Maryland Financial Institutions Section 13-712.1

      The Authority may not close on the sale of bonds which constitute tax supported debt of the State, and may not otherwise borrow money in amounts exceeding $35,000 per year, to finance any segment of a facility unless the Authority:

            (1)      Has certified to the Legislative Policy Committee and the Board of Public Works that the Authority has endeavored to maximize private investment in the sports facility or in the Hippodrome Performing Arts Center facility proposed to be financed and, with respect to a baseball or football stadium, to maximize the State's ability to assure that the professional baseball and football franchises will remain permanently in Maryland. This certification shall be supported by a detailed report outlining these efforts;

            (2)      Has provided to the fiscal committees of the General Assembly, at least 30 days prior to seeking approval of the Board of Public Works for each bond issue or other borrowing, a comprehensive financing plan for the relevant segment of the facility and the effect of this financing plan on financing options for other segments of the facility, including anticipated revenues from private investment where applicable;

            (3)      Has obtained the approval of the Board of Public Works of the proposed bond issue and the plan for financing;

            (4)      Has secured, as approved by the Board of Public Works, either:

                  (i)      With respect to site acquisition and the construction of a baseball stadium, a long-term lease for a major league professional baseball team; or

                  (ii)      Subject to § 13-715.3 of this subtitle, with respect to site acquisition and the construction of a football stadium, a franchise for a National Football League team and a long-term lease which shall include a provision requiring the football team that leases the stadium to agree to reimburse the Authority for $24 million in stadium construction costs including the construction, fitting out, and furnishing of the private suites that are part of the football stadium, on the terms and conditions determined by the Authority;

            (5)      With respect to site acquisition and construction of a Baltimore Convention Center facility, has secured, as approved by the Board of Public Works:

                  (i)      A lease or other written agreement with Baltimore City pursuant to which:

                        1.      Baltimore City agrees to pay $50,000,000 for the capital costs of the expansion of the Baltimore Convention Center not later than the date of the Authority's bond issuance as authorized under § 13-712(a)(1) of this subtitle; and

                        2.      Baltimore City and the Authority will each own a 50% leasehold interest as tenants in common in the improvements comprising the existing Baltimore Convention Center and the Baltimore Convention Center expansion for the duration of any bonds issued as authorized under § 13-712(a)(1) of this subtitle, with neither Baltimore City nor the Authority entitled to sell, assign, mortgage, pledge, or encumber the Baltimore Convention Center facility (or any leasehold interest therein) without the prior consent of the other, except for liens in favor of Baltimore City's and the Authority's respective bondholders;

                  (ii)      A deed, lease, or written agreement with Baltimore City permitting the Authority to design and construct, or contract for the design and construction of, the Baltimore Convention Center facility, and to pledge the Baltimore Convention Center facility and the Baltimore Convention Center site or the leasehold interest therein, as security for the Authority's bonds; and

                  (iii)      A written agreement with Baltimore City:

                        1.      Whereby Baltimore City agrees to operate the Baltimore Convention Center facility in a manner which maximizes the Baltimore Convention Center's economic return and to maintain and repair the Baltimore Convention Center facility so as to keep the Baltimore Convention Center facility in first class operating condition; and

                        2.      That includes provisions that:

                        A.      Protect the Authority's, the State's and the City's respective investment in the Baltimore Convention Center facility;

                        B.      Require the Authority and Baltimore City to each contribute to operating deficits and a capital improvement reserve fund, for the period beginning upon the completion of the expanded and renovated Baltimore Convention Center facility and ending on June 30, 2008, as follows:

                        I.      The Authority shall contribute two-thirds and Baltimore City shall contribute one-third to annual operating deficits;

                        II.      The Authority and Baltimore City shall each annually contribute $200,000 to the Capital Improvement Reserve Fund; and

                        III.      Baltimore City shall be solely responsible for all operating deficits and capital improvements:

                        1.      Prior to the completion of the expanded and renovated Baltimore Convention Center facility; and

                        2.      After June 30, 2008; and

                        C.      Provide for remedies upon default which include the right of the Authority or the State, in the event of a material default by Baltimore City which has not been corrected after a reasonable notice and cure period, to immediately assume responsibility for maintenance and repairs of the Baltimore Convention Center facility and offset the costs of such maintenance and repairs against other amounts owed by the Authority or the State to Baltimore City, whether under the operating agreement with Baltimore City or otherwise;

            (6)      With respect to site acquisition and construction of an Ocean City Convention Center facility, has secured, as approved by the Board of Public Works:

                  (i)      A lease or other written agreement with Ocean City pursuant to which:

                        1.      Ocean City agrees to issue bonds not later than the date of the Authority's bond issuance as authorized under § 13-712(a)(1) of this subtitle and to contribute $14,700,000 of the proceeds from the sale of the bonds for the capital costs of the expansion of the Ocean City Convention Center;

                        2.      The Authority agrees to issue bonds as authorized under § 13-712(a)(1) of this subtitle and to contribute $14,700,000 of the proceeds from the sale of the bonds for the capital costs of the expansion of the Ocean City Convention Center;

                        3.      Ocean City and the Authority agree that if the actual capital costs of the expansion of the Ocean City Convention Center are less than $29,400,000, the savings will be allocated:

                        A.      One-half to the Authority; and

                        B.      One-half to Ocean City;

                        4.      Ocean City agrees to provide the Ocean City Convention Center site, as defined in § 13-701(l) of this subtitle, for the expansion and renovation of the Ocean City Convention Center; and

                        5.      Ocean City and the Authority will each own a 50% leasehold interest as tenants in common in the improvements comprising the existing Ocean City Convention Center and the Ocean City Convention Center expansion for the duration of any bonds issued as authorized under § 13-712(a)(1) of this subtitle, with neither Ocean City nor the Authority entitled to sell, assign, mortgage, pledge, or encumber the Ocean City Convention Center facility (or any leasehold interest therein) without the prior consent of the other, except for liens in favor of Ocean City's and the Authority's respective bondholders;

                  (ii)      A deed, lease, or written agreement with Ocean City permitting the Authority to design, construct, and equip, or contract for the design, construction, and equipping of the Ocean City Convention Center facility expansion, and to pledge the Ocean City Convention Center facility and the Ocean City Convention Center site or the leasehold interest therein, as security for the Authority's bonds; and

                  (iii)      A written agreement with Ocean City:

                        1.      Whereby Ocean City agrees to market, promote, and operate the Ocean City Convention Center facility in a manner which maximizes the Ocean City Convention Center's economic return (which shall not be construed to require gambling activities in the Ocean City Convention Center), and to maintain and repair the Ocean City Convention Center facility so as to keep the Ocean City Convention Center facility in first class operating condition; and

                        2.      That includes provisions that:

                        A.      Protect the Authority's and Ocean City's respective investment in the Ocean City Convention Center facility;

                        B.      Require the Authority and Ocean City to each contribute to operating deficits and a capital improvement reserve fund, for the period beginning upon the completion of the expanded and renovated Ocean City Convention Center facility and continuing during the period that the Authority's Ocean City Convention Center facility bonds are outstanding, as follows:

                        I.      The Authority shall contribute one-half and Ocean City shall contribute one-half to annual operating deficits;

                        II.      The Authority and Ocean City shall each annually contribute $50,000 to an appropriate Capital Improvement Reserve Fund; and

                        III.      Ocean City shall be solely responsible for all operating deficits and capital improvements prior to the completion of the expanded and renovated Ocean City Convention Center facility and after the repayment of the Authority's Ocean City Convention Center facility bonds; and

                        C.      Provide for remedies upon default which include the right of the Authority, in the event of a material default by Ocean City which has not been corrected after a reasonable notice and cure period, to immediately assume responsibility for maintenance and repairs of the Ocean City Convention Center facility and offset the costs of such maintenance and repairs against other amounts owed by the Authority to Ocean City, whether under the operating agreement with Ocean City or otherwise;

            (7)      With respect to site acquisition and construction of the Montgomery County Conference Center facility, has secured, as approved by the Board of Public Works:

                  (i)      A lease or other written agreement with Montgomery County pursuant to which:

                        1.      Montgomery County agrees to contribute $13,196,000 for the capital costs of construction of the Montgomery County Conference Center not later than the date of the Authority's bond issuance as authorized under § 13-712 (a)(1) of this subtitle;

                        2.      The Authority agrees to issue bonds as authorized under § 13-712(a)(1) of this subtitle and to contribute $20,304,000 of the proceeds from the sale of the bonds for the capital costs of the construction of the Montgomery County Conference Center;

                        3.      Montgomery County and the Authority agree that if the actual capital costs for the construction of the Montgomery County Conference Center are less than $33,500,000, the savings will be allocated:

                        A.      One-half to the Authority; and

                        B.      One-half to Montgomery County;

                        4.      Montgomery County and the Authority agree that if the actual capital costs for the construction of the Montgomery County Conference Center are more than $33,500,000, the excess will be shared:

                        A.      One-half by the Authority; and

                        B.      One-half by Montgomery County;

                        5.      Montgomery County agrees to purchase the land for the Montgomery County Conference Center site as defined in § 13-701(o) of this subtitle, on which the Montgomery County Conference Center will be constructed; and

                        6.      Montgomery County and the Authority will each own a 50% leasehold interest as tenants in common in the Montgomery County Conference Center facility for the duration of any bonds issued as authorized under § 13-712(a)(1) of this subtitle, with neither Montgomery County nor the Authority entitled to sell, assign, mortgage, pledge, or encumber the Montgomery County Conference Center facility (or any leasehold interest therein) without the prior consent of the other, except for liens in favor of the Authority's respective bondholders;

                  (ii)      A deed, lease, or written agreement with Montgomery County permitting the Authority to design, construct, and equip, or contract for the design, construction, and equipping of the Montgomery County Conference Center facility, and to pledge the Montgomery County Conference Center facility and the Montgomery County Conference Center site or the leasehold interest therein, as security for the Authority's bonds;

                  (iii)      A written agreement with Montgomery County:

                        1.      Whereby Montgomery County agrees:

                        A.      To market, promote, and operate or contract for the marketing, promotion, and operation of the Montgomery County Conference Center facility in a manner which maximizes the Montgomery County Conference Center's economic return to the community; and

                        B.      To maintain and repair or contract for the maintenance and repair of the Montgomery County Conference Center facility so as to keep the Montgomery County Conference Center facility in first class operating condition; and

                        2.      That includes provisions that:

                        A.      Protect the Authority's and Montgomery County's respective investment in the Montgomery County Conference Center facility;

                        B.      Require Montgomery County to contribute to a capital improvement reserve fund in an amount sufficient to keep the Conference Center in first class operating condition;

                        C.      I.      Require Montgomery County to be solely responsible for all expenditures relating to the operation of the Conference Center facilities, including net operating deficits (the amount by which expenditures exceed revenues) that may be incurred; and

                        II.      Allow Montgomery County to keep all operating profits resulting from the operation of the Montgomery County Conference Center for all years; and

                        D.      Provide for remedies upon default which include the right of the Authority, in the event of a material default by Montgomery County which has not been corrected after a reasonable notice and cure period, to immediately assume responsibility for maintenance and repairs of the Montgomery County Conference Center facility and offset the costs of such maintenance and repairs against other amounts owed by the Authority to Montgomery County, whether under the operating agreement with Montgomery County or otherwise;

                  (iv)      An agreement between Montgomery County and the Authority for the Authority to select through a cooperative procurement agreement one or more contractors to develop, design, construct, operate, and manage the Montgomery County Conference Center facilities during the period that the Authority's Montgomery County Conference Center facilities bonds are outstanding;

                  (v)      An agreement between Montgomery County and the Authority that may allow for the establishment of a board of directors to manage the Montgomery County Conference Center, that provides that the board of directors may include representatives of the Authority, Montgomery County, the private developer, and the community, and that provides that unless action is taken to create a joint venture, corporation, or other legal entity, the board of directors is not a separate legal entity;

                  (vi)      An agreement among Montgomery County, the Authority, and a private developer for the acquisition, construction, and operation of a hotel adjacent to the Montgomery County Conference Center and providing for a capital commitment from such developer for such hotel and, as appropriate, shared facilities; and

            (8)      With respect to site acquisition and construction of the Hippodrome Performing Arts Center facility, has secured, as approved by the Board of Public Works:

                  (i)      One or more written agreements establishing commitments for payments to the Authority of amounts which shall be used by the Authority to fund the $60,000,000 of total acquisition and capital costs of construction of the Hippodrome Performing Arts Center facility and pursuant to which:

                        1.      Baltimore City agrees to pay $6,000,000, $2,000,000 of which shall be deposited to the Hippodrome Performing Arts Center Financing Fund by July 1, 2000, and $4,000,000 of which either shall be deposited to the Hippodrome Performing Arts Center Financing Fund by not later than the date of the Authority's bond issuance as authorized under § 13-712(a)(1) of this subtitle or which shall be deposited to the Hippodrome Performing Arts Center Financing Fund in $2,000,000 increments in each of the next 2 succeeding years from the proceeds of bond issuances which shall have received voter approval by not later than the date of the Authority's bond issuance as authorized under § 13-712(a)(1) of this subtitle;

                        2.      The State of Maryland has deposited to the Hippodrome Performing Arts Center Financing Fund, an aggregate amount of $16,500,000 or such lesser amount as is available to the Authority and is not subject to any budget contingencies;

                        3.      The Authority agrees to issue bonds as authorized under § 13-712(a)(1) of this subtitle and to use $17,400,000 of the proceeds from the sale of such bonds in the manner and for the purposes described in this subsection; and

                        4.      One or more private entities, which may include an Authority affiliate ("private funding sources"):

                        A.      Deposit to the Hippodrome Performing Arts Center Financing Fund, not later than the date of the Authority's bond issuance as authorized under § 13-712(a)(1) of this subtitle, at least $8,000,000, and agree, not later than the date of the Authority's bond issuance as authorized under § 13-712(a)(1) of this subtitle, to pay an additional $12,100,000; and

                        B.      Agree, by not later than the date of the Authority's bond issuance as authorized under § 13-712(a)(1) of this subtitle, to pay all actual acquisition and capital costs of construction of the Hippodrome Performing Arts Center facility to the extent such costs are in excess of $60,000,000, and that any savings from acquisition or capital costs upon completion of the Hippodrome Performing Arts Center shall be paid to the Authority;

                  (ii)      A written agreement with the University System of Maryland pursuant to which the University System of Maryland agrees to transfer to the Authority fee title to the property described in § 13-701(s)(3) of this subtitle; and

                  (iii)      A written agreement with an Authority affiliate whereby the Authority affiliate agrees:

                        1.      To market, promote, and operate or contract, subject to the approval of the Authority, for the marketing, promotion, and operation of the Hippodrome Performing Arts Center facility;

                        2.      To maintain and repair or contract, subject to the approval of the Authority, for the maintenance and repair of the Hippodrome Performing Arts Center facility so as to keep the Hippodrome Performing Arts Center facility in first class operating condition;

                        3.      To pay to the Authority for the duration of any bonds issued as authorized under § 13-712(a)(1) of this subtitle an amount equal to $2 per ticket sold for admission to the Hippodrome Performing Arts Center facility; and

                        4.      To be solely responsible for all expenditures relating to the operation, maintenance, and repair of the Hippodrome Performing Arts Center facility, including net operating deficits (the amount by which expenditures exceed revenues) that may be incurred.