall by praspectivel, . inc& _e3 in tie amounts avable b; the ,:o",pan,: as pr,v.ded :z Secti.�n 4.0: the A_ree,,.ent. re`e".,na`iJ^ cf Taxability snai/ Ccc�r, �.'.- z0m_Pa:.1r, after receiving written n:: t ice t`er e.:f from. the .t,.;stee , :ua_; e-ect t.� reiees, the B`r..s in. w' oie , b:._ not .n part , at tne earliest Can :eaSC:,az1' be Given .oil—wi7:: the 33`e :.`r W''►c~ ^C`1Ce occ :;rrence zol a :,eterr. in, ation Of ._=Xab11 its• in t`:e manner and at t~e r ate �: interes t - rz: i-e� 1:. Sectic . A.tt Cf t'.:e in-erit :re. SA:.£ .IR '_EASE Z.r F RI".jECT ent o_ the Bones t':e .o'...a::,.J\ en 21nts na, lt W nc. t'erM'i:e ...sp--se `f a-v Cr--__-^pertv 4 :.�..:.4�rt' ►: .:: cia ►zs e s s exze=. ,tee :-cr. i t t e- .n t:: a Lease A- r e err e n t. an _ne Interest _te►eon sel: , lease, convey or Or assets except In. tine _nz ", the extent f at anv tiTre !. a azzrezaye mone_s neld 3- deposit i:n -_ne .�n- r.:..- sna11 be S;:ffic:ent tc =ka --Re principal of all the B.-,n:., a: t::e tirre ).:tstandinc , and t.ne interest an, �^.e Bonds to rr.at,...ty :. .. t`e first -ate o- wn._- s.:ct Bonds may !>e redeemed .I: t: tr.:tzr.ty as a.:tncrite- -_• the I-r- rer,.iurr, , ._ -any, a-,- tc pa, s_l fee_ and 1 ik charges of the Issuer and the Trustee due and to become due through the date on which the last of the Bonds is retired the Company shall be entitled to obtain a satisfaction of the Note; the Indenture, or the Agreement, and neither the Issuer, the Trustee nor the Holder of any of the Bonds shall thereafter have any rights hereunder, saving and excepting those that shall have theretofore vested. REQUEST FOR REDEMPTION The Issuer shall at the request and direction at any time of the Company or as required under the Agreement, and if the Bonds are then redeemable, upon the Issuer or the Trustee being fur- nished the requisite funds, forthwith take all steps that may be necessary under the applicable redemption provisions of the Inden- ture to effect redemption of all or part of the then Outstanding Bonds on the earliest redemption date on which such redemption may be made under such applicable provisions. COMPANY TO FURNISH CERTAIN FINANCIAL DOCUMENTS The Company covenants and agrees that, unless all of the Bonds have been retired, or are callable prior to maturity and have been duly called for redemption and payment of principal, interest and applicable premium duly made or provided for, it will furnish to the Trustee and the Issuer the following documents: (a) within one hundred and twenty (120) days after the end of each fiscal year an income statement, surplus statement and a balance sheet of the Company for such fiscal year certified by any inde- pendent certified public accountants acceptable to the Trustee, (b) within ninety (90) days after the end of each quarter the quarterly Company prepared financial statements, and (c) such other financial data regarding the Company or the Project that the Trustee may reasonably request. With each delivery of financial statements required by clauses (a) and (b), the Company will deli- ver to the Trustee a certificate signed by the Authorized Company Representative stating that there exists no event of default or default hereunder or if such event of default or default exists, stating the nature thereof, the period of existence thereof and what action the Company is taking or proposes to take with respect thereto. A copy of such certificate shall be simultaneously fur- nished to the Issuer. The Trustee is hereby authorized by the Company to deliver to any regulatory body having jurisdiction over the Trustee with respect to this transaction copies of any finan- cial data furnished pursuant to the requirements of Section 8.08 of the Agreement. COVENANT PROHIBITING EXCESSIVE ARBITRAGE The Company covenants to the Issuer, the Trustee and the purchasers of the Bonds provided for herein that the Company will not direct any use of the proceeds of the Bonds at any time during A- 37 �4 -1027 4 C� 7 16 the term of. the Bonds which, if such use ha-d been reasonahl' expected on the date the Bonds were issued, would have caused 5u Bonds to be "Arbitrage Bonds" within the meaning of Section 103(r' of the Code, as interpreted by Section 1.103-13► 1.103- 14 ar 1.103-15 of the Regulations of the United States Treasury Depart ment. The Company understands that this covenant imposes an obi). gction on the Company throu(Ihout the term of the issue to comply with thE, requirements of Section 103(c) of the Code, and to eomplp With the requirements of the Treasury Regulations Section 1 .103-13, 1. 103-14 and 1 . 103-15 interpreting such Code section ip directing the investment:; of funds held by the Trustee under tht Indenture. The Company takes full responsibility for calculating,; and instructing the Trustee to pay all amounts due and owing t6- the United States pursuant to Section 103(c) (6) of the Code ar4 agrees to indemnify and hold harmless the Trustee and the Issuet with respect to any such payments to be made to the Unitel' States, except with respect to failure of the Trustee to pap, amounts due and owing to the United States pursuant to Section 103(c)(6) of. the Code after receiving written instructions fros' the Company to do the same. TAX COVENANT The Company and the Issuer hereby covenant and agree that neither shall take any action nor fail to take any action and to the extent that they may do so, hermit the Manager or any other party to take any action which, if either taken or not taken, would adversely affect the exemption from Federal income taxation on the Bonds. COVENANT TO OPERATE PROJECT FOR PUBLIC PARKING The Comnany covenants that the Project will be available on regular basis for general oublic use so that the Project will comply with Section 1.103(8)(a)(2) of the Code. EVENTS OF DEFAULT The following shall be "events of default" under the Agree- ment and the terms "event of default" or "default" shall mean, whenever they are used in the Agreement, any one or more of th following events: (1) Failure on the part of the Company to pay the Financin Payments required to be paid under Section 4.03 of the Agreemen on the date that the payment is due. (2) 'Failure on the part of the Company to pay or cause to paid insurance premiums and taxes with respect to the Project f a period of fifteen (15) days after written notice specifying su failure and requesting that it be remedied shall have been giv by registered mail to the Company by the Trustee. For purposes this Section taxes shall be deemed "due" upon the first date t same shall be payable with penalty or interest. i t• _ _ _. '_ _ ...mod. __,_,. _.___ - �.tif.. _. ...._.—_.�_.__�v._.._i ( 3 ) Failurp n t„i� .,a,-+- of f-hA rmmnanv to observe and per- form any other covenant, condition or agreement which it has agreed to observe or perform, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied shall have been given by registered mail to the ComT)any by the Issuer. or the Trustee, unless the Issuer and the Trustee shall agree in writing to an extension of such time prior to its expiration. however, such a default shall be deemed to be cured, if promptly and in good faith uoon receipt of such notice the Company proceeds diligently to correct such default and cor- rects it within the applicable period or as soon thereafter as reasonably practicable; provided, that in the sole judgment of the Trustee the rights of the Bondholders have not been unduly preju- dice] thereby. If such failure by the Company to observe and perform any such covenant, condition or agreement (other than a failure described in (1) and (2) above) shall result from a change in the Constitution of the United States or of the State of Florida, or administrative or legislative action (whether state or federal), or a final judgment, decree or order of any court or administrative body entered after the Company's contest thereof in good faith, or an Act of God, an act of a public enemy, an order or action of military authorities (whether state or federal), a strike or lockout or other industrial disturbance, insurrection, riot, epidemic, drought, arrests, civil or military restraints, accidental damage to the Project or injury to employees of the Company, or a failure of utilities, or other event beyond the Company's control, then the Company shall not be deemed to be in default during the continuance of such inability. (The settlement of strikes, lockouts and other industrial disturbances shall not be deemed to be entirely within the discretion of the Company, and the Company shall not be deemed to be in default within the mean- ing of this paragraph if it shall refuse to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is, in the sole judgment of the Company, unfavorable to the Company.) (4) The Company shall file a petition in bankruptcy or for an arrangement pursuant to any present or future federal bankrupt- cy act or under any similar federal or state law, or shall be adjudicated a bankrupt or insolvent or shall make an assignment for the benefit of its creditors or shall admit in writing its inability to pay its debts generally as they become due, or if a petition or answer proposing the adjudication of the Company as a bankrupt under any present or future federal bankrupt act or any similar or state law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof, or a receiver, trustee or liquida- tor of the Company or of all or any substantial portion of the Project shall be appointed in any proceeding brought against the Company and shall not be discharged within ninety (90) days after such appointment or if the estate or interest of the Company in the Project or a part thereof shall be levied upon or attached in any proceedings and such process shall not be vacated or discharg- ed within sixty (60) days after such levy or attachment, or the A-39 S" --10 27 x iqui,97jte (ether than as a result of a merger or c,,n::01 ili,;t i'll t-t the Company into or with a partnership or corpor- atielrr un.t(,r. t h 0 c�,n,jition permitting such actions contained in ;;cct ieri i�.t) 3 (,f t ttr A<Ire�ement (`,) The ocourrenct� Q,f a jof3ult under the Indenture► Guar - ant re.'("me,nt or the Mannoement agreement, but only after ideration any anolicable grace or cure periods Contained i n ,1n�• kif the foreq -)ing agreements. The. Comnjn," s'.lall fail to maintain on deposit in U,e L,e�Oi.11 .�rcOmit- reIferred t:) in gection 5.10 of the Aareement an amount which is;, in the reasonable opinion of the Issuer, equal to the o::t imat-t, po1-.1t ion aMI Mairlten , Expenses for the next two calemiar m,:,nths . No tInst3ndina the foregoina, payments received by the Tr,iSt_0(1 put-suant to the ;;uaranty shall be considered r inancina nent ti t.irthe parJOSe Of this Section. hE'MEPI 'S ON DEFAULT Whenever any Event of Def3.11t referred to in Section 9.01 of the :Vl•e lnent shall have occurrel an3 be continuina, the Issuer with the pric-)r written consent o: the Trustee, or the Trustee, may, to the extent permitted by 13w, but in each event with the prior written a:»roval of the Bonn _ Insurer, take an • one or more Of the following remedial steps: 1 1 It the Bon:is shall to declared due an3 Da"P.51e t.,.lrs ian to the orovisions Of the Indenture, as an acceleration Of the oa':- mentzz ;.,avable .ender Section and (C) of the Agreement an aT��unt equal to all amounts due ani payable on the Bo. s (whether tom%' 3:Celeration of mat'.]rity or other—..i_se) shall thereupon be M_Ie_ latel'. d:le and pa':able, •hitho'-t Otner or f'.irt-er action on the the Issuer or t°l? Trustee, to?ether wittil interest t'.^.ereon to the extent permitted by law) from the date of s'.]ch ac^.eiera- tion until t'.e Bonds are p3_3 in f:.:l at thle Default ?ate; pro- vided, howz*er, that if such declaration of acceleration of the ��^7; shall thereafter be rescin,Ae3 p-.irs'uant to the provisions of tale In3enture, then the acceleration of the ourchase price pav- ments p;:rsuant to this Para;ra-oh shall liw.ewiSe be rescin•:3ed w_t11out er or further action On the part of the issuer or the Tr"stee u . (.) FrOT, time to time t3tie wh3te'.er action at ia:: or in appear necessary or desirable to co_lect t*^e = 1'13^Ci'1q pa'; ments an3 an,.,, other amounts payable by the Comp_ an'.' under the Agree-,ent then 3--le an3.'or thereafter to become 3::e, or to enforce performance and Observance of any obliaationp ac!►_ee'^,ent Or cove- nant of the Comoany under the A--reement. _ y^_ amo,nts collecte4 p:rs,i3, to action taken jn4, + `n,c .a �t^er _'13. 37. 3:..._3 .O=1a. tC�. =o: the c; . em-_ of -�- ' 's nn { expenses of the Issuer, the Trustee or any paying agents) shall be paid into the Bond Fund and applied in accordance with the provi- sions of the Indenture. ISSUANCE OF OTHER OBLIGATIONS The Issuer will not issue any other Bonds or obligations payable from the Revenues, nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge on the Trust Estate pledged in the Indenture having prior- ity to or being on a parity with the lien of the Bonds issued pursuant to the Agreement and the Indenture and the interest thereon, upon said Revenues, except under the conditions and in the manner provided in Section 10.02 of the Agreement. Notwith- standing the foregoing, the Company may grant a mortgage in its leasehold estate in the land on which the Project is located as provided in Section 6.1 of the Lease Agreement. ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS The Issuer hereby reserves the right to issue additional obligations upon request for same by the Company, such additional obligations payable on a parity with the Bonds described in Sec- tion 202 of the Indenture for the purpose of (a) financing the acquisition, construction and installation of additional facili- ties to be made a part of the Project, (b) financing completion of the Project or (c) repairs or capital improvements to the Project of a major nature arising from casualty or unanticipated condi- tions after completion of the Project, but the Issuer may not be required or compelled to issue any such obligations. The proceeds of any such Additional Parity Obligations shall be loaned to the Company upon execution of a promissory note and upon the appropri- ate supplementation of the Indenture and the Agreement. No Addi- tional Parity Obligations, payable on a parity from the Revenues with the Bonds herein authorized, shall be issued after the issu- ance of any Bonds herein authorized, except upon the conditions and in the manner hereinafter provided: (1) In the case of Additional Parity Obligations issued for the purposes set forth in (a) and (c) above there shall have been obtained and filed with the Issuer and the Trustee a certificate of a Feasibility Consultant stating: (a) that the books and records of the Company and the applicable books and records Issuer have been audited by him; (b) the amount of the Revenues derived for each of the three Bond Years preceding the date of issuance of the proposed Additional Parity Obligations with respect to which such certificate is made and the Revenues expected to be derived for the Bond Year immediately following to date of issuance of the proposed Additional Parity Obligations with respect to which such certificate is made for each such Bond Year is equal to not less than 125% percent of the Maximum Debt Service Requirement on all outstanding Bonds, inclJLdpr.c ithe Additional Parity Obligations with respect to which such certificte is made together with 100% of Operation and Maintenance Expenses and all other payments required to be made pursuant to the Agreement and the Indenture. A-41 S 1.-Z027 z 4l made without the consent in writing of the Holders of two-thirds or more in the principal amount of the Bonds then Outstanding; f provided, however, that no modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon or in the amount of principal obligation thereof or affecting the promise of the Issuer to pay the princi- pal of and interest on the Bonds as the same shall become due from the proceeds or reduce the percentage of the Holders of the fonds required to consent to any material modification or amendment hereof without the consent of the Holder or Holders or all such Bonds. (3) The Issuer and the Company may without the consent of, or notice to, any of the Holders, enter into an agreement or agreements supplemental to this Agreement, as shall not be incon- sistent with the terms and provisions hereof, for any one or more of the following purposes: (a) To cure any ambiguity or formal defect or omission in the Agreement; (b) To grant to or confer upon the Trustee for the benefit of the Holders of any additional rights, remedies, powers or authority that may lawfully be granted to or con- ferred upon the Holders or the Trustee or either of them; (c) To subject additional revenues to the lien and pledge of the Agreement; (d) To assure compliance with federal "arbitrage" pro- visions in effect from time to time; (e) To authorize the issuance of Additional Parity Obligations; and (f) To reflect any amendments approved by Bond Insurer. A-43 r Appendix I Management's Statement on Responsibilities for Accounting, Auditing and Financial j Repotting 71ie information contained in the financial review section as well as other finam ial h information contained in this annual report to shareholders has peen prepared , i management of the Company. In this connection, management has consulted %+nh the Company's independent auditors to secure their professional advice vaherc it was deemed appropriate to do so. Financial information elsewhere in this report i� ' consistent with the data presented in the financial review section. 21 i The cost basis financial statements have been prepared on the basis of the most appropriate generally accepted accounting pnnctples to the ctrcumaantes The prt- 22 1 many objective of financial reporting is to provide lenders, investors and other u"crs of financial statements with sufficient, relevant information. Consistent with this 28 objective, this annual report also includes certain information based on current value measurements. 29 The financial statements and other financial information are based on the ace ntal method of accounting which requires a certain amount of estimating and informed 30 judgment. Management has made these estimates and judgments based on exten- 43 live experience and substantive understanding of events and transaction. respecting the Company's past and prospective operations. In fulfilling its responsibility for the reliability and integrity of financial inlornw- 47 1 tion, management has established and maintains accounting pnxedures and related control systems. Management believes that these systems and controls pro- vide reasonable assurance that assets are safeguarded; that transactions are executed 49 in accordance with management's authorizations and recorded properly to permit the preparation of reliable cost basis financial statements in conformity with gener- ally accepted accounting principles and current value basis financial information on I the basis described in note 1 to the consolidated financial statements, and that material errors or irregularities are either prevented or detected within a timely period by employees in the normal course of performing their assigned duties. These systems and controls are supported by the Company's business ethics policy and are regularly tested by internal auditors. The independent auditors also review and test established internal control systems to the extent necessary to express an opinion on the financial statements. The Audit Committee of the Board of Directors is composed of directors who are neither officers not employees of the Company. The Committee meets periodically with management, the Company's internal auditors and representatives of peat, Marwick, Mitchell & Co. to review the work of each. The internal auditors and the independent public accountants have full and free access to the Audit Committee and meet with it, with and without management present, to discuss auditing and financial reporting matters as well as the adequacy of internal controls. The Audit Committee recommends, and the Board of Directors appoints, the independent auditors. B-1 SE w"1027 Thr Rou,r l omham and Suh„d,atirs Consolidatcd Cast Basis Mid C'.urrcnt Value Basis Balance Sheets t(IS4 Currrnt Value C.xt Cumnt Value firstCurrrnt Rack 1 note I) Sv'o Bast i note i , Bast Prmpcm And men-ahlrs umict finance Im.". i k11olcs a. �. r. `And I5� Cutmm vatuc ...... I . ...... I'rOpcnl Alld ddc(fCd %'0qi5 Ot pmlet-r, 1 rn A,,m mlaicd drpm Cation and amortization Kctrn•ahlcr undet finance ka_.es Invr ,mcnt in retail irntrn managed under immact .. .. .... Dorlopmcnt operations t,•onctnwston and dorlopment in pnlgrim ................ }'rr :on.gro,-cton costs . ............................ . Ins development rescnr .. .... Real c�ztare iinan.r r.,rivallle5 tnore -) .. .... l i-m-ni v.-Our of mortr2ec loin adt mi=tion an : tmcamm-r arm,\ ......... . Other prop rm. net (nJie ... ...... . ... ......... . Chhet aw-, annz lirfe Ti11 cli:rgm .lcrounrs an,-; notes mrw-,hir (nox S) i.:eli end tcsn��rn uivccaaen� . Tocal t 7$V 2::.1,Mpa^.vinL .10:,-!� are an 1nrC'rMi part O2 rtltSa SLiti'SS)C2lLS B-2 SI.I68.;89 $647.120 10'.4-5 539.645 5,314 38.0-5 13.441) 1.206.864 558.408 63.931 63.931 a,409 9.40L) .; -W - 3. 340 3,398 3.388 69.952 69.952 23.0* 14.409 22.91; '2.91; 10S.023 1cis. 023 26,545 26.545 $1.45-.39; SS00.250 r 51.018.528 51.018.528 $613.445 J6.88- 516.558 5.4 36 1.049.c�8i 529.;2' 1 25.--•; 25.--4 5.t 2 'S.62 �4.40' ;-;.401 ;.229 1; i6.206 r 4_0 S 4 40.S44 20.5S3 $1.2'6.53+ $_1 6.1'2 1994 1981 Current Value Cost Current Value Cost Buis (note 1) Basis Buis (note 1) Basis 'abilities ----------- -- - - Debt (notes 4 and 9): Debt not carrying a Parent Company guarantee of repayment: Property debt ...................................... S 418,539 $418,539 S 378,789 $378,789 Real estate finance notes payable ........................ _ _ - _ - 43,552 43,552 418,539 418.539 422,341 422,341 Parent Company debt and debt carrying a Parent Company guarantee of repayment: Property debt ....................................... 122,781 Other debt ......................................... 22,450 Senior subordinated notes payable ...................... - Totaldebt ....................................... Obligations under capital leases (note 15) ..................... Accounts payable and accrued expenses ...................... Deferred credits and other liabilities ......................... Commitments and contingencies (notes 7, 15 and 16) Deferred income taxes (note 11) ............................ Redeemable $6 Cumulative Preferred stock of $100 par value per sham(note13)..................................... Common stock and other shareholders' equity (note 14) Common stock of 1 C par value per share ...................... Additional paid -in capital ................................. Retained earnings (deficit) ................................. Revaluation equity (note 1) ................................ Less common stock held in treasury, at cost, and receivables for common stock sold to officers ............................ Total common stock and other shareholders' equity ........... Total............................................... B-3 190,Lj1 563.770 26,505 59,661 11,187 64,298 891 122.781 22,917 145,698 564,237 28,449 59,661 11,187 48,612 891 165 165 67,849 67,849 23,247 23,247 643,868 - 735,129 91,261 4,048 4,048 731,081 87,213 $1,457,393 $800,250 117,844 117,844 15.698 16,354 1,479 1,483 135,021 135,681 557,362 558,022 7,625 10,388 51,867 51,867' 7,149 7,149 45,393 27,309 1,058 1,058 163 163 66,206 66,206 (1,349) (1,349) 545,701 - 610,721 65,020 4,641 4,641 606,080 60,379 $1,276,534 $716,172 SS -. 102'7 N 1984 1983 Current Value _ Cost Current Value Cost Buis (note 1) Basis Buis (note 1) Basis Liabilities - Debt (notes 4 and 9): Debt not carrying a Parent Company guarantee of repayment: Property debt ...................................... Real estate finance notes s 418,539 $418,539 S 378,789 $378,789 payable ........................ - - 43,552 43,552 418,539 418,539 422,341 422,341 Parent Company debt and debt carrying a Parent Company guarantee of repayment: Property debt ....................................... 122,781 Other debt ......................................... 22,450 Senior subordinated notes payable ...................... - Total debt ....................................... Obligations under capital leases (note 15) .................... . Accounts payable and accrued expenses ...................... Deferred credits and other liabilities ......................... Commitments and contingencies (notes 7, 15 and 16) Deferred income taxes (note 11) ............................ Redeemable $6 Cumulative Preferred stock of $100 par value per share (note13)..................................... Common stock and other shareholders' equity (note 14) Common stock of lc par value per share ...................... Additional paid -in capital ................................. Retained earnings (deficit) ................................. Revaluation equity (note 1) ................................ Less common stock held in treasury, at cost, and receivables for common stock sold to officers ............................ Total common stock and other shareholders' equity ........... Total............................................... B-3 563,770 26,505 59,661 11,187 122,781 117,844 117,844 22,917 15,698 16,354 - 1,479 1,483 145,698 135,021 135,681 564,237 557,362 558,022 28,449 7,625 10,388 59,661 51,867 51,867 11,187 7,149 7,149 64,298 48,612 45,393 27,309 1 891 891 1,058 1,058 1 165 165 163 163 67,849 67,849 66,106 66,206 23,247 23,247 (1,349) (1,349) 643,868 - 545,701 735,129 91,261 610,721 65,020 4,048 4,048 4,641 4,641 731,081 87,213 606,080 60,379 $1,457,393 $800,250 $1,276,534 $716,172 -102'7 The Rouse Company and Subsidiaries i Consolidated Cost Basis Statements of Earnings i } rJn e'rrir ri 1 �rrrttt/rrr 1. 111,14, 1 QN 4 ,ttid 1982 ' fttt t%u�k�Jttri�,+ 1994 1983 1982 Continuing operations Revenues............................................................... $199,063 S176,54G $153,616i Expenses exclusive of interest, depreciation and amortization ....................... 119,165 106,543 93,726 Interest expense (note 9)................................................... 48,571 42,849 - 38,325! 167,736 149,392 132,051 31.327 27,154 21,5651 Depreciation of property' ................................................... 10.785 9,537 8,398 ,G96 2,321 1,831 Amortization of deferred costs ............................................... 2_ _ _ 13,481 _11,858 _10,229 17,84G 15,296 11,336 Gain (loss) on dispositions of assets, net (note 12) ......... Earnings from continuing operations before income taxes Income taxes (note 11): Current.............................................................. Deferred.............................................................. Earnings from continuing operations ....................................... Discontinued operations (note 3) Earnings from operations of real estate finance .................................. Gainon sale............................................................. Incometaxes............................................................ Earnings from discontinued operations ..................................... Net earnings.......................................................... Earnings per share of common stock after provision for dividends on Preferred stock (note 17): Continuing operations .............................................. . ... . Discontinued operations ................................................. Total........................................................- The accompanying notes are an integral pan of these statements. (4.909) (S5) 191 12,937 15.211 11.3551 .I L� f"Ni- . The Rouse 01"Ipam• and Subsidiaries Consolidated Cost Basis Statements of Changes in Financial Position 1e-an eridt-, 1>,-,zmhcr ; I. 19R4, 19,Ri and 1982 a UP; th'-wandl 1984 1984 1982 Continuing operations Revenues........................................................... Expenses exclusive of depreciation and amortization ......................... . Income taxes -current .................................................. Funds provided by continuing operations .............................. Less mortgage principal payments -operating properties ....................... Funds provided by continuing operations after mortgage principal payments . . Discontinued operations (note 3) Earnings from operations of real estate finance .............................. Income taxes -current ...... . Proceeds from sale Cost of net assets sold and related expenses ................................. Funds provided by discontinued operations . . ...................... . .. . Property development and acquisitions Construction and development expenditures Borrowings of development debt, net .............. . . . Property acquisition expenditures .................................. . . Improvements to existing properties: Tenant leasing and remerchandising .................................... Building and equipment related ..... . .............................. Total uses of funds for property development and acquisitions .............. Real estate finance (discontinued operations) Increase (decrease) in real estate finance notes payable ........................ Decrease (increase) in real estate finance receivables .......................... Total sources (uses) of funds for real estate finance ....................... Other sources (uses) Proceeds from dispositions of assets, net .. .......................... . Decrease (increase) in accounts and notes receivable .......................... Borrowings (repayments) of other debt, net ................................ Increase in accounts payable and accrued expenses ........................... Increase (decrease) in deferred credits and other liabilities ...................... Sale of common stock (note 14) .................. Decrease (increase) in receivables for common stock sold to officers (note 14) ....... Dividends........................................................... Other, net .......................................................... Total other sources (uses) of funds .................................... Increase (decrease) in cash and temporary investments ......................... The accompanying notes are an integral part of these statements. B-5 $ 199,063 S 176,546 S 153,616 (167.736) (149,392) (132,051) (102) (102) (144) 31,225 27,052 21,421 7,158 9,563 24,067 17,489 _5,951 15,470 2,820 4,040 2,381 (161) (7) (115) 50,500 - - (6,056) - - 47,103 4,033 2,266 (65,280) (54,162) (46,471),' 58,974 58,578 37,790; (118) (1,365) (1,788) (8,975) (6,139) (2,119) (11,903) (6,712) (4,233)1 (27,302) (9,800) (16,821)1 (43,552) (4,407) 40,599 60,081 1,969 (45,196)1 16,529 (2,438) (4,597)1 5,509 (67,179) 5,080 7,794 4,038 947 (14,039) 3,415 (54,435) 5,962 5,177 (11,124) (11,077) 10,808 (502) 231 (10,948) 2,283 (15,152) s (5,868) 2,415 6,077 (4,310) 4,409 677 4,170 (4,170) (9,039) 764 993 s (2,689) S� -102'7 A The Rouse Company and Subsidiaries Consolidated Cost Basis Statements of Common Stock and Other Shareholders' Equity Mean ended Dece►nber 31, 19R4. 19R3 and 1982 (in thousands) Receivables Additional Retained Common for common Common paid -in carninRs stock held stock sold to f stock capital (deficit) in treasury officers Balance at December 31, 1981 ...................... $159 $59,770 $ 325 S (418) — Net earnings . .. ........................ — — 8,077 — — Dividends on Preferred stock ....... — — ( 7 9) — — Dividends on common stock-$.60 per share ............ — — (8,960) — Sale of common stock to officers (note 14) .............. 2 4,168 — — (4,170) Amortization of compensation costs related to 1973 Stock Bonus Plan .................................... — 502 — — — Proceeds from exercise of stock options ................ 1 504 — (197) — Retirement of Preferred stock ........................ — 5 — — — Balance at December 31, 1982 ...................... Net earnings . ....................... . Dividends on Preferred stock ...... .............. . Dividends on common stock-$.72 per share ............ Amortization of compensation costs related to 1973 Stock Bonus Plan ... ... .. ........................ Proceeds from exercise of stock options ................ Forgiveness of installments due on receivables (note 14) ... Balance at December 31, 1983 ...................... Net earnings . ....................... . Dividends on Preferred stock ........................ Dividends on common stock-$.92 per share ............ Amortization of compensation costs related to 1973 Stock Bonus Plan ... .. .. ... ................... Proceeds from exercise of stock options ................ Forgiveness of installments due on receivables (note 14) ... Balance at December 31, 1994 The accompanying notes are an integral pan of these statements. 162 64,949 (637) (615) (4,170) — — 10,236 — - - — (68) — - - — (10,880) — — — 502 — — — I 1 755 — (87) - - — — — 231 163 66,206 (1,349) (702) (3,939) — — 38,635 — - - — (59) — - - — (13,980) — — — 207 — — — 2 1,436 — (354) - - — — — 947 $165 ttttttttt. $67,849 ttt�■ $23,247 ■� $(1,056) �� $(2,992) � B-6 U ,� 77,, ,. . The Rouse Company and Subsidiaries Consolidated Current Value Basis Statements of Changes in Revaluation Equity Years rnded Pecemhrr i I , 19R4, 19R i and 19R1 (m thousandi) 1vR4 1981 1982 Revaluation equity at beginning of year ...................... ._ ..— $545,701 $415,492 $340,485 Revaluation equity attributable to assets sold: Operating properties ............. Real estate finance receivables, mortgage loan administration and insurance agency .. . Increase in value of properties in operation during entire year ...................... Value of new properties opened or acquired ................................... . Increase in value of properties in operation .................................... Increase (decrease) in value of real estate finance receivables ........................ Increase in current value of mortgage loan administration and insurance agency ........ Increase in current cost of other property, less accumulated depreciation Increase (decrease) in value attributable to debt, exclusive of operating property debt .... (Increase) decrease in present value of potential income taxes, net of cost basis deferred income taxes .............................................. . Cumulative effect on prior years of changes in reporting current value of mortgage loan administration and insurance agency .................................... Revaluation equity at end of year ........................................... The accompanying notes ate an integral part of these statements. B-7 (2,134) -- (902) (32,101) — 511,466 415,492 339,583 127,209 123,514 50,865 2,727 1,694 7,478 129.936 125,208 58.343 — (275) 865 — 9,813 1,911 1,080 290 83 (1,012) 553 (607)', 2,398 (10,264) 499 132,402 125,325 61,094 — - 4,884 14,815 132,402 130,209 75,909 $643,868 $545,701 S415,492 85 la 2 0 taT :V. •. .\ ��._'. .l .`.�:. .. .. _ ,�.... _ -' _.� �_ _a_-. ems_ ..L -y �'_'a'-.. ... i'.� - - .� _ - --- -' - - ---- _C .:�. _a._ �.ii.-i is ----•-- � �•----r -A.+. I vl�� V-4, 0 I Report of Independent Real Estate Consultants LANDAUER Landauer on ven s,'n`. 335 Madison Avenue Atux inn%rW . M a IMvi (rrrr I(M New York, New York 10017 (212)687.2323 Telex: 710.581.2012 Peat, Marwick, Mitchell & Co. and The Board of Directors and Shareholders The Rouse Company: We have reviewed estimates of the market value of equity and other interests in certain real property owned and/or managed by The Rouse Company (the Company) and its subsidiaries as of December 31, 1984 and 1983. The properties reviewed at December 31, 1984 include all the projects identified as "In Operation" on the "Projects of The Rouse Company" table on the back cover of the Annual Report for 1984, except for The j Mall in Columbia and South Street Seaport. The properties reviewed at December 31, 1983 were the same, except for the retail centers which were opened, acquired or sold during 1984. j The total values of its equity and other interests estimated by the Company were $723,107,000 and $579,983,000 at Decem- ber 31, 1984 and 1983, respectively. Based upon our review, we concur with the Company's esti- mates of the total value of the property interests appraised. In our opinion, the aggregate value estimated by the Company varies less than 10% from the aggregate value we would esti- mate in a full and complete appraisal of the same interests. A variation of less than 10% between appraisers implies substan- tial agreement as to the most probable market value of such property interests. The data used in our review were supplied to us in summary form by the Company. We have relied upon the Company's interpretation and summaries of leases, operating agreements, mortgages and partnership and joint venture agreements. We have had complete and unrestricted access to all underlying documents and have confirmed certain information by refer- ence to such documents. We have found no discrepancies in the data and, to the best of our knowledge, believe all such data to be accurate and complete. The basic assumptions used by the Company and the individual value estimates prepared by the Company were, in our opinion, fair and reasonable. We have also physically inspected, within the past three years, substan- tially all of the properties which were reviewed. Out review has been made in conformity with and subject to the Code of Ethics and Standards of Professional Conduct of the American Institute of Real Estate Appraisers of the National Association of Realtors. Sincerely, Landauer Associates, Inc. John B. Bailey, MAI, CRE Vice Chairman Samuel G. Long, Jr., MAI Senior Vice President Deborah A. Jackson Vice President February 22, 1985 B-9 Cy v .....10 2 tI I ill N..n,l 1 ,�{nl`.In\ uI,I `,nl`.�,I� ��• Ntttc•s to Cottsttltdawd I�in,lttt t.11 �Iatt•ntrnt� (I1 It utn'nt t.tlur 11.1%1. linantul .tatentent\ (h) BASCS of valuation Ira<c'd uIxin its expc'nc' entin ill \elopinc. operating. managing; 11 IL t. ltri-ni .1111v IY' Klrllin ♦,L I' I Mid tlnall, Itic real C•State p101C, t\ .I11 , 11, lonc•tcrm plan, to lilt „ ll'oll'bl, d t n1will \.1111c t1a\t\ tinall, tat At( re•alt:c• the \'.71ue<aw>,7atCti \\tth 1hr l .`rrlp.;r\ , `peraun.e `Ir.rnic,i i,� 1`1,�\t,jr \I11111cI11C11Lit\ 1111otillatNoll a1\llit ill( _. F nlan.;�enu'r c'i,e.f,; t ,� \ ,a11p.711% \ tlomit I.ii 1\IL11 loll alld i 11.711l;r\ ill \hArc'holdCr, pn\Ilcrnc \anti , ihrf a:•c't\ \ \ A \ It \-dlUf'• t, ll, \\Itl� 11sc, for r>tinl.l(C'\, ,rif:en( jMI\ \\ Ill, 11 I\ not I'll \ 1,1c.1 11\ the „\\I h.1\I. tinan\ 1.11 \1.11c Olvranng; pr\,perrlC1 And managed retail center, -he c 111C111\ lIN C oillpoll\ \,111CI.71till' I1h`pc'Tilt'\ And ,Crtaitl ♦1tl1Ct rt'rlt \.7171c A :hc l onli%ir\ , Oper.i;:nc pt''peries ri`J . \1t 1\ !1.7\, .7p1`Ic, talr,i ill \.floc .7n,1 tiuu ,ullrnl \.7hu \ r\,cr,1 `, 4 f•cultt tni^res:' ,:ctnu',i a> :,..,: \.;lu,� c CAA, pt0p:t;\ 111,'It „\\I h.7\t\ oct I\M\t, \-alor, cit'1111IM'd Ill, l ltlt,`I11111\ \\till i. ...� tl\fel lit I.7ll\ .7„CpI C,I at\,11111r II11; Ill Ill, 11'1c'\ Maluecillcm iK'ltc'\C\ it•\f ••. \.Brit ,`t ..• .4e.i,.L\:.6-..ht ,..e 1` -•..- •'".G ptlt,,lg`.;i w.". ;l'.*'t �: ^.1\1??Cat> o-, ne 1.C':?; z—_("a,.\ .. .. t lldl Ihr , lllit'I,l \ally' 11.7\t\ e111.711, L71 \L.11clilcill\ I1101C tC.711111 •lopt'f;\ j,l:•• 1: "t �G.. G.'\,� -t elG C , 1•• , 11'C _.. iE\ „ ill, ♦. ,11t i1.i\C1,`t lflC \ 011111.;11\ .at1\ill(" I Ill(' ,l:I rCl:i \...::C .`i �, � 1(' ♦ .4..\ .•.. f'�e : ...ter , '.` . I I1, ♦ �:It♦ •„ \.: I: �, . :tit, �..�: �... �. ♦ ... unuC'f it'•'i i.ii: i'.i1 „♦••.♦, n ♦, i1: :'..,.,,, \\,'. ,rptc>rr" cx'i:,\a1:7c,1 tec 'A a r .'.:...<..._ GS ". 1 1 .IJ: �`1, . \ ♦ ♦.... .♦,♦ ,`: . , \\, .., , , thC\c' .i\\C'i\ 1`lullaltl\ , - rl.'q i•. :I,. <[,("i ;:\: JG"• t, .1. I oI ,. ... ... .. ....:... ,♦ Cl n?1\,1t .lC. ,.4. 1: .. G 1C'ilt> »Il li l` \\:Ii I>; e:\C.: , .'. ... .:'.. .... .... ...r_..c�f..-...�• .... �.7♦ atr ..,. e.� G♦� -` GcvG. J. t'jz I♦ , i'.. �.�♦ .♦�,. , \. ♦ . :\ � , i . � , • ,�♦ ..7..1.'t, c: 1 .. 7.SC AV. .. '- cc.\.; \'�♦ .. .\\`\ \., ..:, j. a �.1� w. ilri rl:..K: , �1 A:: ♦. _ ..• _ \.♦ ,,n. , is �' : '..: \' . ♦... :\:. .. 1,. �.:\,• S-. hc\'en\t menr .�-:rl, l,- . -..-u.-1.. a. _. : I:, , 7e�. _- .:\ ,,\. .\.�: ')J: nX .\1.�... .1' �., Ana. '.1;'. 1.. w.1 1: .1: ... ... s .:.•�. 1 I Mortgage loan administration and insurance agency 'file Ili(.- I urrc•nt valuc•N of rquity intcr(us In operating propcitic•s and I Lill( Ill \,,III( ''t Ill( IIl�rtll;;lt't' I'"Ill ,Idtlllill'ttat ItIll ,Ind Insur- retail ((rit(rN nlan,1,;Cd tindt'r (IlnttAII In Ihlnt' tear. The ,till I ,It',crlt I\ 1(I Iltnl Y II In I1)8 2 w,Is All t•stlnlat( III Ihc present (,Iluc it lict wr,lt IIIt; tees front incrt•:cu• in ill(. distount lilt(- used in 1982 otlsct it major portion the• pmdollo of lo:uls adnlinls- toed b( Ihc r(•al (•stilt(• fin:ulic• suhsidrar\ and c•srinlatcd net of the increase in potential tax paenicnts attrihutah1c to higher pnljc•(tions of Ixxahlc• int,vlic• at hc'tcnilwr ;I . 1982. The intlu- munlsvonsfrom Ins"Un'( [)()]It It's (ifits ulsuruue• suhsidlary 'Itch snm offuture•. unnamed pn,jc•tis ill the projections reduced [he ( urrCrit value• was not lilt ludcd In the current value hasis tinant i:d N tltrt'illcilt, ill P)S;2, cstinlaled prt-WUll value• (11 I,oie•ntial tax paynlC•nts ill apprc,xi- prior the tumulativc• (flea on alai Ck Stio. 100.000 at IIrk Cnlh(r ;I. Itlti i and C?-.(I(1(1,(1( II I :It pn-Ir vears of rci l Wgnlilni; Nut h rurrc•nt valut• has been shown I)e•temhc•r ; I. 1941. scparatulo, to the st,ue•Illcm of (hange•s to re•valuanon (•quit\'. I'hc ni ihods used to csurnatc Illc Other assets and liahilities All other assets and Icthilitic•s .Ire current values ()f they corn- nl(r( till III,I1l ,Idrl imItnition and insurantc agCnto. tarried in th( I urr(•nt value• halls 11:11ar1(C slI(TI at they lower of toss or net n•:Ill/atilt' %altic Ih('atlic q.tled (alu c aN Ili the' (()It w('IC'thanecd Ill tt!!+; Iu rc(ognize II im- walism market valmi- basis halan(c 4wct. UInN if Ill( I(' hll�Itlt'�Nt'�. Ihe Ctict t nt these (liallp's 1s also During 1115;. illy unipati\ entered Into ( crCiin Ilt•1v marl- sho„n st parait I1 In the siatcmunt of (Ilangc•s in rcvalu:ltion agerlicni and sharc•holdc•r agreement, with rcspc•tt to Its role ('quit( :A dc•tre•:ae In the Ilis(ount rat( used to (ornput( Ihc• t ur- and (•quit% position in The I Inward R(•u•a«h And Develop - refit value of Ili( residcnnal mortgage loan atiministratioll nett Corporation (I IRD). I'hesc agreements adjusted Ihc• accounlcd for :I major portion of the Increase In ulrrctit value C:ornpanyIs interest in I1RD and continue the Conlpanv's attributable• to III!;;. development and operating management of HRD. lender these Real estate finance rccci%ahlc%-Dirt mortgage notes re(eiv- agreements, the• Company rc(e ive s fees for its management of able for whith sale (onlniitmc•nts have• been prearranged are HRD and, under (criain (ir(unlstant es• would receive a pav- tarried at the (oninlltnictlt pate. The remaining nUtCS re((iv- ment if its management role were terminated. In addition, the able and other real cst tte finance• R'(ei1'ablCs are tarried at Company hats the right to sell its voting stock its Connecticut aggregate market value•. General Corporation in the event that file management agree - Other property, net -Other property includes land and, in I ment is terminated without cause, and under certain other tir- 19;-i, nao I'Cla I centers held flit sale•, which arc stated at esti- tuntstances. Payments in respect of termination of the mated net realizable value, and the Company's headquarters management agreement and/or sale of theCompany's equip building, which is valued at CS(litlated current (osi. position could be material. liecausc• of the relativelyimrnatrrial Debt IAimg-terns mortgage dcht relating to the operating value of near term management fees projected to be received by properties is carried at the same amount as in the Cost basis hal- the Company and based on the presumption that the Com- iante• sheet. Since the value of they Company's equity interest in party's role and equity position in HRD will not be terminated + each property is based on net cash flow after mortgage principal I'll the near future, the Company's interest in its agreements and interest paillni •tits. any differencebetween thecurrent i with HRD has not been valued. value and coil basis of long-term mortgage debt is reflected in The application of the foregoing methods for estimating cur- j 1 the• value of the operating property- 111e cost basis balances of rent value, including the potential income tax payments, repre- real estate finance notes payable and other property debt repro- cents the best judgment of management based upon its sent the current value of this debt since interest rates thereon evaluation of the current and future economy and anticipated fluctuate with market rates. The Current values of certain other I investor rates of return at the time such estimates were made. f debt and certain of the obligations under capital Imes have !judgments regarding these factors are not subject to precise ? been computed using estimated market interest rates at Decem- quantification or verification and may change from time to time ber 31, 1984 and 1983 for similar obligations. as economic and market factors, and management's evaluation t Deferred income taxes -The deferred income taxes on a cur- of them, change. rent value basis is an estimate of the present value of income tax I The current value basis financial statements have been and j payments which may be made based on projections of taxable will continue to be an integral part of the Company's annual Income through 2046. 111e projections of taxable income I repcirt to shareholders, but consistent with previous practice, I ' include projects presently under development and future, current value information will not be presented as part of the unnamed development projects and reflect all allowable deduc- Company's quarterly reports to shareholders. The extensive tions permitted under the Internal Revenue Code. The dis- market research, financial analysis and testing of results count rates used in computing the present value of income required to produce reliable current value information makes ? taxes were decreased in 1994 and 1983 and increased in 1982 to it impractical to report this information on an interim basis. reflect Changes in the internal rates of return used to compute 1 1 ; *---1027 (c) Revaluation equity (2) Summary of significant accounting principles 111(' aggtrgalc dlHcrentC he'twCcil the current value h.lsu.ttlti ta) Principle, ol'st:atement presentation cost basis of, the• Company's assets and liahiliriv' is reported as Hie consolidate d finant ial statenu nts include the accounts of u•valu:uion c•yuitc in the sharc•holdc•rs' cyuit)' sc•cunn of the Hie Rolrsc• (ompanl. all nlhsidiarirs and partnerships in which tcmv,GtLuck I (urtVtII VAIII ' IIASis b:11Atli C sheet The cotllponeIIIS n w a na.ltt *oIl Where•\ anti control. and the Coships i s pro - follow.- equity .11 DetC-1nher ;I, It)t•;•1 anti Il)ti; arc• as ,ottionatc Amtc of IIt(- as,;ct,. hahllltic', rcve'nues and ex enses follows tin thousands) I P i topcm- and reccn•ahle•s under (Itlatt(c• leases: False of inICIVsls in operAtIng properties, rrcc n allIcs unit(-[ litlantr Ie Ascs And Interests in WWI (c•tltcrs nl.ucaged under (ootr:a( l Dcht tcl:atc•d to equity interests, excluding dc•ht related to ttlnkC land .. . Value of tiingC land l01.11 JSSCI valur DeprC(1.1trd COSI of opiCrAtIng prtilVIAICS . . .. . Revaluation cquil\- In prop- crt\ and reccii'ablcs under fillani a Ic:asc•s RCA\ CSfatC fitlatl(C rC(CIVANCS . . able of I11ottg;agC lO:ill at{IiiInIs- truion .end insurance agent[ . . 1ct cutrcnt cost in mms of histori- cal cost of olllor propcttl' . . . . . Value attributable to debt, exclu- :nr of opecuing proprnc debt Pm,cm value of potential income taxr, rclatcc{ to trialuation equity. net of cost basis detcrted Income taxi . . . . . .. . .. . .. liltal rmdu.1tion equit of unnitorpotatcd tc'tall center ventures in which it has )flint 1t)ti•I 1')�ii 1111t'reN .Ind tnmwl \illl)„ wi venturers. investment, In vcn- iIIIC, MIR11 Willt-SC111 It'ss dian a 2W,t interest arc, iarri(d al u0111 Signlht,int intertompam h:11MILCI Mid tran,attl,!tl, :ire clit111 micki 1I1 tt,ll,olld,ltlttll. Certain ,amounts for Hs; and hacc been retlassitied t(i t0iltortll to the ptc,�Clllatlo11 for 10s-4 S-2;,111 C S- l•VS; 482.15S A('-,S 15 1,5t)') 2,18; 1.20o, 5a•I I.0.10.0S l OSS,.Ios) )S20•;2-) r4s,-Iso S-,O.(,S4 �1.423 S.(,S- -.00- t15.oSo) (18.OS4) $ t,43,84,8 S 5-15.-01 (h) Property and deferred costs 1 C l Utllp,inv' (.lplt.1hics ,iN prUpC((1 the tons nl(tittrl and de•\clopt11Ct11 cost, ,tN>U(latCd \\Ith the de\Clopnxnt of prt)tCttt and land held for de\clopnlcnt. including interest. (arr\'ing thatgcs and applicable salares ,imi rclatcti tt,sts. Certain t,thcr (ostS a\"o(1.ItCd \ilth the finatlt in.2, le.L ng ails{ opening - pro)- Ccts are (.IpltahZCd .IS deterred t„ti, of prtllett, and are .rotor- rized over the periods hc•nc•tited h\ the v-(penditurc•,. l o,rS ASS04:13tcd v ith ohtaininL (ontra(t, to manage retail kCilters tot oth('rs ,It(' tApitalizir,i and alllonizC,11,vcr the terms otthc contracts or tiee \car,, \\hithc%cr is lest. 111C pre-(onsiniction S1.I,4C tit prole,, development includes effort, and related cost, to K(Ure land control, requisite zoning. department stores and htlancing commitment, and to accom. push other initial tasks \\hich arc• essential to the development of a project. Pre-coristnicrion cost, include land option pa\- merits. legal and architectural fees. feasibilitc stud\ costs. Sala- ries and related cosh, other dirc(t expenditure, and interest charges. \ilex• cost, are transferred to construction and de(elop- rllent in progre',,<\i'he'n the pre•(on,triction tisks ire achieved. Depreciation of property for financial repor-tirg purpose, i, computed primuil} by the straight-line method. The annual rite of depreciation for most of the Companv s retail propert,L - is bxed on a S5 year composire life :uld a salvage Value of approxinlatel\ 10c producing in edecti\'e an.:al rate of depreciation for new properties of , � of depreciable The other retail properties, all office buildings and other prop- cmes xe depreciated using composite live, ranking primanh from 40 vear\ to 50 %Cars. Pro\ducinZ ef✓ec-lVe annuli rate, Jt depreciation for new propemes ranging: trom :.5 c-; to _.0 Maintenance and repair (oFrs ire expensed aQ i ns—, opera-,.O:, .t.< incurred. while signi2icam impro\"ements. replacement_ ar. nlatot reno\'atiOn, ire (harge.i. to the appropr:ite a((oUnt, 111e ( ompin\ procldes for tt1C (oti, of E4''C;," i l\ �..- (;C\• fun prC•io^�ttJiTion of ott, it .: ply:en, all\' s-trUmon arld development costs chart[, re�;ne is :`iK% on a'' et -mutes or t.^.0 pry pan\" - ,1L\JR:inLtnt .,. C:'.��r:� n pro!e :. .:7 r, 9 firm �tagc' t(f.dcvc'It)pmc•nt :Ind (h) c•stnl)alc•s of TiCt rc'alizahlr l:f%t tier }anu,lr� 1. It)� i. (hangc� n, flit })cnsi011 })tan %aluc %kim it ;it(, lt.tt than ttt,rt m(tlrrcd nn printer I,, in ( timtrm - in( rCa';('d lilt' ,It luali.il pit -wilt VJIUC Of at(elmulatt•d he•neflts by ilon mid d('t'(1t,pt11('r)t it, pruPrc,,c Other dcNc1t1pmC'rlt (o"t, Si.52o,tlflfl (hC's('t harlgrti Int.rcivcd pctl�iorl tosv� for 1984 b1 (hargcd dirc(th it, operations in(ludC ((Kt, asvx iate'd N ith Ihr S2 s(I.mio The a�,,unlcd rate of return used in determining the inni:d e(aluations of proje(tt. ,tttuati,ll prrseni value' of a((umulatcd hericfits was 99;J, at bath (c) Accounting for costs during lease -up periods When projc•us are iflitialty opened. (c•rt;tln (ostll su(It as Intcr- c'sr. ground rents. real testate• taxes and insuwntc• arc (apit.ihic'd or cxpcnscd pn,portamatc to ottupancy during flit- lease-ul) pc•ri()(l. 'Ills-• lease• -up pe•riud tonlinUel, until the proje•CI rcathe•s 90t!40 oc(upan(y or has J)Uell operating fur uric year f'ndc•r thi, polity the Costs taplializc•d were sii l.00u for 198-1. S-4-2,000 for 1983 and S29-moo for 1982. The amounts expensed were' S2.99i,000 for 198•4. $4.800,000 for 198i and Sl .5i,),t oo for 1982. (d) Accounting for leases Leases whit It transfer substantially all dice risks and hcnc•lit� of ownership to tenants arc considered finance Iease•s and the present values of the minimum lease payments thereunder, less the estimated residual values of the Ic•ascd properties. arc• accounted for as recciyables. Leases which transfer suhqantialh all the risks and benefits of ownership tit the Company arc' (on- sidered capital leases and the initial present Values of the mini- mum lease payments arc accounted for as property and debt. Direct costs of negotiating and Consummating flit. re -leasing of tenant spaces arc deferred and cxpenscd over the terms of flit - related leases. (e) Pension plan The Company's defined benefit pen.lon plan c(.»ers substan- tially all of its employees. -flic actuarially determined normal cost of the pension plan is accounted for as a Compensation cost. The Company's polity is to tcrnd pension c,,,ts at(nlc•d. Pension costs were 5724,000 ti)r 198-4. Sa3-0)(10 for 1981 and $1,10t,000 for 1982. A Change in tile assumed race of return on fund assets from 6% to 9% effective )anuary 1, 1983 reduced pension costs for 1983 by $804,000. A comparison of accumu- lated plan benefits and net assets available for such benefits at January 1, 1984 and 198 i (the dates of the latest actuarial valu- ations) is as follows (in thousands): Actuarial present value of accumulated benefits: Vested ........................ Nonvested ..................... Net assets available for benefits........... i 1984 1983 $10,455 1,202 $11,657 $ 6,086 864 $ 6,950 $10,167 $10,131 v:duatit,n date's. In (orine•ttwn with the sale of Rowe• Real Istatc Finan(c, hit in Sc•prcrilhcr 1981, the actuarial pre•sCIlt v;ilue tit a( ( unlul.tic•d hrnctits and nct assets available for henc•- tits N%crr rcdu(cd by 4591h.000 and S1.192moo. re•spettiveh•. (1) Income recognition -real estate finance operations R('yc•nurs from real ('star(' tin;rl)(c upvralwns. pnnlarih loan origtrlatlon and loan atirninistruion intomc, were slo. i5(,,000, S14.059.000 ;uu1 S9.9-1 000 for P)S I. P)S; and 1982, rc•spt•(t IvvI% Loan origination ituonu includes ilACII)cnt feces fur services performed in arranging mortgage iinam ing: tonlnlltlllent feces rc•(c•n•c•d from real testate' developers for arranging tirril commit- ments hx permanent financing: origination feces: arid income• or loss resulting front flit- sale of first mortgage loans. tiuth iIlk omc• Is r•((tgniz.ed as follows' pla(cnu•ni frees arc• rcotgnlmd Nhe•n the• pcnnanclit and (on- stru(tion loan tonulliuncnts h:n•c been obtained and atcepte•d, tollc•Ctiun of the fee is rewunahly assured and there arc no remaining significant obligations to pc•rfi)rm; -tommitincnt fees rc'Cc•iycd front real c tatc• developers arc• ini- tially deferred and are then taken into intomc• upon the sale of loans to investors; -origination fees are recorded as income• upon collation at settlement" -income or loss related to the sale of first mortgage loans is retordc•d when the notes are purchased by investors. First mortgage notes held for sale are Carried at the lower of cost or market as determined by outstanding commitments from investors or Current investor yield requirements calculated on an aggregate basis. ! Loan administration income represents fees earned in con- nection with the servicing of real estate mortgage loans for investors. Such income is recognized concurrent with the receipt !, of the related mortgage payments and is based generally on the outstanding principal balances of the loans serviced. Mortgage loan origination costs are charged to operations as incurred. The costs of acquiring loan servicing from others are amortized over ten to twelve years. (g) Income taxes Deferred income taxes are provided to reflect the effect of dif- ferences in the timing of deductions and other items for income tax and financial reporting purposes. Investment tax credits are jaccounted for on the flow through method. 13-13 8L -102 '.7 1 1 � � � � � � `. _ i ( { I The condensed, combined balance sheets of the joint ventures and equity at December 31, 1984 and 1983 are summarized as and the Company's proportionate share of assets, liabilities follows (in thousands): Operating properties: Property and deferred costs of projects .......................... . Less accumulated depreciation and amortization .................. . i Construction and development in progress ........................ . Other assets ................................................. Total..................................................... Combined 1984 198i $481.268 5500,022 75.180 77,021 .106,088 42i,00I 33,6-1 - 26.578 14,031 S466.337 S43-,032 Proportionate Share• 1981 1983 S220,661 30,215 l w, A-16 16.690 1 i.0i7 S226,183 Debt, principally mortgages ..................................... $357,852 S341,424 S178,260 Other liabilities .............................................. 17,075 11,008 8, 346 Venturers' equity ............................................. 91,410 84,600 39,577 Total ..................................................... S466,337 $4.37,032 S226.183 S2 33, 379 31,305 202.0-4 0.884 $208,958 $170,002 5,452 31,504 S208,958 The condensed, combined statements of earnings of the joint and expenses for 1984, 1983 and 1982 are summarized as fol- ventures and the Company's proportionate share of revenues lows (in thousands): Combined 1984 1983 ------------ Revenues .................................. $130,521 $120,274 Expenses exclusive of interest, depreciation and amortization ............................. 71,134 58,386 Interest expense ............................. 33,558 31,833 104,692 90,219 25,829 30,055 Depreciation and amortization ................. 13,478 12,989 Net earnings ............................. $ 12,351 $ 17,066 The proportionate share columns reflect depreciation based on the Company's use of its cost basis and composite depreciation rates which differ from depreciation rates used by the ventures. Earnings and losses of the joint ventures are required to be Proportionate Share 1982 1984 1983 1982 $110,401 $64,325 S59,286 S54,372i 55,863 35,168 28,835 27,5831. 30,185 16,738 15,843 15,015 86,048 51,906 44,678 42.598 24,353 12,419 14,608 11,774 12,757 4,580 4,136; $ 11,596 _5,002 $ 7,417 $10,028 $ 7,638 repotted by the venturers for Federal and state income tax pur- poses based on their respective interests therein. Accordingly, no provisions for income taxes are included in the combined financial statements of the ventures. B-15 y K •. i (5) Property and deferred costs of projects Property and deferred costs of projects at December 31, 1984 and 1983 are summarized as follows (in thousands): 1984 1983 Buildings and improvements ........ $583,888 $558,580 'Land ........................... 28,441 20.447 Deferred costs .................... 23,757 24,341 Furniture and equipment .......... 9,513 8,431 Investments in office building ventures ...................... 1,521 1,646 Total ......................... $647,120 $613,445 (6) Development operations The construction and development in progress accounts, carried at cost, include land and land improvements of $16,916,000 at December 31, 1984 and $6.340,000 at December 31, 1983. Changes in pre -construction costs for 1984 and 1983 are sum- marized as follows (in thousands): 1984 1983 Balance at beginning of year ......... $ 8,627 $ 5,424 Costs incurred .................... 10,225 5.202 Costs transferred to construction and development in progress .......... (6,744) - Costs of unsuccessful projects written off ..................... (2,699) (1,999) Balance at end of year .............. $ 9,409 $ 8,627 (7) Real estate finance receivables Real estate finance receivables at December 31, 1983 included +first mortgage notes held for sale of $55,993,000. Certain of i these notes were pledged as collateral for the real estate finance i notes payable. Prior to December 31, 1983, the real estate finance subsidiary issued mortgage -backed securities guaranteed by Government National Mortgage Association or Federal National Mortgage ' Association. The outstanding principal amount of such securi- ties at December 31, 1983 was approximately $555,000,000 which also represented the approximate principal amount of the related mortgages which served as collateral for the securi- ties and were being serviced under this program, In keeping with the economic substance of these transactions, the issuance Of the mortgage -backed securities and simultaneous placement of the related mortgages in trust have been accounted for as a sale of the mortgages; accordingly, neither the mortgages receiv-able nor the securities payable appear on the balance sheet. Related trust funds of approximately $17,800,000 at Decem- her 31, 1983 on deposit in special bank accounts were also not included on the balance sheet. (8) Accounts and notes receivable Accounts and notes receivable at December 31, 1984 and 1983 are summarized as follows (in thousands): 1984 1983 Accounts receivable, primarily rents and services for tenants ........... $ 35,948 $26,574 Notes receivable, including secured notes of $69,754 in 1984 and $15,024 in 1983 •••.••••••.••••• 74,094 16,615 Due from HRD .................. _ 889 161 110,931 43,350 Less allowance for doubtful receivables . 2,908 2,506 Total ......................... $108,023 $40,844 The additions to the allowance for doubtful receivables were $1,347,000 for 1984, $1,555,000 for 1983 and $759,000 for 1982. Accounts and notes receivable due after one year were $15.371,000 and $13,579,000 at December 31, I984 and 1983, respectively. The Company owns 20% of the outstanding voting stock of The Howard Research And Development Corporation (HRD). The Company's investment in HRD of $1,685,000 has been fully absorbed by its equity in losses of HRD and the equity method of accounting for the investment has been discontinued. The amounts due from HRD are principally amounts due under a management contract which are collected currently. The Company manages the development by HRD of Colum- bia, Maryland under a management contract which expires, subject to certain termination rights, upon substantial comple- tion of the development of the project. The costs reimbursed under the management contract were $3,682,000 for 1984, $3,803,000 for 1983 and $3,805,000 for 1982. In addition, HRD reimbursed the Company for costs of certain other ser- vices aggregating $2,716,000 for 1984, $2,718,000 for 1983 and $2,486,000 for 1982. The Company also was paid $720,000 for services primarily in connection with the proposed refinancing of HRD's income -producing properties in 1983 and $784,000 as an incentive management fee in 1984. B-16 (9) Debt In recognition of the various characteristics of real estate financ- ing, debt is grouped as follows: (a) "Debt not carrying a Parent Company guarantee of repay- ment" which is subsidiary company debt having no express written obligation which would cause The Rouse Company to repay such debt; and (b) "Parent Company debt and debt carrying a Parent Com- pany guarantee of repayment" which is debt of The Rouse Company and subsidiary company debt with an express written obligation of The Rouse Company to repay such debt under certain circumstances. With respect to debt not carrying a Parent Company guarantee of repayment, The Rouse Company has in the past and may in the future, under some circumstances, support those subsidiary companies whose annual obligations, including debt service, exceed operating revenues. When such support is given, it would most likely be in connection with the start-up period of an operating property. The annual maturities of debt as of December 31, 1984 are summarized as follows (in thousands): 1985...................................... $ 65,426 1986........................................ 18,205 i1987........................................ 21,779 �1988 . 12,041 1989........................................ 14,140 Subsequent to 1989 ........................... 432,646 Total .................................... $564,237 Mortgages and bonds totalling $443,975,000 at December 31, 1984 are secured by deeds of trust or mortgages on real estate projects with a general assignment of rents. This debt matures in installments through 2019 and bears interest at rates ranging from 5 3/4 % to 14%. Approximately $8,991,000 of this debt bears interest at rates which vary based on the prime rate or other indices and approximately $130,743,000 is subject to payment of additional interest based on the operating results of related properties in excess of stared levels. Advances under construction loans totalling $97,662,000 at December 31, 1984 bear interest at rates ranging from 91/2 % to I2'/2%at December 31, 1984. Advances (&Si3,947.000are supported by a take-out commitment for long-term financing at 12%. These advances and advances not supported by take- out commitments are classified as long-term debt using the maturities of the related or anticipated )ong-term financing. The outstanding advances include accounts payable subse- quently funded by construction loans of $4.165,000 and $5,017,000 at December 31, 1984 and 19R3, respectively. Other debt includes unsecured borrowings of S 10,000,000 at December 31, 1984 and 1983. Of such amounts, $7,800,000 and $10,000,000 were supported by 100% compensating bal- ances at December 31, 1984 and 1983, respectively. Interest and fees of 1.1 gib are payable on amounts borrowed for which the Company maintains compensating balances. The remain- ing borrowings of $2,200,000 at December 31, 1984, which are not supported by compensating balances, bear interest at the prime rate. The remaining balance of other debt, of'which $4,089,000 at December 31, 1984 is secured, bears interest at rates ranging from 12 % to 12 3/4 %. Total interest costs were $56,975,000 in 1984, $48,314,000 in 1983 and $43,505,000 in 1982 of which $8,404,000, $5,465,000 and $5,180,000 have been capitalized, respectively. At December 31. 1984, the Company has a bank revolving line of credit of $20,000,000 which expires in 1987. No amounts were borrowed under this line of credit during 1984. A subsidiary of the Company has a bank revolving line of credit of $20,000,000 for capital improvements which expires in 1989. At December 31, 1984, $1,646,000 was borrowed under this line of credit at an interest rate of 1 1/4 % above the daily market rate for thirty day certificates of deposit. B-17 t I0 hiY annc tsxrmc �c and iets iine L-t •_ ._.._ate -... _._... _ _ l.�lt•LJC ilir _ �.i •'rim.^_ i_: i� ::-- - -. _._ �.�._ .— • _ _..- _ ._ - _�-..tom. L L _ -. : tt t t ....: 17... ...... _ .'r'.a. __t . e'er! =il '.'SAY �� _`- _. • r •--_.-c Z :Y: _�"� _ .. - ^ � _ _ —_ .� � . _ _ . _ _ Lim •-.i. G i_� 1i . L_ � NtL Tn Z.4 Zs _r. � '• is 44 The deferred income tax provision applicable to continuing 1'he pr,�yision for I„�s on sale of retail centers, which was operations, representing the tax effect of timing differences. is rck,oidud in thu f(,unh ,luarwr of 11)84, relates e!t nvo off -price e omprised of the following (in thousands): rurail o c•rntt•rs held for sale t De•tcmhe•r 31. 1084. The costs of 1984 1983 1 l82 these• t�yo ce•nrcts �%( R «rtttc•n down to net realizable value Depreciation and vyhdoh ds in( ludcd to „diet pnopern, nut. at December ;1. N84. amortization ........... $4.170 $4.8()5 $5,45- t ether hisses reoognizoi to 1,ns 7 ttu ludo a loss in( urrcd on the sale "I a par, d (it Lind :dn,f a pomN oil for anticipated future I Interest and carrying costs capitalized 1,813 ornt5 ass,,, date,{ mill a pr,gx•n\ c„Id ............ 2.111 1.746 Additions to reserves, net of (13) Redeemahic Preferred Stock write-offs .............. (606) (389) (5-5) Gains from property sales "1he•n• aru 25,0(w ~barns of authoniud $r, Cunnilatiyc Preferred reported in different years stuck of witi( h 8.905 shares and 10,5-8 sham are issued and outstanding at Do unthcr ; I , I I)8 t and 198;. resput tivcIv. At on tax return ........... (1,042) 280 f 1,966) Compensation costs -stock the (;orttpariv opt ion. the pref'Mc•d stock may be redec•rtu•d in , option and stock bonus whole or ,n p:ut ;it Itin per share plus am aU'rued but unpaid plans ................. 627 74 138 Foreign tax credits ......... — — (` 7) liyidcnc{� The (.urnpam is required on luh I of each )car, until such Investment tax credits ...... (30) (365) (547) time• as nu hares rc•rrtain outstanding. to de•po�sit S10-moo into ;t preferred stock puro tease fund tnr the pun hale for retirement Deferred state income taxes 921 738 — Other, of shares of the prctMcd stock tendered by the holders at the net ............... (32) (403) 200 Iotycst pricu� dun,icrcof up to :uni incfudint� rho «dcmption Total ................. $5,841 $6.963 $4.356 price. L;nder certain e ircunt5tatxes. the shares of preferred stock i The net operating losses being carried forward from Decern- may be converted into shares of common stock of the Company her 31, 1984 for Federal income tax purposes aggregate at market value or $5 per share, whichever is greater. Under the I $50,040,000, including an estimate of $21.300,000 for 198-1. terms of the Company's Charter. as long as shares of the pre - The loss carryfotward will begin to expire in 1992. In addition, (erred stook remain outstanding, the Company may not pay the net operating loss for the seven months ended December dividends. make distributions on its common stock (other than 31, 1976 is being amortized over a ten year period and will stock dividends), not may the Company or its subsidiaries reduce taxable income by $614,000 annually through 1986. acquire shares of the outstanding common stock of the Coin - The consolidated Federal income tax returns of the Company ' pany in excess of certain specified amounts. have been examined by the Internal Revenue Service through j December 31, 1980. (14) Common Stock [here are 20.000.000 shares of authorized common stock of (12) Gain (loss) on dispositions of assets, net which 16,501,796 shares and 16,285,759 shares were issued at j Grains (losses) on dispositions of assets included in earnings ! December 31, 1984 and 1983, respectively, including 1,196,186 from continuing operations are summarized as follm%s ; shares and I ,183,621 shares, respectively, held in treasury. At (in thousands): December 31, 1984, shares of the authorized and unissued i common stock are reserved as follows: (a) 26,191 shares for 1984 1983 1982 1 conversion of the $6 Cumulative Preferred stock; and (b) Sales of interests in retail 415,888 shares for issuance under the Company's stock option centers ............... $ 3,409 $ — $ 134 and stock bonus plans. Provision for loss on sale of + The Company's stock option plans provide, among other retail centers .......... (5,750) — — things, for the grant, at the discretion of the Personnel Com- Sales of residential units ... — — 883 mittee of the Board of Directors, of options and for the grant of Other losses, net ......... (2,568) (85) (998) stock appreciation rights to officers and employees who are —� --__ Net gain (loss) ......... $(4,909) $ (85) $ 19 granted options thereunder. The plans provide that options are �� ■.�� exercisable at the time specified by the Personnel Committee except that, unless waived by action of the Board of Directors, In 1984, the Company sold its 50% interest in a retail center i options may not be exercised earlier than six months following realizing a gain of $3,278,000. The balance of the gain rrcog the date of grant, but can be exercised thereafter, in whole or in nized in 1984 resulted from a sale in 1981 of a portion of the Company's 50% interest in a joint venture. B-19 c9u —1027 part. at am' tinic during the 01'111111 Ilt"I"Li. but fllkl ill-IJILlIt'd AddiZI1171A tntere>t 01", !fit10.11�-_ Ten %cars from thc iaic of cram JT) S', :�.000 it,, 5 to- in A suniniarx if changes in the l: 'CL, lk:!117( 13 A' i� -77" -11 1Mp n- un J QCr ppr, J ht ,IUA n, -4 1 11 1� )n-init in kto( k k NAM o'IM r, h hAr�-� in 11, .4' lhatel� Optwn� grantc,-, I I' I I fl, )I if j j rc� I T. 4 A Art, suble(t Op ]!,it( -C tri, �k i ii. h is t <c AT -hc rat(- of 2(l the PC (31 h 44 1- '1 Per 1-1_�% :a, ific tilt shares Issued in Arll�4, I a t:.. I e to i h tshares issued $1(, (10 per '-4 1. rCk e;\ It. rek)PIVIlt 011- 519 13 per hir( .,tit t-rnpl,-%merit t the mipam through $11) So Per 0-_ TI 7A C.f In, U Titntj% with the SO n,,` r4, the per Options karit:ellu,�nc tor the Pa, MICW A rc,latt,l ;tic - Av- mc ,, bear interest at 6 Balance at end (-A r "Ild Are duc in t"%(- equal annual in<rallm, Tits 11-iteinnim: sixteen A"Cr !"U,Irl,( ,he k,,ntinuvd employ - The option, able asfolloNks 1, ;00 ch.ires a, 5,; I 6.000 charts at $I0 ',(,. -4,4-(-, . �, at S 10 00. 5 1, ;6; hare, at 5 1 S 1-4, and In March I Q�Z The G)mpAn% $2. ;20,C") to nine officers of the (_,,nip.,M 7N', ;`It, by them of 1.45.f0i shares ofauThor:,-e,,' "n-." _qock at $I(, fK) per share. the market V.,!UC J' loans bear interest at and are due installments beginning in.fanuari, i,,*.4 continued empl,wment of ej,h I achievement of,cr,.A,n iiikt- q uen( to 108 1 .the G)rn pan erce("' I 'r 1_1'% the n.i T, when due In additi.-,r_ !hc Compir,. 1, .;re,4 !I S580.000 to these officers in )?nua-r-% I'li-4 'Aixrl !i.t conditions v6ert first fulfilled. These li,am alsil rej' !!-",( at (,010 and are due in four equal annua! inktAlImt-7.7.- injanuary I485. subject to the conditions t - or described above. In Mac 19,S2. the Compam autht,ri7ed A of $1 .850." To its then President and Chief Exe,litive Offit,-r. who is now ab.--) Chairman of the Board. and The purchase b-, him of I00.000 shares of authorized and unissued oimmc,n stock at $18.50 per share. the market value at that dart The loan bears interest at 6% and is due in eight equal -annual installments beginning in.lanuary 19S.; Contingent uFK-,n his continued employment. the Compariv agreed to f0rpl-Vt The irisTallmenis when due and to make additional payments of $231.250 to him on the due date of each jn5t_1!mrnt 'Flit- for- giveness of the installments. the additional I omr);,nsa!ioFi p.,% - otl ILCr. ]list Allm,w t,4: mcrit, ,cell he tf! rgiven 'III(. rair laiue of all k k Kinu T:Ar-:, the er,ni And the install --lent, Are tieing amorz;;,(:ui as Com- tric restriction perv)d, ;u,-h cotc ap ,gre- t:Itt:,i S20- (,(It) in !')S-4 and S5"2 -(00 in 1,)� ;and) OK During 1,;`, _,. it,, empl-l-, et- ciok purchase plan w2c termi- na ted and replaced be it,, cn)pl,,% cc av inzs plan under which :,I� Compariv matih�., ernplovee coritnhU'TIC)TIS. Up TO a -p(, ined perc crita.a. w;th ointriburwris of shares -if 115 ,,,n-,mor. ctckk 19 1 Lex,,t-, The l.Imparlc. a=: lessee. has entered in,,,-, operating leases 16.11`10U, dates through 20-(,. rn,*-, of which are land leases Rents under such leases aggregated S-.151 .000 for 19s4. for 1�)83 and IOS2. including con- ,in,ccut rents. based on the pe-tormanceof the related proper. Ties_ ,f Upf). And respectively. In addition, real estate taxes, insurance and maintenance expenses are obligations of the Compariv The minimum rent pai,mcnis due under operating leases are summarized as follows iin thousands) 1,;t, 5 NSO Subsequent To I t),Sc) Total 3.795 3.550 3,282 3.001 2.6-3 139,603 $155,904 (Obligations under u+pital Icatc,, rcl;trc titthe• ( ompany•s l he net imestmc•nI to finante• leases as of December 31. hc•adquart crI hud,irng. a retail (emir an.l octwin cquipntr•nt w 1 !s E ,un1 i i- twim,micd as f(,Ilos (in th(,usands): The• ope•t:tting )m1l�cn\ anti ()(her property a((ount,, inclu,IC 11)8.1 1983 costs of S �il,(11(().11((0 and S l 1 ,(10i,000 anti aoo uIII ulatcd dt -prc. (ration Of Si.074.000 and 82mst,im00 at Dctctnhc•r i I, N%,' ( I��t,ol nun�nn:nr Ic:�" p.n me nr� („ hr and I )83, respectively, related to these Icasc•s. ` Minimum pas- rc,c nr�i,�.tr trrm, it 1(;ncs S12.12v S12,710 ments under the capital Im, se,, are S+, 1')8.noo in I,)s5 and 1r1lual %aloe it leak-d 1986, 54.039,000 in 198". 5;.-4o,00tl ut 1988. S;.?92.o0u it, proprtss 109 •169 1989 and 5121,786,000 fur subsequent through 203O. In I ncarncd mL,irnc (",2h•i1 ('.743) years addition, taxes•insuranceandtiialnte•nafit ecxpenus,ire•(,hli \c(in,c1tmcnt S 5,31-4 5 5.436 gations of the Company. 11ie minirnum 1,aymc nts (luc• aggro gate 5141.350,000 at lhcCerribe•t 31. 198-3: the am, unt (16) Other conimitnunrs and contingencies outstanding is the present value• Of Cleo• aggregatc paynu't't` t 'ommitn ents tpr the a(qursrrion and construction of properties discounted at rates ranging frorn 719b to 1 3"i,. to the onfu,an Course• Of bustriess and other Commitments not in t S ace in the Con any',, retail centers is leased tp a roxi- sc( forth c•Iscsshrrc am(,urtt to approximately 517,800,000 at ma,pa tenant in addition to minimum rcntspthe virtually all which will he funded by Dco.cuvs majority of the retail leases provide for percentage rents when id ton,, s. adcanecs under ucuon loans. JdNa the tenants' sales volumes exceed stated amounts as well ,ts Subsidiaries of the (.umpam• have contingent liabilities f the other revenues which reimburse the (-'.ompan}• fur certain of its ;rrnountirig to SN2.000.000 with respect to mortgages and operating expenses. Rents and other revenue•,, Gom tenant,, arc (,(tier de•ht and S46,000.000 with respect to aggregate mini - summarized as follows (in thousands): mum rents under lc,n -term -term operating leases of Minimum rents Percentage rents ........ Other revenues ....... Total .............. 198-11 1983 l9b2 S 82,805 S 73,973 S 64.021 16,318 14,127 12,190 70,M8 58,906 52.863 S169,181 S147,006 $129.080 The minimum rents to he received from tenants under oper ating leases in effect at December 11. 1984 are summarized a-s follows (in thousands): 1985 .................................... S 85.953 1986...................... I............. 81.410 1987.................................... 74.791 1988.................................... 67,160 1989.................................... 62,617 Subsequent to 1989 ......................... 190,1660 Total ` Certain of the Company's tenant leases are accounted for :ts finance leases since the terms of the leases transfer substantially I all the risks and benefits of ownership to the tenants. Rents under such leases aggregated $822,000 for 1984, $818.000 for 1983 and $801,000 for 1982, including contingent rents of $241,000, $227.000 and $210,000, respectively. The minimum payments to be received from tenants under finance leases in each of the next five years are approximately $580,000. Certain }pint ventures at Detcrnber 31. 1984. The Compam and one of its subsidiaries are defendants in a suit in u hit h the plaintiffs allege various acts of negligence, breach of warranty and fraud in connection with the design and construction of a 194 unit condominium. The litigation is hc•in,g defended vigorously by the Company. Additionally, the Company has taken appropriate steps to seek complete indem- nity and contribution from other defendants to the extent that the Company ur its subsidiary may incur liability for the alleged defective design and construction. The Company and certain of its subsidiaries are defendants in various other litigation matters arising in the ordinary course of business, som, of which involve claims for damages that are substantial in amount. Some of these litigation matters are covered by insurance. In the opinion of management, adequate provision has been made for possible losses and the ultimate resolution of all such litigation matters will not have a material effect on the consolidated financial position or consolidated results of operations of the Company. (17) Earnings per share of common stock Earnings per share of common stock is computed by dividing net earnings after provision for dividends on the $G Cumulative Preferred si(xk by the weighted average number of shares of common stock outstanding during the year. The numbers of shares used in the computations were 15,174,000 for 1984, 1 15,079,000 for 1983 and 14,891,000 for 1982. Common stock equivalents have not been used in computing earnings per common share because their effect is not material. 13-? 1 Ou "�1l/tir% Price of common stock and dividends The Company's common stlx k is tradoi i :hc (outit l t 1 he high and low bid prices and dividends per share were as follows: Quarter ended Dere•mher Schrcmhcr Itnc• 1\4ar.h December September June March ;1. 108-1 0. 1081 ;0. 198-1 31. 1984 31, 1983 30. 1983 30, 1983 31, 1983 High 321/N 343/s 361/4 353/4 281/2 ....... Low 3 t ;1 '., ; i 28'/4 295/s 281/2 27114 26 ............. Dividends ......... . .18 .18 .18 .18 Source: Pic Wall Srrect Journal, 1:,1stcrrl 1-diti ti The Company's Charter pro %ides that thc- ( ornl,am In,n not Nuniber of holders of common stock pay common stock divRic•nds in c•so css of c c•rt,un shcri R.,i 11u• number of holders of record of the Company's common amounts so long as share•• of l'rc ti•rred stok k remain t vintantlirw i - nxk as of February 28, 1985 was 3,067. Interim 6nandal information Interim consolidated results of operations are summarized as follows (in thousands except per share data): Quarter ended -- ----- December Septemhe•r June — --- -- - - March December September June March i 31, 1984 ;0. 19S•1 ;o. 10-1 31, 1984 31, 1983 30, 1983 30, 1983 31, 1983 Continuing operations: Revenues.......... Earnings (loss) before income taxes ........... Earnings (loss) from continuing operations ....... jDiscontinued operations: Revenues.......... j Eamings before income taxes ..... Eamings from discontinued operations ....... Net earnings (loss) . . Earrings (loss) per common share: Continuing operations ....... Discontinued operations Total .... $52.241 $51,543 $48.908 $46,371 $51,507 $44,879 $41,300 (628) 3,014 (46) 1, 72 7.5.1 3,29- 4,065 1.603 — 2,980 3,204 4,112 - 44.881 -30 1.644 — 30,354 399 888 (46) 31,726 4,46-4 2,491 $ (.01) S .00 _.- —2.N $ .2- $ .10 02 ---.16 .06 $- ---2 0 $ 4.733 3,559 4.024 2,410 1,944 2,207 3,345 3.391 3.458 421 893 1,081 99 491 595 2,509 2,435 2,802 S .15 $ .13 $ .15 _ .01 .03 .04 $ .16 $ .16 f .19 i $38,860 2,895 1,585 i 3,865 1,645 905 2,490 i I Impact of Changing Prices Statement o4' Financial Accounting Standards No. 33. "Finan- vial Reporting and Changing Prices." as supplemented by Statement No. 41, "Financial Reporting and Changing Prices' Specialized Assets -Income -Producing Real Estate," requires the Company to disclose the impact of changes in the general pur- e basing power of the dollar (i.e. inflation) on certain tangible assets and related charges to operations. The goals of Statement No. 33 are based on the objectives set forth in the Financial Accounting Standards Board's (the Board) Concepts Statement No. 1, "Objectives of Financial Reporting by Business Enter- prises," which concludes that financial reporting should provide: - information to help investors, creditors and others assess the amounts. timing and uncertainties of prospective net cash inflows to the enterprise; and - information about the economic resources of an enterprise in a manner that provides direct and indirect evidence of cash flow potential. The presumption underlying the required disclosures is that measuring certain assets and expenses in constant dollars will provide better information to assess prospective cash flows and current economic resources of an enterprise. iThe economic characteristics of income -producing real estate provide an opportunity for the Company to achieve the objec- tives of financial reporting identified above. Based on stable, long-term rents which generate a high quality cash flow stream for the Company's income -producing properties and the ability j to identify this cash flow stream with specific properties, the objectives of financial reporting can be achieved by reporting j net cash flow generated by properties and the value of proper- ties measured by the present value of prospective net cash flows. I Lenders and investors to income -producing properties are gen- erally not concerned with "income" measurements which include a deduction for recovery of cost (depreciation and amor- tization). They are concerned about cash flow and projections of cash flow. Because of the primary relevance of value basis and cash flow reporting, management believes that supplemental disdosurrs should inc ludo oper{ting results in terms of cash flow. the impact of inflation and changes in the current value of income -producing properties '11u•sc disclosures are presented in Schedule 1 on page .14 A primary concern of the Board regarding inflation account- ing deals with the ability of an enterprise to maintain operating capacity. Ilic Board has concluded that adjusting original cost to an inflation -adjusted basis gives users of financial statements an indication of whether or not current revenues, net of current operating expenses. are adequate to cover the current cost of the operating capacity used during the period -measured by depre- elation of the inflation -adjusted cost of such operating capacity. Because large portions (often in excess of 900% ) of the original costs of income -producing properties are funded by nonre- i course mortgage debt, a more relevant capital charge to opera - I tions is the principal payments on such debt. Because of this highly leveraged capital structure, the economics of income - producing properties are measured in terms of an owner's equity in the property. Operating results are measured in terms of net cash flow to the owner after deducting mortgage princi-pal payments and property values are measured in terms of the value of the equity interest therein plus the mortgage financ- ing. On such basis, the Company's continuing operations for 1984 provided funds of S24,067,000 after mortgage principal payments on operating property debt. Schedule 1 presents the Company's results of operations and changes in shareholders' equity on a current value basis. The Schedule is presented to further the process of developing more relevant reporting formats for the real estate industry• and should be read in the context of the current value basis financial statements and related notes presented elsewhere herein. Schedules 2 and 3 which follow provide the additional supple- mentary information as to the impact of inflation required by Statement No. 33 as supplemented by Statement No. 41. B-23 SIS 1027 ct- ri The Rouse Company and Subsidiaries Statement of Operating Results Adjusted for General Inflation Schedule 2 Yew ended December 31, 1984 (in thousands) General cost Inflation Basis Adjusted Buis Continuing operations: Revenues..................................................................... $199,063 ;199,063 Operating expenses............................................................. (119,165) (119,368) Interest expense................................................................ (48,571) (48,571) Depreciation and amortization.................................................... (13,481) (22,446) Loss on dispositions of assets ...................................................... (4,909) (14,613) Earnings (loss) from continuing operations before income taxes ......................... 12,937 (5,935) Income taxes (note 1)........................................................... (5,943) (5,943) Earnings (loss) from continuing operations ......................................... 6,994 (11,878) Earnings from discontinued operations ................................................ 31,641 31,594 Net earnings................................................................ 5 38,635 S 19.716 atln� Crain from decline in purchasing power of net amounts owed .............................. $ 21,236 aantlata Notes: (1) Statement No. 33 requires that income tax expense not be adjusted for the effects of general inflation. Consequently, the provision does not teflect the customary relationship to eamings before income taxes on the adjusted basis. 0 (2) The effects of general inflation arc based on the change in the Consumer Price Index for All Urban Consumers for 1984. B-25 S" --102'7 Thr Rou.r t ompanc and Subsidiaries five -Year Comparison of Selected Supplementam Financ al Data Adjusted For Effects of General In9ation _._ - _---...— -- 3 Yra, ended 1411,*h,lI r an It ;, ,guard< cc; cr bare d.-'a \4 '- _Schedule - --- - Operating txsulu; Rmrnues from cont nume operations -as $1-6.546 515;.!16 Si;2.1E- $ll4,523 -in xirmant PS4 dollars i0(1 144.060 165.;0(, 151.565 144.360 Funds provided by conunuine operations -as reported . .... S �i.:_5 $ -'-.05: S '1.421 S 14.665 S i2,269 -adiustedforgeneralinflationin:ormant l��S4dollars �i.C�_� 2S.20 16."55 15.466 Net camings -ic rrported S :R.6;i S 10.2;6 S ?•0"- S 5.158 f 4,049 -adluaed for general tntlation in connant 10,54 dollars ,45 ;.:"0! 18.808) Net taming ilosis l per char of common Beech -AS reported S - 5; S 6- f 54 S i" S -'9 --adtumrl tom ceneral intlation in constant PS-4 dollar i. =: 66) Tool iiru (nom1. -as reNned Sir, 0J.2co S"i:.;-: St ; .fib: 555=.fi5i S526.:;8 Debt, capital leap and prc crnv Stock- note) as trp<`ttc.i SSr+; 5-- SSr` .oar SSQc 0^G �;;F Ga.,n from docLme in oi:rc .L nC mvwrr of net a^zour.t< ca cti in axvtant 10�4 dollar S :1._;r S :`.`5; S .-.--' S 4: ;;4 S tC, 6i)'_ shareholder e,;tun' Htszort.al aw basu -asrrpoRcv S ._1` $ $ 5y.e�c• S 24.5 5 -adiu�rd ti`r micril L l;ti��r. n :.�r_�a^.t . `S; a.`iia.'s �`'S.--. 5;-.-bo 5i�•r;{ 4-t .55" lut;rm value to -1<trpi`r:�1: S .��`: Stir'..'�l� S-� --. S•i+-V..�. S� ti.'t �hurholum pc: sill.: F-"X : ::n H_c\�nrll car: �s, s'li-CN tJ{ }-rnc al _.:.::h'C ..\'^Jar.t -La.: L urtrm \'uuc -1< rrNmcd $ -in i :.L^ z `. t ♦ �4 .l. -L •� Is -a.. ... :\.... - ... Via. _. ...a... .. _.. .. .= i`:�.. u. _.i�` _ GL -� !-t -� nC �� ♦ �ocr. _. 1:x ;«;1--` :: i� -�--^i .:-r^.a ::i•:: \i:: :\`-:a. a.1\`� a:'ti u: :1:. :� .:a. ruvr {Y:f. m—Aec rd. i �i'r!kla�C'5 i The Rouse Company and Subsidiaries Five -Year Comparison of Selected Supp lementary Financial Data Adjusted for Effects of General Inflation --- Schedule 3 Year ended December 31 (Dollar amounts in thousands, except per share data) 1984 1981 1982 19R1 980 1 Operating results: Revenues from continuing operations: -as reported ....................................... $199,063 $176.546 $153,616 $132,487 $114,523 -in constant 1984 dollars ........................... 199,063 184,060 165,306 151,365 144,360 Funds provided by continuing operations: reported $ 31,225 $ 27,052 $ 21,421 $ 14,665 $ 12,269 -as ....................................... -adjustcd for general inflation in constant 1984 dollars ..... 31,022 28,203 23,051 16,755 15,466 Net eamings (loss): -as reported ....................................... $ 38,635 $ 10,236 $ 8,077 $ 5,158 $ 4,049 -adjusted for general inflation in constant 1984 dollars 19,716 1,985 (3,220) (13,428) (8,808 Net earnings (loss) per share of common stock: $ -as reported ....................................... $ 2.53 $ .67 $ .54 $ .37 .29 -adjusted for general inflation in constant 1984 dollars ..... 1.29 .13 (.22) (.99) (•66, i Tota.1 assets (note): -as repotted ....................................... $800,250 $716,172 $631,862 $552,851 $528,238 Debt, capital leases and Preferred stock (note): -as reported ....................................... $593,577 $569,468 $505,060 $436,385 $442,727 Gain from decline in purchasing power of net amounts owed: -in constant 1984 dollars ............................. $ 21.236 $ 18,858 $ 17,227 $ 41,334 $ 60,602 Shareholders' equity: Historical cost basis: -as reported ....................................... $ 87,213 $ 60,379 $ 59,689 $ 59,836 $ 24,575 j -adjusted for general inflation in constant 1984 dollars ..... 595.221 537,786 509,835 476,557 379,517 Current value basis: -as reported ....................................... $731,081 $606,080 $475,181 $400,321 $279,867 -in constant 1984 dollars ............................. 731,081 631,875 511,341 457,363 352,782 Shareholders' equity per share of common stock: Historical cost basis: -as reported ....................................... -adjusted for general inflation in constant 1984 dollars ..... $ 5.70 38.89 $ 4.00 35.61 $ 3.97 33.88 $ 4,06 32.37 $ 1.82 28.14 Current value basis: j -as reported ....................................... $ 47.76 $ 40.13 $ 31.58 $ 27.19 $ 20.75 -in constant 1984 dollars ............................. 47.76 41.84 33.99 31.06 26.16 Cash dividends per share of common stock: j -as reported ....................................... $ .92 $ .72 $ .60 $ .48 $ .40 -in constant 1984 dollars ............................. .92 .75 .65 .55 .50 Market price per share of common stock at year-end: -unadjusted ...................................... $ 34.00 $ 31.75 $ 26.63 $ 20.50 $ 18.50 -adjusted for general inflation in constant 1984 dollars ..... 33.53 32.55 28.34 22.65 22.28 Average consumer price index (1967 = 100) ............... i 311.1 298.4 289.1 272.3 246.8 Note: The effects of general inflation on total assets and debt, capital leases and Preferred stock have been reflected in shareholders' equity adjusted for general inflation in constant 1984 dollars. B-26 G • Nianagellient's Discussion and Analysis of Financial Condition and Results of Operations fhc }ilIl ass ing and analysis should he read in con- primarily from management fees earned by the Company from junction with tic (onsohdatt•d Lost hasis and current value basis its efforts respecting Columbia and improved occupancy and financial -tatrments on pages ?' through 27. the supplemen- food and beverage sales at the Cross Keys Inn. The increase in um financial information on pages 43 through 46; and the earnings in 1983 was the net result of additional management hive -year Summary of Earnings Before Non -Cash Charges from fees earned from the Columbia project offset by the effects of a Operations on page 49. Tf dix utision and analysis focuses on decrease in occupancy rates at the Cron Keys Inn. Earnings Lk -fore Non -Cash Charges from Continuing Opera- uons (referred to hereinatter as "Earnings") of the respective divisions of the- Company. Such earnings are believed by man- agement to present a more meaningful measurement of the results of opt•rations of the• Company and Usability to pay divi- dends and provide working capital than net earnings after deductions for non<ash items such as depreciation of property, amortization of deferred costs and deferred income taxes. The discussion and anah•sis also focuses on the significance of the current value hasis financial information, the Company's cur- rent financial strength and liquidity and the impact of inflation. Operating Results Retail Centers Earnings from retail centers were $32,156,000 in 1984 compared to$29,IS3,0o0 in 1983 and $24,584,000 in 1982. Earnings have increased at a compound average rate of 16.2 % per year over the last three years. the primary factors contributing to the growth in earnings were leasing of space at higher rents and growth in tenant sales. The growth in earnings from retail centers is affected by start- up losses. These losses are expected during the first two years of most new projects and expansions. The exclusion of these losses from earnings for the last three years results in a compound growth rate of 18.6% per year as compared to the 16.2% noted above. Since the majority of the Company's leases provide for per- centage rentals based on sales over a negotiated level, increases m tenant sales have resulted in increases in percentage rent reve- nues. Also, most of the Company's tenant leases are short-term and require payments which reimburse the Company for cer- tain of its operating expenses as well as minimum fixed rents j and percentage rents. As leases expire, space is re -leased to existing or new tenants. Under the new leases, minimum fixed rentals are adjusted to market rentals, new percentage rates are established and expense reimbursement provisions are updated. i Since most of the variable operating expenses of retail centers j are reimbursed by the tenants and a significant portion of expenses is fixed, a large pan of the increase in rental revenues from re -leasing and growth in tenant sales directly increases earnings from retail centers. Tenant sales have grown an average of 7% per year during the past three years. Community Projects Community projects include the Cross Keys Inn, other properties in the Village of Cross Keys (VCK) m Baltimore, Columbia, and several parcels of land held for sale. Earnings were $1,285,000 in 1984, $1,114,000 in 1983 and $871,000 in 1982. The increase in earnings in 1984 resulted Development Net development costs and expenses were $3.199.000 in 1984, $2,485.000 in 1983 and $3,8'4,000 in 1982. The major components of these amounts include addi- tions to the development reserve, new business costs, fees eame'd on development projects and the operations of the com- pany's consulting subsidiary, The American City Corporation (ACC). The development reserve is maintained to abwrb costs of projects which may not go forward to completion and costs in excess of estimated net realizable value of projects in the con- struction and development stage. Additions to the develop- ment reserve were $2,858,000 in 1984, $2,030,000 in 1983 and $3,000,000 in 1982. The increase in 1984 is primarily the result of a greater number of complex urban projects in the develop- ment stage. The decrease in 1983 is primarily the result of a change in accounting policy necessitated by the application of Statement of Financial Accounting Standards No. 67, "Accounting for Costs and Initial Rental Operations of Real Estate Projects," which was issued during 1982. The result was an increase in costs recognized as additions to the development reserve and a reduction of approximately the same amount in new business costs. A sharp decline in the number of consulting contracts due to governmental cutbacks and increased competition resulted in a loss for ACC in 1984. This loss was partially offset by develop- ment fees earned on a project in St. Louis. Corporate Interest and Other Expenses Corporate interest income was $3,893,000 in 1984, $2,826,000 in 1983 and $4,068,000 in 1982. This income represents interest earned on the temporary investment of excess corporate cash and on notes related to sales of certain assets. The increase in 1984 is primar- ily attributable to interest earned on the $50,500,000 note received from PaineWebber in connection with the sale of Rouse Real Estate Finance, Inc. This increase was partially offset by less capital available for investment due to funds temporarily invested in development projects awaiting financing. The decrease in interest income in 1983 primarily resulted from lower market yields on short-term investments. Corporate interest and other expenses were $2,910,000 in 1984, $3,586,000 in 1983 and $4,131,000 in 1982. General and administrative expenses comprised the majority of such expenses. The reduction in these expenses is attributable to cor- porate interest capitalized into development projects funded with corporate cash and a reduction in corporate borrowings. B-27 5" 0, V 4.1'. 4,- 1 IUI twt. 4l- r- no % IT4, xr VA "of a Vn- mc; ttt. I Ptl I WL I :ts=-. arz tr" 3r M! =m 15 z!:., �.v a mr- Jl;v• VnIL, Df j'4 nrz- zq-; Ml-M:; Tw� =1! n":7 t�� :7 -1-MM 'It 4zr7Tj7r�,.' zmm M" -T zzmz=tzai3.,-,-w r.-z . rimtnr` tmM 'I'Tirm 7 i Z�7� zl�-wlll-=z 21 �Lw— zi� A 0 rr. 7M an �m I-, -n;�- t.2cznT*r%r)7v-:- mr, nr 74! Z,., 'T --m innanr= D=-, V-F,-n Inv: ttv it', zi 24 . lr--,z Irl:7 2. mv, mv, 127, 2ir az nrrmst, :.r M-.- - -nnursnni Z,�!' 71�t! mr I t Mr- '. rn v V: :♦ 4Q wr -*IM 'Inart; MN�aTl: r4 WT I M T'hr I4—"., c ,...I I..r. . ,.... R Five Ycar Summary of Earnings &f Orc Non -Cash Charges From Operations Continuing operations Revertut•s- Retail center,,: Minimum and percentage rents ....... .......... Other rent,, ... . ...... ................... ...... . Other revemu•s Rcvcnucs-('ommunin prr,jeo" . Residential rents Retail and office building rents ....... .. ..... .... . Inn rc•vcnuc,� . . ............................ ....... Other rc•venuc•s .............. Devclrrpmcnt-interest and firs ..... ............ ....... Corporate interest income .......... ............ ... .. Total revenues ............ ........... . Expenses exclusive of depreciation. amortization and deferred income taxes: Retail centers: Operating expenses ................. ........... ... Interest, primarily on long-term debt .................. . Community projects: Operating expenses ................................. Interest, primarily on long-term debt ......... ........ . Development ....................................... Corporate interest and other expenses .................... . State income taxes, current ............................. Earnings before non -cash charges from continuing operations ..................................... Earnings before non -cash charges from continuing operations by division Retail centers ........................................ Community projects ................................. . Development ....................................... Corporate interest and other expenses ..................... Earnings before non -cash charges from continuing operations ..................................... Discontinued operations Revenues........................................... Expenses exclusive of depreciation, amortization and deferred income taxes ............................ State income taxes, current ............................. Earnings before non -cash charges from discontinued operations ..................... . 1'rar rn,lc•d lkv rmhc r � I .In rh,tt�ani�r _ In�.� 1rF; I,r�i lrf+l 19R(1 S 96,9n8 c ►t5.(,1(, S -3.646 S 65,015 S 57.-16 68.1;0 5-,491 51.92- 44.-02 37,112 1-.5;2 15,352 12,005 9.1;2 6.830 1.248 ;.12- 2.981 2,-81 2,51)5 2.230 5A;O 4.-99 5.0-2 5.314 4.5- 2.035 4.9"6 1.461 -01 1.184 1.993 2.505 2.656 2,384 2,122 3.893 2.820 4,068 2.044 1,504 199.063 1-6,546 15 1.6 10 i32.48- 114.523 101.526 8-.131 -5.967 65,510 54.786 48.'92 42.043 36.980 33,409 29,385 8,261 10,55- -,350 6,991 7,34' 1.055 1.085 1,093 1.215 1.511 . 5,192 4.99(1 6.530 4,995 4.393 2,910 3,586 4,131 5.505 4,401 167,736 149,392 132,051 117,625 101,823 102 102 47 11 46, S 31,225 S 27.052 S 21.518 S 14,851 S 12,654 S 32,156 S 29,183 S 24,584 S 20,519 S 17,441 1,285 1,114 871 404 381 (3.199) (2,485) (3,874) (2,611) (2,271)1 983 (760) (63) (3,461) (2,897)1 S 31,225 S 27,052 S 21.518 S 14,851 S 12,654 1 S 10.356 S 14,059 S 9,971 S 8,060 S 6,447 1,536 10,019 1,590 6,540 5,689 161 ', 115 — — S 2,659 S 4,033 S 2,266 S 1,520 S 758 Note -Certain amounts for prior years have been reclassified to conform to the presentation for 1984. B-29 SS-102'7 DESCRIPTION OF THE CITY Geography Appendix C The City of Miami, situated at the mouth of the Miami River on the western shore of Biscayne Bay, is a main port of entry in Florida and the county seat of Metropolitan Dade County which encompasses 2,000 square miles of Florida's southeastern region. The City comprises 34.3 square miles of land and 19.5 square miles of water. Dade County is often referred to in this document as Greater Miami or the Miami area. Miami is the southernmost major city and seaport in the continental United States and the center of pan -American trade and air transportation. The nearest foreign territory is the Bahamian island of Bimini, some 50 miles from the state's tip. Climate Due to its location near the upper boundary of the tropical zone, Miami's climate is strongly influenced by the Gulf Stream, trade winds and other local climatic factors. Its average yearly temperature is 75.5. Summertime temperatures average 81.4 and winter temperatures average 69.1. Rainfall comes most frequently between the months of May and September, with June the heaviest, averaging nine inches. Population The U.S. Bureau of Census estimated the population of the City of Miami at 346,865 as of April 1,1980. On October 1, 1980, this figure was upwardly adjusted by 53,130 to account for the influx of Cuban and Haitian Refugees. This adjustment estimates the City of Miami's population at 399,995 as of October 1, 1980. All 1980 U.S. Census information, however, is based on the lower, April 1, 1980 population estimates. The 1984 population estimates of 383,027 has been computed by the State of Florida Division of Population Studies, Bureau of Business and Economic Research, University of Florida, State of Florida. Miami's racial and ethnic mix is comprised of non -Latin Whites, Blacks and Hispanics, sixty-seven percent of the City's population is White, 25% is Black and 8% is classified as C-1 A" --102'7 "Other." The most signif-icant change has been in the Hispanic category, which has grown to represent 56 percent of the City's total population. South vi.otida is a popular destination for retirees from the Northeast seeking out the hospitable and temperate climate. The retiree population contributes significantly to the local economy as recipients of transfer payments such as Social Security, pen- sions and investment income. Appropriate supporting services are provided by the State and the County. The City provides only limited specialized services. Government of Miami The City of Miami has operated under the Commission -City Manager form of government since 1921. The City Commission consists of five elected citizens, who are qualified voters in the City, one of whom serves as Mayor. The Commission acts as the governing body of the City with powers to pass ordinances, adopt resolutions and appoint a chief administrative officer known as the City Manager. The City Clerk and City Attorney, as well as members of the Planning and Zoning Board, the Off -Street Parking Board, the City of Idiami Health Facilities Authority, the Downtown Development Authority and the Miami Sports and Lxhibition Authority are also appointed by the Commission. City elections are held in November every two years on a nonpartisan basis. At each of these elections a Mayor is elected for a two year term. Candidates for Mayor must run as such and not for the Commission in general. At each election two members of the Commission are elected for four year terms. Thus, the City Commissioners' terms are staggered so that there are always at least two experienced members on the Commission. The City Manager serves as the administrative head of the municipal government, charged with the responsibility of managing the City's financial operations and organizing and directing the administrative infrastructure. The City Manager also retains full authority in the appointment and supervision of department directors, preparation of the City's annual budget and initiation of investigative procedures. In addition, the City Manager takes appropriate action on all administrative matters. The Assistant City Manager for Administrative Services, who is appointed by the City Manager, supervises the Departments of Finance, Management and Budget, Computers and Human Resources. The Finance Director is appointed by the City Manager based upon his qualifications. He supervises the Department of Finance, C-2 which includes the functions of accounting, treasury management and self-insurance. The electorate of the City will vote on August 13, 1985 on a proposed Charter Amendment to provide for the creation of an executive Mayor form of government. Other changes proposed in the Charter Amendment include increasing the number of commis- sioners to five from the present four, changing the Mayor's term of office to four years beginning in 1987, allowing the Mayor to appoint the Director of Administration, Director of Finance and Budget, and the City Attorney, which must be ratified by a majority vote of the Commissioners. If approved, it is to be effective for the November, 1985 mayoral election. A separate charter amendment will also go to the voters in August, 1985 to provide for the holding of partisan election for the Office of Mayor if the Executive Mayor Charter Amendment becomes effective. Mayor and City Commissioners Maurice A. Ferre was elected Mayor in November 1973, reelected in 1975, 1977, 1979, 1981 and 1983 for two-year terms respectively. Mayor Ferre is a graduate of Lawrenceville School in New Jersey and holds a Bachelor of Science degree in Architectural Engineering from the University of Miami. lie is a prominent businessman and corporate consultant with interests in both the United States and Latin America. Joe Carollo was elected Commissioner in November, 1979 and reelected in 1983 for a four-year term and elected Vice -Mayor by the City Commission in December, 1984 for a one-year term. Vice - Mayor Carollo is a graduate of Miami Dade Community College and Florida International University. He holds a Baccalaureate of Arts degree in International Relations and a Baccalaureate of Science degree in Criminal Justice. He is presently President of Genesis Security Services, Inc. Miller J. Dawkins was elected Commissioner in November, 1981 for a four-year term. Commissioner Dawkins is a graduate of Florida Memorial College and holds an MS degree from the University of Northern Colorado. He holds a Baccalaureate of Science degree and a Master Science degree in Social Sciences. Commissioner Dawkins is an administrator at Miami Dade Community College where he has been employed for 15 years. Demetrio Perez, Jr. was elected Commissioner in November, 1981 for a four-year term. He holds a Master of Science degree C-3 u IMF"" Lucia Dougherty is the City Attorney for the City of Miami, Florida, and the former City Attorney for the City of Miami Beach. She received her B.A. degree from Syracuse University, a M.L.S. degree from Oklahoma City University, a J.D. degree from Oklahoma City University and a L.L.M. Degree in Ocean and Coastal Law from the University of Miami, Florida. She is a member of the Florida and Oklahoma Bars and has also served as a lecturer at numerous conferences and seminars. Ralph G. Ongie was appointed City Clerk on July 31, 1976. He was the Assistant City Clerk from 1972 to 1976, and the Deputy City Clerk from 1958 to 1972. He is a graduate of Baraga High School, Marquette, Michigan, and has attended advanced personnel administration courses in 3ainbridge, Maryland and selected courses at the University of Miami. Mr. Ongie is a member of the International Institute of Municipal Clerks. Scope of Services and Agency Functions The City provides certain services as authorized by its charter. Those services include public safety (police, fire and code enforcement), parks and recreational facilities, trash and garbage collection, limited street maintenance, construction and maintenance of storm drain systems, planning and economic development functions, and construction of capital improvements. The Police Department provides a full range of police servi- ces, has a uniformed force of 1,060 and a civilian component of 448. The Fire Department is rated as Class 1 and provides a full range of fire protection and emergency services as well as pro- viding a full range of medical and rescue services. In addition, building code, inspection and enforcement services are admini- stered through the Fire Department. The City provides garbage and trash pickup and enforces sanitation requirements. Disposal of trash and garbage is per- formed by Dade County under contract with the City. The Depart- ment of Public Works maintains certain streets and sidewalks and manages construction of sewers and other capital facilities required by the City. The State of Florida and Dade County are responsible to maintain most arterial streets and all major high- ; ways within the City. The Department of Parks and Recreation maintains and operates all City owned parks and administers vari- ous recreational and cultural programs associated with these facilities. These programs are directed to all segments of the City's tri-ethnic population. i C-5 StS -102 i 'Phc, City is responsible for planning, land use and zoning, and maintains a separate department to promote economic development. Regional Government Services The fallowing information and date concerning Dade County (the "County") describes the regional government services the County provides, For residents of the County, including residents of the City. 'rile County is, in affect, a municipality with governmental powers effective upon the twenty-seven cities in the County and the unincorporated area. it has not displaced or replaced the cities but Supplements them. The County can take over particular activities of a city's operations (1) if the services fall below minimum standards stet 1,y the County Commission, or (2) with the Consent .'If tilt' govern ill'I body of the city. Since its inception, tale Metropolitan County government has assumed respon.iiiility on a county -wide service basis for a number of functions, including County -wide police services; complementing the municipal police services within the munici- palities, with direct access to the National Crime Information Center in Washington, 1).C. and the Florida Crime Information Conte". ; uni fc,, m -ys tem of fire protection, comp1eae.^.ting the muni,ipa: fire ;protection services within ten „-inicipalities and providing full service fire protection for seventeen ities which have consolidated their fire depart:..en.s w:_'- t^e County's fire department; consolidated two -tie_ co::rt=_'te': coclforming to thy' revision of Article V of the tion which became effective on January 1, 1973; yJeve:-p.._ operating a County -wide water and sewer system; the various surface transportation programs an;: the development of a unified rapid transit syste.,; c e:a___.. a central traffic control computer system; merging transportation systems into a County system; ef`ectin public library system of the County and eighteen which together overate the main library, seventeen six mobile units • serving forty-four County -wine __n- tralization of the property appraiser and tax cz tions; furnis.iing Jata to municipalities, -- Instruction and several state agencies for 'Che pre_aration anJ for their respective gove:n=en___ _ e:a____._. collection by the Dace County Tax Collector_ _ __I _aN__ dirt: ihuto:h Ji:ectIy to the respective g.ve:-me-_-a_ to tleir rd5t.,ective tax levies; an -A .__.: .zi � ,�an..a: _ a:.o_ e.. by t e 3�a:. _ -n= J- and enforceable throughout the County in such areas as environ- mental resources management, building and zoning, consumer pro- tection, health, housing and welfare. FINANCIAL INFORMATION General Description of Financial Practices The City Charter requires the City Manager to submit a budget estimate not later than one month before September 30 of each fiscal year. Each department prepares its own budget request for review by the City Manager. The City Commission holds public hearings on the budget plan and must adopt the budget not later than October 1. The City's Governmental Funds (General, Special Revenue, Debt Service and Capital Projects Funds) and Expendable Trust Funds follow the modified accrual basis of accounting, under which expenditures, other than interest on long-term debt, are gen- erally recorded when the liability is incurred and revenues are recorded when measurable and available to finance the City's operations. The accrual basis is utilized by all Proprietary Funds. The financial statements of the City are examined annually by a firm of independent certified public accountants, presently Coopers & Lybrand. The opinions of the independent certified public accountants are included in the Comprehensive Annual Financial Reports of the City. Statement of Revenues and Expenditures } The following table presents certain financial information with respect to the financial capability of the City. See the Section "Financial Statements" for audited financial statements of the City for the fiscal year ended September 30, 1984. P �7 C - t p 4 E .yiY �p- ununa, ,• 0t Revenues, Expenditures and Year -End Fund Balances (:;udk7etalw Basis) 6e1101-al Fund a n.i not,il ):`ii�)ation 11e10t S e r v i c e Fund F i _,,-.11 Year Ended Septemlver 30 feral Fumi: A Moot: iatt<i F uki ic`t al i ; l i:1t i :Iq :t1i1: 1�C i:cw i scNi 19A5 1984 . et 1: tual 4L)0 — 1983 1982 1981 --tual A,-- I- Actuai :137,%'44,34? "i2�,G36,333 153,965,574-3-,-44,349 ]-23,u:,79-,333 _:_,1- ,335 _:',6?3,'31 _2"-:c,:94 X\i ."'thet S 54, " ,_ General Obligation L)eOt Service Fvnd: -A:tom? " :75 --.---ne— _- --- __ _ -_--=-=_- 9 The City's general fund receives revenues from a variety of sources. The following table lists the revenues received by the City from these sources for the past five fiscal years. General Fund Revenues and Other Financing Sources (000' s) 1984 1983 1982 1981 1980 - Taxes: - Property Taxes (1) $ 78,968 $ 67,619 $ 61,865 $ 54,060 $ 42,679 Utilities Service Taxes 22,301(2) 21,648 20,674 18,563 16,826 = Franchise Taxes 4,885 5,703 4,919 4,825 61703 = 106,154 94,970 87,458 77,448 66,208 - Licenses and Permits: Occupational Licenses 3,982 31874 4,775 4,712 31112 Permits 11871 1,414 677 889 715 5,853 5,288 5,452 5,601 3,827 Intergovernmental: Federal Revenue Sharing 9,987 9,267 9,281 9,166 7,909 State Revenue Sharing 110,715 12,298 12,084 12,113 11,428 Sales Tax 10,634 9,478 - - -- Other Grants 3,178 4,242 4,019 4,021 3,452 35,514 35,285 25,384 25,300 22,789 Inteagovernmental 2,687 2,483 2,511 2,581 3,342 Charges For Services: Solid Waste Fees 7,735 7,867 6,841 5,870 1,876 Other Fees 4,412 3,627 3,950 51256 3,183 12,147 11,494 10,791 11,126 5,059 Other Revenues and Financing Sources Total 5,611 $167,966 4,446 $15_ 3,9�66 6,148 $13i 7m 744 3,000 $125,056 3,221 $104,446 (1) Article 7, Section 9 of the Florida Constitution provides that except for taxes levied for payment of General Obliga- tion debt and certain voter approved levies, municipalities in the State may not levy ad valorem taxes in excess of ten mills per $1.00 ($10 per $1,000) of assessed valuation upon real estate and tangible personal property having a situs within the taxing city, when the tax is being imposed to generate monies for municipal purposes. The City levied a millage of 9.8571 mills for general operations for the fiscal year 1984/85. C-9 0 urn The City's general fund receives revenues from a variety of sources. The following table lists the revenues received by the City from these sources for the past five fiscal years. General Fund Revenues and Other Financing Sources (000's) Taxes: Property Taxes (1) Utilities Service Taxes Franchise Taxes Licenses and Permits: Occupational Licenses Permits Intergovernmental: Federal Revenue Sharing State Revenue Sharing Sales Tax Other Grants Intragovernmental Omrges for Services: Solid Waste Fees Other Fees Other Revenues and Financing Sources Total 1984 1983 1982 1981 1980 $ 78,968 $ 67,619 $ 61,865 $ 54,060 $ 42,679 22,301(2) 21,648 20,674 18,563 16,826 4,885 5,703 4,919 4,825 6,703 106,154 94,970 87,458 77,448 66,208 3,982 3,874 4,775 4,712 3,112 1,871 1,414 677 889 715 5,853 5,288 5,452 5,601 3,827 9,987 9,267 9,281 9,166 71909 11,715 12,298 12,084 12,113 11,428 10,634 9,478 -- -- -- 3,178 4,242 4,019 4,021 3,452 35,514 35,285 25,384 25,300 22,789 2,687 2,483 2,511 2,581 3,342 7,735 4,412 12,147 5,611 $16.�. 7, 966 7,867 3,627 11,494 4,446 $15_ 31966 6,841 3,950 10,791 6,148 $1379744 5,870 5,256 11,126 3,000 $125,056 1,876 3,183 5,059 3 221 104'446 (1) Article 7, Section 9 of the Florida Constitution provides that except for taxes levied for payment of General Obliga- tion debt and certain voter approved levies, municipalities in the State may not levy ad valorem taxes in excess of ten mills per $1.00 ($10 per $1,000) of assessed valuation upon real estate and tangible personal property having a situs within the taxing city, when the tax is being imposed to generate monies for municipal purposes. The City levied a millage of 9.8571 mills for general operations for the fiscal year 1984/85. C-9 8" -�1027 eilt e r xe the Boards of Trustees of the Plan and the System as explained in Notes 16(A) and 18 of the Notes of the Financial Statements. This settlement is also addressed in Appendix D, Letter of City Attorney. The major changes to the Plan and System as a result of the settlement are as follows: The "Retirement System" became the "City of Miami Fire Fighter and Police Officers Retirement Trust" (FIPO), "Retirement Plan" is now "the City of Miami General Employees and Sanitation Workers Retirement Trust" (GESW). The composition and selection of members for both Boards has been changed. • Each of the two independent Boards of Trustees, in its discretion, may have its own employees, its own administrator, its own attorneys, accountants, money managers, and other professionals. • The City total annual contributions to FIPO (nee "System") and GESW (nee "Plan") will consist of: A. Administrative expenses B. Actuarial contributions for normal cost using the "Entry Age Method", a mechanism has been agreed upon to resolve possible disagreement on annual contributions by a third party. C. The annual unfunded liability contributions are based on a schedule that requires $5,000,000 for FIPO in 1984/85 and $6,400,000 for GESW for fiscal 1984/85, and increases approximately 5% per year. The total unfunded liability including current improvements have been calculated on January 1, 1983 for FIPO to total $104,500,000; and on October 1, 1982 for GESW to total $109,000,000. The unfunded liability will be eliminated by the year 2012 for FIPO and by the year 2008 for GESW. • The Cost of Living Adjustment ("COLA") Fund was created to be funded by "excess interest earning" of the FIPO s and GESW and by an additional 2% of salary contributions by the City employees. • The final judgment extinguished any obligation by the Boards of Trustees of the Plan and System for a variable g annuity benefit based on the performance of investments 4 C-11 is limited to $100,000 per claimant, and $200,000 per occurrence in accordance with the Florida Statutes, Section 768.28, which waives sovereign immunity in torts, claims to the extent of such amounts. (See Note 12 in the Section "FINANCIAL STATEMENTS" for a discussion relating to the City's self-insurance program.) Group health benefits are self -insured for employees represented by the American Federation of State, County, and Municipal Employees, Local 1907, certain managerial confidential employees not represented by the labor union, and retirees of these two groups. The City also offers these two groups of employees the choice between the indemnity group benefit and a pre -paid health maintenance organization. The City has purchased a specific stop loss policy for self insured insurance claims that limits the City's liability to $97,500 per occurrence. The Sanitation Employees Association has a self -funded health benefit plan as its sole health benefit option. In July of 1984, the Fraternal Order of Police and the International Association of Fire Fighters established separate group benefit plans for both active employees represented by those bargaining units and retirees formerly represented by those bargaining units as their sole health benefit option. The City's contribution to provide group health benefits for these bargaining unit employees is limited by the labor agreements. The limitation for group health benefits is an amount similar to that which the City has been contributing for these employees to its self -funded plan. Proposed Revenue Bond Issues I The City expects to offer marina revenue bonds in an amount not presently expected to exceed $8 million by the end of 1985 for the purpose of expanding and developing marinas located on Dinner Key. The City Commission has approved the issuance of up to $65 million of Multi -Family Housing Revenue Bonds for the purpose of providing housing for families and persons of low and moderate income including the elderly under the Affordable Housing program. Such bonds shall be payable solely from revenues derived in connection with the projects to be financed. No schedule has been developed for the sale of these bonds. Authority to issue Industrial Development Revenue Bonds in an amount not to exceed $20 million for the construction of a 1,200 space parking garage and surface parking lot as part of the Bayside Specialty center (see page 20 for a description of the C-13 W r- project) has been granted by the City Commission. These bonds will be backed solely by the credit of the Rouse Company of Miami. Bonds are expected to be sold during the summer of 1985. ECONOMIC AND DEMOGRAPHIC DATA Introduction and Recent Developments Miami's diversified economic base is comprised of light manu- facturing, trade, commerce, wholesale and retail trade, and tourism. While the City's share of Florida tourist trade remains an important economic force, the great gains Miami has made in the areas of banking, international business, real estate and transhipment have fortified the local economy. Major capital improvements have allowed the area to accommodate and foster this rapid expansion. The Port of Miami has almost doubled in size, from 325 acres to 600 acres through a $250 million expansion program completed in 1981. The Port expansion program is designed to move 16 million tons of cargo and four million cruise ship passengers a year by the year 2000. Immediate plans include a third gantry crane, and the addition of 1,000 square feet of lineal berthing space. Further plans call for a land fly over bridge linking directly to the interstate system and a $100 million complex comprised of two new cruise berths, office and retail space and a 500 seat restaurant. Miami International Airport is undergoing a $1 billion expansion program. A seven story 2,300 space parking structure, directly across from the main terminal, was completed in 1984. An elevated pedestrian sky bridge, opened in early 1985, connects the parking structure to the main terminal. Other projects include the construction of a direct connector road to the airport expressway and a soon to be completed cargo tunnel. Expansion and modernization of passenger gate areas continues, to accommodate the increase in domestic and international passenger traffic. The Cargo Clearance Center which will centralize all cargo related federal agencies, will be operational in 1987. Downtown Miami continues to grow at a healthy rate. During 1985, 15 major projects will be under construction at an estimated development cost of $1.077 billion. Included among these projects are nine (9) new office buildings that will provide over 3.7 million sq.ft. of additional Downtown office space. New residential projects will add over one thousand housing units. l C-14 5 1985 Downtown Construction Office Space 3,751,731 sq. ft. Retail Space 549,839 sq. ft. Residential 1,144 Units Bute 1 156 Rooms Metrorail The new $1 billion, 20.5 mile Metro Rapid Transit System is completed and fully operational. This system contains 21 neighborhood transit stations spaced approximately 1.5 miles apart. Of major importance to Downtown development will be Metro Mover, an elevated 1.9 mile central City people mover system connected to Metrorail. Bayside The Rouse Company, a leading builder of specialty marketplaces in downtown waterfront settings, has been selected to develop the Bayside Specialty Center on twenty acres along the waterfront in Downtown Miami. The project will feature 200,000 sq.ft. of new retail space and 35,000 sq.ft. of renovated restaurant space. Total project cost is $79 million, with city participation limited to a $4 million investment in infrastructure improvements. The Bayside Parking Garage, to be located adjacent to the specialty center, will contain 1,200 parking spaces and a surface lot. Bayfront Park Bayfront Park, adjacent to the Bayside project area, will be redeveloped at a total project cost of $22 million. Seventy percent of the project financing has been secured by the City through a variety of federal and state sources. Southeast Overtown/Parkwest The Southeast Overtown/Parkwest Redevelopment Program entails the redevelopment of 200 acres of prime real estate, adjacent to the central business district, for new residential and commercial activity. The general redevelopment concept for the project area is the provision of a wide range of housing opportunities, with supporting commercial uses, to serve the area's future popula- tion. By the end of the century the project area is envisioned to have the capacity to support over 9,000 residential units and over one million square feet of commercial space. The City of C-15 , i ami has been delegated limited redevelopment L,").,lf.r e initiation of the redevelopment plan. Public scct,.)r :-.: :r i tMC'nt i11 be focused on land acquisition, relocation, `1 oject :marketing, infrastructure improvements and )r1, in some instances, the provision of gap finan�ir,,j. It i -sti.matel teat over $100 million in various public f «iii. 1-verage approximately $1 billion in private invest.r,,:nt d�ri:g t'e next 10 to 15 years. The City's commitment £-.,r 198rd is mit�d to the use of $10.1 million in general obligation housing h_�nds for land acquisitions and approximately $750,000 in federal giant funds. Sports and Exhibition Center The City of Miami approved an ordinance creating th,, Miami o its ant Exhibition Authority on July 28, 1983. .statutes require the creation of such an Authority as a precedent to the County enacting an ordinance levying a 3*- onvQntion Development Tax on hotel rooms. The City's ;:,are of !I tax proceeds must be used to construct a multi -purpose cc)nvention/coliseum exhibition center within the City of Miami. The City's share of these tax proceeds is expected to be $3-$4 :;i?.1_i.on )er year. Plans for the facility require a minimum of 150,000 sq.ft. of exi;i,5ition space, 75,000 sq.ft. of conference space, a 16,000 .scat sports arena and all appropriate parking and ancillary ar(-,as. The selection of a developer by the City Commission of the City of Miami occurred in June of 1985. The City is currently planning to enter into negotiations in the immediate future. Corporate Expansion The favorable geographic location of Greater Miami, the trained commerical and industrial labor force and the favorable transportation facilities have caused the economic base of the area to expand by attracting to the area many national and international firms doing business in Latin America. In Greater Miami, over 100 international corporations have set up hemispheric operations. Among them are such corporations as Dow Chemical, Gulf Oil Corporation, Owens-Corning Fiberglass corporation, American Hospital Supply, Coca-Cola Interamerican Corporation and Ocean Chemicals, Inc., a subsidiary of Rohm & Hass Company. C-16 Other national firms which established international operations or office locations in Greater Miami are Alcoa International, Ltd., Atlas Chemical Industries, Bemis International Dymo, Inc., International Harvester, Johns Manville International, Minnesota (3-M) Export, Inc., Pfizer Latin America Royal Export and United Fruit. Industrial Development Greater Miami contains over one hundred million square feet of industrial building space. Manufacturing concerns account for nearly half of the occupied space with storage companies occupying an additional 35 percent of the City's industrial space. Transportation and service companies occupy the bulk of the remaining 15% of the City's industrial space. The Industrial Development Authority (IDA) of Dade County reports that approximately two-thirds of Greater Miami's industrial firms own their facilities. There are currently 37 industrial parks in Greater Miami. Miami's apparel industry is one of the largest in the nation. Miami's market is primarily made up of numerous small firms rather than a few large operations. Roughly 30,000 jobs are provided by nearly 500 manufacturers. Florida apparel firms, most of which are centered in the Miami area, shipped $849 million in merchandise in 1980, a 56% increase over 1970 figures. South Florida is one of the fastest growing interior design centers in the nation. Over 250 design -related businesses provide 6,000 ancillary jobs and generate $250 million into the local economy. More than $10 million in new construction has taken place in the past three years at the Miami Design Plaza, located on 38 acres within a 14-block area in midtown Miami. It is anticipated that approximately $11 million more will be invested in the district in the immediate future. Financial Institutions Dade County is growing as an international financial center with 36 foreign banks operating in the community. Additionally, there are 46 Edge Act Banks that have moved to the Miami area. These include: BankAmerica International, Bank of Boston International South, Bankers Trust International, Banco de Santander International, Chase Bank International, Citibank International, Irving Trust, Chemical Bank International, Manufacturers Hanover International, and Morgan Guaranty International. The Federal Reserve Edge Act Amendment, adopted C-17 U -ia2'7 ,01 in 1979, permitted banks to open international banking subsid- iaries outside their home states. The Federal Reserve System has located a branch office in Dade County to assist the Atlanta office with financial transactions in the South Florida area. There are 73 local banks in Dade County which together have a total of 17.6 billion in deposits. A ten year summary is presented below: Bank Deposits (1) Number of Year Banks Total Deposits 1984 73 $17,603,600,000 1983 70 16,158,326,000 1982 65 13,486,248,000 1981 65 9,234,540,000 1980 63 9,341,691,000 1979 71 7,982,108,000 1978 73(2) 7,015,276,000 1977 98 61481,146,000 1976 95 5,526,615,000 1975 93 5,296,569,000 Source: U.S. Comptroller of the Currency. (1) The information presented is for Metropolitan Dade County as a whole which includes the City of Miami. The figures include national and state chartered banks that are F.D.I.C. insured; state chartered non-insured banks are not included. (2) Decline in number of banks is attributable to change in Florida's banking laws which now allow for branch banking. Some of these branches were separate banks prior to the change in law. Tourism Miami always has been a very attractive city for domestic and international tourists. Its climate and beaches draw many thousands of visitors throughout the year. Local government and private interests have cooperated in developing outstanding attractions and events which include power boat races at Miami Marine Stadium, the Orange Bowl Classic, the Seaquarium, Planet Ocean, Parrot Jungle, Monkey Jungle, the Orchid Jungle, dog and horse races, Jai Alai, the Viscaya Palace and Metrozoo. Other C-18 points of interest and activities include tours of the Everglades and the Florida Keys, major league professional sports events, and annual attractions such as the Youth Fair, Graphics Fair, International Folk Festival, Marathon Race, Calle Ocho Open House, Carnaval Miami, Coconut Grove Art Festival, Kwanza and Goombay Festivals, Hispanic Heritage Week, Little River Oktoberfest and the Orange Bowl festival events. The Miami Grand Prix auto race has been run annually in downtown Miami since 1983. Cars and drivers from around the world competed for more than $250,000 in prize money in 1985. During 1984, approximately 5.5 million out-of-state visitors stayed in 59,000 hotel and motel rooms in Greater Miami. Many of these visitors participated in international trade activities such as conventions and conferences. Film Industry Film production in South Florida reached an all time high in 1984, according to figures released by the State's Department of Commerce, Motion Picture and Television Bureau. Florida is ranked as the third largest film production center in the U.S. State and local officials estimate that between 60 percent to 70 percent of Florida's film business is conducted in South Florida (Dade and Broward Counties). The 1984 film production totals for Florida were $180.5 million resulting in an estimated $108 to $126 million added to the Miami area economy. Agriculture The land area of Greater Miami includes large agricultural expanses on which limes, avocados, mangoes, tomatoes, and pole beans are grown for the fresh produce market. During the sunny and warm winter months, the mild climate enables these crops to be grown and harvested. Many of the vegetables are shipped to the northern United States during the winter. Exotic tropical fruits such as plantains, lychee fruit, papaya, sugar apples and persian limes grow in the area and cannot be grown anywhere else in this country. Export More than fifty-five percent of Florida's foreign trade, which according to the U.S. Commerce Department's 1984 figures totalled in excess of $20 billion, flows through the ports of Miami. C-19 0* Further stimulation in the investment climate has resulted from the implementation of the 12 year Caribbean Basin Initiative program, designed to boost the economies of 27 countries of Central America and the Caribbean Islands. The new law, which grants duty-free entry into the U.S. of material goods produced in the region, is also expected to bring greater economic stability to those countries. Trade offices have been established in South Florida by several countries, in addition to economic affairs conducted by the 37 foreign consulates located in the Miami area. These trade offices include those established by Belgium, Chile, Colombia, the Dominican Republic, Guatemala, Hong Kong, Jamaica, Korea, Panama, Spain and the Philippines. Miami International Airport Metropolitan Dade County is the owner of five separate airports within its boundaries. The responsibilities for their operation are assigned to the Dade County Aviation Department. Miami International Airport ranks 8th in the nation and loth in the world in the number of passengers using its facilities. It ranks 4th in the nation and 5th in the world in the movement of domestic and international air cargo. During 1984, airport services were provided to over 19 million domestic and international scheduled passengers. The airlines serving the Miami International Airport provide world- wide air routes convenient for importers and exporters. The Airport's facilities include three runways, a 7,000 car parking complex, approximately two million square feet of warehouse and office space, and maintenance shops. Approximately 30,000 individuals are employed at the airport. In 1984 the Airport served 19.3 million passengers and handled 1.0 billion pounds of cargo. Previous years statistics presented below: are C-20 r �f A Year Passengers (000) Cargo (000's lbs.) 5 J 1984 19,328 11022,960 1983 19,322 1,184,526 1982 19,388 1,246,700 1981 19,849 1,170,008 1980 20,507 1,130,800 1979 19,628 1,066,313 197$ 16,501 1,026,593 1977 13,736 987,998 1976 12,884 808,791 1975 12,068 745,453 Source: Dade County Aviation Department. Port of Miami The Port of Miami is owned by Metropolitan Dade County and is operated by the Dade County Seaport Department. From 1975 to 1984, the number of passengers sailing from the Port increased from 804,926 to 2,217,065, an increase of 175%. This increased growth highlights the Port's emergence as the world's leading cruise ship port. The Port of Miami specializes in unitized trailer and container cargo handling concepts. The most effective use of equipment and the Port's convenient location combine to make the Port the nation's leading export port to the Western Hemisphere. From 1975 to 1984, the total cargo handled increased from over 1.26 million tons to over 2.29 million tons, an E increase of 81%. i In 1979, details were completed for the expansion of the Port of Miami from 300 acres to 600 acres. The additional space is needed to accommodate the increasing number of shippers, buyers, importers, exporters, freight forwarders and cruise passengers who wish to conduct business through the Port. In 1984 the Port served 2.2 million passengers and handled 2.29 million tons of cargo. A summary of the growth in revenues, passengers and cargo for previous years is presented below: a C-21 3 • Gu 1V 2 % Ez Year rs 1984 515,941,548 2,217,065 1983 14,201,008 2,002,654 1982 12,941;, r.g 7 1, 760, 255 1981 12,468,522 1,567,709 1980 ',056,395 1,459,144 1979 8,110,840 1,350,332 1978 6, 2 �F, 1�35 982,275 1977 5, 37'1,1 ' 173,016 1976 4,'?'r,r;l 1,029,687 1975 804,926 Source: Dade (_',)1, 11 + `; -,'-}r11 t Dr-, pa r. tmhn t . Cargo (Tonnage) 2,287,281 2,305,645 2,665,921 2,757,374 2,485,791 2,291,382 1,922,864 1,711,535 1,525,095 1,257,603 Demographic Data The followi wl the distribution by age groups among the populat. io>> J,1 '„nth Miami and Dade County residents. Age Group an a Percentage of Total Population 1980. Dade Age Group 1,In, 1) �i Percentage Number Percentage 0-5 23,459 7% 113,544 7% 6-19 G1,82G 17% 330,738 20% 20-34 75,919 22% 374,276 23% 35-39 106,569 31% 471,351 29% 60-75 55,924 16% 230,136 14% 75+ 23,168 7% 105,736 7% 865 100% 11625,781 100% Source: 1980 U.S. Census of Population and Housing. Per capita pe1zon,�1 income for Greater Miami residents has consistently been atxavc that for the Florida and United States averages. The folio -wing table compares the per capita personal income of Dade County, Florida and the U.S.A. C-22 J Per Capita I -come Dade County 11'.1 r I J a A. _gade/U.S.A. 1983 $12,131 1 1 , Y - 167 104% 1982 11,717 10'�401 1iI100 106 1.981 10,885 101 1980 9,598 103 1979 8,894 !3 , t5 5 5 103 1973 8,030 7,773 103 Source: University of Fl(),. i,T-i j-iT - J �,();-iomic and Business Research. Retail Sales Although Miami contains 22.1 r)f the population of Dade County, almost half of the lr value of sales transactions for the County arty 1. (2,- in the City. The following table presents five yuaj S of sales information for Miami and Dade County. Taxable Gross Salc—l (000's) 1984 1983 1982 1981 1980 Miami $ 5,437,940 5,214,000 $ 5,296,400 4,712,800 Dade County 12,223,215 11,664,000 12,114,000 10,888,000 Miami/Dade 45% 450 46'o 44% 43% Source: Department of Revenue, State of Florida. C-23 8' "-1027 Ok 1, . 17_ The tables below indicate the scope of employment throughout Miami and Dade County Eastern Airlines f Southern Bell Telephone and Telegraph Burdines University of Miami Pan American World Airways Florida Power and Light Southeast Banking Corporation/Southeast Bank, N.A. Miami Herald Publishing Company Publix Winn Dixie Stores, Inc. Ten Largest Private Employers Greater Miami 1934 Type of Number of Business Employees Airline 12,754 Utility 7,300 Department Store 6,065 University 5,200 Airlines 5,200 Utility 5,020 Bank 3,982 Newspaper 3,933 Super Market 3,786 Super Market 3,400 Raployed Persons by Industry Type 1980 Agriculture, Forestry, Fishing, Mining Construction Manufacturing Transportation, Communication Public Utilities Wholesale Trade Retail Trade Finance, Insurance, Real Estate Business and Repair Services Personal Entertainment and Services Health Services Educational Services Other Professional Services Public Administration Total Miami Percentage County Percentage 1,590 1% 14,850 2% 11,150 7 44,560 6 27,070 17 103,970 14 12,740 8 81,690 11 9,550 6 44,560 6 27,070 17 133,670 18 11,140 7 59,410 8 9,550 6 37,130 5 15,920 10 51,980 7 12,740 8 59,410 8 7,960 5 44,560 6 6,370 4 37,130 5 6,360 4 29,710 4 159,210 100 742�630 100 Source: 1980 Census of the Population and Housing. C-24 a CA Miami Dade County U.S. ihneuployment Rates Annual Average 1983 1 1984 1983 9.3% 9.6% 12.0% 7.6 7.8 9.8 7.3 7.5 9.6 1982 1981 1980 12.4% 7.8$ 6.8% 10.1 6.8 6.0 9.9 7.6 6.1 (1) Four month Average. Source: United States Department of Labor, Bureau of Labor Statistics. Housing The U.S. Census figures for 1980 show that the median value of owner occupied housing was $47,517 which is an increase of 171% of the median value of $17,500 per owner occupied housing as outlined in the 1970 U.S. Census figures. The following tables detail the characteristics of housing by units in the City of Miami and Dade County. Values of Owner Occupied, Non -Condominium Housing Units 1980 Miami Percentage Dade Percentage Less than $25,000 3,690 11% 14,156 6% 25,000-39,999 8,283 25 43,732 18 40,000-49,999 6,326 19 39,978 17 50,000-79,999 11,012 33 81,130 35 80,000-99,999 1,684 5 21,211 9 100,000 and over 2,462 7 34,658 15 Total 33�,457 1.� 234,865 100% median value $47,517 $57,200 Source: 1980 U.S. Census of the Population and Housing Ovcunied Housing by Tenure 1970 Percentage 1980 Percentage Owner Occupied 43,158 36% 45,738 34% Renter Occupied 77,235 64 881,308 66 i 120,393 100% 134,046 100% i Source: 1970 and 1980 U.S. Census of the Population and Housing. t C-25 1 rt` ' Ok Building Permits The dollar value of building permits issued in the City since 1978 is as follows: Building Permits Issued Dollar Value Number Year (000's) of Permits 1984 $345,262 10,258 1983 299,941 9,446 1982 358,676 8,653 1981 532,205 9,605 1980 350,054 10,518 1979 201,667 12,213 1978 105,064 12,246 Source: City of Miami's Fire, Rescue and Inspection Services Department. New residential construction in the City since 1978 has been estimated as follows: Housing Units Started Number of Year Units 1984 1,018 1983 661 1982 1,753 1981 3,164 1980 2,188 1979 1,995 1978 1,319 Source: City of Miami's Fire, Rescue and Inspection Services Department. BFG12APPA C26 Appendix E SPARSER, $NEVIN, SHAPO 6 HEILDRONNER PROFESSIONAL ASSOCIATION MIAMI. FORMA 32131 BRYANT, MILLER AND OLIVE, P.A. TALLAMASSEL FL01110A 32301 1985 City of Miami 3500 Pan American Drive Miami, Florida RE: $ City of Miami, Florida, Industrial Development Revenue Bonds, Series 1985 (Bayside Center Limited Partnership Project Gentlemen: We have acted as bond counsel in connection with the issuance by the City of Miami, Florida (the "Issuer") of $ City of Miami, Florida, Industrial Development Revenue Bonds, Series 1985 (Bayside Center Limited Partnership Project), dated October 1, 1985 (the "Bonds") to finance the cost of the acquisition and construction of a permanent, multi -level urban public parking facility (the "Project"). We have examined the law and such certified proceedings and other papers as deemed necessary to render this opinion. Defined terms herein shall have the meaning given to such terms in the Indenture and Agreement hereafter referred to unless the context otherwise requires. As to questions of fact material to our opinion we have relied upon representations of the Issuer and Bayside Center Limited Partnership, a Maryland Limited Partnership (the "Company") contained in the Indenture, the Lease Agreement and the Agreement described below, the certified proceedings and other certifications of public officials furnished to us and certifications by the Company, without undertaking to verify the same by independent investigation. The Bonds are issued pursuant to an Indenture of Trust, dated as of October 1, 1985 (the "Indenture"), by and between the Issuer and Sun Bank, National Association, as Trustee (the "Trustee") and a Financing Agreement, dated as of October 1, 1985 (the "Agreement"), by and between the Issuer and the Company. Under the Agreement, the Issuer has agreed to lend Bond proceeds to the Company for the cost of the Project to be constructed on land leased to the Company by the Issuer pursuant to the Lease Agreement, dated January 14, 1985, as amended (the "Lease Agreement"). The Bonds are secured by monies on deposit in certain funds and accounts established pursuant to the Indenture (other than the Excess Earnings Fund) and by certain revenues derived by the Issuer from or in connection with the Agreement. E-1 8r-1a2 r The Bonds are additionally secured by a Guaranty Agreement to the extent set forth th-rf,in, dated as of October 1, 1985, between the Rouse Company and Sun Bank, National Association, as Trustee. The Bonds were validated by judgment of the Circuit Court of the Eleventh Judicial Circuit of the State of Florida, in and for Dade County rendered on June 21, 1985, pursuant to Chapter 75, Florida Statutes, and the time for taking an appeal therefrom has expired without an appeal being taken. The Bonds and interest thereon do not constitute a general indebtedness of the Issuer, the State of Florida or any political subdivision thereof, or a pledge of its or their faith and credit. Reference is made to an opinion of even date of Greenberg, Traurig, Askew, Hoffman, Lipoff, Rosen & Quentel, P.A., counsel for the Company, with respect, among other matters, to the status and qualification to do business of the Company, the power to enter into and perform the Agreement and the Lease Agreement and with respect to the Agreement and the Lease Agreement being binding and enforceable upon the Company. We have not been engaged to and have not undertaken to review the accuracy, completeness or sufficiency of the Official Statement relating to the Bonds or other offering material relating to the Bonds except to the extent, if any, stated in the Bond Purchase Agreement pursuant to which the Bonds have been sold. This opinion should not be construed as offering material relating to the Bonds, but should be considered only for the opinions expressly stated herein. Based on our examination, we are of the opinion, as of the date of delivery and payment for said Bonds, as follows: 1. The Issuer is a municipal coporation created and existing under the laws of the State with the power to enter into the Indenture and the Agreement and to issue the Bonds. 2. The Indenture and the Agreement have been duly authorized, executed and delivered by the Issuer and are valid and binding obligations of the Issuer enforceable upon the Issuer in accordance with their terms. E — 2 l 4 �aa i iisY � FS%ik sx. 3. The Bonds have been duly authorized, eY:ec-_,red and delivered by the Issuer and are :valid ano binding special obligations of the Issuer, payahl_ by the Issuer solely from monies on depo.it it certain funds and accounts established pursuant to the Indenture (other than the Excess Earning_ Fund) and from certain revenues derived by the Issuer from or in connection with the Agreement. 4. Under existing law, the interest on the Bonrls is exempt from federal income taxes, except for interest on any Bond during any period while it is held by a "substantial user" of the facilities financed by the Bonds or a "related person", as those terms are used in Section 103(b)(13) or the Code. We call your attention to the fact the interest on the Bonds may become subject. to federal income taxes if the limitations oil investment in nonpurpose obligations (within the meaning of Section 103(c)(6)(H) of the Code) set- forth in Section 103(c)(6)(C) of the Code is exceeded or if the rebate to the United States set forth in Section 103(c)(6)(D) of the Code is not paid in accordance with the requirements set forth in Section 103(c)(6)(E) and (F) of the Code. This opinion is not applicable with respect-_ to the taxability of interest on the Bonds under- federal law if action by the Company or another person or entity results in the investment limitation contained in Section 103(c)(6) of the Code being exceeded or if the rebate requirements contained in Section 103(c)(6) of the Code are not fulfilled. 5. Under existing law, the interest on the Bonds is exempt from direct taxation under the laws of the State of Florida, except estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, as defined in Chapter 220, Florida Statutes. It is to be understood that the rights of the holders of the Bonds and the enforceability thereof are subject to the exercise of judicial discretion in accordance with general principals of equity, to the valid exercise of the constitutional powers of the United States of America and of the sovereign police powers of the State or other governmental units having jurisdiction, and to bankruptcy, E-3 " 19_10217 12 9 insolvency, reorganization, moratoriurn, an<3 other similar laws affecting creditors' rights heretofore or hereafter enacted. Very truly yours, SPARBER, SHEVIN, SHAPO 6 HEILBRONNER, P.A. BRYANT, MILLER AND OLIVE, P.A. E-4 BFG11AGTI Exhibit C Disclosure Statement 24 S,S"1027 I Hough & Co. 100 SECOND AVENUE SOUTH SUITE 800 P.O. BOX 57008 ST. PETERSBURG, FLORIDA 33701.7008 18131 823-8100 EXHIBIT C DISCLOSURE LETTER October 10, 1985 City of Miami, Florida City Hall 3500 Pan American Drive Coconut Grove, Florida 33133 RE: $17,010,000 CITY OF MIAMI, FLORIDA INDUSTRIAL DEVELOPMENT REVENUE BONDS, SERIES 1985 (BAYSIDE CENTER LIMITED PARTNERSHIP PROJECT) Ladies and Gentlemen: Pursuant to Chapter 218, 385, Florida Statutes, and in reference to the issuance of bonds as set forth above, William R. Hough & Co., and Shearson Lehman Brothers Inc., acting on behalf of themselves, AIBC Investment Services Corporation and the other Underwriters as listed in Exhibit A to the Bond Pur- chase Agreement (collectively, the "Underwriters") makes the following disclo- sures to the City of Miami, Florida (the "City"). The Underwriters are acting as underwriters to the City for the public offering or sale of the Bonds. The total fee to be paid to the Underwriters in f the Bond Purchase Agreement between the Underwriters and the City executed October 10, 1985 is equal to 3.062% of the total face amount of the Bonds, or $520,902.72. In addition to this disclosure of the total fee to be paid to the Under- writers, we make the following statements and representations to the City as required by Chapter 218.385, Florida Statutes. _ (a) Expenses estimated to be incurred by the Manager in connection with the issuance of the Bonds: ITEMIZED EXPENSES Travel and Communication $ 38,978.82 Advertising and Printing 9,904.00 Underwriters Counsel 44,000.00 Computer 12,765.00 Munifacts, Clearance and Good Faith 19_,646.80 TOTAL $125,294.62 STATE, COUNTY AND MUNICIPAL BONDS r 4° r 1 fA i City of Miami, Florida October 11, 1985 Page 2 (b) Names, addresses and estimated amounts of compensation of any person Who is not regularly employed by, or not a partner or officer of, an underwrit- er, bank, banker, or financial consultant or advisor and who enters into an un- derstanding with either the City or the Manager, or both, for any paid or pro- mised compensation or valuable consideration directly, expressly or impliedly, to act solely as an intermediary between the City and the Manager for the pur- pose of influencing any transaction in the purchase of the Bonds. None (c) The amount of underwriting spread expected to be realized: Underwriting $1.00 per $1,000 par amount Takedown/Concessions $15.80 per $1,000 par amount (d) Management fee charged by the Manager: $6.50 per $1,000 par amount (e) Any other fee, bonus and other compensation estimated to be paid by the Underwriters in connection with the Bonds to any person not regularly employed or retained by the Manager: Underwriters' Counsel Fee $40,000 (including expenses) Other $ 4,000 (f) The names and addresses of the Manager connected with the Bonds: William R. Hough & Co. 100 Second Avenue South Suite 800 St. Petersburg, Florida 33701 Shearson Lehman Brothers Inc. 1390 Brickell Avenue Suite 200 Miami, Florida 33131 AIBC Investment Services Corporation 1390 Brickell Avenue Miami, Florida 33131 Very truly yours, WILLIAM R. H & CO. Peter W. e Vice Pres Rr . - 02" a EXHIBIT D Form of Opinion of City Attorney , 1985 William R. Hough & Co. Shearson Lehman Brothers Inc. AIBC Investment Services Corporation Sirs: I am the duly appointed City Attorney of the City of Miami, Florida (the "City"). In connection with the issuance by the City of $ aggregate principal amount of its industrial Development Revenue Bonds Series 1985 (Bayside Center Limited Partnership Project) (the "Bonds"), I have participated in various proceedings in connection therewith. All terms not otherwise defined herein shall have the meanings ascribed thereto in the Bond Purchase Agreement, by and between the City, the Company and the Underwriters (as defined therein) dated , 1985. I am of the opinion that: (a) the City is a municipal corporation existing under the State of Florida duly organized and validly existing under the Constitution and laws of the State of Florida; (b) the City has full power and authority under the Constitution and laws of the State of Florida, (i) to issue t industrial development revenue bonds, such as the Bonds, and (ii) to secure the Bonds in the manner contemplated by the Bond Resolution (as defined in the Bond Purchase Agreement); (c) the City has and had, as the case may be, full legal right, power and authority (i) to adopt the Bond Resolution and to execute and deliver the Bond Purchase Agreement and the Agreements, (ii) to issue, sell and deliver the Bonds to the Underwriters as provided in the Bond Purchase Agreement, and (iii) to carry out and consummate all other transactions contem- plated by the aforesaid agreements and instruments, and the City has complied with all provisions of applicable law in all matters relating to such transactions; BFG05EXHD rr 1985 Page 2 (d) The City has duly authorized or ratified (i) the adoption of the Bond Resolution, and the execution, delivery and performance of the Bond purchase Agreement, the Bonds and the Agreements, (ii) the execution, delivery and distribution of the Official Statement, and (iii) the taking of any and all such action as may be required on the part of the City to carry out, give effect to and consummate the transactions contemplated by the aforesaid agreements and instruments; (e) The Bond Resolution, the Bond Purchase Agreement and the Agreements constitute the legal, valid and binding obligations of the City enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally; (f) the Bonds have been duly authorized, executed, issued and delivered and constitute legal, valid and binding obligations of the City enforceable in accordance with their terms and the terms of the Bond Resolution, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally; (g) all approvals, consents and orders of and filings with any governmental authority or agency which would constitute a condition precedent to the issuance of the Bonds or the execu- tion and delivery of or the performance by the City of its obligations under the Bond Purchase Agreement, the Bonds, the Agreements or the Bond Resolution have been obtained or made and any consents, approvals and orders so received or filings so made are in full force and effect; provided, however, that no representation is made concerning compliance with the Federal securities laws or the securities or Blue Sky laws of the various states; (h) the adoption and performance by the City of the Bond Resolution and the authorization, execution, delivery and performance of the Bond Purchase Agreement, the Agreements, the Bonds and any other agreement or instrument to which the City is a party, used or contemplated for use in consummation of the transactions contemplated by the Bond Purchase Agreement or by the Official Statement, and compliance with the provisions of each such instrument, do not and will not conflict with, or constitute or result in a violation or breach of or a default under, the Constitution of the State of Florida, or any existing law, administrative regulation, rule, decree or order, State or Federal, or, to the best of my knowledge, material provision of any agreement, indenture, mortgage, lease, note or other agree- BFG05EXHD r y� f"Ib` , 1985 Page 3 ment or instrument to which the City or its properties or any of the officers of the City as such is subject or result in the creation or imposition of any prohibited lien, charge or encum- brance of any nature whatsoever upon any of the revenues, property or assets of the City under the terms of the Constitu- tion of the State of Florida, any law, or to the best of our knowledge, any instrument or agreement; (i) to the best of my knowledge and belief, no litiga- tion or other proceedings are pending or threatened in any court or other tribunal, State or Federal, (i) restraining or enjoining or seeking to restrain or enjoin the issuance, sale, execution or delivery of any of the Bonds, or (ii) in any way questioning or affecting the validity of any provision of the Bonds, the Agreeements, the Bond Resolution, or the Bond Purchase Agreement, or the validation proceedings for the Bonds, or (iii) in any way questioning or affecting the validity of any of the proceedings or authority for the authorization, sale, execution or delivery of the Bonds, or of any provision, program, or transactions made or authorized for their payment, or (iv) questioning or affecting the organization or existence of the City or the title of any of its officers to their respective offices; (j) the Bonds have been duly and properly validated in accordance with the laws of the State of Florida. I am pleased to inform you that based upon my participation in the preparation of the Official Statement as City Attorney and without having undertaken to determine independently the accuracy or completeness of the contents thereof, I have no reason to believe that the Official Statement (except for the financial and statistical data included therein and information relating to the Project or the Partnership as to which no view need be expressed) as of its date contained or as of the Closing Date contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. BFG05EXHD "-1a27 EXHIBIT E Supplemental Opinion of Bond Counsel 1985 City of Miami City Hall 3500 Pan American Drive Coconut Grove, Florida 33133 William R. Hough & Co. Shearson Lehman Brothers, Inc. AIBC Investment Services Corporation Sirs: We are Bond Counsel to the City of Miami, Florida (the "City") and its Board of City Commissioners (the "Board"). In connection with the issuance by the City of $ aggregate principal amount of Industrial Development Revenue Bonds, Series 1985 (Bayside Center Limited Partnership Project) (the "Bonds"), we have participated in various proceedings relating thereto. All terms not otherwise defined herein shall have the meanings ascribed thereto in the Bond Purchase Agreement dated , 1985, by and between the City, the Company and the Underwriters (as defined therein). We are of the opinion that: (a) the City has full right, power and authority under the Constitution and laws of the State of Florida to (i) issue industrial. development revenue bonds, such as the Bonds, and (ii) to secure the Bonds in the manner contemplated by the Bond Resolution as defined in the Bond Purchase Agreement; (b) the City has and had, as the case may be, full legal right, power and authority (i) to adopt the Bond Resolution and to execute and deliver the Bond Purchase Agreement, the Indenture and Financing Agreement, (ii) to issue, sell and deliver the Bonds to the Underwriters as provided in the Bond Purchase Agree- ment, and (iii) to carry out and consummate all other transac- tions contemplated by the aforesaid agreements and instruments, and to the best of our knowledge the City has complied with all provisions of applicable law in all matters relating to such transactions; 1 Sv'-1021 (c) the City has duly authorized or ratified (i) the adop- tion of the Bond Resolution and the execution, delivery and performance of the Bond Purchase Agreement, the Bonds, the Indenture and Financing Agreement, (ii) the distribution of the Official Statement, and (iii) the taking of any and all such action as may be required on the part of the City to carry out, give effect to and consummate the transactions contemplated by the aforesaid agreements and instruments; (d) the Bond Resolution and the Bond Purchase Agreement constitute the legal, valid and binding obligations of the City enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally; (e) the Bonds have been duly authorized, executed, issued and delivered and constitute legal, valid and binding obligations of the City enforceable in accordance with their terms and the terms of the Bond Resolution, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally; (f) to the best of our knowledge, all approvals, consents and orders of and filings with any governmental authority or agency which would constitute a condition precedent to the issuance of the Bonds or the execution and delivery of or the performance by the City of its obligations under the Bond Purchase Agreement, the Bonds, the Indenture and Financing Agreement or the Bond Resolution have been obtained or made and any consents, approvals and orders so received, or filings so made are in full force and effect; provided, however, that no representation is made concerning compliance with the Federal securities laws or the securities or Blue Sky laws of the various states; (g) to the best of our knowledge, the adoption and perform- ance by the City of the Resolutions and the authorization, execution, delivery and performance of the Bond Purchase Agreement, the Bonds, the Indenture and Financing Agreement, do not and will not conflict with, or constitute or result in a violation or breach of or a default under, the Constitution of the State of Florida, or any existing law, administrative regulation, rule, decree or order, State or Federal; and (h) the Bonds are not subject to the registration require- ments of the Securities Act of 1933, as amended, and the Resolu- tion is exempt from qualification under the Trust Indenture Act of 1939, as amended. 2 1 �t As Bond Counsel we have not participated in the preparation of the Official Statement and have not independently verified the accuracy or completeness of the statements contained therein, except as expressly provided herein. We are pleased to inform you that the statements contained in the Official Statement under the captions "Summary Statement" "Introductory Statement," "Authorization and Validation", "The Project", "The Manager- DOSP", "Description of the Bonds", "The Series Bonds," "Security for the Series 1985-A Bonds," "Tax Exemption" and "Appendix A," insofar as such statements constitute summaries of the Bond Resolution, the Bonds, the Indenture and Financing Agreement and the Constitution and laws of the State of Florida, constitute fair summaries of such documents and the Constitution and laws of the State of Florida. We are also pleased to inform you that based upon our partic- ipation in the preparation of the Official Statement as Bond Counsel to the City to the extent set forth above but without having undertaken to determine independently the accuracy or completeness of the contents thereof, we have no reason to believe that the Official Statement (except for the financial and statistical data included therein and the information relating to the Partnership and the Project as to which no view is expressed) as of its date contained or as of the Closing Date contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. BFG05EXE Respectfully Submitted, 3 :s7 EXHIBIT F Opinion of Greenberg, Traurig, Askew, Hoffman, Lipoff, Rosen & Quentel, P.A. , 1985 City of Miami City Hall 3500 Pan American Drive Coconut Grove, Florida 33133 William R. Hough & Co. Shearson Lehman Brothers Inc. AIBC Investment Services Corporation Sirs: We have acted as counsel to the Bayside Center Limited Partnership (the "Partnership"), Rouse -Miami, Inc. ("Rouse") and The Rouse Company (collectively, the "Company"), in connection with the issuance of $ City of Miami, Florida, Industrial Development Revenue Bonds, Series 1985 (the "Bonds"). All terms not otherwise defined herein shall have the meanings ascribed thereto in the Bond Purchase Agreement dated , 1985 by and between the City, the Company and the Underwriters We are of the opinion that: 1. In reliance upon the attached opinion from the office of General Counsel of The Rouse Company, the Partnership is a limited partnership, duly formed and validly existing in good standing under the laws of the State of Maryland, and is authorized to engage in business in the State of Florida (the "State"). Rouse -Miami, Inc. is a corporation duly formed and validly existing in good standing, under the laws of the State of Maryland and is authorized to engage in business in the State. The Rouse Company is a corporation duly formed and validly existing under the laws of the State of Maryland. The Partnership has all power and authority to own its properties (including, without limitation, the Project), to conduct its business as presently conducted and as contemplated to be conducted by the Official Statement and the Documents and to K "-1027 Y.NN Fi r d -..—...fi..»......�.a.�.��...e.t�'.... execute, deliver and perform the Documents and the Bond Purchase Agreement. 2. The execution, delivery and performance of the Documents the Bond Purchase Agreement and the taking of all other actions, and the execution, delivery and performance of all other documents, required to consummate the transactions contemplated thereby and by the Official Statement, have been duly authorized by all necessary action of the Company. The Documents and the Bond Purchase Agreement have been duly executed and delivered by the Company, constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their terms, (except that (i) the enforceability of such instruments may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws of general application in effect from time to time relating to or affecting the enforcement of creditors' rights, (ii) certain equitable remedies, including specific performance, may be unavailable and (iii) the indemnification provisions contained therein may be limited by applicable securities laws and public policy). 3. The execution, delivery and performance of the Documents and the Bond Purchase Agreement and the consummation of the transactions contemplated thereby will not conflict with or constitute a breach of or default under any of the governing agreements of the Company, or to the best of our knowledge, under any indenture, mortgage, deed of trust, lease, note, commitment, agreement or other instrument or obligation to which the Company is a party or by which the Company or any of its property is bound, or under any law, rule, regulation, or to the best of our knowledge, any judgment, order or decree to which the Partnership is subject or by which any of its property is bound. 4. To the best of our knowledge, there is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or threatened against the Company (nor, tr- the knowledge of such counsel, is there any basis therefor), which (i) affects or seeks to prohibit, restrain or enjoin the issuance, sale or delivery of the Bonds or the use of the Official Statement or the execution and delivery of the Documents or the Bond Purchase Agreement, (ii) affects or questions the validity or enforceability of the Bonds, the Agreements, the Documents or the Bond Purchase Agreement, (iii) questions the tax-exempt status of the Bonds or the completeness or accuracy of the Official Statement, or (iv) questions the power of the Company to perform its obligations under the Official Statement, to carry out the transactions HIS • 1027 contemplated by the Official Statement construct, equip or operate the Project. or to own, acquire, 5. The Partnership has made all filings with and received all approvals, consents and orders of any governmental authority, body, board, agency or commission which are necessary to permit the Company to execute, deliver and perform its obligations under the Documents and the Bond Purchase Agreement► to carry out the transactions contemplated by the Official Statement, and to own, acquire, improve, equip and operate the Project (except for local approvals and consents, such as local building and health permits, that may be required in connection with the construction and operation of the Project pursuant to the Agreement). 6. No consent, approval, authorization or order of, or registration or filing with, any governmental agency, commission, authority board, or body is required with respect to the Company for the execution and delivery of, and the performance of its obligations under the Documents. 7. The statements in the Official Statement under the headings "The Partnership and the Project" fairly and accurately present the information purported to be summarized therein. 8. No facts have come to our attention that would cause us to believe that the Official Statement contained, on the date thereof, or contains, on the date hereof, any untrue statement of a material fact or omitted, on the date thereof, or omits, on the date hereof, to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 9. Compliance with 90-10 test [To come]. BFG12EXB Respectfully yours, sit') 2w